MARCO ISLAND — Some Marco Island utility customers are going to be down in the dumps if City Council approves a proposal considered on Monday that will increase their water and wastewater rates again. Other islanders, will be pleased that fairness was considered in the reworking of the city’s utility rate structure.
All Marco Island water and wastewater customers endured a 9.5 percent rate increase last October; will see another 10.5 percent increase this October and if City Council approves the newest proposal, some will see hikes of more than 50 percent in their base rate. The base rate is the consistent monthly charge irrelevant of usage.
The proposed changes in base rates for various customer types may be somewhat beneficial to single family homeowners, while many condominium dwellers will see significant hikes.
“This is a terribly, terribly important issue that tends to put the condo world against the single family world, which nobody wants,” said Dick Bergmann of the city’s utility advisory committee.
A utility rate study by the five-member utility advisory committee sought to make base rates more equitable between customer types. Customer categories include multifamily with individual meters, master-metered condos, commercial and single family residential, among others.
In doing so, customers who may have enjoyed the lowest rates for years, the master-metered condominiums, will see compounded rate increases exceeding 25 percent by October. Nearly 1,000 customers in the North Marco Utility will see a 50 percent increase in their wastewater base rate.
If approved, master-metered condos, which are condos with one meter for all units, would see an average increase coming in October of about $15 per month per unit.
Customers in many of the island’s areas aren’t pleased with the prospects. Others, such as Amadeo Petricca, have said previously that it’s way past due.
Craig Woodward, president of North Marco Utility, which is privately owned and pays the city for waste water services, said there are more than 800 customers in his area who can’t absorb such hefty increases.
Woodward wasn’t able to speak on Monday because public input was cut short due to time, but council will hold another public workshop in June.
“I’m going to have 800 people here,” Woodward said after the meeting.
“It’s not coming down the pipeline, that’s why I’m here,” continued Woodward, who is also an attorney on the island.
Rate structure change proposals come from the notion that the utility needs to make up for five years of not changing the rates to ensure the utility, purchased in 2003, is covering its fixed costs in the most equitable way possible. Fixed costs include pipe maintenance, plant upkeep and paying off the bonds from the city’s purchase, among other expenses, that don’t change based on the amount of water used.
Several council members said they were skeptical about the proposal.
Councilman Larry Magel said he thought cost based on usage was most equitable.
That idea doesn’t work with a utility that has expensive fixed costs, said Rob Ori, the city-hired consultant from Public Resources Management Group. Currently 80 percent of the utility’s costs remain even if no one used any water, he said.
The proposal brings the current base rates up from covering 42 percent of the utility’s fixed costs to covering 50 percent of the utility’s fixed costs. It won’t bring in additional money to the utility, but makes more of the revenue steady while usage is steadily declining, Ori said.
Covering all of the fixed costs in the base rate would be too astronomically high, he added.
Councilman Bill Trotter said that in that sense, the proposal may be a compromise.
A base rate that covers much of the fixed costs reduces the financial risks for the city and is favorable for bonding, Ori reported.
If council approves the recommendations, customers in Key Marco, Goodland and Marco Island’s single family residential users could see a relative relief in base rates, but either way, officials said, rates need to go up for everyone.