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Now browsing: Hometown News > News > Volusia County

Utility rate increase, system upgrade in store for Orange City
Rating: 1.14 / 5 (7 votes)  
Posted: 2013 Jun 07 - 06:09

By Erika Webb

Residents of Orange City will pay more for their water, beginning June 15.

The Orange City Council voted 6-1 at the May 28 meeting to raise utility rates.

For 850 of the city's sewer customers, the hike will be substantial -- 58 percent. Water rates will increase 14 percent citywide.

Commercial customers will see increases based on usage.

Henry Durica was the only resident to speak at the meeting. He warned the council this is an election year for three seats on the council.

"Gentlemen, we the citizens are the real cans you'll be kicking down the road with a rate increase," Mr. Durica said.

With the exception of Councilman Tom Abraham, who voted against the increase, council members agreed raising costs to meet needs was the right thing to do -- in the best interest of voting residents.

"We should have been upgrading and repairing our system on a constant basis and we have not been doing that," Councilman Bill Crippen said. "Our water system is deficient and it needs to be fixed."

Councilman Abraham said people have told him they can't pay their bills, that they have been getting "good, clear water."

"Where's the problem?" he said.

Councilman Gary Blair pointed out the infrastructure is in "horrible shape."

"There are places in the city that still have wooden water lines from who knows how long ago," he said "The system needs to be totally redone, and this is the time to do it."

In 2012, the city contracted with Public Resources Management Group Inc. of Maitland to conduct a water, wastewater and reclaimed water revenue sufficiency analysis, the results of which were reviewed and discussed at a public workshop April 9.

At the workshop the council determined a rate increase was "fiscally necessary" to meet ongoing operational and regulatory requirements as well as scheduled capital improvements of utilities.

One compliance measure, already underway, adheres to EPA Stage 2 Disinfectants and Disinfection Byproducts Rule, one part of a set of interrelated regulations that address risks from microbial pathogens and disinfectants/disinfection byproducts.

"It is a new mandate that says we have to treat our water a little differently," said Orange City Finance Director Christine Davis in a phone interview. "It's in engineering where they're testing the water quality and (determining) what it's going to take to bring Orange City into compliance."

She said the cost for implementation will be $2.5 million.

The sufficiency analysis was commissioned because of concerns with the overall condition of the city's water system.

Corrosion of the pipes is resulting in orange water for some customers who are not enjoying the pun.

In a phone interview after the meeting, Public Works Director Paul Johnson explained many of the lines are undersized, four inches and smaller, some as small as three-quarter inch.

"It's a 100-year-old utility," Mr. Johnson said. "Any new lines that are installed at this time need to be at least six inches."

At the April 9 workshop City Manager Jamie Croteau noted that sewer service is provided by Volusia County.

"Some of our customers in the city pay Volusia County rates already, and then some of our customers pay Orange City rates, but we all have Volusia County sewer service," Ms. Croteau said.

It's those customers who have not been paying county rates who will be hardest hit, because the city has to pay the county to treat its wastewater. That cost will now be passed to all rather than a portion of the city's consumers.

In a presentation at the workshop, Henry Thomas, vice president of PRMG, called the water/wastewater management system "the largest business in the city."

He explained Orange City's rate structure provides no revenue for reinvestment in the system, the water rates are not even adequately funding operation and maintenance.

Though there are not a lot of capital improvement needs in the wastewater system because of its size, Mr. Thomas said costs are increasing due to inflation.

"We've got a lot more water customers than we do wastewater," Mr. Thomas said.

However, the customer base is not increasing to pay for the increased costs, he said.

Mr. Thomas noted Orange City has not had the resources to adequately plan for the future and instead has been replacing lines as they break.

Due to its healthy reserves, the city also has the option to subsidize rate increases by phasing in the rate increase over a multi-year period, he said, which would help relieve the financial impact on the water customers. The plan was established anticipating minimal growth in the customer base.

Capital needs for the next five years were identified at $12.9 million, according to city documents.

Recommending what he called a "must do -- not a, we want" project strategy, Mr. Thomas identified priorities such as public health and safety and quality of service to include the EPA regulatory project and replacing undersized and old lines.

"It's about managing our assets wisely," Mr. Thomas said.

"The water side has been subsidizing the sewer side," Ms. Davis explained. "Now we're leveling it out."

She said without reserves, the city would have to fund capital improvements completely with debt, and agreed the city's $3 to $4million in reserves will help, but not enough for Orange City to pay as it goes.

"We'll have to take out some debt and take out some reserves," Ms. Davis said.

The system's revenues will repay the debt.

Orange City's last utility rate increase was in 2010.

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