By Mike Lednovich
Mayor Bradley Bean, Vice Mayor David Sturges and Commissioner Darron Ayscue ignored expert advice and voted Tuesday to reduce new user water/wastewater hookup fees by 9%, thus costing the city almost $1 million per year in potential revenue.
Commissioner Chip Ross argued that the $1 million could be used to retire $25 million of Utility Department debt.
The 3-2 City Commission decision was the final vote on the amount the city charges for new residential and commercial buildings to hook up to the city’s utility system. The vote to lower the fee to $3,000 from $3,280 defied the advice of several experts, including the city’s own Utility Director Andre Desilet, to raise the fee to $10,040.
The city previously commissioned a study by the Florida Rural Water Association to determine how much the city should be charging new users. FRWA Consultant Katherine Van Zant in July told city commissioners the city was not charging enough in fees and was unfairly placing the burden of upgrading the system on current users. She recommended raising the fee to $10,040.
Desilet, as he did in September when the commission cast its first vote on the capacity fee issue, said the city needed the additional funds to pay the $25 million utility debt and have funds for future repairs.
In making the argument to raise the fee, Ross presented data that projected nearly $1 million in additional revenue yearly if the capacity fee was raised to the recommended level. His report also showed that a vote to lower the fee also would result in $40,000 less per year in fees than the previous rate of $3,280.
Also as a result of lowering the fee, Ross maintained that current users would have to pay on average $54 more to make up the difference in lost revenue. “The current rate payers are subsidising the capacity for the new rate payers. And the new rate payers are not paying their fair share,” Ross said.
Ross asked Desilet why he supported the increase to $10,040.
“I believe it’s more responsible for the long term health and viability of the utility and it helps to offset the new users of the system and accurately values the capacity that they’re going to be utilizing,” Desilet said.
Ross then asked Desilet if he knew of any experts that were advising the city to lower its rate. “No sir,” he answered.
Sturges argued that the suggested rate hike was based on a FRWA study that used a different methodology than previous capacity fee studies.
“There’s an orange, a kiwi and a pineapple up there (fee schedule comparison) and unfortunately that’s what we’re looking at,” Sturges said in questioning the data behind the rate increase. “If we were looking at oranges to oranges, that number should be higher today, not lower.”
Desilet defended the results of the FRWA study. “I agree with the way FRWA approached it (the study). It was a very collaborative process,” Desilet said. “We wiped the slate clean and started over with new data. I think that what we arrived at is an impartial analysis of our system.”
Mayor Bean asked several questions regarding Ross’ numbers and said he explained his reasoning for lowering the rate at the previous meeting in September. Commissioner Asycue asked no questions and gave no reason for his vote to lower the fee.
Commissioner James Antun joined Ross in opposing lowering the fee.