TARPON SPRINGS — Faced with rising costs all around, for things ranging from gas to groceries to electricity, city residents are about to take another hit.
City commissioners on Tuesday voted to raise water and sewer rates to ensure that the fund that sustains the utilities remains healthy.
It's especially significant because the city will soon need to issue bonds to pay for a $45-million alternative water plant.
"In order to be able to issue bonds, we have to show a rate structure that will pay all operational costs and any debt services," said finance director Arie Walker.
If not, the city may be faced with higher interest rates on its loan, which is sure to be more costly to customers in the long run, Walker said.
The city is also likely to have less money coming in than expected because the number of customers, which was estimated to increase by 2 percent this year, rose by only half a percent.
"If your assumptions are no longer valid, you have to make adjustments," Walker said.
Overall, rates would go up about 4 percent annually for the next nine years, but customers who buy only water would bear the brunt of the cost, paying an average of 8 percent more each year.
Commissioners voted 4-0 (Chris Alahouzos was absent) for the option that raised the rates more slowly and gave higher hikes to water-only customers who use septic tanks instead of sewer services, who account for about 30 percent of residents.
The move more fairly shifts the burden of rising water costs to water-only users, said consultant Mike Burton, who studied the city's rate structure.
Single-family households with both water and sewer services that use 6,500 gallons a month currently pay $60.65. In 2009, that total would rise to $63.04, and in 2013, $73.62. By the end of the nine-year term, 2017, the cost would be $86.13.
Commissioners rejected options that would have meant steeper hikes on the front end of the nine-year period and expressed empathy for residents.
"I'm a resident as well. We're all feeling it," said Vice Mayor Robin Saenger.
About three dozen people came to the public workshop, and those who spoke urged the board to leave rates alone.
Former City Commissioner Eve Lelekis asked commissioners to economize, as she said she has had to do herself. Lelekis, 61, said she limits laundry loads and doesn't use her dishwasher. Still, her water and sewer bill is nearly $70 a month, she said.
"These are very challenging times, and we the public are being bombarded from every side," said Lelekis. "We can't take much more."
Some residents questioned why the city couldn't find money in the budget to absorb the increases. But water and sewer services are paid for through a self-supporting fund, which prohibits borrowing money from other sources.
Commissioners said the rates might be reduced once Tarpon Springs stops buying water from Pinellas County when the city's reverse osmosis water plant comes online in 2010 or 2011.
Tarpon residents aren't alone. Municipalities across the region are raising rates an average of 6 to 7 percent over the next few years, Burton said. Tarpon Springs' current rates for a single-family home (averaging $60.65) are slightly below the regional average of $62.38, Burton said.
Commissioners must vote on the proposed hikes twice in the coming weeks. The new rates would go into effect Oct. 1.
Rita Farlow can be reached at [email protected] or (727) 445-4162.