How good intentions can go terribly wrong

The initiative to bury the power lines on Longboat Key has been considered for years but wasn’t pursued until Florida Power & Light Co. announced it was going to replace the power poles on Gulf of Mexico Drive, and if the town decided on underground utilities at this time, it could reduce the cost by taking advantage of FPL’s cost avoidance. 

What appeared to be a unique opportunity to improve our community has perhaps become one of the most divisive endeavors that the town has ever pursued. 

Consider the following:

To ensure that the proposed referendum cost would be not be exceeded, the consultant provided a conservative estimate, which the town inflated with a 20% contingency, then added an extra contingency on top of that. 

In addition, when asked, nobody can tell us how much we are saving by FPL not replacing poles, or for the expected 25% savings from the government adjustment factor. 

The result is that the project cost has become astronomical ($48 million).

For perspective, the Diverging Diamond Interchange on I-75 at University is estimated to cost $74 million.

We got a Longboat Key price quote, and the real cost will be much less. The town will work to minimize the actual project cost, however, the big price tag inflated the estimated assessments. If, for example the entire island could be put underground, including street lighting and dark fiber costs, for little more than the estimated cost of GMD alone, the outlook for the project could have been much different.

The first Longboat Key non-ad valorem assessment has turned out to be much more complicated and controversial than anybody expected. It spreads costs based on benefits received, not cost, a concept that few understand.

As stated in the Willdan Methodology document:

“Florida law does not specify the methodology or formula that must be used in calculating assessments; however, the assessment apportionment methodology must be reasonable and not arbitrary." 

Although the methodology could be fair and reasonable, by failing to adequately address the details, as applied it has turned out to be neither fair nor reasonable for the following reasons:

1.  Using ad valorem tax rolls (parcels) as the basis for non-ad valorem assessments is easy, but by not considering the underlying details (units), it has created some glaring inequities, i.e. parcels that are not subdivided into units. Multifamily residences, multiple cottages with a single owner, multiple boat slips with one owner, hotels, shopping centers, etc. are all treated like single parcels, even though they have the physical characteristics of other assessed entities. This reduces the number of taxable units, thereby increasing the cost for all parcels.

2.  The benefit assessments are subjective, have been poorly defined and have not been adequately discussed in an environment that could yield a rationale that all could embrace.  

3.  Once the estimated assessments were “advertised” any changes like the Dry Dock change that reduced an assessment as it did, results in cost that must be shared by all other parcels. Using contingency funding to cover shortfalls due to assessment changes shifts the burden to the rest of the community.

In my mind, the contingencies are to cover unexpected project costs, not problems with the assessment mythology.

4.   “Cost sharing” (18% vs. 82%) with neighborhoods with underground utilities gives all parcels an equal vote, even though 70% of parcels face much lower assessments, ($74 vs. $400 to $700 per year for 30 years). If only the overhead neighborhoods could vote, as originally proposed, this would not have been an issue.

5.  The guidelines that resulted in neighborhoods that currently have underground utilities — such as Spanish Main Yacht Club, Club Longboat and others — being classified as overhead could have been avoided if the town had evaluated each property and included modification charges (much like looping), if it resulted in bringing the neighborhood into underground compliance for less than the estimated overhead cost assessment. 

As an engineer, I have been trained to test any hypothesis to assure that the results are reasonable (make sense) and that it works for all conditions.  In my opinion, the intention of the town and its consultants was to be fair and equitable in sharing the undergrounding cost. 

However, they didn’t test and fix the methodology. They appear to be deaf to the issues mentioned above in the interest of “expediency”…i.e., let's get it done.

 It has been stated that delaying the neighborhood referendum to the next available voting opportunity would have no impact on the project timing.  Is it wise to proceed with a vote that could leave the voters in a position in which they may respond is by voting "no," when I believe that the overwhelming desire of most residents is to get this done for the betterment of our town?

Lenny Landau is a mechanical engineer and member of the the Longboat Key Revitalization Task Force.