HomeMy WebLinkAboutR-91-0311Jy-91•-140
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RESOLUTION NO. lilt
A RESOLUTION AUTHORIZING THE CITY ATTORNEY TO
INITIATE PROCEEDINGS UNDER CHAPTER 86 OF THE
FLORIDA STATUTES FOR THE PURPOSE OF OBTAINING
A JUDICIAL DECLARATION OF THE RIGHTS AND
STATUS OF THE CITY OF MIAMI AND OF THE
FLORIDA POWER & LIGHT COMPANY AS THOSE RIGHTS
AND STATUS EXIST UNDER THE TERMS OF A
FRANCHISE AGREEMENT GRANTED TO SAID FLORIDA
POWER & LIGHT COMPANY BY ORDINANCE NO. 9472
OF THE CITY OF MIAMI, FLORIDA, FOR PLACEMENT
OF UTILITY LINES IN, ON AND UNDER STREETS IN
THE CITY, SAID AGREEMENT PROVIDING THAT
CREDIT BE GIVEN TOWARD COMPENSATION OWING TO
THE CITY BY THE UTILITY COMPANY UNDER SAID
AGREEMENT FOR AMOUNTS OF MONEY PAID TO THE
CITY BY THE UTILITY COMPANY IN THE FORM OF AD
VALOREM TAXES.
WHEREAS, there is a presently existing Franchise Agreement
between the City and Florida Power & Light Company allowing said
utility company to place its lines in, on or under City streets;
and
WHEREAS, the language of said Agreement provides that credit
toward the compensation owing the City by the utility company
under the Agreement be given to the utility company for the
amount of ad valorem taxes paid to the City by the utility
company; and
WHEREAS, the constitutionality of such practice permitted
under said Agreement, i.e. ad valorem tax credit, is in doubt and
the Florida Legislature has provided a mechanism for resolving
such doubts by way of a judicial declaration of the rights and
status of the City and utility company under the terms of said
Agreement;
NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY
OF MIAMI, FLORIDA:
Section 1. The recitals and findings contained in the
Preamble to this Resolution are hereby adopted by reference }
thereto and incorporated herein as if fully set forth in this
Section.
Section 2. The City Attorney is hereby authorized to
initiate proceedings under Chapter 86 of the Florida Statutes for
the purpose of obtaining a judicial declaration of the rights and
status of the City of Miami and of the Florida Power & Light
Company as those rights and status exist under the terms of a
Franchise Agreement granted to said Florida Power & Light Company
by Ordinance No. 9472 of the City of Miami, Florida, for.
placement of utility lines in, on and under streets in the City,
said Agreement providing that credit be given toward compensation
owing to the City by the utility company under said Agreement for
amounts of money paid to the City by the utility company in the
form of ad valorem taxes.
Section 3. This Resolution shall become effective
immediately upon its adoption.
PASSED AND ADOPTED this 25th
day of April , 1991.
XAVIER L. SUFLREZ, MAYOR
CITY CLERK
PREPARED AND APPROVED BY:
RREN BITTNER
SISTANT CITY ATTORNEY
APPROVED AS TO FORM AND CORRECTNESS:
L.
CITY
orrihoutM2197
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CITY OF MIAMI, FLORIDA
INT M OFFICE MEMORANDUM
To Honorable Mayor and Members DATE April 19, 1991 FILE A-91-168
of the City Commission
SUBJECT . PP&L Franchise Pee
Credit for Ad Valorem Taxes
FROM . O ge L.Pey
ndez REFERENCES
Ci y Atto-
ENCLOSURES:
The attached Resolution authorizes the City Attorney to initiate
a declaratory judgment action against Florida Power & Light. to
determine the constitutionality of the indirect ad valorem tax
exemption currently provided to Florida Power & Light under the
City of Miami's Franchise Agreement, authorized by Ordinance No.
9472.
This comes at a time when the constitutionality of such exemption
is being questioned by other municipalities and when Florida
�{ Power & Light is engaged in extensive lobbying efforts in
+ Tallahassee to enact this ad valorem tax credit into law. As we
i understand it, the House has already passed the Bill, and it is
i presently pending in the Senate. We are advised that the Senate
Bill contains an amendment which would make the enactment
inapplicable to those cities who have filed suit against Florida
i Power & Light prior to the effective date of the legislation.
Consequently, time is of the essence in our getting this lawsuit
on file. t
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JLF/WB/sls/P917
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91- 311
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ACCEPTANCE of ELECTRIC FRANCHISE
ORDINANCE Not. 9472
6Y FLOR10A Pok%ER do LIGHT COMPANY
city of Miami
Miami, Florida August 271 1962
Florida Power & Light Company does hereby accept the electric franchise in the
City of Amami, Florida, granted by Ordinance No. V472, being:
"AN ORDINANCE GKANTINU TO FWRIDA POWLIt & LIGHT
COMPANY, ITs SUCCtbSORS ANU ASW NS, AN ELECTRIC
FRANCHISE, IMPOSING PROVWUNS MNO COWITIONS XUATING
THERETO, PKOVIUiNG FOR MuSTHLY PAY.MthTb TJ THE CITY
OF MIAMI, #%NU PROVIDINQ FOR AN LFF ECTiVE JATE"
Which was passed and adopted on July 251, 1992.
This instrument is Bled with the City Clerk of the City of Miami, Florida, in
accordance %ars the provisions of Section 2 of said ordinance.
FLORIUA POWER a LIGHT COMPANY
Vic rc►1aent
ATTtSTs � —
.-- �
I
ti
ORDINANCE NO. 9479
AN ORDINANCE GRANTING TO FLORIDA POWER k
LIGHT COMPANY, ITS SUCCESSORS AND ASSIGNS AN
ELECTRIC FRANCHISE, IMPOSING PROVISIONS AND
CONDITIONS RELATING THERETO, PROVIDING FOR
MONTHLY PAYMENTS TO THE CITY Of MIAMI, AND
PROVIDING FOR AN EFFECTIVE DATE.
BE IT ORDAINED BY THE COMMISSION OF THE CITY Of MIAMI, FLORIDA:
Section 1. There Is hereby granted to Florida Power k Light Company (herein
called the "Grantee% Its suecassors and assigns, the non-exeluiive right, privilege or
franchise to construct, maintain and operate in, under, upon, over and across the present
and future streets, alleys, bridges, easements and other public places in the City of
Miami, Florida (herein called the "Grantor") and its successors, in accordance with
established practice with respect to electrical construction and maintenance, for the
period of 30 years from the effective date hereof, electric light and power facilities
(including conduits, poles, wires and transmission lines, and, for its own use, telephone and
• telegraph lines) for the purpose of supplying electricity to the Grantor and its successors,
and inhabitants thereof, and persons and corporations beyond the limits thereof.
Section 2. As a condition precedent to the taking effect of this grant, the
Grantee shall have filed its acceptance hereof with the Grantor's Clerk within 30 days
after final adoption hereof.
Section S. The facilities of the Grantee shall be so located or relocated and so
erected as to interfere as little as possible with traffic over said streets, alleys, bridges
and public places, and with reasonable egress from and ingress to abutting property. The
Location or relooation of all facilities shall be made under the supervision and with the •
approval of such representatives as the governing body of the Grantor may designate for
the purpose, but not so as to unreasonably Interfere with the proper operation of the
Grantee's facilities and service. When any portion of a street is excavated by the Grantee
in the location or relocation of any of its facilities, the portion of the street so excavated
shall, within a reasonable time and as early U practicable after such excavation, be
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s replaced by the Grantee at its expanse and in a condition as good as it was at the time. of
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such excavation.
Nothing in this Section shall be construed to make the Grantor liable to the
Grantee for any cast at expense in connection with the construction, reconstruction or
relocation of the Grantee's facilities In streets, alleys, bridges, and public places of the
f Grantor made necessary by widsning, paving or otherwise Improving such streets, alleys,
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bridges and public places, except that the Grantee Shall be entitled to reimbursement of
such cats and expense: from funds available from sowers other than the Grantor as may
be provided by law.
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• Stetion 4, Grantor shall in no way be liable or responsible tot any accident or
damage that may occur in the construction, operation or maintenance by the Grantee of
Its facilities hereunder, and the teceptanee cf this ordinance shall be deemed an
agreement on the part of the Orantee to indemnify the Grantor and hold it harmless
— l
against any and all liability, loss, cost, damage or expense which may accrue to the
Grantor by reason of the negligence, default or misconduct of the Grantee in the
construction, operation or maintenance of its facilities hereunder.
Sectionn5. All rates and rules and regulations established by the Grantee from
' time to time shall at all times be reasonable and the Grantee's rates for electricity shall
lat all times be subject to such regulation as may be provided by law.
Section 6. No later than 60 days after the first anniversary date of this grant,
and no later than 60 days after each succeeding anniversary date of this grant, the
Grantee, its successors and assigns, shall have paid to the Grantor and its successors an
I
amount which added to the amount o(all taxes as assessed, levied, or imposed (without
regard to any discount for early payment or any interest or penalty for late payment),
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" licenses, and other impositions (except amounts for assessments for special benefits such
�? as sidewalks, street paving, and similar improvements) levied or imposed by the Grantor
i
upon the Grantee's electric property; business, or operations, and those of the Grantee's
electric subsidiaries for the preceding tax year, will equix (6) percent of the Grantee's
revenues from the We of electrical energy to. residential, commercial and industrial
customers within the corporate limits of the Grantor for the 12 fiscal months preceding
the applicable anniversary date.
,jSection
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7. Payment of the amount to be paid to the Grantor by the Grantee
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under the terms of Section 6 hereof for the first fiscal year of this grant shall be made in
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advance by 11 estimated monthly installments commencing on the effective date of this
grant and ending on January 21, 1914. Each estimated monthly installment during the
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first fiscal year of this grant shall be calculated on the basis of 90% of _the Grantee's
revenues (as defined in Section 6) for the monthly billing period ending 10 days prior to
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each scheduled monthly payment. The twelfth and final payment for the first fiscal year
of this grant, which shall be due no later than 60 days after the first anniversary date of
this grant, shall be adjusted to reflect any underpayment or overpayment resulting from
the 11 estimated monthly installments made for said fiscal you.
Payment of the amount to be paid to the Grantor by the Granters under the terms
'
of Section 6 hereof for the second and each subsequent fiscal year of this grant shall be
made in advance by estimated monthly Installments commencing 10 days after tM end of
the first and each subsequent anniversary date of this Rant, and each such estimated
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monthly installment MAU be calculated on the isms of Go% of the Grantae's revenues (as
defined in Section 6) for the monthly billing period anding 60 days prior to each scheduled
monthly payment. The final installment for the second and each subsequent fiscal year of
this grant shall be adjusted to reflect any underpayment or overpayment resulting from
estimated monthly installments made for the preceding fiscal year.
Section A. As a further consideration of this franchise, the Grantor agrees not to
engage in the business of distributing and selling electrielty during the life of this
franchise or any extension thereof in competition with the Grantee, its successoft and
assigns.
Section 9. Grantor reserves the right, upon the expiration of the franchise term
herein provided, to purchase the property of the Grantee used under this grant for an
amount equal to the then existing cost of reproduction of such property, less depreciation
to date of such purchase, together with going concern value and any damages to the
remainder of Grantee's property caused by such purchase. All closing costs of such
purchase shall be borne by Grantor. Nothing herein contained shall require Grantor to
} acquire Grantee's property or to renew the franchise herein granted.
Section 10. Failure on the part of the Grantee to comply in any substantial
i respect with an of the provisions of this ordinance shall be Pe Y P grounds for forfeiture of this
grant, but no such forfeiture shall take effect if the reasonableness or propriety thereof is
i protested by the Grantee until a court of competent jurisdiction (with right of appeal in
either party) shall have found that the Grantee has failed to comply in a substantial
respect with any of the provisions of this franchise, and the Grantee shall have six months •
after the final determination of the question to make good the default before a forfeiture
i
shall result with the right in the Grantor at its discretion to grant such additional time to
i< the Grantee for compliance as necessities in the case require; provided, however, that the
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1 provisions of this Section shall not be deemed exclusive of such other remedies as may be
provided by law.
I
eetion 11. Grantor acknowledge It is fully informed concerning the existing
franchise granted by Dade County, Florida, to the Grantee herein, and accepted by the
Grantee, as set out to Ordinance No. 90.16 adopted on May S, 1960 by the Board of
County Commissioners of Dade County, Florida. Grantor egress to indemnify and hold
Grantee harmless against any and all liability, loss, eat, damage and expense incurred by
Grantee in respect to any claim asaerted by Dade County against Grantee arising out of
the franchise set out in said Ordkw4e No. 60.16 for recovery of any sums of money pald
by Grantee to Grantor wrier the terms of this subspuent franchise agreement. Both
Grantor and Grantee have relied on Resolution No. R-10-76 of the Board of County
j
Commissioners of Metropobtan fisde County, Florida in ranting and aeeepting the
aforesaid franchise.
Section 12. Should any station or provision of this ordinance or any portion
hereof be declared by a eourt of competent jurisdiction to be Invalid, such decision shalt
not affect the validity of the remainder as a whole or as to any part, other than the part
declared to be invalid.
Section 13. Ordinance No. 4974, effective April 1, 19111 Is hereby repealed, and
all ordinances and parts of ordinances in conflict herewith are hereby superseded to the
extent of any such eonfUet.
Section 14. This ordinance shall become effective on March 28, 1993 after first
having been accepted by the Grantee In accordance with Section 2 hereof.
PASSED ON FIRST READING By TITLE ONLY this 22 day of July , 1982.
PASSED ON SECOND READING BY TITLE ONLY this 29th day of July, 1982.
PASSED AND ADOPTED ON THIRD AND FINAL rEADING BY TITLE ONLY this
9th day of se tem e , 2982.
1lAL'1tICE A. not
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ATTEST:
01CL
CIE,
RALPH Ctt ON
CITY CLERX
•
APPROVED AS TO FORM AND CORRECTNESSt
OX, i .
�RNEY'
CITY A
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APPROVED AS TO FORM AND CORRECTUESS:
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CITY OF MIAMI, FL( MIDA
INTEA-OFFICE MEMOAANDUM
►
To Honorable Mayor and Members DATE : April 11, 1991 FILE A-91-169
of the City Commission
sua,rct : Fig&L Franchise Fee
Credit for Ad Valorem Taxes
FROM :Jorge L♦ Pernandez REFERENCES
City Attorney
ENCLOSURES:
We are writing to give our legal comments to the memo sent to you
by Guy Sanchez, representative of FP&L on or about April 2, 1991,
concerning House Bill 1863.
As a background, House Bill (HB) 1863 was originally drafted with
the purpose of creating boundaries for the providing of
electrical service by public utilities within the State of
Florida. The intention was to eliminate duplication of service
and thus facilitate greater efficiency by electric utilities.
The Bill also provided that the Public Service Commission would
have the jurisdiction to create these boundaries. On its face,
these goals seem to be desirable objectives. However, the Bill
-
also included a provision which would eliminate the right of
local governments to condemn, through the exercise of powers of
eminent domain, utility properties for the purpose of competing
with the utilities in the providing of electrical service.
The net effect of the establishment of boundaries: and the
elimination of the eminent domain powers of local governments is
to substantially reduce the bargaining power of municipalities
over the public utility when negoti'at'ing a franchise fee..;
Presently_# the City of Miami collects a, 6% franchise fee on
FP&L's gross revenues within the City, less the amount of ad
valorem and other taxes paid.
As a result of the objections and lobbying efforts of local -
governments during this session of the,Legislature, amendments to
HB 1863 have been proposed, and these'were enclosed to you by Mr.
Sanchez. As you can see from the highlighted portions,
especially
p y on page 10 of the draft legislation, Section_12(b)
retains the ad valorem tax credit, i.e.:
(b) Upon the expiration of any franchise
agreement, the municipality or county which is.a party
to such franchise agreement:
91- 311
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Honorable Mayor and Members April Up 1991
of the City Commission page Two
1. shall be entitled to charge as a fee for
the use of right-of-way, a fee at the same rate and
subject to the same conditions and offsets, if any,
provided in the franchise agreement for the franchise;
or
2. may, by ordinance, impose a fee for
right-of-way not to exceed 6 percent of the electric
utility's gross revenues for the sale of energy and
power within the jurisdiction of the county or
municipality, less the aggregate amount of other taxes
assessed,,_, levied, or imposed (without regard to any
discount for early payment or any interest or penalty),
licenses. and other fees or taxes imposed by such
municipality or county directly against such electric
utility.
This, in effect, gives the Legislature's imprimatur to an ad
valorem exemption to electric utilities presently provided forn
the FP&L franchise with the City of Miami and many other
municipalities throughout the state. Unfortunately, this comes
at a time when the City of Miami and other cities are considering
filing suit against FP&L to eliminate and void the ad valorem tax
exemption. This is because the granting of such an exemption by
this indirect method constitutes, in our view, an arguably
constitutionally prohibited exemption on non-exempt property.
Our research has revealed that, as a general proposition,
municipal contracts promising not to impose taxes, or granting
indirect tax exemptions, are ultra vires and void in the absence
of specific legislative authority. See Lykes Brothers vs. City
of Plant City, 354 So.2d 878, 880 (Fla. 1978). Consequently, if
•�
FP&L is successful in getting this Bill passed through the
Legislature, the legislative authority for this tax exemption
will then exist and the City of Miami will be stymied in its
'
efforts to invalidate that clause in its franchise agreement.
Accordingly, we recommend that you not be swayed by FP&L's
lobbying efforts and arguments that "this Bill will not in any
H
way impact our franchise fee with the City of Miami".
JLF/WB/sls/PS92 t
cc: Cesar H. Odio, City Manager
Angela Bellamy, Asst. City Manager
Ward Barritt, Admin. Asst./Intergovernmental Affairs
#.
Aurelio Perez-Lugones, Legislative Administrator
Hattie M. Daniels, Director/Internal Audits
Elliott Prenner, Staff Auditor Principal/Internal Audits
Manohar Surana, Director/Budget Dept.
Dipak Parekh, Principal Management Analyst/Budget Dept.
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