'Who are you?' Lakeland officials lash out at legislative efforts to regulate utility money
LAKELAND — Lakeland dodged a potential blow to the city's annual budget from Tallahassee, but city officials have been warned to prepare for another battle next year.
Two pieces of legislation, Florida House Bill 1331 and Senate Bill 1380, aimed to limit how much of a municipal utility's revenues could be given to the city to pay for other governmental functions and projects. Neither bill gained enough support for passage.
Instead, the legislators crafted a specific bill aimed at regulating Gainesville Regional Utilities, or GRU, which had been representatives' primary concern. It has not yet been sent to Gov. Ron DeSantis for his signature.
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Commissioner Stephanie Madden voiced her frustration with the proposed legislation's attempt to impose further state oversight on the city and Lakeland Electric at Monday's meeting.
"We don’t try to tell private companies what to do with their dividends. I don’t know why they care what we do with our dividend at Lakeland Electric, especially when it’s at the state Legislature," Madden said.
Lakeland Electric pays an annual "utility dividend" into the city's General Fund, the portion of the city's budget used to pay for public safety, parks and recreation, street lightning and other day-to-day activities. The utility's payment has grown from $29.2 million in 2017 to an anticipated $32.6 million in fiscal year 2023.
"We use our dividend to pay for things like public safety, fire trucks and parks. They want to say, 'That’s just porking your budget, you should cut that.' Really, who are you to tell us that?" Madden said. "Come visit our city, we don’t have beaches. We don’t have the amenities of other places. Our quality of life has been built because we made a decision to have an enterprise fund, to have a municipal electric utility."
David Shepp, Lakeland's lobbyist with The Southern Group, said he feels the issue is likely to come up again next year and possibly for several years.
"Keep it on your radar," he said. "We avoided it this year, but it certainly has not gone away and will not go away."
The House bill's sponsor, Rep. Demi Busatta Cabrera, R-Coral Gables, has a philosophical issue with how municipal utilities who serve customers outside their jurisdiction set rates and use the proceeds, Shepp said.
LE does not charge a different electrical rate, fuel rate or customer service charge based on whether customers live in or outside city limits.
There is a slight difference in taxes. Lakeland Electric customers inside the city limits pay a 10% utility tax. Non-residents pay a 10% surcharge tax in addition to a 10% Public Service Tax levied by Polk County, for a total of 20% tax rate on their electrical bill. Lakeland Electric does not have any direct control over the county's tax rate.
Commissioner Sara Roberts McCarley said she feels Lakeland is unique in how it has assembled its utility commission. It is comprised of the seven elected city commissioners and six appointed customer representatives. Of the six appointees, one spot is designated for a non-city resident who pays for residential service. That seat is filled by Souk Desoyvanh since September 2022.
Another two of the six appointed utility committee positions are filled by residential customers who live inside Lakeland Electric's service area. These individuals can either live in the city limits or may be non-residents, like committee member Jack English.
"We have representation from unincorporated areas," McCarley said. "I'm not sure GRU did that."
This year's drafted legislation is far from the first time Lakeland officials have had to worry about the state imposing additional oversight of how Lakeland chooses to operate Lakeland Electric. In 2019, a legislator proposed a law that would prevent municipal-owned electric utilities from giving money they had collected from customers to a local governmental entity to help finance the cost of its services and daily operations.
Sara-Megan Walsh can be reached at swalsh@theledger.com or 863-802-7545. Follow on Twitter @SaraWalshFl.
This article originally appeared on The Ledger: Lakeland officials lash out at effort to regulate utility dividend
