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Council to discuss options to reduce debt on north RO plant

By Staff | May 18, 2010

City staff is presenting council with options to reduce debt on the north RO water plant, which the board is set to discuss at its workshop on Wednesday.
The options presented are as follows: adopt the rate model as it stands, impose a public service tax, impose a capital facility assessment fee, issue general obligation bonds or restart the utility expansion project.
A general obligation bond would require approval by voters.
The public service tax would be imposed on certain utilities like natural gas, electric and propane.
There are two options for the assessment fee, aimed at properties not yet connected. One would be limited to prior expansion areas where properties are already abutting utility lines. The second would encompass all of North 1-8 and Southwest 6/7.
Should council decide to adopt the rate model, it will do so with with lower rates than previously assumed.
Originally envisioned at around 15 percent, the new rate model brings it down to just over 10 percent.
City spokeswoman Connie Barron said if a public service tax is imposed, at least when it comes to electricity, citizens would pay that tax to LCEC which would then pay the city.
There’s still some question, too, as to whether the special assessment fee is even legal.
In order to assess the property, there must be a benefit. Right now no time table exists as to when the utilities expansion, in any fashion, will resume.
“That’s the question that has to be answered tomorrow,” Barron said today. “You cannot charge that fee without some assurance that service will be provided in a set period of time.”
Councilmember Kevin McGrail, whose district will see a lion’s share of the utilities project should it restart, said he’s been told by residents if they have to pay an assessment they want an immediate benefit.
He said water would be easiest to provide, and paying assessments would amount to nothing but a slip of paper.
“In my opinion, if I’m living north of Pine Island Road, and someone gave me the choice of an IOU slip or water, I would gladly take the water,” McGrail said. “What good is a piece of paper?”
McGrail said he also doubts that residents would support a general obligation bond. He said people in the south have already paid their assessments, and there are still far too many people up north who don’t want utilities.
“I don’t see anyone in the city supporting it,” McGrail said.
City council meets Wednesday, May 19, at 5 p.m., in city council chambers.