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Tarpon OKs Increase In Utility Rates

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By Mark  Schantz | The Suncoast News

Published: July 25, 2008

TARPON SPRINGS -- During a public hearing Tuesday night the City Commission told residents it has no choice but to increase water and sewer service fees.

With Commissioner Chris Alahouzos absent, commissioners voted 4-0 to raise the utility fees by 4.75 percent a year.

Before the vote, residents pleaded with commissioners for relief from the rising cost of living.

Some suggested the city lay off utility division employees to offset operational costs or reduce other city services such as trash pickup as alternatives to raising utility fees.

Mike Burton, owner of the Burton and Associates, a St. Augustine-based government economics consulting firm, said the city faces a decline in water and sewer fund revenues. Rising operational costs, conservation initiatives and less growth in the housing sector are the main causes for the revenue shortfall, Burton said.

To keep its water and sewer operations solvent through 2017, Burton suggested the city increase its fees by the 4.75 percent per year.

Since 30 percent of city utility customers only receive potable water service, a larger percentage of the increase will fall on that side of the equation, rather than being divided equally among water and waste water, Burton said.

Without the prospect of the city eventually being able to produce its own drinking water, the recommended rate increase would have risen to 5.25 percent, Burton noted.

City Finance Director Arie Walker noted under its bond agreement the city cannot utilize water and sewer reserve funds to make up for an operational financial deficit.

Eve LeLekis, one of the residents who spoke at Tuesday's public hearing, told commissioners these are challenging times. The public is being bombarded on all sides with rising taxes and other costs, she said, adding taxpayers "cannot take much more."

Another resident asked if the poor, disabled or elderly could be exempted from having to pay the higher utility rates.

In response, Mayor Beverley Billiris said these are some of the worst economic times in recent memory. So everyone has to face and share the burden together, she said.

The city could not exempt hardship cases from paying higher water and sewer fees because the resulting revenue shortfall would have to be made up from the city's general fund, Billiris said. That is not feasible now because state-mandated property tax rate cuts will produce a roughly $1.2 million decline in general fund revenue next fiscal year, the mayor said.

Billiris did, however, ask interim City Manager Mark LeCouris to look into someday giving hardship cases a break from utility rate increases.

Commissioners are residents, too, and will share any pain higher utility service fees might cause, the mayor said.

Commissioner Susan Slattery said firing city employees to offset costs would not help the situation. The city is already operating with a bare-bones staff, she said.

Mark Schantz can be reached at 727-815-1075 or mschantz@suncoastnews.com.

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