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Now browsing: Hometown News > News > Volusia County

Deltona leaders consider more cuts to water, sewer rates
Rating: 3.25 / 5 (20 votes)  
Posted: 2012 Oct 19 - 00:15

By Dan Harkins

dharkins@hometownnewsol.com

DELTONA - Ilona DiDio lives alone on a fixed income from Social Security.

She asked Deltona city commissioners last week to help, not just by freezing another year of utility rate increases for a month or two, as they did recently, but to roll those rates back to where they were two or more years ago.

"I have hospital bills ... medicine and everything," the 78-year-old said. "And I cannot pay and I will not continue to pay that high price."

She wasn't alone. Though only a handful of residents spoke at last week's workshop, resident Jennifer Houdeshell presented about 1,000 signatures of residents who also say they're tired of the ever-increasing rates.

"You have no right to dangle the lives of (6,000) families over a financial cliff every month," she told them, referring to the number of households of the city's 32,000 on the city's sewer system - about 17 percent. "...You have no right to wreck our budgets and imperil our homes."

Instead of continuing for a fifth year the 17.25 percent annual increases in water and sewer rates that commissioners enacted in 2008 - after 13 years of not raising rates for inflation - commissioners froze those rates on Oct. 1 until they could decide how best to proceed.

Deputy City Manager David Denny presented commissioners last week with four options to relieve residents' duress while continuing to maintain a sustainable utility and build a new $29.4 million wastewater treatment plant on the city's north side to accommodate growth and spur economic development.

The first option is to increase the coming fiscal year's water rates by 15.25 percent instead, while reducing residents' sewer bills by $14 a month. This would save the average resident about $10 a month, while allowing all but $2 million in utility capital projects to proceed.

The three other options are to roll back rates by one, two or three years, saving residents on water and sewer an annual average of $28, $52 and $72 a month, respectively.

The one-year rollback would still allow the city to receive financing for the new treatment plant through a state program at 2.5 percent interest, but would require an additional $900,000 in capital projects be scrapped.

The two- and three-year rollbacks, he said, would be catastrophic: No treatment plant would be possible with either, and the city would need to cut $9.4 million in capital projects for the two-year rollback and $17 million for the three-year rollback.

"You've got a utility here that can't survive," Mr. Denny said, referring to the latter two options.

The city's annual debt service for its water and sewer system is $5.6 million annually. That would increase by $1.9 million if the wastewater treatment plant is approved.

The city took over the water and sewer system a decade ago, and even though the utility hadn't raised rates for seven years, the city decided to freeze rates for another five years after that.

So as inflationary pressure mounted, the utility became less and less able to sustain itself.

"It's very unfortunate to hear that we are where we are because we made a bad decision," Commissioner Zenaida Denizac said. "...I can live without my cell phone. I can shut down my cable. Even if gas prices go up, I can walk or take a bus. But I can't live without water. It boils down to needs versus wants, and this is a great need."

Commissioner Heidi Herzberg said those years without any increases unfortunately demand increases now.

"That's the reason that we are in the jam we are in now," she said. "We didn't even increase the rates for cost of living. We didn't increase the rates until it was problematic."

Since the utility is now city-owned, Mr. Denny said, many residents believe tax dollars can be used to prop it up in times of trouble.

"None of those funds receive any tax dollars," he said. "None. Zero. So anything the utility does is paid for by revenue by the people who are connected and pay for the service they receive."

Nevertheless, some commissioners appear reluctant to raise rates any more at all.

"I can't see us increasing at this time now any rates on the people of this city," said Commissioner Michael Carmolingo.

And if that's the case, said Finance Director Bob Clinger, and no new treatment plant is built, "we believe significant economic development is very doubtful in the foreseeable future."

Mayor John Masiarczyk said commissioners need more time to review the recommendations.

"This is our first chance to look at this, too," he said, "so you're going to have to bear with us."

He and other commissioners appear to support a financial assistance program to help low-income bill payers.

Commissioner Denizac used old newspaper clippings from 2001 to show city leaders promising a money-making venture when taking over the utility from Florida Water Services, one that wouldn't require any rate increases.

"It was supposed to help the city," she said. "But in the end we see what happened, and I don't think it's fair for the residents."

Mr. Denny told her that when the utility was privately owned, its shareholders received profits but the system went into disrepair. Now, with the city as the owner, he said, "the profits are in the ground," in an upgraded system.




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