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Utility rate hike forcing city council to revisit UEP

By Staff | Mar 31, 2009

In a contentious discussion Monday about a proposed 92.5 percent increase in water, sewer and irrigation utility bills over the next five years, Cape Coral City Council members did agree on one thing — there needs to be a solution to the halted utility expansion project at the center of the controversy.
There was no consensus, however, on what the solution should be.
A myriad of proposals were floated by council members, including having the city take over project manager duties, privatizing the UEP and having future utility customers contribute to construction costs.
The idea with the most support was scheduling a workshop to develop a solution.
“I think we need to get everyone together in a room and hash out a solution,” Mayor Jim Burch said.
According to Financial Services Director Mark Mason, the rate increase is necessary for the city to avoid defaulting on its debt on bonds issued for the UEP.
Mason discovered in December that the city was already in technical default of water and sewer bonds worth $315 million.
In May, council members did not adopt a proposed rate hike in which the average utility bill would have increased 50 percent over five years, assuming a stoppage in the UEP. At the time, the UEP was still in progress.
Subsequent council votes have halted the project altogether.
“If we had implemented those rates, we probably wouldn’t be standing here today,” Mason said Monday.
Councilmember Pete Brandt had the harshest criticism of city staff, accusing them of incompetence in handling the UEP.
“I think what we have here is a very strong indication of mismanagement,” he said, citing cost projection increases in facility expansion projects.
Brandt added that he is focused on solutions to the problem, and wondered aloud if homeowners not yet hooked up to the utility system could help pay for the project.
Florida statutes, however, may prevent the assessment of fees for people who are not yet benefiting from the project.
“I don’t know,” Brandt said when asked if it is legally possible to charge owners of improved properties in areas where the utilities are not yet available.
“I want to pursue that,” he added.
Councilmember Tim Day posited sidestepping the current project manager, MWH, with the city taking over its duties.
That, however, would require the city to hire more workers at a time when it is trying to cut expenses in an effort to trim at least $10 million from the budget.
Day said the extra workers would be paid for by the special assessment associated with the UEP, and would not come out of the general fund.
“Let’s utilize our own people in city government. It’s taking the profit out of this, and just getting it done for the sake of getting it done,” he said.
Council members favored more discussion to any concrete action, postponing a vote on the rate increase from May 4 to May 18.
Day will liaison with city staff to get the collective questions of council members answered before the workshop.
The date of the workshop is yet to be determined, but is likely to be held before the tentative May 18 vote on the hike.
Councilmember Dolores Bertolini reminded the dais that developing a plan for the UEP does not take care of the shortfalls and the need for a rate increase.
“A lot of these solutions are long-term. We have a short-term problem, we have to pay the debt,” she said.