BEACON PHOTO/AL EVERSON
Drinking less or paying more? —The City of Deltona may soon get its first increases in water and sewer rates in 13 years. The City Commission rejected a proposed rate hike earlier this month, but supporters of the higher charges say they are needed to keep pace with rising operating costs and to make certain Deltona can pay the bonded debt it incurred to buy the utilities in 2003 and to improve the systems.
By Al Everson
posted Nov 1, 2008 - 9:09:04am
An increase in Deltona's water rates has only been delayed, not denied, City Manager Faith Miller said.
Miller said the City Commission will take up the 17-percent rate hike again Nov. 3, after turning it down 4-3 Oct. 20.
Deltona's water rates have not changed since 1995.
A consultant hired by the City Commission recommended a series of annual rate hikes through 2013, and said each increase should be 17 percent.
But the City Commission asked the staff to submit some alternatives to the planned double-digit increase.
"There's not too much we can do, alternatively," Miller said.
She said Deltona must raise its water and sewer rates to avoid a deficit in the utility budget, which is not supported by property taxes.
"It's jeopardizing our bond rating," Miller said. "We're not going to miss a bond payment."
Deltona owes about $4.5 million per year on debt the city incurred when it bought the water and sewer systems in 2003. The city sold about $81.7 million in bonds to buy the utilities, and the debt includes borrowing for capital improvements, including a planned sewage-treatment facility, new water-storage tanks, and utility relocations.
The bonds are to be repaid over 30 years; the current payoff is just under $79 million.
The situation is not yet desperate, Miller said, but the costs of running the systems have gone up sharply over the past several years, and they are continuing to rise.
The city, she said, has had to pay considerably more for four particular items: chemicals, sludge removal, electricity and fuel.
"The costs of these four items have increased $841,000 a year since 2005," Miller said. "That's not employees or insurance costs."
Burton and Associates, the St. Augustine consulting firm that conducted the rate study for Deltona, warned the utilities will begin operating at a loss during the 2008-09 fiscal year, unless more revenue is forthcoming.
The deficit may be as much as $1.75 million, the firm concluded, adding the utilities' fund balances — cash reserves set aside for unforeseen expenses — will be gone in about two years.
The proposed rate changes mean an average "water-only" customer's monthly bill will rise from $19.27 to $22.59. About 29,000 homes and businesses are "water-only" customers. These customers use septic tanks to dispose of sewage. An average bill is based on a usage of 10,000 gallons of water.
The average sewer customer — who is also a water customer using 10,000 gallons — would see his or her monthly bill increase from $85.61 to $100.38.
These figures would apply to customers inside the city limits, while customers of Deltona's water or sewer systems outside the city limits would pay higher charges.
The City Commission meets at 6:30 p.m. Monday, Nov. 3, at the Deltona Community Center, 980 Lakeshore Drive.
The meeting was moved from City Hall because the commission chamber is a polling place for the general election.
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Tax and spend.
Tax and spend.
Come on residents - empty your wallets. Give the city more!
Give the city more!
Give the city more!
Give the city more!
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