Water capacity fee increase for new construction also approved, for first time since 1999
The same day the Sarasota County Commission voted unanimously to raise the wastewater fees its residential and commercial customers pay, it also increased both water and wastewater capacity fees for new construction.
The last time wastewater capacity fee changes were approved — for new sewer connections — was in 2004, according to a staff memo provided to the board in advance of the Oct. 7 meeting.
The water capacity fees had not been modified since 1999, as noted in a 2018 capacity fees study county staff paid a consulting firm to undertake.
In the spring of 2018, county staff hired Public Resources Management Group (PRMG) of Maitland to complete the analysis necessary as the basis for any capacity fee adjustments.
On Oct. 24, 2018, Scott Schroyer, then-director of the county’s Public Utilities Department, answered questions posed by then-Commissioner Paul Caragiulo, about the timeline for that initiative.
As he understood the situation during the summer of 2018, Caragiulo said, the Public Utilities Department staff had been delaying the start of that study.
Schroyer pointed to his own understanding that one of the commission’s eight major initiatives for the 2017-2019 fiscal years was to “Ensure Fiscal Sustainability.” To that end, Schroyer continued, county administrative staff initiated the fee study effort toward the end of 2017, with the consulting firm hired in March or April of 2018.
“OK,” Caragiulo replied.
A staff memo provided to the commission in advance of that Oct. 24, 2018 regular meeting referenced the board’s major initiatives, noting that three strategies were associated with them. The third strategy, the memo continued, was a review and update of the county’s utility capacity fees.
In a memo provided to the commissioners as part of the packet for their regular meeting on Oct. 7, Mike Mylett, the new director of the Public Utilities Department, pointed out that PRMG completed the capacity fees study in September 2018.
(With a unanimous vote on Aug. 27, the commission had confirmed Mylett as Schroyer’s successor.)
PRMG noted that since the fees last were reviewed and adjusted in 2004, “the County’s total gross utility plant investments have increased by over 100% and overall construction costs have increased by over 50%,” the Oct. 7 memo continued.
The 2018 study “revealed that while the County’s current water and wastewater levels of service appear reasonable based on current facility use, increased capacity fees are needed to account for projected capital costs and growth within the County,” Mylett added in that memo.
In its September 2018 report, PRMG said that, based on its findings, it recommended that the water system capacity fee be increased from $2,720,to $2,950, or $230 per Equivalent Dwelling Unit (EDU).
Mylett has explained to the commission that an EDU is a single-family dwelling.
“For the wastewater system, we are recommending an increase in the facilities capacity fee from $2,627.16 to $3,190, or $562.84 per EDU,” the PRMG report said. “The combined water and wastewater fees with the proposed rate adjustments would be $6,140, an increase of $792.84 or 14.8% when compared with the existing combined fees of $5,347.16,” the report noted. “Recognizing that the combined facilities capacity fees have not been adjusted in approximately fourteen years,” it continued, the overall change would represent a compound annual growth rate of approximately 1% per year.
“Overall, we consider this to be reasonable,” the report added, given the county’s “total gross investment in utility infrastructure (including construction-work-in-progress),” plus the rise in the overall expense of constructing utility plants. The report pointed to the Construction Cost Index published by the Engineering News Record, which showed a 50% uptick since 2004.
On Oct. 24, 2018, when Schroyer and Robert J. Ori, president of PRMG, appeared before the commission, Schroyer said staff was not recommending any increases in the fees at that time.
Among its next steps, Schroyer continued, staff would “explore alternative methodologies” to be used in the future and then discuss with county administrative staff and the commission, as well as stakeholders, the potential for any changes in the fees before making such a formal recommendation.
In early April, Schroyer left the county’s employment and County Administrator Jonathan Lewis named Mylett as interim director of the Public Utilities Department.
Serious problems and significant expenses
Schroyer’s unannounced departure followed the revelation that the county’s water reclamation facilities — primarily the Bee Ridge structure on Lorraine Road — had been illegally discharging millions of gallons of reclaimed water over a period of years. Altogether, records showed that just under 1 billion gallons had flowed from the Bee Ridge facility’s 142.5-million-gallon storage pond between September 2015 and March 26 of this year.
Three nonprofit groups — led by Justin Bloom, founder of the Suncoast Waterkeeper — filed suit against the county in U.S. District Court in Tampa this spring in an effort to force the county to take the necessary steps to improve its wastewater system so those spills would end.
In an Oct. 4 guest column for The Sarasota News Leader, Bloom, an attorney specializing in environmental law, pointed to the Suncoast Waterkeeper’s investigation of sewage spills in Sarasota County, which led to the lawsuit. “That effort revealed a shocking pattern of longstanding, systematic infrastructure failures and disregard for public health and water quality in the coastal waterways that we are committed to protect,” he wrote.
Lewis told the News Leader in June that he was unaware of the situation with the Public Utilities Department until he learned of the pending litigation.
County commissioners this summer criticized senior staff — without citing names — for keeping them in the dark about the problems with the wastewater system. They emphasized that they need to hear bad news, regardless of the expense that might be entailed in correcting problems.
The County Commission has agreed to modify the Bee Ridge Water Reclamation Facility (WRF) to Advanced Wastewater Treatment (AWT) status and increase its capacity by 50%, at a potential cost of $160 million.
That step also was part of a Consent Order with the Florida Department of Environmental Protection (FDEP), based on the illegal discharges. The work must be completed by Dec. 31, 2025.
Implementing new fees
The revised water and wastewater capacity fees will go into effect on Jan. 7, 2020, Public Utilities Director Mylett told the commission on Oct. 7.
Along with approving the increases in those fees that day, the commissioners approved a $1 “wastewater quality fee” per month for all single-family dwelling units.
Further, the board voted unanimously to raise the county’s wastewater fee by 5% a year until the county has paid off the bonds that will cover the expense of the water reclamation facility improvements.
The new wastewater quality fee and wastewater rates will go into effect on Jan. 1, 2020, Mylett said.
Referring to the wastewater hike, Commissioner Alan Maio sought clarification on Oct. 7 from Mylett that it “stays on until we remove it?”
“That’s correct,” Mylett told him.
“With no end date until we say so?” Maio asked.
“That’s correct, sir,” Mylett again told Maio.
When Commissioner Christian Ziegler asked about the lack of a termination date for the rate increase, that was when Mylett explained about the fact that the increased revenue will be pledged to pay off the bonds.
In response to concerns Ziegler raised about the lack of a “sunset” date for the higher wastewater rate, his colleagues agreed to ask staff to take a look at a potential modification of the language in the resolution that had been proposed.
As a result, on Oct. 8, Mylett explained that he had worked with the Office of the County Attorney on amended the resolution’s wording. The modification said the rates are intended to remain in place “until the full payment of all outstanding indebtedness to which the revenues from those rates are lawfully pledged.” Therefore, after the debt has been “fully satisfied,” the wastewater rate increase “shall automatically sunset unless otherwise reviewed and continued by the Board of County Commissioners.”
Maio made the motion to approve the resolution — with staff’s modification — with all the water and wastewater rate and capacity fee changes.
Commissioner Ziegler seconded the motion, and it passed 5-0.