Who Should Pay for Water Hookups? Ross Says 3-2 Vote Means Residents Pay

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.

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Mark Tomes
Noble Member
Mark Tomes(@mtomes)
1 month ago

What can be said that has not been said many times before? Giveaways to developers like these reduced fees always result in higher taxes and fees for property owners and other taxpayers. You get who you vote for. Republican voters are almost always voting against their own interests, merely because they feel duty-bound to vote for their party’s candidate rather than the candidate who will really represent them.

Noble Member
1 month ago
Reply to  Mark Tomes

Since my comments are going to be censured by the editor … second time this has happened … I’m exiting this platform. They happily let Mark Tomes spew his garbage … no one is allowed to respond to it. And I’m taking careful note of who advertises on here … businesses to be avoided.

Noble Member
1 month ago

Seems like yet another bad decision by this commission. They have been consistent in supporting developers, decreasing revenues, and increasing expenditures.

Betsie Huben
Noble Member
Betsie Huben(@betsie-huben)
1 month ago

And then the “orange, kiwi and pineapple” were joined by three bananas who voted to increase the gap between what it costs to operate city utilities. That is fiscal mismanagement and we will pay for it. =-(

Douglas M
Noble Member
Douglas M(@douglasm)
1 month ago
Reply to  Betsie Huben

That was funny!!!! Well done! My first laugh of the day.

I was wondering why the apple wasn’t used…….never heard of the Kiwi and pineapple comparison.

Alan Hopkins
Noble Member
Alan Hopkins(@dawaves)
1 month ago

Take this for what it is worth

The cost for a new hook up is born by the developer initially and then by the buyer ultimately. The ongoing cost of the service is then born by the property owner. If the cost to service the debt and maintain the system is not being meet by those using and paying for the service then the cost needs to go up. Otherwise those not benefiting from the service are subsidizing it’s usage. Conversing if there is a surplus of money being collected above these considerations then the users are subsidizing other expenses. This real isn’t hard but until someone produces the economic cost benefit analysis of the hook up fees and recurring revenue versus the maintenance replacement and debt service cost it’s hard to know which is correct.

As is often the case the information was not provided so that we the taxpayers could make a rational decision.

Not holding my breath.

Faith Ross
Active Member
Faith Ross(@faith-ross)
1 month ago
Reply to  Alan Hopkins

Alan, I think the business and hotel community of Fernandina will turn blue (holding breath with shock) when they get slammed with the future costs of NOT paying off the utility debt of the City’s aged/antiquated system and the high cost of funding the future replacement that needs to happen now. They won’t be laughing about pinapples or kiwis. Want to hear some people screaming at you for not planning ahead? Yep! Not smart under any study anyone wants to make up. Will certainly give Mayor Bean all the credit for the high costs being passed on to the island businesses and residents.

Paula M
Noble Member
Paula M(@paula-m)
1 month ago

Looks to me like the Commission defied the advice of SEVERAL experts to decide this which is obviously skewed to developers favor. Why bother to hire experts for advice if it’s going to be ignored because it doesn’t suit certain people’s agendas?

1 month ago
Reply to  Paula M

In the end, the fees are actually paid by the home purchaser, not the developer, who simply raises prices to cover this expense. Local private property owners who decide to build, not developers, do benefit–so the decision is indeed “skewed” in favor of local residents.

1 month ago

The FRWA methodology–full system replacement–does not properly reflect the status of our utility infrastructure. Perhaps those criticizing should take the time to read the study, and then reach a judgement–words are cheap, facts are real.

1 month ago

The Three Stooges strike again!