110 W. New York Ave.
DeLand, FL 32720
Deltona puts water-rate hike on ice
By Al Everson
posted Sep 28, 2012 - 7:41:52am
There is strength in numbers, as a standing-room-only crowd of Deltona residents proved when they decided to fight City Hall.
After more than three hours of listening and talking Sept. 24, the Deltona City Commission averted a planned water-rate increase. Utility rates and charges will stay at their current levels, at least for now.
“The people have sent us a clear message,” Mayor John Masiarczyk said.
Commissioners rejected calls to roll back the rates, but promised to seek ways to relieve the financial burden on Deltona’s utility customers, especially those who receive sewage service.
“I think that the people have spoken,” Commissioner Zenaida Denizac said, toward the end of the special meeting on water and sewage bills. “Something needs to be done ... [to] grant some immediate relief.”
“It’s difficult,” Alice Russell told the City Commission, noting she had received a $150 monthly bill. “How am I supposed to pay that on a fixed income?”
Nancy Siebert, who supervises Pine Ridge Fellowship’s food bank, said her church has helped 800 families since the end of August.
“We make ... referrals to Volusia County Human Services because of utilities, and the No. 1 bill is the water,” Siebert said.
The City Commission four years ago approved the five annual rate increases — 87 percent in all — with the understanding that the extra revenue would avert a deficit in the utilities fund and cover the city’s bonded debt for the purchase of the water and sewage systems, as well as providing money for maintenance and expansion.
In 2003, Deltona bought the utilities from Florida Water, a private firm, using an $80 million bond issue. The outstanding balance is now about $73 million, according to city officials.
Deputy City Manager Dave Denny said the rate increases are needed to take care of an aging waterworks.
“The infrastructure of this utility — some of it is 50 years old,” he said. “We have to maintain that system. ... A lot of capital is needed for that.”
Denny reminded the City Commission that new revenues are needed to build a new wastewater-treatment plant east of State Road 415 to support anticipated commercial development in the Osteen area.
That plant may cost about $25 million, and not having it ready to connect to new commercial development — including a planned shopping complex and perhaps a new medical center or hospital — would derail efforts to grow the local economy, Denny warned.
To help pay for the plant, Deltona may receive a $20 million loan from a state fund, repayable at 2.5-percent interest per year.
“It’s going to take two years to build the plant, and we’re going to need revenue to pay on that loan,” Denny said.
Denny managed Florida Water’s Deltona systems before the city bought them, and the city hired him to continue operating the utilities as a public enterprise.
“Our sewer rates are high,” he said. “We don’t have enough customers.”
More customers would spread the cost of capital improvements and maintenance among more households and businesses.
Of the almost 30,000 homes and businesses that buy water from Deltona Water, only about 6,000 are connected with the sewage system.
Official information shows a typical single-family home has a combined monthly water/sewage bill of $146.74, but the 17.25-percent rate hike would push that bill to $172.04 per month.
The mention of capital expenses drew fire.
“We were told this was about the bond issue, and now we’re finding out we’ve been lied to,” said Jamie Jessup, urging the City Commission to reduce the water rates. “You can’t move a city forward by being deceptive. ... You need to go back and undo the lie.”
“I think there were some untruths told to you and the public,” resident Susan Armon told the City Commission.
Deltona’s utilities collect about $18 million in billings each year. The city must pay about $5.5 million on the bond debt this year. The rest of the money goes for operating expenses, including personnel, chemicals, maintenance and repairs.
“I’ve heard the utility has excessive revenues. Not so,” Deltona Finance Director Bob Clinger said.
In response to the numerous calls for relief, Commissioner Fred Lowry moved to “forgo” the next water-rate increase and roll back the utility rates to their 2010 levels.
“I can’t vote for the motion as it stands, because there are too many uncertainties,” Mayor Masiar-czyk said. “If we roll these rates back, we can’t build that new plant.”
“The rates are already too high. Just dropping the next rate increase is not good enough,” Commissioner Herb Zischkau argued. “It’s not a technical decision; it’s a human decision.”
The commission voted 5-2 against the reduction. Masiarczyk, along with Vice Mayor Paul Treusch and Commissioners Denizac, Michael Carmolingo and Heidi Herzberg, formed the majority. Lowry and Zischkau were on the losing side.
Denizac’s motion to set aside the fifth and final rate increase was passed 6-1. Treusch dissented. Thus, the new fiscal year that begins Oct. 1 will not bring higher water and sewage charges.
Commissioners also pledged to look for ways to lessen sewage charges. No date for further discussion or review has yet been set.
“The sewer bills are outrageous,” Carmolingo agreed.
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