Res No 068-11-13382RESOLUTION No.: 68-11-13382
A Resolution of the Mayor and City Commission of the City of South Miami,
Florida, exploring options with regard to the Florida Power & Light
Franchise Agreement scheduled to expire in 2014; and providing an effective
date.
WHEREAS, in May of 1984, the City of South Miami entered into a franchise agreement
(the "Franchise Agreement") with FPL for a 30 -year period which granted a non- exclusive
electric franchise to the utility to utilize public rights of way throughout the City in return for
franchise fees; and
WHEREAS, the City currently receives approximately $1.2 million annually in franchise
fees, approximately 9.4% of annual tax revenues and 6.4% of annual total revenues; and
WHEREAS, certain franchise fees remitted to the City come from a regressive
consumption tax of 5.7% on the electric bills of rate payers; and
WHEREAS, the Franchise Agreement creates a tax on residents and business owners, in
exchange for which they sign over sovereign rights to FPL - in essence the Franchise Agreement
forces taxpayers to pay to lose their own rights; and
WHEREAS, the Franchise Agreement locks taxpayers into a fixed tax rate for 30 years
that cannot be changed by elected officials or by citizen referendum, even though the electric
rates can be changed by FPL with no consent by the taxed parties or municipal elected officials,
thus the amount the citizens are taxed is no longer under control of the City; and
WHEREAS, the 30 year monopoly created by the Franchise Agreement limits the options
available to City residents with regards to lowering energy prices and encouraging innovation
through competition; and
WHEREAS, pursuant to the Franchise Agreement, FPL can locate power lines and
equipment almost any place unless the City can find a reason to challenge such placement or use;
and
WHEREAS, the City's right to self - determination dictate's sovereign authority with
regards to the placement of power lines within the City, the deployment of new technologies, the
use of renewable energy sources, and the distribution and selling of locally generated solar
power;
WHEREAS, FPL passes most, but not all, of the franchise fees through to the City, minus
certain holdbacks, and subject to certain delays which allow FPL free use of the citizens' money;
and
WHEREAS, Miami Beach audited FPL's franchise fee collections over a three -year
period and found that FPL had underpaid their city $1 million; and
Page 1 of 2
Res. No. 68 -11 -13382
WHEREAS, the City of Parkland, FL in Broward County did not renew their Franchise
Agreement with FPL in 1993 but has continued to receive electric service as before; and
WHEREAS, Franchise Agreements are unnecessary because cities without Franchise
Agreements may continue to purchase electricity from FPL at the same rates as those with
Franchise Agreements;
NOW THEREFORE BE IT RESOLVED BY THE CITY COMMISSION OF THE
CITY OF SOUTH MIAMI THAT:
Section 1. The City shall study all options with regards to the FPL Franchise Agreement
expiring in May of 2014 including options to develop alternate tax revenues to replace the
current revenue stream from franchise taxes imposed on rate payer's electricity bills with the
goal that, by fiscal year 2013 -14, the City will not need to rely on electricity franchise fees
revenues for operations and could refrain from entering into a new Franchise Agreement with
FPL.
Section 2. This resolution shall take effect immediately upon adoption.
PASSED AND ADOP'T'ED this 1 9thday of Apr; t , 2011.
ATTEST:
��(3���
CITY CLERK
APPROVED:
M941� .4
MAY R
COMMISSION VOTE:
4 -0
Mayor Stoddard:
Yea
Vice Mayor Newman:
Yea
Commissioner Palmer:
absent
Commissioner Beasley:
Yea
Commissioner Harris:
Yea
Page 2 of 2