Water bills in Hialeah are sky high. But city leaders might suspend at least one fee
Water and sewer services in Hialeah have long been a contentious issue, with residents frequently complaining about their bills and politicians promising improved customer service and relief programs aimed at reducing costs.
Now, Mayor Esteban “Steve” Bovo is proposing suspending the city’s “franchise fee,” which contributes to making the services among the most expensive in Miami-Dade County. The suspension would be for customers with an average or below average bimonthly consumption rate of 5,250 gallons.
Hialeah imposes a franchise fee on the utility for using municipal rights of way. The fee, calculated as a percentage of a property owner’s bill for bimonthly water usage, was set at 10% when it was introduced in 2014 under Mayor Carlos Hernández. Since 2019, the fee has been gradually decreasing and currently stands at 4%.
City officials told el Nuevo Herald that Miami-Dade County has passed on a 13.6% increase in water rates and a 3.3% decrease in sewer rates to Hialeah, resulting in an overall 10% increase for residents next fiscal year. The city’s franchise fee suspension is meant to reduce the burden on residents and businesses, though even with the suspension, some customers will see a 6% increase in their bills.
“We are trying to mitigate the price of water,” the mayor’s office said.
Properties with higher than average bimonthly consumption, whether residential or business, will not qualify for the franchise fee suspension. The city has not specified how many of the 58,700 accounts managed by the Public Works Department will receive relief.
At Tuesday’s council meeting, Bovo acknowledged that some residents and developers had expressed concerns about water pricing. Frank De La Paz, a longtime lobbyist for small developers in the city, highlighted difficulties in meeting with employees from the Public Works Department, which oversees the city’s water and sewer services. He specifically mentioned challenges related to obtaining the sewer capacity certification letter required by the county for property development.
The council unanimously approved the ordinance suspending the franchise fee in an initial vote Tuesday, with all five members present —Jesus Tundidor, Monica Perez, Melinda De La Vega, Carl Zogby and Luis Rodriguez — voting in favor. Council members Bryan Calvo and Jacqueline Garcia-Roves were absent.
The second and final vote on the ordinance is scheduled for Aug. 27.
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Bovo told council members that the budget has a healthy reserve and that the city should be able to manage a suspension of the franchise fee revenue, which would help subsidize the average consumption costs for customers.
“We saw it fit to be able to suspend the franchise fee for this year,” he said.
Residents of Hialeah receive their sewer services from the county and get half of their water from Miami-Dade County. The other half comes from a reverse osmosis plant that is jointly owned by the city and the county.
The administrative decision follows an ultimatum issued by Miami-Dade County in a letter to Hialeah on July 22, demanding payment of $18 million for past services. Hialeah requested an extension until Sept. 30, which the county granted, according to a letter from County Mayor Daniella Levine Cava that was obtained by el Nuevo Herald.
On that matter, Bovo told el Nuevo Herald on Tuesday night that he was not going to write a check for $18 million if he is not clear on how much Hialeah really owes to the county, saying there’s some dispute about how much water was used.
“If we owe $18 million, if they prove [it] to me without discussion, we will pay,” Bovo said. “But I think there should be a conversation a little bit broader too, because this issue ... bothers me and I think there should be some kind of resolution.”
READ MORE: Hialeah faces $18 million water debt as Miami-Dade issues an ultimatum
Impact on the city’s finances
A 2020 study on water and sewer public service rates in Hialeah, commissioned by the local government and conducted by Milian, Swain & Associates Inc., found that franchise fees have significantly affected residents’ bills since their adoption in the fiscal year 2014. Over the past seven years, those fees have contributed to approximately 17% of the increases in water and sewer prices. In 2021, when the study noted an average consumption of 4,500 gallons, the fees amounted to about $4.50 per month and $55 per year, which represented roughly 8% of the average customer’s bill.
Nearly a year ago, in September 2023, Ruth Rubi, Hialeah’s executive director of finance management, emphasized the critical role of the franchise fee in sustaining the city’s general budget. That warning came after longtime resident and former mayoral candidate Juan Santana advocated for the fee’s elimination — a proposal the administration rejected at the time.
Rubi explained last year that reducing the franchise fee would likely force cuts to capital projects and essential services. The 4% fee on water and sewer bills currently contributes $3.8 million to the city’s budget.
Bovo also expressed concerns about the potential fallout, stating at the time, “The council needs to understand which projects will be affected, including ongoing water and sewer improvements, and how delays in these projects could impact the city.”
Since Bovo took over the leadership of the city in November 2021, Hialeah has been evaluating its options, including briefly considering handing over the department’s responsibilities to the county. This option was later discarded because “the pensions of the department’s employees would still rely on the city, and there was no guarantee that it would alleviate the problems.”
The most recent step taken by the city to mitigate the impact on residents was the creation of a Public Services Relief Program one year ago. Although the city had budgeted up to $250,000 for the assistance, only $4,711.50 was allocated in grants, according to public records provided to el Nuevo Herald.
A total of 117 families qualified for the program. Public records from the Finance Department show that, on average, each resident benefiting from the program received a one-time credit of $40 on their service bill.
At the time, Hialeah faced a $19 million fiscal deficit, and this year, the city plans to draw approximately $12 million from its reserves — partly to cover the more than $3.8 million that would be lost if the franchise fee is suspended.
As the city’s finance director prepares the new budget, estimated at around $450 million for the next fiscal year, the debate over water and sewer bills may become a central issue in the upcoming 2025 election. The next election will feature races for the mayoral seat and four council members.
