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Water, sewer rates adjusted as utility merger looms

In anticipation of the county's eventual takeover of Florida Water Services in Spring Hill, officials alter fees to consumers.

By WILL VAN SANT
Published September 5, 2003

BROOKSVILLE - The proposed merger of Florida Water Services' Spring Hill utility and Hernando County's water and sewer network is edging closer.

Thursday, county commissioners approved changes to Hernando's water and sewer rates for the first time since 1997, ostensibly to keep the utility network fiscally fit and running smooth.

The net effect of the changes, however, is to match fee increases the county plans to charge existing Florida Water Services Spring Hill customers starting April 1. Those increases will be charged if Hernando succeeds in its bid to purchase the company's utility network.

From a management standpoint, creating uniform rates throughout the county is the only sensible course of action, officials say.

"It's an administrative nightmare to try to segregate the costs," said Chuck Lewis, director of Regulatory Franchise and Administration, prior to the board's vote. "There's no reason to do that."

Starting Oct. 1, the 19,000 water customers the county now serves will see their monthly charge drop from $8.50 to $4.85. While customers now get up to 3,000 gallons free for their monthly charge, under the new rates, each 1,000 gallons will cost $1.12.

Customers now pay $1 for each 1,000 gallons used above their free 3,000.

The monthly sewer service charge will increase from $9.15 to $12.33. The county's 16,500 sewer customers will pay $2.64 per 1,000 of water used, an increase of 6 cents.

Officials say roughly 60 percent of customers use 6,000 gallons of water or less each month.

A 6,000-gallon consumer who is on both the county's water and sewer systems, for example, will pay $39.74 a month as opposed to the current $36.13, an increase of 10 percent.

The changes make the county's rate structure identical to the one Florida Water had in place in 1992, before the company reduced customers' bills to make up for overcharges.

The rate structure, which includes increases for heavy use in the dry season, also mirrors the rates consumers in Spring Hill face in April if the county succeeds in its purchase effort.

A 6,000-gallon user, whether served by the county or the Spring Hill system, for example, will pay $39.74 a month if the deal closes.

While acknowledging the administrative merits of having uniform rates across an expanded county utility system, officials also expect increased revenue.

County Utilities Department director Kay Adams said changes in the county's rate structure will bring in an extra $500,000 a year that can pay for system improvements. It will mean that water fee revenues will stop subsidizing sewer service.

One element of the rate increase proposal concerned residents in attendance at Thursday's meeting the most: a plan to allow county utility bureaucrats to raise rates each year based on the Consumer Price Index.

"I know I speak for a lot of people who probably are not here ... ," said Brookridge resident Ronald Weaver, "who would be astonished that the County Commission is even considering this."

Weaver called the proposed annual price index boosts an "arbitrary, unprecedented" burden on residents. Water and sewer rates should never increase, Weaver said, in the absence of an identifiable need and input from those affected.

Lewis, the regulatory director, explained that the price index was approved each year by the Public Service Commission in Tallahassee and had been since the late 1970s. A final figure for the price index, which this year is up 3.9 percent, is computed with assistance from the state's Office of Public Counsel, Lewis said, which is supposed to represent the interests of rate payers.

In some years the price index goes up; in others it goes down, Lewis said.

County Commissioner Robert Schenck was not persuaded. He alone among the board voted against the rate increases, based on his opposition to the inclusion of the price index element, which he called "an excuse to automatically raise rates every year."

The board reconvened after the vote, and County Commissioner Nancy Robinson moved to have any increase in rates based on the price index be subject to a public hearing and vote by the board. Robinson's motion passed unanimously.

- Will Van Sant covers Hernando County government and can be reached at 754-6127. Send e-mail to vansant@sptimes.com

[Last modified September 5, 2003, 06:12:24]


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