Newspaper article The Florida Times Union

Neptune Facing Rate Hike to Fix Utilities Water, Sewer Lines Crumbling; Bills to Go Up 25%

Newspaper article The Florida Times Union

Neptune Facing Rate Hike to Fix Utilities Water, Sewer Lines Crumbling; Bills to Go Up 25%

Article excerpt

In the near future, Neptune Beach residents will likely face a

hike in water and sewer rates to pay for an ambitious program to

upgrade an antiquated utility system.

The question is how much that increase will be.

A higher increase now could mean more money in reserves later

to offset the cost of future projects as the city embarks on a

15-year, $15.9 million upgrade of a utility that is still using

some lines that date to the 1930s.

Neptune Beach City Manager Richard Linn said the City Council

is looking into a 25 percent hike that would raise the 6,000

gallon-per-month rate from $30 to $37.50.

In future years, the rate would increase more, perhaps as much

as 10 percent annually for the following four years.

Linn said the 25 percent hike now and future increases of 10

percent would be an optimum method of building reserves. With a

substantial reserve, future bonds would be easier to get and

interest rates would be lower, he said.

"If we don't get the system on a sound financial footing, it

would be difficult to bond and expensive to bond," he said.

The average monthly consumption for a single-family home tied to

water and sewer services in the city is 6,000 gallons.

Now, the city's rates are lower than those in surrounding

communities, including Jacksonville, Jacksonville Beach and

portions of nearby St. Johns County. With a 25 percent hike, the

rate would be lower than what is charged in all of those

communities with the exception of Atlantic Beach.

The amount of any increase will be tied to funding plans the

City Council will also be considering, Linn said. The city could

pay for the work with short term or long term bonds, reserve

funds or a combination of sources, he said.

City Council member Ron Patronik said the problem is that the

city is tied to making repairs using only funds generated by the

utility system.

Because of a past bonding issue that said improvements must be

paid for by the system itself, the city must come up with

funding through rate hikes.

Patronik said he hoped portions of the work -- like road

resurfacing that will be needed after the utility work is done

-- could be paid for from other funds. …

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