Let’s talk about the budget, building beneath homes and charter county status in Monroe County

Monroe County Commissioner David Rice joined Good Morning Keys on KeysTalk 96.9/102.5FM this morning to talk about what’s been going on in the county.

There was a budget meeting on Tuesday.

Rice said things are “looking good, although we will have a rather small increase. Last year, our millage rate dropped and this year, we had to kind of make up for it because things are happening in our environment and in our economy that really doesn’t allow for us to continue at that level. The average value for this year, for taxable value, and you have to keep in mind that’s not your market value because it’s usually taxed at a significantly lower rate, but it’s getting close to $500,000. The person that owns that average home and it’s hard to find $500,000 homes these days. They’re going to be paying about $11 a month more in taxes if we eventually adopt what’s recommended at this time.”

There will be two or three more public hearings and staff will continue to work to trim the budget.

Rice said, “We’ve got some strange economic circumstances going on. Just to give you an example, the inflation rate in the country has trended down over the last 18 months to about 5%. However, the South Florida inflation rate has remained steady at about 9% per year. So we’re a bit of an anomaly. I think most of us are aware of that the cost of many, many things have increased over the last couple of years. A great deal of that is if you live in South Florida, your money will buy about 19% less than it would have two years ago. I’ve gotten a couple of emails from people talking about being working people and they have increasing costs and so on. It’s kind of sad, because what I know is that the same costs that increase for them, increase for the county. We’ve seen a substantial increase in insurance because we do insure most of our public property and I think we’re paying over $5 million a year this year to insure that property. So the same factors that are hitting every homeowner hit county government in the same way. It’s not a fun situation.”

Car insurance is another tough issue in Florida.

Rice explained, “We’ve got what amounts to kind of a car insurance crisis in Florida. I heard recently that another company has moved out of Florida. They simply won’t do business here anymore because they can’t do it profitably. It’s not a pretty picture. I don’t think we’re going to lose Citizens, because as I understand it, Citizens was created by the state of Florida to be an insurer of last resort. So I don’t think Citizens can leave. They can go bankrupt and I think that’s part of the concern, as their responsibility grows larger and larger percentage. Their concern is in the event of a major hurricane, how to have the financial resources to pay for recovery.”

September 6 will be the first public hearing in Key West for the county budget and September 20 will be the final public hearing in Key Largo.

Rice said, “That’s our standard procedure for going through the public process associated with adopting a budget.”

The County Commission has agreed to extend a deadline on a resolution recently passed that would have temporarily allowed property owners and real estate agents to sell their homes without fear of legal reprisal.

Rice said, “That’s a part of a bigger package with our negotiations with FEMA, trying to get a little more slack for our residents here. A part of that, of course, is those folks who would really like to be able to build more than 299 square feet at ground level beneath their homes. That’s an interesting situation. We did talk with FEMA about it and I think they certainly were willing to discuss it. However, there are some factors that are making me wonder exactly how flexible they’ll be willing to be because we need to revisit why we have that. I think a lot of people came in in the middle of this and don’t understand how we got to where we are. A number of years ago, illegal downstairs enclosures were all over the county and the enforcement was not terribly stringent. FEMA came to us and said essential you either clean up this mess, Monroe County, or you’re no longer going to have federally subsidized flood insurance, which would increase everybody’s costs tremendously, if they could get flood insurance. The real kicker is that a mortgage on our homes that comes from a federally controlled bank requires that flood insurance. So would we lose our ability to finance homes? So we kind of cleaned it up, for the most part, and now we’re talking to FEMA and saying, well, we’ve been punished for roughly 20 years. Isn’t that enough? Can’t we once again allow people to enclose that downstairs space that’s below flood level? They’re saying, well, we’ll talk about it, but you know what? We’ve got this list here and this list shows us how many homes in Monroe County are currently under violation.”

The list has 1,900 homes in Monroe County that are in violation.

Rice said, “What we would have to convince them is we can do the same thing we used to do, and produce a different result. And you know what they say about insanity is continuing to do the same thing and expect a different result. I don’t know that human behavior has changed so much that if we give people additional space downstairs, we can’t expect them to do the same thing they did before, which is see it as a funding opportunity, turn it into habitable space and rent it out. We could certainly use the housing, no question about that. But it could very quickly put us back into jeopardy with FEMA and they actually have canceled flood insurance in numerous areas around the country because of non-compliance. So it’s a slippery slope. We’re going to do the best we can.”

Monroe County becoming a charter county is another topic that’s been discussed recently.

Rice said, “That’s a kind of a complicated question. Don’t want to go into all of it, but I can share my analysis of the bottom line on this and that is that Monroe County over the next 20 years is facing huge expenditures, because of things like takings cases that we know are inevitable, correcting the saltwater that’s on our roads now and is continuing to be more and more frequent in areas in the county. What has been nuisance flooding every now and then is becoming much more frequent and really interfering with people’s ability to travel. We’ve got some communities in this county that drive through saltwater on their only road that accesses their community for 97 consecutive days over the last year. I’m not talking a little water, I’m talking 10 to 14 inches of water. We need to do something about that. It’s horrifically expensive to do that and we’re going to have to have the funds to do it. One of the things that a charter county would allow us to do is to pass a transportation surtax, a sales tax. So it’s really a question of do we want to face these extraordinary expenses in the future without any outside help and pay for it out of our taxes? Our would we like to create a situation where our five plus million visitors would pay the lion’s share of those funds through an increase in sales tax. As a property owner, it doesn’t take me very long to realize which I would rather do. So that’s one of tomorrow’s problems and it’s one we need to keep in mind and learn more and more about the advantages and potential disadvantages of the charter County.”

The voters will ultimately make the decision.

Rice said, “It cannot be enacted without passing a referendum by voters. It’s actually a two-step process. One is a referendum has to pass that the voters say, yeah, we think this is a good idea. That requires enough information to make a valid decision. Then there would be another referendum that would determine how that government would be structured because the statute that covers the charter county really gives you kind of a menu of things you could select from. It gives a local government or the people who control local government, the voters, more control over their local government by far. They can have more commissioners if they wish. They can give them term limits if they wish. There’s quite a list there of things that are options. So we’ve all got a lot to learn on that. It’s going to be an important question.”