Reality Check Letter to BB&T on Possible City Loan for $2.68 Million

From: Lisa Shifflett
Sent: Thursday, November 11, 2010 6:27 PM
To: 'mlindsay@bbandt.com'; 'mcsmith@bbandt.com'
Subject: Additional information on Polk City
Importance: High

Earlier, I sent you some information about Polk City in a email concerning BB&T possibly issuing a loan to the City of Polk City in the near future. I came across additional information this afternoon that directly affects Polk City as well, while reviewing the Polk County Board of Commissioner’s Meeting Agenda scheduled for next Tuesday, November 16th. Agenda item number #18 specifically, can have substantial impact on the City of Polk City’s ability to repay this possible loan to the point that the resulting outcome of these decisions and future litigations may directly impact the future existence of the city.

If the county is successful in taking back the Mt. Olive Utility System from Polk City, this will result in Polk City loosing approximately half of its current utility customers, many of which are both water and sewer customers who pay substantially higher percentages of the total gross revenue the city receives through utility fees. Currently, Utility Service Fees are the primary source of income for the city. According to the 2010-2011 budget, projected fees for services of water and sewer utilities make up $1,905,000 of the total $3,807,243 projected revenues, equaling 50% of the total projected revenue for the city.

Another issue that is also being discussed at this county meeting is the legality of the water and sewer access fees being charged by the city. These are also referred to as WAC & SAC fees. These are fees the city is charging property owners to have water or sewer lines running past the property without any kind of hook up or meters. The city is disguising these fees under the name of “Privilege Fees” instead of Access Charges in their budget documents. In the 2010-2011 City budget $169,450 of SAC fees and $91,753 of WAC fees are projected. This totals $261,203 of projected revenue, just under 7% of the total revenue for the year, which may very well be found to be unlawfully assessed the property owners. In last year’s ‘09-‘10 budget the SAC fees alone were projected to generate $169,450 for the city. Instead the amended budget which is due to be approved in a special city meeting on November 15th, shows the actual funds received on this line item was only $26,090, due to property owners refusing to pay this very likely illegal charge. The amended budget document does not show the difference in the WAC fees actually received vs. projected, but it would be fair to assume a similar situation in that account as well. Here is a link to this document due to be discussed at the meeting on the 15th: http://fl-polkcity.civicplus.com/archives/52/Ordinance%201270.pdf

Another issue that will be discussed is the back impact fees that the city still owes the county from 2006 & 2007. The county is requesting payment in full of the $531,000 due. The County will discuss how they plan to proceed to force Polk City to pay these monies the city collected from developers then misappropriated by transferring the money into the city’s General Fund. The money was then spent without a trace. The county had presented a deadline of October 22nd, 2010, for the city to repay these fees in full. Instead the Acting City Manager/Vice Mayor attempted to present a check to the county for the sum of $2,800. Yes, that is a check of less than $3,000 on a debt of more than $500,000. The county refused to accept this check and is now deciding on what the next step will be in the process to get these delinquent funds.

Here is a link to my blog post that has links to all these agenda items for the county meeting and supporting documentation. http://concernedcitizensofpolkcity.blogspot.com/2010/11/next-step-in-mt-olive-utility-system.html

This is just further evidence that the City of Polk City is in NO financial position to be acquiring additional debt. Please deny the City’s request for this loan for $2.68 Million dollars!

Sincerely,

Lisa B. Shifflett