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Council approves slight utility rate decrease

By Staff | Sep 10, 2013

One of the unintended consequences of putting off the Southwest 6 & 7 utilities expansion project was that it put a heavy toll on ratepayers to the tune of a 30 percent increase.

With the program back in place, and with North 1 & 2 next on the docket, ratepayers will not only see a decrease of 3 percent in their rates for fiscal year 2014, but no further increases until at least after fiscal year 2017 and perhaps much longer, officials determined Monday

Utilities Director Jeff Pearson explained the projected structure Monday as part of a resolution that would establish rates for water service, wastewater and irrigation.

The presentation, with the help of Burton & Associates, said the decrease is possible because of the good financial performance of the UEP even before it starts. The 3 percent decrease means an annual savings of $38 per year for the average user.

When the city decided to suspend the UEP and not recalibrate its rates in 2008, Burton & Associates said the city went into technical default on its lien debt and that required the city to implement a 30 percent rate increase in 2010.

The decrease will keep Cape Coral on the more affordable side of things compared to other communities, trailing only Naples, Collier County and Punta Gorda in affordability based on 5,000 gallons, the Burton report said.

In other business, the city also amended its infrastructure element to reduce the sanitary sewer facilities level of service from 250 to 200 gallons, the second such decrease since 2007, when it dropped from 300 gallons to 250.

The city council also retired $11.5 million in water and sewer bonds, series 2003 and issued the same amount of bonds for 2013 in order to refund those outstanding bonds.

Councilmember Kevin McGrail said those bonds, with lower interest rates, will save the city $950,000, since the old bonds had rates between 3.12 and 5.25 percent and will be traded in for those expected to be 1.75 percent.

Also, at Councilmember Lenny Nesta’s request, council vote 5-3 to take a public information folder out of the city council’s office and put it in the city clerk’s office, where it had been and as is by protocol in many municipalities.

Nesta, who got the idea from his participation in the League of Cities meeting, said he was doing this to try to avoid an issue or a lawsuit by putting a procedure in place and using it.

While some thought this was a pro-active step, other council members were worried that not enough due diligence was done and that to bring it up without an ordinance at the last minute was taking things too fast.

“This came on my desk just before the meeting. We can’t workshop this?” Chris Chulakes-Leetz said. “We’re running too fast.”

Mayor John Sullivan, Chulakes-Leetz and Marty McClain cast the nay votes.

Nesta also suggested the city consider a business manager in the office, perhaps a member of the council itself, to oversee issues in the office in the event things get too busy.