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Agenda set for IRB utility rate hikes
By HARLAN WEIKLE
| Article published on Wednesday, July 9, 2008 |
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INDIAN ROCKS BEACH – Rate increases are always painful, but then so is going deeper into the red. Those were the two options delivered to Indian Rocks Beach officials Tuesday by the consulting firm, Burton and Associates of St. Augustine.
Andrew Burnham, vice president of Burton delivered his report on the study, which recommended significant and immediate hikes to sewer and solid waste rates designed to relieve the growing shortfall in those enterprise funds’ assets.
Enterprise funds, designed to support themselves as businesses, are required legally to maintain adequate balances in reserve for three months of operation. To do that, funds over the past six years, according to city records, have been transferred out of general funds from taxes. A recent outside audit revealed the ongoing procedure and recommended the rate study in order to assess what level of rate increases would remedy the situation, restoring the fund balances in the shortest time and with the least amount of pain.
Using comparative rate figures from neighboring Pinellas municipalities, which place IRB about mid-point in the rate structure, Burnham recommended a 60 percent increase for solid waste rates from $18.26 to $29.22. Belleair currently pays $28.94 per household while Oldsmar’s rate is $12.70. Subsequently there would be no further rate hikes in the next four years 2010 - 2013. “Beyond that, the variables were too many to be able to accurately estimate rates out to 10 years,” Burnham said.
The initial 60 percent increase, according to Burnham, is needed to immediately restore the fund reserve, a one-time event that thereafter would not need to be repeated, hence the lack of increases for the next four years.
Much was similar regarding the sanitary sewer rate recommendations. That sewer fund, which Burnham noted has experienced shortfalls in all but one of the past seven years, received transfers from the general fund on just two instances since 2005: one for the sum of $61,000, another for $470,000. The previous years the sewer fund had sufficient reserves to cover the imbalance between revenue and expenditures without tapping into the general fund.
However, in order to remedy the perceived trend Burnham offered two options: an immediate 80 percent increase for 2009 from $23.72 to $42.72 followed by no increases for four years; or a 2009 increase to $37.95 followed by a 10 percent increase in 2010 and 2.5 percent increases each year 2011-2013.
IRB currently remains low on the rate comparison listing for sanitary sewer at second from the bottom; the increase would immediately move the city near the top in a range from $23 to $45 per household monthly billing.
In a phone conversation Wednesday morning with interim City Manager Danny Taylor, Mayor R.B. Johnson and City Finance Director Marty Schless, Taylor confirmed that the proposed rate increases generated by the study, which cost $25,000, will be considered during the present budget process.
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Article published on Wednesday, July 9, 2008
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