Bite the bullet on rate hike
As expected, a proposal to greatly increase water and sewer rates is on the table Monday.
Cape Coral City Council will be asked to increase the monthly fee for water and sewer services each year for the next five: 30 percent beginning this October, another 15 percent in October 2010, 2011, and 2012 and 3.5 percent in October 2013. The fee increases for wastewater would be of the same percentages.
If approved, utility rates will nearly double in the next five years, bringing the average Cape Coral water and sewer bill from $81.97 per month to $157.79.
These proposed rate increases come on the heels of the annual increases begun in 2006, and exceed previous projections by a substantial amount.
Council, though, has no choice but to pass the fees, onerous though they are: The city is in technical default of the bonds issued to pay for facility expansion projects. The city absolutely must come back into compliance, and the only way to do this is by guaranteeing the city has enough revenue to make its payments.
An ugly option?
Sure.
Should we be kicking and screaming?
Maybe.
But the consequences of actual default carry a pretty hefty price tag, too – a junk bond rating and much higher interest rates, assuming money could still be borrowed for city projects.
Approving the rate increase to come into compliance is by far the less costly evil.
Nor does it mean we all pay 30 percent more for water and sewer come October.
While time is running out on the compliance issue and action there is critical, council has the entire summer to examine other options that may allow the board to mitigate some of the proposed increase before it actually goes into effect.
We certainly urge them to do so, including definitive action on restarting the UEP.
Approve the rates, comply with the bond covenants, examine the options, and then move forward with the one that will fairly and equitably get the bills paid.
For if there is one thing we have hopefully learned from the bond debacle, bills always come due. And we always have to pay, one way or another.
– Breeze editorial