 |
||||||||
 |
||||||||
|
||||||||
|
Dispute over sewer rates continues
By AMY WIMMER © St. Petersburg Times, published April 22, 2001 ST. PETE BEACH -- This city thinks $772,135.54 should cover its debt to St. Petersburg. But St. Petersburg, once called St. Pete Beach's "sister city in the same county" by the judge overseeing a dispute between the two, wants another $3.73-million. The cities have a June 4 court date to settle the conflict over the wholesale sewer rates that St. Petersburg charges St. Pete Beach. The dispute stretches back to 1995, when St. Pete Beach began withholding sewage treatment charges the beach city believes are unjustified. On Tuesday, after a private executive session allowed by the Sunshine Law because it involved ongoing litigation, the City Commission met publicly and agreed to pay St. Petersburg roughly three-quarters of a million dollars. That amount is the difference between what St. Pete Beach believes it owes St. Petersburg for six years worth of back charges and the amount St. Pete Beach has already paid the larger city in that time. The payment also includes a 10 percent interest gain per year for each year the money was not in St. Petersburg's possession. The cash will come from the city's sewer fund, where St. Pete Beach has been saving money to pay its debt to St. Petersburg if a judge orders it to do so. St. Pete Beach is making the large payment now based on its consultant's assessment of what the smaller city would owe if the two parties had stuck to their original contract. "In the litigation, we have been in the process of obtaining financial information that was never available to our city until this lawsuit was initiated," City Attorney Jim Devito said Tuesday. That information allowed St. Pete Beach to recalculate how much it believes it owes St. Petersburg, and also led the commission to adjust the amount it pays monthly for sewage treatment. Each month since January 1995, St. Pete Beach has paid $698.11 per million gallons, and paid the balance of the charges to an in-house sewer fund. Now St. Pete Beach will begin paying St. Petersburg $882.53 per million gallons monthly. The new figure is far below the amount that St. Petersburg believes it is owed. St. Petersburg contends St. Pete Beach should pay $1,826.33 per million gallons monthly to pay for treatment of its sewage. "They bill us a certain amount, and we pay at a rate we feel is appropriate, and the difference pays into the fund," said Steve Gallaher, St. Pete Beach's finance director. Altogether, St. Petersburg believes St. Pete Beach owes $4.5-million in back charges, which is about how much St. Pete Beach has in its sewer fund. That fund has been accumulating since 1999, when St. Pete Beach raised sewer rates to prepare for the possibility of losing this lawsuit, which focuses on whether St. Petersburg has broken its contract with the beach and illegally raised rates. The lawsuit also would affect Treasure Island, which has an agreement with St. Petersburg similar to its southern neighbor. Treasure Island also has been refusing to pay the higher rates charged by St. Petersburg but has been collecting the high rates from its customers, pending the lawsuit's outcome. St. Pete Beach's agreement with St. Petersburg began in the 1970s, when environmental regulators forced the closure of the beach treatment plant. St. Pete Beach helped finance St. Petersburg's Northwest treatment plant to handle the city's sewage. In return, the beach city was promised that its bills would always be in line with the actual cost of treating its sewage, and that guarantee was solidified in a 1985 contract that was held up in court during an earlier phase of this lawsuit. Over the years St. Petersburg has tried to include other costs it considers "direct," such as compensation for property taxes the city would have earned if the treatment plant property were owned privately. Depending on the outcome of the lawsuit, St. Pete Beach will either pay St. Petersburg some or all of the $4.5-million worth of sewer payments it has collected from its residents, or it will have a large balance in its sewer fund. That money must be spent on sewer-related projects, but also can be used to give residents a rate reduction. "Our attorneys have been working very diligently to put us in the best position possible," Mayor Ward Friszolowski said.
 © 2006 • All Rights Reserved • St. Petersburg Times
490 First Avenue South • St. Petersburg, FL 33701 • 727-893-8111 
|
From the Times South Pinellas desks |
