Spring 2006 – The fire rescue fee fiasco – Lessons to be learned

President’s Column By T. Sinclair (Tory) Jacobs

The Fire Rescue Fee Fiasco reminds me of the movie title “Sex, Lies & Videotape” without the sex and without the videotape.

Although Judge Lopez has made his ruling on this case and said the unsavory settlement cannot stand and a class action may move forward, it’s important that you, BHA members, know the BHA involvement.

A bit of history… In 1998 a consulting firm set up by an up-state law firm came up with a scheme that would enable Florida municipalities to circumvent their ad valorem tax caps by generating fees through special assessments. This is like offering a scheme to rob banks and then not be liable for prosecution. Everybody knows that bank robbery is a felony. Stealing from taxpayers is even more heinous.

The City of Miami – then under severe financial pressure – succumbed to the temptation and voted to enact the Fire Rescue Fee, though strongly opposed by BHA and other community organizations. We were early supporters of TTUFF (Tenants & Taxpayers United For Fairness) an umbrella organization formed to have the fee rescinded, get the funds returned to the taxpayers and to fund an initiative requiring any and all fee legislation be authorized by referendum. BHA contributed to the legal fees by a check for $2,500 to the law firm retained to represent TTUFF.

Initially, we were successful. The City Commission voted 4-1 to repeal the Fee, but the Governor’s Oversight Board (then in control) ordered the City to re-instate the Fee.

Speeding forward from 1998 to 2004, the believed-to-be class action proceeded through the Florida courts and the Fee was finally declared unconstitutional. At this point, the City of Miami was defenseless against an action to refund the Fire Rescue Fees paid.

The law firm originally retained by TTUFF had been merged into the Miami firm, Adorno & Yoss. For reasons unknown, the class action status had not been certified by the Court, so that five members of TTUFF were the only plaintiffs. There is conflicting testimony as to how the settlement came about, but it is generally agreed that the City of Miami’s legal department, acting under the impression that they were responsible for protecting the City’s financial interests, not the City taxpayers’ interests, came up with a settlement scheme. This plan would cost the City only $7 million and by delaying settlement, permit the statute of limitations to run out, precluding additional claims.

This might be considered astute “lawyering” in a corporate environment, but it is a mistake in judgment for a municipality.

For the $7 million settlement plan to work required what appears to be collusion between the City and the law firm supposedly representing Fire Rescue Fee payers by keeping the settlement agreement under wraps, a violation of the Sunshine Law.

I am personally most offended by the small group of dedicated civic activists who were founders of TTUFF and who in the end succumbed to greed.

We submit the following lessons:

1) If it starts with a taint, it’s hard to get rid of the smell.

2) Operating a city as if it were a business works just so far.

3) Enough money can corrupt some of the best of us.

4) Collusion between both sides in a legal matter, especially when quarter-backed by an attorney who had been retained to represent the citizens, the taxpayers, the wronged public gives off a strong aroma, actually a stench, if you will.

It is too soon to tell if any of these lessons have been learned.

From BHA News, Spring 2006, Vol. XVI, No. 1