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October 3, 2013

White Springs sewer rate increases

Jasper — A standing room only crowd turned out for a two-hour final budget hearing at town hall council chambers in White Springs on Tuesday, Sept. 24, and most left the meeting dissatisfied with the results, but with a better understanding of the town’s challenges.

On the table were proposed millage rates and adoption of the budget for fiscal year 2013-14, both of which passed at the end of the meeting by a 4-1 vote with Councilman Rhett Bullard voting against both.

Mayor Helen Miller announced that the proposed millage rate for the 2013-14 fiscal year of 4.387 mils is a rollback rate for 2013. Town Manager Bob Farley also reminded the audience that two publicly advertised budget workshops had already taken place.

“By a vote of 4-1 the budget was passed on the first hearing we had,” said Farley. “That budget is a balanced budget of $1,372,130 in revenues, as well as $1,372,130 in appropriations and reserves. All of council’s recommendations from the workshop, as well as the public hearing have been added to the budget.”

Before the two items were passed there was a lot of back and forth debate between council members and the public about rising water and sewer rates. The subject that garnered the most attention and the most input from residents was the proposed rate increase for sewer services. Some residents suggested raising the rates in steps each year to lessen the impact. Others suggested reverting back to septic tanks rather than sewer, or even farming the service out to a private company.

Farley, in an effort to justify the sewer rate increase, explained that the town had been pulling funds from their reserves to keep the sewer department operating in past years. He said the cost of operating that department over the last 10 years had gone up 54 percent, however, the rates that residents have been paying only went up 17 percent.

Miller explained that the 2008-09 recession also affected the town’s revenue and had an impact on raising rates.

“The bond market crashed,” she said. “We had a loan from the state that was invested in a bond and the proceeds of that bond were used to pay off the existing loan, which is now about $500,000. When the bond market crashed, the income from that bond went away, so this year we were in a scramble to refinance.”

Farley, she said, arranged a new low cost 20-year loan to pay off that balance. Previous loan payments were $96,000 annually and it was paid out of the bond income.

“The additional cost to the town on an annual basis is about $32,000,” said Miller. “So that’s $32,000 in addition to everything else we’re paying off. That was an unanticipated additional annual expense.”

Miller went on to explain that when new personnel took over at the sewer plant last year, it was discovered that many years of maintenance and service that should have been done hadn’t been done under previous management. Required quarterly sludge maintenance, she said, had not been done since the sewer plant was built, as well as other service procedures.

“This year we had to catch up on that service and maintenance,” Miller said. “Now we understand the true operational nature of the sewer plant.”

Andrew Greene, the new sewer plant operator, Miller said, has passed his state requirements and the town is now in a better position to run the plant properly. She also said Farley is the first professional, experienced town manager the town has ever had and he brought to light many things the town needed to correct when he came onboard.

“I don’t want to raise rates and I don’t want to raise taxes, but the town council has a fiduciary duty to balance the books for the town,” Miller said.

Rumors that rates were being raised in order to increase salaries of town personnel, Miller said, are not true.

“The employee salaries and benefits for this fiscal year was $391,367,” Miller said. “We have a reduction in personnel costs for the next fiscal year down to $360, 297. We are reducing salary costs over $30,000 from this year to the next. We are consolidating positions and we’re reducing consulting costs. The effort is being made to get the town’s operations as low as we can, but without sacrificing the quality we need to stay afloat.”

Farley explained that in previous workshops the Florida Rural Water Association did an analysis of expenses versus revenues for the town and recommended sewer rates be raised. The town council, he said, approved the rate increase at their last meeting. He went on to explain that the general fund includes costs for fire, police, administration and the road department.

“Those departments are funded through the ad valorem taxes,” he said. “Currently, that is $408,000. In order to operate that department, additional funds had to become available.”

Resident Coretta Ford said she understood the reasons for the rate increase, but she also told the council there are many residents in White Springs who are one paycheck away from poverty and that the slightest increase in rates will be a hardship.

Miller explained that even more stringent state and federal guidelines for water quality are coming down the pike and will be another expense the town has to look forward to.

Miller and Farley recently went to Tallahassee to try to procure a multi-million dollar grant from DEP to deal with inflow and infiltration in the water system.

“We’re going to be very, very fortunate to get over 90 percent of that as a grant,” Miller said. “We have the possibility - instead of raising the matching funds - of either getting that from the Hamilton County Development Authority or a CDBG matching fund. You don’t get any better than that.”

When some residents suggested septic tanks would be cheaper than a sewer system, Miller explained that the DEP is cracking down on them and that to get a new septic tank installed the cost to the homeowner would be about $16,000.

“We’re also next to the Suwannee River, which means they’re going to expect greater cleanup from us in our community in terms of water,” said Miller.

Miller said she is well aware there are many low income residents in the town and that property taxes are extremely low for most residents, with 70 percent of them paying less than $100 a year. Those same residents, she said, expect 24-hour police and fire protection, as well as other services, all of which cost money.

The volunteer fire department is one matter that if not corrected by the end of the year will cause homeowners’ insurance rates to rise. An enclosed structure and not enough certified firefighters are two items that did not meet ISO requirements in a recent inspection and will be costly to correct.

Miller said, “We do, as a town, have a host of issues to deal with, none of which have easy fixes and they all cost money.”

Councilman Richard Marshall said he, just like the other council members, does not want to see rates rise for residents, but it is something that needs to be done so that the town can provide necessary services.

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