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Cape council expected to discuss rate study

By Staff | Oct 1, 2011

Cape Coral City Council is expected to discuss Wednesday a new study that offers various options to mitigate utility rate increases or even lower fees for water and sewer services.

Options in the Utility Revenue Sufficiency Analysis prepared by Burton & Associates looks at how rates would be affected by no restart of the halted utility expansion program; by implementing a citywide public services tax on electric and natural gas bills; by imposing a special assessment against properties with services available but not connected; assessing properties in the north Cape and SW 6/7 where utilities are not yet available; and restarting the UEP.

The projected impact on rates ranges from increases of 5.5 percent over the next two years to actual rate decreases, depending on the option or options selected.

The analysis also finds that the city has already achieved significant savings through cost-cutting measures undertaken by staff and that projected rate increases can be honed even under the current scenario.

The study has been in the city’s hands since Sept. 10, when Andrew Burnham, vice president of Burton and Associates, presented the study to Sheena Millken, city budget administrator.

City Manager Gary King declined comment on the report, which is slated to be presented at a council workshop meeting Wednesday.

Council members contacted say they have not had time to digest the findings, options or conclusions.

One, resident, though, says the report shows measures could help to save ratepayers more than 31 percent on their bills.

Former Financial Advisory Committee chair Steve Riggs, who has studied the report, said a combination of the ideas contained in the study could lead to significant savings.

Riggs said the proposal should be discussed but so far has flown under city council’s radar.

He sent an email to council and King this week urging that public discussions commence.

Riggs maintains that combining the restart of utility expansion in SW 6/7 and North 1-8, along with implementing an infill assessment program, ratepayers could see a 31 percent decrease in their bills in 2013.

The rate study proposes a lot of “what ifs”, including restarting SW 6/7 and North 1-8, identified as “Alternative Options of Working Group.”

The conclusion in the study states, “Based on the assumptions and data … any one or combination of the options identified by the Working Group would serve to lower the future rate increase requirements of the Utility, starting in FY 2012.”

Riggs said it is disconcerting that council had not yet discussed the options offered in the rate study.

“It looked like there were significant rate reduction possibilities that Burton outlined,” Riggs added.

Although King declined comment Friday on the rate study, or what presentations his staff may be working on, he has indicated that he believes Riggs has misinterpreted the analysis.

In an email to city council members, Riggs, city spokeswoman Connie Barron and Finance Director Victoria Bateman, King wrote, “His erroneous conclusion (that a combination of infill, SW6/7 and N1-8 will produce an overall 31+% decline in water and sewer rates) is grossly exaggerated. We will be presenting this report formally at an upcoming COW meeting, at which time the scenarios will be properly outlined. Of course, you know that there are significant construction and operational issues related to restarting any of those initiatives, beyond the simple finances and economics. You are also aware that the infill assessment initiative is already in progress, as we speak.”

King also didn’t understand how Riggs came to have a copy of the report, as it had not been released to any one but members of his staff.

Riggs said he obtained the report by via a public records request.

City Council is expected to meet as the Committee of the Whole on Wednesday, Oct. 5, at 5 p.m.