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BELLEAIR - Saying that it was time for the town’s water system to start paying for itself, Belleair’s Finance Director J.P. Murphy unveiled a proposed revamped rate structure at the town’s regular meeting on July 2.
The town pays for its water through what is known as an enterprise fund and that, said Murphy, is why it has to start breaking even.
“An enterprise fund is one that has to pay for itself,” he said. “So if there is a deficit then rates must go up to bring in the revenue to pay for that deficit.”
Murphy also explained that there has been a significant deficit in the water fund for several years.
“Over the past five years there has been an average deficit of just over $330,000,” he said. “It dates back to when the Biltmore closed and we lost the revenue that facility provided to the water fund.”
Under the proposed new structure households in Belleair will pay a base rate of $12.37 a month, compared with $10.02 right now. That rate covers basic expenses such as personnel and equipment, water costs are then added onto that.
So, for an average household that uses 4,000 gallons of water a month, the monthly bill will be $19.81, compared to $10.02. The more water that is used the more the bill. A household that does a lot of irrigating and uses 8,000 gallons of water a month would pay $44.65, compared with $22.18 right now. A household that uses 25,000 gallons of water a month would pay just over $150 a month, compared with $84.96 right now.
Murphy told the commission that up until now Belleair has the cheapest water rates in Pinellas County, in fact the second cheapest in Tampa Bay, second only to Tampa which sells a vast quantity of water.
“Under the proposed rate structure we will be more in line with what other cities charge,” he said. “We’ll still be below average on the higher end.”
Mayor Gary Katica, in commenting on the loss of water income when the Biltmore closed, said the closing had a much larger impact than that.
“Right now they are only paying $45,000 in property taxes and they should be paying $500,000 if they were operating,” he said. “We’ve probably lost $4 million in revenue in total since they closed.”
The new rate structure, if eventually adopted, would eliminate the annual deficit and bring in a surplus of $16,000. Murphy also noted that billing would be monthly, thus eliminating what he called “rate shock” every time there was an increase.
The new structure would be reviewed every two years and adjusted so revenue can cover the expenses.
The Commissioners gave Murphy the green light to go ahead and plan the necessary public meetings to discuss the new structure, which, if approved, would go into effect in the fall.