Utility Chief Asks That New Study Be Used to Set Fees

By Mike Lednovich

City Utilities Director Andre Desilet has sent a letter to city commissioners requesting that they reconsider what the city charges homebuilders to help pay for future improvements to the water and stormwater systems.

Last August, the city commission voted to actually lower the capacity fee charged for new home construction against the advice of a Florida Rural Water Association (FRWA) consultant who told the city they were not collecting enough in fees to pay for future replacement of key components of the systems.

The capacity fee is a one-time charge to new residential and commercial buildings for connections to the water and sewer system. The fees are used to reimburse the Utility Department for the capital costs necessary to provide increased capacity to serve these new customers. Any fee changes must be done by ordinance and approved by the city commission. The capacity fee reduction ordinance is on Tuesday’s city commission agenda for a vote.

Under Option A, the commission lowered the fee from $3,280 to $3,000. The FRWA supported increasing the fee under Option B to $10,040 for each new constructed home. That proposed rate hike was met with vigorous opposition by the Northeast Florida Builders Association.

“I would recommend revisiting this recommendation and either approving option A (a 9% reduction) or option B and phase the increases in over a period of 5 years,” Desilet said in his letter. “We recognize that option B is a substantial increase of over 200%, but phasing in the increase will reduce the initial impact to new development. Allowing the existing fees to remain in place in the presence of more recent analysis and recommendations may open the City up to legal challenge.”

The current fee is based on a 2015 study. The new fees proposed are the result of a recent FRWA study that implemented an entirely new methodology and metrics.

“Beyond the difference in the methods used to calculate the fees between the two most recent studies, the overall cost to replace, and therefore value of the system, has increased dramatically due to the recent material and labor cost increases,” Desilet said in his letter.

The utilities director urged commissioners to address the results of the new study and the fee.

“The recent study and recommendation to increase capacity fees has generated a lot of discussion, as well as a fair amount of confusion and misunderstanding. I have read many articles and comments, and I feel the need to provide a response. Although the Commission declined to raise the capacity fees as proposed, I do believe this topic should be revisited,” he said.

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rocknrobin12@gmail.com
Noble Member
[email protected](@rocknrobin12gmail-com)
9 months ago

Again impacts to new home construction. How in the world is sturges allowed to vote on this. He should be recused! And how in the world can a so called attorney let this continue to happen. This is like the 3 or 4 time I’ve seen this go on!

Alan Hopkins
Noble Member
Alan Hopkins(@dawaves)
9 months ago

Mike

Before deciding if there is a need for an increase in the fees here are a few questions.

Where can I get a copy of this study?

What is the breakdown of the cost our utility department has for a new hookup?

What is the average projected revenue stream from a new hookup?

How do our utility rates compared to other similar cities in Florida?

Not necessary to make a decision on whether the fees are appropriate or not but I’d like the answers to these questions as well.

What is the value of our utility department?

What is the projected revenue over the next 5 years of the utility department?

Where do I find an audited financial of the utility department?

Thanks in advance.

Mike Lednovich
Trusted Member
Mike Lednovich(@mike-lednovich)
9 months ago
Reply to  Alan Hopkins

Alan: your best bet is to watch the Fla Rural Water District presentation last August to the City Commission. The consultant presents the findings and what the city needs to do to meet future needs.