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Water and sewer rate hikes may be coming
By SUZETTE PORTER
| Article published on Monday, June 15, 2009 |
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CLEARWATER - Come Oct. 1, customers of Pinellas County Utilities will be paying more for water and sewer services, if proposed rate hikes are approved by the Board of Pinellas County Commissioners.
Tom Crandall, utilities director, told the board during a June 9 work session that a variety of reasons necessitated rate hikes for potable water, reclaimed water and sewer services.
Proposed increases are $2 per 6,000 gallons of potable water for residential customers and 23 cents for wholesale customers. Proposed increase for sewer would mean an added five percent or $1.60 for residential customers and 14 cents for wholesale. Reclaimed water bills could go up as much as a $1 a month over the next few years.
Crandall told the board that water use was down which means less revenue for utilities.
“This (reduced water use) has been the pattern for many years and it doesn’t look like its short term,” he said. “We’re at historical low levels.”
He said the reduction in water use was due to a combination of factors: good conservation practices, the record drought and the economy.
He said at the same time revenue was down, operational costs were going up, in part due to increases in costs from Tampa Bay Water.
Utilities has managed to keep rates stable for many years, Crandall said, but current conditions make it necessary to raise rates.
Andy Burnham, senior vice president and project manager for Burton and Associates, said results of a revenue sufficient analysis showed that without rate adjustments, utilities would sustain a $5 million loss in the year 2010.
“And the need for adjustment gets worse in 2011,” he said. “But for now we’re focusing on the needs for 2010.”
Crandall said another concern was some municipalities, including Clearwater and Tarpon Springs, which currently purchase water from the county, are looking to increase their own supplies.
Utilities is cutting its water and sewer workforce and taking a number of other cost-cutting measures, but a huge chunk of the budget is the fixed cost of payment to Tampa Bay Water, Crandall said.
Utilities also proposes to implement a drought rate surcharge and a tiered billing system, perhaps as early as mid-year 2010. The tiered billing method would most impact households who use large volumes of water.
Crandall said after rate hikes for the year 2010 were approved, Utilities would bring back another proposal for the new rate structure to discuss and incorporate by sometime in the spring of 2010. He said the proposal would not include additional rate changes. The new proposal would deal only with how the rates are billed.
Commissioner Karen Seel questioned the reason behind what she called a “double whammy” by raising rates then going for the tier grades after.
Burnham said the rate increases needed to be done for the fiscal year 2010 due to utilities need for additional revenue to pay for costs. He said the mid-year change to tiered billing would be rate-neutral adjustment and by waiting to implement it would give more time to make it clear to customers what was happening.
A long discussion was heard about reclaimed water which was described as a money loser. Burnham said the county would need to charge $50 to $60 a month to recover the cost of the reclaimed water program.
“But that would not give people the incentive to use it,” he said.
And, despite the costs, use of reclaimed water is a good, due to it providing an alternative water supply, especially during periods of drought, and providing a way to discharge treated sewer water, he said.
Commissioner Susan Latvala, who sits on the board of Tampa Bay Water, said the use of reclaimed water has an even greater benefit in that it reduces the cost to Tampa Bay Water.
“For every million gallons of water that Tampa Bay Water doesn’t have to produce, it saves $10 million in cost,” she said. “It keeps costs down and saves the customer money.”
County Administrator Bob LaSala also pointed out the importance of the reclaimed water system due to the 0 discharge permit in the northern county.
“We live in an area surrounded by outstanding Florida water,” he said. “We have to get rid of the water without discharge into the bays and lakes, which is an issue in the rainy season. We need to be creative with disposing of that water. Reclaimed water use takes care of it.”
Commissioners again brought up the possibility of metering reclaimed water use.
Southwest Florida Water Management District has encouraged us to do that, Crandall said. But it’s a fairly expensive to do.
Commissioners anticipate that a public hearing on proposed utilities rate increases will be scheduled in September.
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Article published on Monday, June 15, 2009
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