Utility Rates to Increase

Port St. Joe city commissioners are proceeding with recommendations to increase utility rates due to the reduction in business users and a lack of proposed residential growth.

The commission voted to proceed with the utility rate increase 5-0, following recommendations from a study conducted by Burton and Associates that proposed a multi-year increase that will raise rates for both water and sewer usage.

The study proposes the rate adjustment in order to satisfy operating and capital costs for the city, after the reduction in revenue due to the current economic state of the city i.e. vacancy and foreclosed homes as well as the loss of large users such as the St. Joe Paper Company and the Arizona Chemical in recent years.

According to the study, the current rate structure does not produce enough revenue to cover the city’s utility costs or provide incentives for conservation.

The study recommended a new rate structure that would attempt to maintain an affordable rate for low-volume users while a greater increase would be placed on high-volume users to gain back lost revenue.

The five-year plan would initially increase revenue to the city for sewer usage by 4 percent in 2011. In 2012, revenues would increase another 6 percent, followed by a 13 percent in 2013 and 3.3 percent in 2014 and 2015.

Water revenue would increase by 39 percent in the first year and 8 percent each subsequent year through 2015.

If passed, consumers could expect to see on average 12.7 percent hike in the first year on their residential monthly water and sewer bill or an average $8.96 increase from the current year.

In 2012, water and sewer bills would increase on average by 6.9 percent or $5.49.

In 2013, the increase would average 10.8 percent from 2012, or on average $9.26 per month.

In 2014 and 2015, the average increase would be 5.3 percent each year.

Consumer impacts will depend on the amount of water and sewer used per month.

The study shows that 26 percent of users inside city limits are considered low volume users, using up to 2,000 gallons per month. To provide incentives for conservation, there will be only a 4 to 7 percent increase for these users per year.

A typical user – the 52 percent of residents that use 3,000 to 6,000 gallons per month – will see a 10 to 17.5 percent increase.

High volume users representing 22 percent of water and sewer consumers, those that use over 6,000 gallons per month, could see an increase anywhere from a 21 to 69 percent increase in their bill depending on the amount of water and sewer used per month.

The key to avoiding these significant increases, officials said is to conserve.

The monthly base rate for water will also increase for customers.

The proposed rate for residential homes will be $20.84 per month, up from $15. For smaller commercial businesses, the rate will increase from $22.50 to $31.26 per month. A base monthly charge for larger commercial buildings is proposed to increase from $30.00 to $62.52.

Counteracting some of the proposed new charges, the sewer monthly base rate is recommended to be lowered for residents and small commercial businesses.

Sewer monthly base rates for residents are proposed to drop from $30 to $24.16 a month. Smaller commercial businesses can expect a drop from $45.50 a month to $36.64, although large business could see an increase from $60 a month to $72.48 a month.

The costs to establish first time connections for new establishments will also increase. Currently, the one time fee for water in the average residential unit is $1,435. For a new sewer line it is a one time fee of $2,270.

If passed, those fees will increase to a one time fee of $2,014 for water and $2,856 for sewer. According to the study, these charges are intended to recover the cost of expansion-related facilities with new connections.

The city will conduct public hearings at 5 p.m. on Sept. 7 and 21 to make a final decision on adopting these recommendations. If passed residents should see the new rate changes on their November bill.