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Utility relocations: Legislation proposes cost shifting

By Staff | Mar 6, 2015

If proposed legislation regarding who pays for the relocation of utilities passes, it could cost the city of Cape Coral thousands of dollars more for road projects.

Councilmember Jim Burch said the state bill would require municipalities, pre-platted cities, and counties to pay for the relocation of utilities.

“I have been following this for some time,” he said. “I know enough about it that it is something that will certainly impact all pre-platted cities. We are the biggest city out there.”

Burch said the proposal has already passed the first hurdle.

City Manager John Szerlag said the measure was passed at the first committee meeting at the House level concerning who would front the cost for the relocation of utilities.

The proposed legislation would essentially change a law that has been in effect for 100 years. For the past 100 years there has been a partnership between municipalities and utility groups.

“Now they want the municipality to pick up the tab on that,” Burch said.

Szerlag said when there is an existing road that needs to be widened because of health related issues, such as accidents; there is a public necessity to widen the road to eliminate traffic crashes. When acquiring property to widen a road, he said there are three cost components that take place.

Those three components include design, overlay and a public utility easement.

Szerlag said the overlay cost is what the city would need to expand for the road project. He said more times than not there is a need to acquire additional property to divide into two areas, including a right away.

The public utility easement is acquired to place the utility next to the right away.

Szerlag said the city pays for the design, acquisition of the property for the city project and the easement to relocate the utilities, as well as the construction of the road project.

Szerlag said the city can say to the utility, “We purchased this public utility easement; you need to move your utilities into this easement.”

“The utility has to comply because of 100 years of law,” he said.

Another option is the city pays for the relocation. Szerlag said an example may be increasing a road for a right turn lane.

The third example would be where the city and utility partner and share the cost of the utility line move.

Szerlag said the city has no issue with the purchase of easement at no charge to the utility. But if the legislation passes it would add in excess of $600,000 for a lane mile if the city had to front the cost.

“We would find another revenue source to pay for this or we would have to reduce the scope of work,” Szerlag said.

The proposed legislation would have a negative financial impact on the city, he said, which could mean the delaying of projects.

Burch said they are still at 45 percent in total build out.

“We are going to have those growing pains,” he said.

Burch said the existing roads are going to have to be widened to accommodate the growth. He said there will be a conflict with the utilities that are in place running alongside the edge of the roadway when the widening takes place.

“That is going to cost and those costs can be considerable,” Burch said. “It’s a huge concern.”

He said they do not like Tallahassee taking away powers that they already have.

Burch said the buzz word with the proposed legislation is “unfunded mandate.”

“We don’t want to build in our budget for things that are paid for,” he said. “We are hoping that this is one of those that don’t make it.”

Burch said they have drafted language for the bill for the League or Cities. He said they have put their ducks in a row and have done their research.

“So far everyone agrees with us, expect the person that drafted the bill,” Burch said.