Sewer and water rate hike higher than has been cited
To the editor:
The just completed audit of the city by the auditing firm of Purvis Gray and Co. disclosed the city was in violation of the bond covenant or contract with the people who bought bonds used to finance expansion of the sewer and water facilities in the past. That could result in our inability to sell bonds in the future.
It was for that reason the city finance director asked the council for approval of a series of rate increases to allow the city to get back in compliance. The public has been led to believe our sewer and water rates needed to be increased by 92.5 percent in order to meet future bond payment obligations over the next five years. All of this came about because the council rubber stamped approval to expand the system based on input from the staff which contained wrong assumptions on the need for such expansion. Their forecast assumed 5,250 new sewer and water accounts would be added each year and that demand for service would continue to grow beyond our ability to meet that demand. The record clearly shows we have never grown more than 3,839 new water accounts in one year and that was in 2005. In 2006 growth was 1,896 and in 2007, we only grew another 207 accounts and in 2008 another 1,484 accounts. You can find this on page 152 of the city’s annual financial report.
Here is yet another tidbit of information I just uncovered which should be of interest to all Cape Coral S&W ratepayers. It is not 92.5 percent more we are being asked to pay but 136 percent more if we use the year 2008 as a basis of comparison.
Page 17 of the often quoted 2008 Burton and Associates “Revenue Sufficiency Analysis” said the average Cape Coral sewer and water bill in 2008 was $66.91 for using 5500 gallons of water/month.
That 92.5 percent increase was based on the rates in effect in 2009 and not in 2008 when the original study was made. If we compare the 2008 monthly bill of $66.91 to the year 2014 monthly bill shown in Mr. Mason’s memo dated March 23, 2009, the per cent increase becomes 136 percent and not 92.5 percent.
The Burton study which was done in 2008 said on page 17, “The average combined water and sewer bill of all the entities in the survey based on 5500 gallons per month is $67.50 per month.” Therefor I believe we should start using as a basis for comparison, the 2008 rates and not the 2009 rates. Let me repeat that the increase is 136 percent more over the next five years than we were paying in 2008 unless the city finds another way to pay for this massive new capacity that may not have been needed.
Sal Grosso
Cape Coral