Newspaper article The Florida Times Union

Bond Issue Talked in St. Johns Utilities Buyout Rates Would Increase in 2 Service Areas

Newspaper article The Florida Times Union

Bond Issue Talked in St. Johns Utilities Buyout Rates Would Increase in 2 Service Areas

Article excerpt

Two private utilities are proposing St. Johns County issue

$85.5 million in bonds to purchase them and then raise rates for

their customers.

About $74 million of the bond money would be paid to the owners

of Intercoastal Utilities and St. Johns Service Co., which serve

7,000 customers in the Ponte Vedra area.

The proposal comes at a time when officials have said it makes

sense to consider consolidating the 19 water and sewer utilities

in St. Johns County so officials have more control over rates

and growth. But some have urged caution in what would be a

complex and expensive undertaking.

As part of the deal, the county would pocket $6 million of the

bond money to use however it wanted. The other $4.5 million

would go toward starting to pay off the debt.

All customers of the county's utility service would be

responsible for paying off the bonds.

The proposals do not mention any rate increases for customers

of the county's utility. But there would be higher rates in both

northeast service areas.

Rates within the Intercoastal service area would go up about 22

percent this year, rather than the 46 percent it wants if it

retains ownership.

St. Johns Service water and sewer customers would have an

average 19 percent rate increase this year.

Michael Givens, finance director for St. Johns County Clerk of

Court Cheryl Strickland, said he did not understand why the

county would want to issue $6 million in bonds more than it

would need to buy the utilities. The county would have to pay

off the $6 million with interest, he noted.

The bond issue would be a cheap way for the County Commission

to get money for other projects, said William Sundstrom, a

Tallahassee attorney who made the proposals on behalf of the

utilities.

"It would totally be their choice" whether to issue the extra

$6 million, Sundstrom said.

Givens also questioned why the county would be interested in

splitting future connection fees with the current owners, as the

proposals suggest.

Givens said the proposals need to be thoroughly studied by

county staff. …

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