INDIAN ROCKS BEACH — Huge increases in sewer and garbage rates appear assured here as the city struggles to return its utility operations to profitability.
Tuesday, the City Commission tentatively approved 60 percent increases in residential solid waste and sewer fees. Similar increases also were approved for commercial customers. A final vote is set for Aug. 28.
"Anybody who is a commissioner does not like to talk about, vote on, or have any part of increases," Mayor R. B. Johnson said. "But we are the ones who have to make this decision. It's us five. This is one of the toughest times I can recall being a commissioner."
The proposed garbage rate increase means that single-family homeowners will pay $21.30 a month instead of the current $13.31 a month.
Similarly, monthly residential sewer fees will jump from $23.72 to $37.95.
A higher, 80 percent increase (to $42.70 monthly) for sewer fees was rejected, largely because the city is considering selling its sewer system to the county.
The unanimous decision came after months of discussion and accusations from some residents that the city's finances were badly mismanaged.
"I am upset by these numbers, as well. There are a lot bigger errors than I even expected," said Commissioner Daniel Torres.
"As a city we are in a very bad position, and I don't want to see us get in a worse position. I want to get on the right course."
A consultant hired earlier this year found both funds were losing money, had no reserves left and would continue to depend on infusions of taxpayer dollars without significant fee increases.
"We quickly determined that since 2001 to 2008 the sewer fund has been operating at an annual loss," said Andrew Burnham, vice president of Burton & Associates.
By the end of this year, transfers from the general fund to support the solid waste fund since 2001 will total about $440,000, according to the Burton study. Likewise, transfers to the sewer fund will total about $770,000.
Without the rate increases, continuing losses in the two funds would require more than $4-million in general fund loans over the next five years, according to Burnham.
Within five years, the proposed fee increases will result in the funds becoming self-sufficient.
In addition, the money "borrowed" from the general fund since 2001 will be repaid and reserves will be created equivalent to three months of working capital.
Burnham urged the city to review its sewer and garbage rates on a regular basis to ensure that the funds remain self-sustaining.
Some residents accused past city administrations of making illegal or improper money transfers to keep the two utility funds solvent.
"The loans from the general fund were advances and were legal," countered City Attorney Maura Kiefer, while adding that the action "was not the greatest accounting procedure."
Ed Pinero, a former city commissioner, urged the city to ask the state attorney general for a legal opinion on whether the city was required to pay back the general fund loans.
"We're not stupid," he said. "Listen to what we have to say. We put you up there to listen to us. Nobody denies that you need an increase, but how much it is is at issue."