Water and wastewater treatment rate increases tabled indefinitely

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Water and wastewater treatment rate increases tabled indefinitely

January 26, 2017 - 14:36

Hernando Counties Utilities Director Gordon Onderdonk presented information to the BOCC about proposed increases in the water and wastewater rates for the next three fiscal years. It would be part of the PILOF, or Payment in Lieu of Franchise Fees, which allows the utilities department to use the right of way for the water/sewer lines, fire hydrants, etc. The PILOF is made to the County’s General Fund.

The utility company would pay a franchise fee, or rent to the County, and that is what Deputy County Attorney Jon Jouben stated Florida Water had paid, at a 4.5% rate. When the County acquired the utility, the payments continued for a time until “the early 2000s.”

Any increase that the utilities department would pay to the General Fund would be passed on to the consumer, so a rate study was requested to determine how a proposed rate adjustment of 4.5% would compare to similar city and county utilities departments. If the utilities department had to pay 4.5% rate to the county, this would translate to a 4.712% increase to the consumer. Cost to a consumer using 7,000 gallons per month is an average $3.06 higher (for customers receiving both water and sewer service) than the existing rate.

Commissioner Steve Champion stated that there would be no discussion if this were a private utility company, but since the County owns the utility, it looks like a tax. To Commissioner John Allocco, the County already maintains the right of way, and with a good portion of the county using private wells, it’s a hard sell. Chairman Wayne Dukes used an analogy of taxes being used to maintain county parks which are used by a fraction of the residents or the dredging of the Hernando Beach area.

The recent election showed that the public is in favor of smaller government and less oversight, and this action would increase the county government, Dukes said. He stated the only reason he was in favor of a gas tax was because everyone would pay, and it would benefit the county. Allocco thinks the issue is also transparency. Champion is concerned about the county’s parks, which operate on a very small budget. But it is the parks which draw the visitors to the county.

The Restore Act, which is designed to improve the quality of the groundwater and springs, also wants improvement to septic systems, but there is no money to fix them. The PILOF fund could be put into a reserve account which would be used for special projects, upon approval by the BOCC.

Jouben stated the increase would not appear as a separate line on the bill, since it is just for internal accounting purposes. According to County Attorney Garth Coller, the PILOF was discussed in August 2016 during budget discussions.

Champion asked if the PILOF amount could be phased in, and start with a smaller amount. Jouben advised that the BOCC could make the choice of up to the maximum of the 4.5%. Nicholson stated he would not vote for the PILOF, regardless of the size, as he considered it a tax increase.

The consensus of the BOCC was that no action would be taken.