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City to move forward with controversial UEP

By Staff | May 5, 2009

Cape Coral’s off again, on again utilities expansion project is back on — conceptually at least.
City council members voted 7-1 Monday to restart the project, which has been the subject of alternating votes for and against by council members over the past year.
The vote means 6,500 residents in the Southwest 6/7 area of the UEP could face average assessments of $10,200 for water, sewer and irrigation utilities, while the 57,000 lot owners north of Pine Island Road could be assessed an estimated $6,000 for the water utility.
While a specific plan is not in place, Councilmember Gloria Tate, who initiated the motion to go forward with the UEP, stated water, sewer and irrigation utilities should be installed in the SW 6/7 region by MWH, the current project manager.
The SW 6/7 portion of the UEP is slated to cost $81.5 million, according to MWH documents dealing with the project when it was initially passed by council members last year.
“We have to move forward with (MWH) in 6/7 now. If we’re not going to move forward then those of you who vote no better have more than a piece of paper and an idea,” Tate said.
Tate’s comments were partly aimed at Councilmember Pete Brandt, the only person to vote against the project, who earlier made a presentation to council members outlining his objections to the UEP.
Council members have been hesitant to move forward on a project that would bring added financial burdens to residents already enduring economic hardships.
Councilmember Tim Day put the UEP back on the city’s agenda last week, showing that rates of foreclosure in SW 6/7 and north of Pine Island Road — 5 percent — are higher than in areas that already have utilities and that were assessed at a higher rate than the one proposed in SW 6/7.
Bill Fluharty, a SW 6/7 resident who bought his home in 2006, disputed the assertion, giving an impassioned plea to council members against the UEP and the assessments it would bring.
“The housing crisis has really pulled any investment from the homes,” he said, adding that the equity residents in areas that have already been assessed could rely on is nonexistent for SW 6/7 residents.
The added financial burden could lead Fluharty to leave his home.
“At some point it becomes a smart business decision to take a hit and take foreclosure,” he said.
But council members are facing the prospect of a 92 percent rate increase over five years for current utility customers to prevent defaulting on bonds if progress is not made on the UEP and more customers are not added to the system.
They are scheduled to vote on the increase May 18.
Brandt, however, found no reason to move forward with the UEP until what he sees as assessment methodology problems and the exorbitant cost are corrected.
He also doubted Day’s claim that the project would not adversely affect foreclosures.
“I think the conclusion (Day) reached about foreclosures, I don’t see how that’s necessarily a good conclusion. It doesn’t mean that number (foreclosures in the new UEP areas) isn’t going to be tremendously exacerbated,” Brandt said.
He also admitted that the rate increase, which would not go into effect until October, might be inevitable.
“We’re probably going to be forced into doing that initially in order to prevent us from defaulting on our bond covenants,” he said.
Larry Laws, project manager for MWH, was apprehensive as to whether the vote from council members signified an irreversible will to move forward with the UEP, but he was optimistic.
“The encouragement I took out of it is that they seem to be moving forward,” he said. “There were variations on the theme, but the theme seems to be to move forward, which is the right thing to do.”