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Water rates may shoot way up

City officials were relieved - if not a bit surprised - last week when a City Council workshop about a proposed hike in the residential water and sewer rates didn't draw any angry, bill-wielding residents.

It could be that customers understand: The system is running a huge deficit, and after six years of stable rates, an increase is needed.

But another reason is likely that commercial customers didn't know their bills could go up exponentially. The city's largest users currently pay $151 a year for water and sewer service. But their annual bills could rise anywhere from $3,570 to $11,478 under a plan the council is considering.

None of those figures include the proposed increase in usage charges for each 1,000 gallons of water and sewer.

The hefty increase is part of a wholesale transition to a tiered cost structure that puts commercial rates more in line with industry standards, said City Manager Frank DiGiovanni.

Businesses currently pay the same base rate for utilities as residents: $12.62 a month for water and sewer. The proposed adjustment will mirror the county's rate structure, though the city would still have noticeably cheaper rates.

While residential customers - whose average base rate could increase $3.38 a month- might not voice much opposition, he warned the council that the businesses will complain loudly.

"This is a big pill; this is a difficult pill," DiGiovanni said during the Thursday workshop. "You're going to hear from these people. You're changing the cost of doing business."

Council member Sophia Diaz-Fonseca worried that the businesses would pass the cost on to customers, but other members said it was a necessarily evil.

"While it isn't popular, we do have to deal in reality," said council member Jacquie Hepfer, noting the $455,731 deficit the system ran in 2005.

The effect is more costly for businesses with larger meters, and the increases in base rates are gradually less for those with smaller pipes.

Here's how the math works out:

- Businesses with six-inch meters could pay $956 more a month for water and sewer.

The six entities with these meters include Citrus Memorial Health System as well as Avante and Arbor Trail rehabilitation and nursing centers.

- The five customers with four-inch meters could see their bills jump $472 a month.

- The six businesses with three-inch meters could see a $297 monthly hike.

- The more common two-inch meters, which includes 59 businesses, could fork out $142 more a month.

- The 42 commercial customers with 1-1/2-inch meters could see monthly bills increase 87 percent, or $84. That equals a $1,012 yearly hike.

- The nearly 100 businesses with one-inch meters could pay $36 more a month, which computes to an annual rate four times higher.

- The standard customers with three-fourths-inch meters would have rates $6.75 higher, or $81 more a year.

That's $40 more than residential customers with the same size pipes.

Last week's workshop was the first meeting to consider DiGiovanni's proposal.

Final council action won't likely come until late January or February, officials said.

John Frank can be reached at jfrank@sptimes.com or 860-7312.

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