MARCO ISLAND — City Council heard recommendations from its consultant Michael Burton, president of Burton & Associates, Wednesday in its first workshop to determine future water and sewer rates. The firm completed three studies for council: a revenue sufficiency study, and two rate designs, the M1 and M54 approaches.
In a slide presentation, councilors were shown side-by-side graphs of the two rate designs as they would affect homeowners on Marco Island and in Marco Shores. The designs offered new methods for calculating water and sewer bills, a step that council is considering as it goes forward to raise utility rates equitably.
Using the most commonly sized lot of 9,000 by 15,000 square feet with a monthly water usage of 16,000 gallons, Burton concluded the M54 design predicted a rate increase of 9.7 percent or $14.41 monthly. The M1 design at the same level raised rates 3.1 percent or $4.62. About 35 percent of water and sewer bills were issued for this size lot.
Within the lot size using either design, new rates against current bills varied by usage. In the M54 design, higher demand resulted in gradually increasing rates to 13.7 percent or $28.37. Rates also increased as demand dropped. Lowest consumers experienced increases of 12 percent or $6.71.
The M1 design predicted larger swings in rates. Increases for the largest single-family users rose to 16.7 percent or $34.64. The smallest single-family consumers received a rate decrease of 28.2 percent or a reduction in billing of $15.70.
Rates for multi-unit users, such as condominiums, also varied by usage. An average 30-unit condominium using 80,000 gallons saw a small rate decrease. Commercial users, on the other hand, saw significant rate increases under the M1 design. Commercial users are calculated on meter size rather than lot size with categories ranging from 5/8 inch to 6 inches.
Councilors debated how servicing the debt for purchase of facilities and continuing upgrades should be allocated among water and sewer users. In debt calculations, “equivalent residential units” or ERUs are weighted by category of user. Most single-family homes are weighted as one ERU based on the flow of 440 gallon of water per day and 220 gallons of wastewater. Multi-family units equal about one-third of an ERU.
Councilor Trotter felt accumulated debt should be spread equally among all users. Debt service is assumed under the M54 design in usage charges.
“We should treat all users as equal shareholders of the system,” he said. “(It should be a) fair and equitable plan based on how the plant was purchased for total build-out.”
Council Vice Chairman Larry Magel disagreed.
“It looks like you’re using a political solution here. We’re ignoring the recommendation of our consultant,” he said. Magel pointed to irrigation as a large differentiator in usage.
“Acquisitions were not equal. Upgrades were not equal. Seventy percent of water usage occurs between midnight and 6 a.m., Magel said. “We have to have expensive storage tanks to store water to meet irrigation needs.”
Public speaker Muriel Bell said she was attending her first council meeting.
“I listened very carefully to Mr. Burton’s report. I’m puzzled why with so much detail you would question and try to rearrange the numbers to be considered,” she said. “Condo and single family owners have been pitted against each other. I don’t feel that one-family homeowners should be penalized because they want a green lawn and gardens.”
In the revenue sufficiency analysis, Burton & Associates concluded that no rate increases were necessary for fiscal year 2012 ending Sept. 30. In the 2012 through 2017 analysis, rate increases were recommended at 6 percent for 2013 and 2014 and 3 percent for 2015 through 2017 to meet utility needs.
The study also concluded that surcharge adjustments could be made. In 2012, road resurfacing surcharges could be adjusted from 4 percent to 3 percent, and Septic Tank Replacement Program (STRP) surcharges could be adjusted from 8 percent to 3 percent. The study recommended reductions as soon as possible.
In 2016, road resurfacing surcharges could be eliminated, and STRP surcharges should be increased from 3 percent to 5 percent, the recommendation concluded.
Additional recommendations included adding an affordable block for water usage from 0-6,000 gallons per month and capping sewer charges for single-family residences at 6,000 gallons per month.
Council decided to continue discussion of rate designs and the cost of services study at its next workshop to be held at 1 p.m., March 14, in the city’s Community Room, 51 Bald Eagle Drive.