Bonita Springs water customers face possible rate hike

Increasing costs may prompt Bonita Springs Utilities to raise water rates for its 40,000 customers.

If so, it would follow a 3.4 percent hike in 2007, 2.8 percent in 2008, but no raise in 2009.

Utilities Executive Director Fred Partin said Thursday that Bonita Springs Utilities has a $25 million line of credit that must be refinanced by the end of September.

In addition, he said, the company has $26.2 million in variable interest rate bonds that it plans to combine with the line of credit into a 2010 Series Bond.

“The potential for increasing interest rates makes this a good time to secure fixed rate tax exempt bonds,” he said. “BSU and its rate analyst are gathering information to determine what, if any, increases may be needed to meet increasing costs and bond covenants.”

Any hikes would have to be approved by the local city council, Partin said.

Compared with surrounding neighborhoods and districts, Bonita Springs Utilities rates (at about $80 a month on average) would fall somewhere in the middle.

On monthly average, Naples clocks in at $48.88, Marco Island at $103.25 and Collier County at $73.65, said Bryan Mantz, a supervising consultant with Public Resources Management Group Inc.

Some of the older utilities, Partin said, may enjoy lower rates at the moment but would be faced with replacing aging infrastructures and be compelled to hike rates.

Partin said those areas that have updated have rates and charges comparable to, or sometimes higher than, Bonita Springs Utilities.

As for the anomaly of increased rates when many consumers are subject to the pervasive financial crunch of the past two years, Partin said effective and efficient operation is the key.

“That includes addressing matters such as refinancing the line of credit and variable rate bonds that could cost much more when interest rates increase in the future,” he said.

Ron Pure, a local consumer and also chairman of the Taxpayer Action Group of Bonita Springs, said a decrease in costs would be more applicable.

“(BSU) should cut overheads to cover the costs of increases,” Pure said. “The problem is that the public is apathetic. They’re not going to storm the Bastille ... and that’s the unfortunate thing we have at local levels.”

Bonita Springs Utilities’ 2009 operating revenues increased by 4.5 percent to $33.8 million over the 2008 figure of $32.4 million partly because of a “slight” growth in the number of connections, while operating expenses — excluding depreciation — decreased by 7.5 percent to $16.9 million, Partin said.

Those decreases, he explained, were achieved by deferring or eliminating non-essential spending and the deferring of some capital projects, but at the same time the utility has “successfully maintained its strong working capital position.”

Bonita Springs Utilities is a member-owned cooperative with nine board members who are also customers, and “who work hard to balance the impact of rate adjustments on our member-customers against the long-term financial soundness of the utility,” Partin said.

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