Repeal of Vero Beach water, sewer rate increases fails

VERO BEACH — Unless the Vero City Council takes the issue up again at a later date, the more than $13 million in cumulative water and sewer increases scheduled for the next five years will remain in place.

With Vice Mayor Sabin Abell out sick and Councilman Tom White having left the meeting to speak at a Rotary Club luncheon, a unanimous vote of the remaining three — Mayor Kevin Sawnick, Councilman Brian Heady and Councilman Ken Daige — was needed to approve the measure.

 

  Heady, for several reasons, was not convinced. He grilled Water and Sewer Director Rob Bolton about the potential impact on city property taxpayers.

“We did a study to show that we needed these increases and there’s no comprehensive report that we have that shows that we don’t need them,” Heady said.

City staff said the move to repeal the rate increases was about three weeks in the making, yet neither Water and Sewer Director Rob Bolton nor retiring Finance Director Steve Maillet did not have time to submit a written plan of how the city would survive minus $1.2 million in revenue in the coming year, or millions more in years to come.

To cut expenses, Bolton also said he had eliminated some open positions and, due to some retirements, more staff would be cut from the budget in the fall.

Without giving dollar figures, Bolton said he was also proposing delayed capital improvements to the city’s reverse osmosis plant and further delaying another reverse osmosis train due to reduced water consumption. The rate increases would have allowed the city to build up the 90-day operating cash reserve that bonding agencies like to see in order to issue municipal bonds.

Instead, Bolton said the city could create a “sinking fund,” putting money away to eventually pay for the improvements in cash.

The current operating cash in the fund ranges month to month from zero to about $500,000, Bolton said.

The water and sewer enterprise fund is already nearly $25 million in debt. Heady said the rate increases should be used to pay down that debt, in preparation for the possibility that the city would lose 38 percent of its customers when franchise agreements with the Town of Indian River Shores and the county expire in 2016 and 2017, respectively.

“The payments are $1.46 million (per year) on the $14 million bond and on the loan, the State Revolving Fund, are $560,000 next year,” Bolton said.

Heady also was against the measure because he felt it was only postponing the inevitability of rate increases, not eliminating them. He said the burden, down the road, would need to be shouldered by city taxpayers and potentially by only city residents should the county and Shores pull out of the system.

Daige strongly disagreed with the council’s failure to act.

“I understand what Mr. Heady is saying, these are concerns we need to think about in the future, but now we need to pass this,” Daige said, adding that ratepayers are suffering with bills they can’t pay.

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