A city utility department — set up as a self-sustaining enterprise fund — shouldn't be gushing red ink every time someone turns on the tap. But that is the case in the city of Port Richey, where at least seven years of status quo water and sewer rates has meant subsidies from the city's general fund and a rate structure more favorable to businesses and out-of-city customers than to the average person living in the city.
It is simply unfair to charge residential customers the same rate as big commercial users. Current rates do just that, effectively curbing any reason to promote conservation. Likewise, asking city residents to subsidize the department — via general fund transfers — gives utility customers outside the city a pass on sharing more of the maintenance and depreciation costs.
Late last month, the Port Richey City Council had a chance to right these wrongs, but fumbled on a proposed rate increase. The City Council defeated the ordinance on a 3-2 vote.
The skepticism is understandable. After all, this is a city utility department that can not account for one of the five wells supposedly paid for via a $3.3 million bond. That is the same expansion, completed in 2008, that financed new lines that are too small to meet demand. And who can forget the former city attorney/interim city manager who discovered in 2007 that as much as 25 percent of the city's water, 5 million to 10 million gallons, was disappearing every month?
Past mismanagement, however, should not be used as a rationalization to avoid tackling the current problem — a utility system that isn't paying for itself. Over the past eight years, the city water fund spent $2.2 million more than it took in and only showed profitability when it slashed operating costs and ignored routine and long-term maintenance.
Allowing the trend to continue simply shifts the costs to fewer people — property taxpayers within the city — and threatens the city's general fund solvency because of dwindling tax revenues from declining real estate values and additional exemptions.
Buying 1,000 gallons of water for more than $4 and reselling it for $1.85 is no way to run a utility. The City Council needs to reconsider its rejected ordinance. Council members Terry Rowe, Nancy Britton and Bill Colombo defeated the proposed rate hike, saying their constituents couldn't afford another financial burden.
Actually, they can't afford not to. Those same constituents are paying the difference via property taxes anyway. The city needs to update its utility charges to more accurately reflect the costs of providing water and sewer service, and it needs a rate schedule that doesn't penalize homeowners while rewarding businesses.