MARCO ISLAND — Marco Island residents and City Council members heard the long-awaited results of the Cost of Service study, which will be used to help set future water and sewer rates on the island.
Mike Burton, president of Burton and Associates, the firm hired by the city last December, made his recommendations to a packed council chamber during Thursday’s special meeting. Based on the findings, the impact of implementation of the calculated rates will be significant, although some residents should see a decrease in their bill. The savings are based on water usage; the more water used, the higher the cost.
The Cost of Service study specifically considered Marco Island and Marco Shores. According to the findings, residents who live in a single family home, a condo with individual meters and/or commercial users on Marco Island currently pay approximately $30.83 for water and $25.14 for sewer. Under the new rate structure, those residents would see a decline in their water and sewer bill.
When Burton broke down the findings to single residents between 9,000 square-feet to 15,000 square-feet, the savings were more substantial. Homes that use less than 1,000 gallons of water, which is more than 6 percent of residents billed, could experience a bill that is more than 26 percent lower. However, residents in the same square-footage home who use approximately 6,000 gallons of water, which Burton stated is the average usage amount, would see a 5 percent increase.
Residents who live in multi-unit condos or apartments with individual meters may see savings as high as 54 percent depending on water usage. More than 48 percent of bills in this category use less than 1,000 gallons of water. Those residents may see a savings of more than $30. But a nine percent increase could be in store for bill payers in this category who use 6,000 gallons of water or more.
For multiple unit homes (based on 30 units), Burton calculated a flat 10,000 gallon water usage. Residents in this category may see a 40 percent decrease in their bill.
On Marco Shores, the rate, single family homes with the same square-footage where residents use less than 1,000 gallons of water, which accounts for 43.6 percent of bills, would see a water bill more than 34 percent lower. Multi-units with 10,000 gallons of water usage would have a 12.1 percent bill reduction.
The increase in capital charges, also known as impact fees, will be the biggest pill for residents to swallow. Marco Island residents’ proposed fee for water and sewer would be $10,727, an increase of 16 percent totaling an extra $1,451. In Marco Shores, the same fee is estimated to be $9,466, a two percent increase equaling $190 dollars.
Burton explained to councilors that these capital fees are discretionary. However, the fees must be applied across the board, and according to state law, the council could not charge residents one fee and businesses a different fee.
In explaining his findings to council, Burton told members that the current rate structure is not unreasonable and is similar to other smaller communities. Burton also said that the data used in the Cost of Service study was enough to cover costs in 2010, but he did not know if the increased fees would make the city revenue neutral for 2011. The city needs to generate $27.2 million in revenue from water/sewer rates.
“We now have a starting point, whether we like the answers or not, to address some of these issues,” said council chairman Jerry Gibson.
“This will help us look at the implication of policy,” added Bill Trotter, one of three councilmen who also served on the Cost of Services advisory committee.
Since the meeting was intended to present findings and not set rates, many residents still have questions about the impact of the study.
“I think it would be more fair and equitable to have sewer fees based on the size of the house,” said A.K. Battagalli, a widow who told councilmen she paid nearly $400 for her last water bill and expressed concerns for people like herself who are on a fixed income. “We have to find a fair solution and I don’t think what you’re considering is fair for single family homes.”
Resident Bill McMullen worried that council members are considering a rate system without considering future operating costs.
“No one has addressed whether we make enough money (in revenue) to fund this elephant.”
With the report complete, the council scheduled a policy roundtable to further discuss the data and begin the process of setting rates. That workshop will be held on June 6.
A copy of the complete Cost of Service report is available on the city’s website, www.CityofMarcoIsland.com.