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Indian Rocks Beach utility bills may rise

INDIAN ROCKS BEACH — Residents are facing a $359 hike in their annual sewer and garbage bills if the City Commission approves recommended rate increases needed to fix a $1-million budget shortfall.

A sewer and solid-waste rate study prepared by consultants and presented to the city Tuesday calls for an 80 percent increase in sewer rates and a 60 percent increase in garbage pickup fees.

Without the rate increases, continuing losses in the funds would require more than $4-million in general fund loans over the next five years, according to Andrew Burnham, vice president of the consulting firm Burton and Associates.

The rate increases also are needed, the consultants said, to repay more than $1-million in property taxes the city loaned the two utility funds, which have lost money for six of the past seven years.

"Your current rate structure is not providing sufficient income for operating and capital requirements," Burnham told the commission.

Since 2001, the city has loaned the solid waste fund $440,000, and the sewer fund, $770,000.

Without rate increases, next year the city would have to "advance" the solid waste enterprise fund $270,000 so it could pay its bills. Similarly, the sewer fund would need nearly half a million dollar subsidy next year.

By increasing the utility rates, Burnham said, the city would not have to loan any more money to the funds and would start being repaid in the coming year for the $1.2-million already loaned.

Repayment of the loans is required by law. Not doing so would force the city's auditors to issue a "red flag" to the state.

Here is what is proposed:

• Solid waste (garbage) residential fees: $29.22 monthly, a $10.96 increase (60 percent) over the current $18.26 monthly rate.

• Sewer residential fees: $42.70 monthly, an $18.98, or 80 percent, increase over the current $23.72 monthly rate.

The consultants offered a second option for sewer fees, increasing the rate by 60 percent the first year, 10 percent in 2010 and then another 2.5 percent each subsequent year — resulting in a rate of about $48.25 a month by 2013.

The commission could also consider changing its current fixed-rate sewer fees to charge residents a flat fee plus a variable fee based on actual water usage.

This would result in higher bills for some residents, and was not recommended by the consultants.

Burnham recommended the city not consider changing its rate structure until after it puts its new flat fee rates into effect.

The growing red ink in the sewer fund began after Pinellas County changed how it charged the city for processing outflow.

Several years ago, the city did increase sewer fees, but not by enough.

Just how bad the financial problem had become was not discovered until March, when the city's auditors questioned the funds' balances and transfers.

This was reinforced last month when a budget consultant reported that the city had virtually depleted its general fund reserves to subsidize the funds.

"You are running out of cash. The only way to get out of this is to raise the rates," consultant Rob Garner told the city.

Several residents sharply criticized previous commissions for allowing the financial situation to develop.

"We are in a mighty serious situation," said former Mayor Jim Driscoll. "For five or six years our (property tax) millage has been too high because we were subsidizing things going down the sewer and up the incinerator. You have inherited a mess."

Whatever monthly fees are eventually put in place, both the garbage and sewer fees are billed every two months and actual residents' bills will be twice the monthly rates.

No action was taken on the proposed rate increases, which must be done by formal ordinance. Commissioners will debate the increases as part of their budget deliberations this summer, and two public hearings on the actual rate structure ordinance will be held on Aug. 12 and 28.

In other action Tuesday, the commission backed away from firing its treasurer, Marty Schless, and instead agreed to "evaluate" his performance after the city's budget is approved.

The commission also agreed to ask Indian Shores for a formal proposal to take over policing. The city currently contracts with the Sheriff's Office for law enforcement services.

Indian Rocks Beach utility bills may rise 07/12/08 [Last modified: Monday, July 14, 2008 7:38pm]
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