News that Matters
Thursday July 31st 2014

On Sale:

Follow the Blog

Archives

ECUA Raising Rates

Proposed Ten Percent Hike Comes With Controversy
by SEAN BOONE

Despite a packed room of public opposition, the Emerald Coast Utilities Authority Board approved at its Sept. 23 meeting a motion to increase rates for its customers. On Oct. 1, sewer and water rates will jump 8 percent and will do so again for each of the next three years. Sanitation will be raised 2 percent for the next fiscal year

More than 50 people attended the meeting to show their displeasure with the rate hikes. Those who spoke on the issue said they were living on a fixed income; struggling to get by in the current economic climate.

“I just don’t see how you could raise anything at this time,” said Francis King, a retired Pensacola resident.

Pensacola City Councilwoman Diane Mack said she fully understood the responsibility of the decision but asked the board to postpone the increase for a year and evaluate other local utility rates.

“When you make recommendation, make sure rates are based on neighboring areas.”

Despite a 3-2 vote from the board to increase rates, members took note of the outcries. After hearing more than 15 residents and officials on the issue, a motion was made to reduce the original rate increase proposal, which called for a 34 percent increase to water and sewer and a 3 percent increase for sanitation. Board members decided to nix more than $770,000 in employee raises to reach that mark.

Board member Larry Walker said the rate increase decision was the “worst policy decision” he had been forced to make during his 20-plus years representing District 5 and eluded to the fact that ECUA has held rates down for more than a decade—including the aftermath of Hurricane Ivan in 2004; a storm that caused considerable damage to infrastructure.

Walker told the audience that sewage overflow had increased 45 percent in the past few years, creating numerous backups in homes and water outages.

“Now we’ve come to a point where the needs for the public are such that I don’t think we can deny them,” said Walker.

According to a year-long report from the Malcolm Pirnie Inc., engineering and consulting firm commissioned by the ECUA, the utility needs extensive infrastructure repairs and replacements in the next six years to meet Environmental Protection Agency (EPA) requirements.

Walker referenced a $1 billion order that the EPA slapped on the city of Birmingham to upgrade its sewage system as a cause for concern for the board.

“They could come down on us with a $160 million order in three years,” he said.

ECUA Executive Director Steve Sorrell told board members the Malcolm Pirnie firm created a sufficient plan for that timeframe—a plan that would put forth roughly $5-6 million a year towards $153 million in bonds over the next 20-30 years. Sorrell noted that the proposed rate change for sanitation was primarily to offset an 8 percent increase in charges from the Perdido Landfill.

Board member Dale Perkins said he felt the report was biased “for the worst case scenario” and made a motion to refuse their engineering work for future infrastructure work—ultimately voting against the final motion because of it.

Lois Benson, the other board member in opposition of the increase, said that despite the need for new infrastructure, it was not the right time to spend that kind of money.
“My response is we just spent $300 million (on new wastewater reclamation facility). There’s only so much we can spend on it. It’s too much, too soon.”

DOWN THE ROAD

Because the rates were not increased to the levels originally recommended by state, bond insurance rates could be increased, according to Sorrell.

Right now ECUA needs to repair 185 of its 377 lift stations, which could cost an average of $250,000 each.

“We have been told our system needs more than $200 million in repairs,” says board chairman Elvin McCorvey. “If we do not repair the sewer lines it will cost a lot more to the taxpayers (over the years).

“We must provide quality service to our customers.”

McCorvey said that years of putting off rate changes has put ECUA in its current fiscal bind and notes that if rates were not increased now, customers would likely see a much higher rate increase in the near future.

“If we don’t hit you with (a rate increase) this year, we’re going to hit you with it next year and it will probably be twice as much.”

According to ECUA, “based on the average consumption of 5,000 gallons, water rates will increase $1.39 per month, or about 5 cents per day, and wastewater service will increase $2.09 per month, or about 7 cents per day.  Monthly sanitation rates will increase 17 cents for Lifeline customers (low income seniors defined by federal guidelines), 31 cents for seniors and 36 cents for residential customers.”

sean@inweekly.net