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City again holds off on sewer hike

By LORRI HELFAND
Published December 14, 2006

LARGO - City leaders still aren't ready to raise sewer rates even though their staff says a big rate hike is needed to shore up the sewer system's finances and pay for future improvements.

At Tuesday night's work session, City Commissioners again said they want more information before making any decisions. They already had postponed a vote on the issue last week.

Commissioners asked staff to crunch more numbers to find out why actual sewer bills were lower than past city projections.

Because of that discrepancy and other factors, a consultant recently predicted a revenue shortfall of $3-million over the next three years.

To make up for the shortfall, the city's staff has proposed rate increases that would generate 22 percent more sewer revenue. They originally proposed rate hikes that would produce a 16 percent revenue increase.

Actual single-family residential customer increases would vary, with residents paying from 9.2 to 31.7 percent more a month depending on how much water they use.

City Commissioner Andy Guyette called the proposed rate hike "outrageous."

"To me what it's saying is that the average increase is 29.5 percent," said Guyette, citing figures for single-family residential customers, who use an average of 5,000 gallons of water a month. "I want more data because I really have a hard time supporting these increases."

City Manager Steve Stanton said rates will have to go up no matter what type of data is provided.

"We can provide more data," he said, but "it's not going to change the recommendations."

Part of the proposed rate increase would go toward about $5.6-million in improvements aimed at curbing wastewater overflows. Over the past five years, 30.5-million gallons of untreated wastewater overflowed or was discharged from Largo's sewer system, mostly because of heavy storms.

In response, city officials decided this spring to move ahead with a plan to reduce wastewater overflows. Those improvements could cost up to $100-million over the next decade.

Staff doesn't project additional rate hikes over the next three years. But, because of those improvements, rates would likely increase down the road.

Tuesday night, Guyette said he also was disappointed that staff failed to suggest projects that could be deferred to avoid an increase of this magnitude.

"The bottom line is you're still getting the amount of money you want," he said. "That's not what we asked for."

Stanton said putting off projects will only delay the inevitable.

"If you start deferring capital projects for a year or two to lessen an increase, now you're going to have a larger one in the future," Stanton said.

Staff believes that annexations and decreases in the consumption of potable water may have caused the discrepancy between projections and the recent analysis.

Whenever the city annexes properties that receive sewer service, the city loses a 25 percent surcharge applied to customers who live outside the city.

Commissioners said they weren't comfortable raising rates without more information about the discrepancy.

"I would prefer to wait until we find out what created this so-called problem or new trend," Vice Mayor Harriet Crozier said.

Management services director Kim Adams said officials planned to implement an increase in April. He said commissioners must approve a rate increase by the first meeting in February in order to do so.

Lorri Helfand can be reached at 727 445-4155 or lorri@sptimes.com.

[Last modified December 13, 2006, 20:28:20]