Brickell Homeowners Association

Q. Where do your taxes and fees go?

A. Wherever the elected officials want to spend them.

First, a disclaimer: This column is non-partisan. This column is political.

Elected officials control the expenditure of our tax and fee contributions. Today, the expenditure of these revenues is not necessarily invested in the neighborhoods from whence they came. (This holds for the City, County, State and Federal Government.)

In our own District 2 of the City of Miami, Commissioner Marc Sarnoff told BHA representatives at their January meeting, "We’re 78% of the City’s tax base…Impact fees which should be spent in District 2 are not being spent on District 2."

Actually, much of District 2-generated taxes are spent elsewhere.

How can we influence the decisions of elected officials? Commissioner Sarnoff said he plans to "challenge, possibly sue" the City of Miami over this practice. For those of us without legal expertise and with limited resources, however, access, leverage and perceived voting power are our chief means of influence.

How can we obtain such power? Two ways:

1) individual and corporate campaign contributions which are, per force, partisan.

2) voting -- voting is unique in that its effect is both partisan and non-partisan at the same time. Yes, it is partisan to the candidate or issue supported, but in a larger sense, it is non-partisan because the number of actual voters, rather than the number of registered voters in each district, holds greater sway with elected officials. Numbers of likely voters gets the attention.

The distinction between generating influence via partisan and non-partisan means is being made because BHA is non-partisan regarding candidates, but not necessarily so when it comes to issues. We can urge our community to vote, but not for a specific candidate. (This function is limited to the Brickell Neighborhood Political Action Committee [PAC].)

We have some 5,000 registered voters in the BHA community and growing through increasing population and registration. If 4,000 regularly vote, this number can easily swing an election in the City of Miami and even in the County, as well.

You might want to keep this in mind on August 26th, especially if you care where your tax and fee contributions go.

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

President's Column By T. Sinclair (Tory) Jacobs
The Fire Rescue Fee Fiasco - Lessons to be Learned

The Fire Rescue Fee Fiasco reminds me of the movie title "Sex, Lies & Videotapes" 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.

Reprinted from BHA News, Summer 2000
Controversial Fire Rescue Fee Struck Down
This judicial ruling just in on a special assessment in North Lauderdale nearly identical to Miami's "Fire Rescue Fee." The word: illegal.

This has been BHA's belief, and the legal position of the warriors at BHA ally, TTUFF (Tenants and Taxpayers United For Fairness, Inc.), ever since the City enacted the fee in 1998. TTUFF's subsequent class action suit against the City of Miami has been slowly making its way through the legal process, while in the meantime, Brickell residents and all other homeowners in Miami have been paying an annual Fire Rescue Fee, now up to $61 per household.

The mid-June Fourth District Court of Appeal's finding, however, determined that the fee imposed by the City of North Lauderdale was not a valid special assessment.

All the Way To the Top
"The case has been certified for hearing to the Florida Supreme Court as a matter of "great public importance," TTUFF reported, "a major victory for opponents of illegal taxes disguised as special assessments."

The case hasn't yet made it to court in Miami, however, this legal precedent in North Lauderdale has spurred TTUFF to ask the City to discuss how to rectify the situation.

"The City of North Lauderdale's special assessment is identical to the City of Miami's special assessment," TTUFF attorney Eric Lee wrote to City Attorney Charles Mays in late June. "The City of Miami's special assessment includes a provision for emergency medical services. The Fourth District found: 'as a matter of law, the emergency medical services component of the integrated fire rescue program at issue in this case did not provide a special benefit to the assessed properties,'" Lee advised.

Refunds Could Break the Bank
Miami's motion for dismissal will be thrown out, Lee asserts, and with the seeking of class certification "the implications of this decision on the City of Miami are enormous."

In consideration of not pursuing refunds for the years the tax has been collected, TTUFF would like to see the City agree to put a Charter change on the ballot that would mean all future special taxes are possible only if they gain voter approval at the polls. The City has not yet responded to this notion.

Assessments like the Fire Rescue Fee have become means for governments to increase revenues without exceeding constitutionally mandated property tax caps. As stated the TTUFF Web site by its president, Peter J. Clancy:

"A new and pervasive form of taxation without representation has arisen in Florida. Under the guise of special assessments and user fees, local governments have found a remarkable new tool to circumvent constitutional millage caps ... and they are using it!"

TTUFF expects the City of Miami's Motion To Dismiss and Summary Judgement to be denied in early August. After that, City of Miami depositions will begin at which City officials will be questioned on their knowledge of facts and circumstances leading to adoption of fire fee special assessment.

While questioning its constitutionality from the beginning, readers may recall that BHA initially battled the inequity of the Fire Rescue fee, assessed differently for single-family and condo homeowners. Eventually, BHA prevailed to win a more equitable levy, however, BHA directors never gave up the battle over the legality of the fee, seeing it simply as "an end-run around the ad valorem tax."

Many agree with TTUFF's synopsis of the fee: "The fire rescue special assessment is no more than a convenient means of generating new revenue for the City's general fund. Of the $11 million raised in the current fiscal year, only $4.2 million went directly to the Miami Fire Rescue Department for equipment purchases. The remainder went into a general fund used to run City government."

Reprinted from BHA News, Fall 1998
Condos Exempted from Supplemental Waste Fee
Success! Condominium owners were exempted from the City of Miami's "Supplemental Waste Fee," the City's newest revenue-generating measure intended for commercial businesses.

After months of discussions with Commissioners, the City Manager and the City's legal department, the BHA was successful in convincing City Commissioners that residential condominium buildings should not be included.

The Commission originally passed the ordinance last spring for "commercial establishments," payable May 31st. According to the wording of the ordinance, condominium associations were considered commercial establishments, and the City mailed invoices for the fee of about five dollars per unit to about half the membership of the BHA.

While five dollars does not sound like a lot of money, for some of the larger BHA member associations, it represented an unplanned, unbudgeted line item of several thousand dollars. The total cost to Brickell Condos alone would have been about $25,000 each year.

Just when the Brickell Homeowners Association seemed to be making headway with the notion that City residentswhether living in condos or single-family dwellingsshould be treated equally since they contribute to the tax base at the same rate, the Miami City Commission likened condo associations to commercial enterprises. The result is that condo associations throughout the City of Miami are finding themselves included in the latest revenue-generating fee enacted by the commission: the "Supplemental Waste Fee."

The Commission passed the ordinance March 31 assessing a supplemental waste fee on "commercial establishments," payable May 31st. According to the wording of the ordinance, condominium associations are considered commercial establishments, and the City mailed invoices for the fee of $5 per unit to about half the membership of the BHA.

Upon learning that the City was characterizing condominium associations as commercial establishments, the BHA protested vigorously, including an appearance before the Commission in late May. Finally the BHA prevailed upon Commissioner Plummer to introduce an ordinance correcting the misnomer which was passed four to one on first reading by the Commission in late July. The second reading is scheduled for September 8, the next regularly scheduled Commission meeting. If it passes on second reading, it becomes effective in 30 days and refunds of fees paid would be expected.

The big unknown at this time is action by the Governor's Financial Oversight Board. With news nearly every day of how the Oversight Board is getting tougher and impatient with the City, the pressure increases on Commissioners looking for new revenue every place possible.

If the Board does not interfere, BHA leaders hope that reason will prevail and the City will give final approval to recognizing that condominiums associations are not commercial enterprises.

The Miami Herald is calling for commissioners "Face Up to Reality" and "Do What It Takes" in its editorials, including raising garbage-collection fees to reflect actual costs and curb expenses.

In Tony Doris's "Good Morning" column in the Miami Daily Business Review on August 10th, Mr. Doris suggested that "Maybe the little people out there can help the clueless officials come up with some cost-cutting ideas." He credited BHA ally, TTUFF (Tenants and Taxpayers United For Fairness), along with the Brickell Homeowners Association"Brickell condo commandos that have always been a tough crowd"with a list of suggestions for fixing the City's budget woes. Mr. Doris does not necessarily endorse these ideas, but said he did endorse the idea of "putting such suggestions in the public domain and obligating people in positions of authority to respond."

Reprinted from BHA News, Summer 1998
President's Column By T. Sinclair (Tory) Jacobs: Do we know who we are? Does the City of Miami know who we are? What difference does it really make?

The recently enacted Supplemental Waste Fee assessed against commercial establishments erroneously included condominium associations. When we brought this mistake to the attention of Commissioner Plummer, J.L. sponsored a remedial ordinance which passed on first reading four to one. However, its passage at the second reading scheduled for September 8th is at risk because of potential intervention by the Governor's Financial Oversight Board.

Currently, the dollars involved amount to some $5.00 per condominium unit annually. Far more critical than the immediate financial burden is recognition of the condominium community as part of the City's residential tax (and fee) base, rather than part of the City's commercial tax base.

Residents are empowered primarily by their right to vote. Commercial establishments are empowered not so much by owners' voting rights as by their contributions to candidates' election campaigns and employment of lobbyists. Commercial establishments have the opportunity to pass increased in taxes and fees on to customers. Residents do not have this pass-along opportunity.

We know condominiums and condominium associations are part of Miami's residential tax base. We must be sure the City recognizes this verity.

The City Commission on July 21st passed an ordinance exempting residential condominiums and residential condominium associations from the assessment of supplemental waste fees.

The following morning at the Financial Oversight Board meeting, there was a comment to the effect that this action represented another example of the Commission not being firm in its revenue generation commitments and succumbing to voter pressure.

Actually, this is not the case at all. The Commission was correcting an inadvertent mistake in a previous ordinance that levied this assessment on COMMERCIAL establishments and, obviously, condominiums and condominium associations are not "commercial establishments."

Single-family residential entities whether juxtaposed horizontally or vertically must be treated equally with regard to taxes and assessments. Residential condominiums are a significant segment of the City's residential ad valorem tax base and are subject to the homestead exemption which is, of course, not available to residents in commercial, multifamily properties.

It should be noted that residential condominiums currently benefit from the City's public right-of-way cleaning services to no greater extent than do residents of single-family, unattached housing.

It is arbitrary and fallacious to characterize residential condominiums and condominium associations as commercial. These entities are not operated for profit and thus, by definition, are not commercial establishments.

We respectfully request that the Board take no action that would impede the City Commission's passage of this corrective ordinance at the scheduled second reading on September 8th. This is a matter of fairness and conformity with Noah Webster, far more than it is one of revenue.

Reprinted from BHA News, Summer 1998
Column: Would You Knowingly Overpay Your Income Taxes? Why Overpay Property Taxes? 12 Points For Condo Owners. By Sheila Anderson

Taking income tax reductions is as American as apple pie. Taxpayers have the right to pay the lowest taxes permitted by law. In fact, most people recognize their net worth is protected by the tax deduction process.

Similar principles of taxpayer protections apply to property. Every state has a system whereby owners and their agents can make sure allowable deductions are considered and applied to their ad valorem tax assessment. Florida's system is available to every owner annually. The following points represent what Florida condominium owners should know.

THIS CRITICAL "TRIM" DOCUMENT IS LEGAL NOTICE GIVING OWNERS AND THEIR AGENTS 25 CALENDAR DAYS TO FILE A PETITION FOR A VALUE ADJUSTMENT BOARD (VAB) HEARING.

At the end of the 25-day period, the filing period ends for the calendar year, and the corresponding right to request a hearing expires.

Florida condominium associations and individual owners have the constitutional right and annual opportunity to apply for Hearings on ad valorem property taxes. Failing to do so means a risk of overpaying property taxes and reducing net profit on future sale. Current or future sales based on market values are not affected or influenced by the use of the VAB process, but owners' present and future returns on investment are.

Sheila M. Anderson is President of Commercial Property Services, Inc., a licensed real estate brokerage corporation which serves as a property tax agent for institutional, corporate, and individual property owners throughout Florida. Mrs. Anderson has testified before the Governor's Ad Valorem Task Force and Florida Representative Bob Stark's Tax and Finance Committee Workshop. Presently, she serves on the Department of Revenue's Real Property Guidelines Workgroup.

The opinions contained herein are those of the author and do not necessarily reflect viewpoints held by the BHA. Readers are invited to send in their comments related to the neighborhood or condominium living that may be of interest to Brickell residents.

For some, the battle of the Fire Rescue Fee is settled. The final amount of the fee seems much more palatable than the proposed $160 a year a mere $24 for condominium and single-family owners.

The tax is also being imposed more equitably than originally proposed condo, apartment and single-family owners will all pay, rather than just condo and apartment owners.

Further, the fee is being used for capital improvements of the fire rescue service (new trucks and renovated stations), and will end in five years, Commissioner JL Plummer said, which some find reassuring and reasonable.

But for many, the battle of the Fire Rescue Fee is far from over. The legal challenges have begun by a number of parties who contend the fee is an additional tax, "an end run around ad valorem taxes," illegal and unconstitutional. Any amount, even one penny, levied in this way is unacceptable, opponents contend.

The Coalition of Real Estate Owners and Organizations, CREOO, and Taxpayers and Tenants United For Fairness, TTUFF, have filed suit and vowed to fight all the way to the Florida Supreme Court. It may become a class action suit.

The Brickell Homeowners Association worked with these groups to help defeat the tax back in late February. When the City Commissioners reinstated a reduced fee in April, the coalition came together again.

The implications of this Fire Rescue Fee "affects anyone in the city and in the state," Judy Clark, a TTUFF leader said.

When the Florida Legislature passed the bill in 1996 allowing "special assessments" the floodgate was opened. "Any municipality or county can charge anybody anything and can use it for any purpose," Ms. Clark said. "Any fee, any time, no cap, no limit."

Indeed, that does seem to be the way the language of the law reads. (See side-bar below.)

Opponents of the fee say that some of the reassurances residents have been told are not actually the case: The $24 per year amount could actually go up to $48 per year. The Commission did not specify in the language of the ordinance that the collected revenues would only go for capital improvements, Ms. Clark said. Plus, the five-year sunset can be lifted anytime with a vote by the Commission, she said.

Clearly it is Commissioner Plummer's intent that the new revenue be used for new rescue vehicles and that it is "guaranteed for five years only."

Ten new rescue trucks have been ordered and another 10 will be ordered, Commissioner Plummer reported to BHA Directors May 20th. Those trucks respond to 70,000 calls a year. They need to be upgraded and kept current to keep the excellent service they provide, the Commissioner said.

Homeowners should pay the fees while the case makes its way through the legal system, Sheila M. Anderson, a CREOO leader, advised. The legal victory may be a number of years down the road and refunds would be made then. If the fee isn't paid, an owner could have a lien filed against his or her property, she explained, which no one wants.

Residents interested in joining the suit are invited to call Ms. Anderson at (305) 579-0022.

Title XII. Municipalities Chapter 170. Supplemental And Alternative Method of Making Local Municipal Improvements

(1) In addition to other lawful authority to levy and collect special assessments, the governing body of a municipality may levy and collect special assessments to fund capital improvements and municipal services, including but not limited to, fire protection, emergency medical services, garbage disposal, sewer improvement, street improvement, and parking facilities. The governing body of a municipality may apportion costs of such special assessments based on:

(b) An alternative methodology, so long as the amount of the assessment for each parcel of land is not in excess of the proportional benefits as compared to other assessments on other parcels of land.

(2) Property owned or occupied by a religious institution and used as a place of worship or education or by a public or private elementary, middle, or high school shall be exempt from any special assessment levied by a municipality to fund emergency medical services if the municipality so desires. As used in the subsection, "religious institution" means any church, synagogue, or other established physical place for worship at which nonprofit religious services and activities are regularly conducted and carried on.

Courtesy of Atlas, Pearlman, Trop, Borkman, et al

To the dismay of many residents, two other revenue measures passed by the City of Miami Commissioners will be financed by Brickell homeowners, along with other condominiums and businesses throughout the City.

The City's new "Supplemental Waste Fee on Commercial CU's" will help finance the cost of picking up illegally dumped garbage throughout the City, a 65,000-ton annual problem. The new fee is based on Certificates of Use. For a BHA condo association, this amounts to $144 per year plus $5 per unit. For large condominium associations such as Brickell Place I with 552 units, that's an unanticipated $3,000 check owners will need to write to the City.

At first, some BHA residents thought this fee surely must not apply to them, never having encountered illegally dumped garbage on their condo property. But that's not what it's for. The fee is for garbage dumped anywhere in the City of Miami, regardless of who is the victim.

The Brickell Homeowners Association voiced its opposition at the May 26th City Commission meeting and asked whether it is legal to assess condominiums a tax designed for commercial businesses. Mayor Carollo instructed the City Attorney to research it.

In another measure, the City increased the excise tax they charge commercial waste haulers from 15% to 20%, a 33% increase. The private haulers will undoubtedly make up this loss in fees by increasing the rates they charge their condo association customers.

The reaction of one resident expressed the sentiment of many over the new Fire Rescue Fee, the new fee to cover illegally dumped garbage and the increase in excise tax to private haulers serving condos: "We're getting screwed in three ways by the City and without even a single kiss."

The Brickell Homeowners Association is made up of 21 condominium associations ranging in size from four units to 552 units. The residences are located on Brickell Key and from 15th to 25th Roads on both sides of Brickell Avenue.

The City of Miami Finance Department records for 1994 show that BHA members represent 5.1% of the residential units in the City, and pay 9.3% of all residential property taxes collected by the City.

These numbers understate the neighborhood's contribution to the City tax rolls because our membership includes only condominium residences. The rental apartments and single-family home in the area also contribute tax income to the City.

New condominium properties under construction in the Brickell enclave, including Tequesta Point, St. Louis and Santa Maria, all of which are committed to BHA membership, will soon add materially to the City's property tax revenues.

Miami is a big city, spread out over many square miles. It is easy to overlook the fact that more than one of every 20 Miami residences are located in one small area, Brickell; and that more than $1 of every $11 in residential property tax revenues emanates from this few-block neighborhood.

We would anticipate that City officials be mindful of Brickell's share of the City's revenues when considering our requests for City services. However, when "push comes to shove" letters, faxes, telephone calls and, most effective, mass presence in the City Commission gallery are the motivators toward favorable action.