BY MARK J. CRAWFORD
Starke water and sewer customers will see their rates rise again pending final approval of the ordinance first presented on July 2.
The commission voted 4-1 to move the ordinance to final reading.
City Manager Drew Mullins reminded commissioners that increasing rates was a commitment made in exchange for the USDA funding needed to reconstruct the city’s wastewater plant.
USDA provided $27.1 million toward the project to improve the efficiency and enhance treatment to meet higher environmental standards. This was a combination of both grant and loan funding, the latter of which must be repaid. The city pledged future utility revenue to cover repayment.
Commissioner Danny Nugent presented his recollection of the city’s repayment commitment, which was to raise rates by 5% every other year. City Manager Drew Mullins said nothing was passed that effect. Instead, the commission was told that the total cost to customers would increase by $45 over time to repay the loan. So far, the cost has increased by $19, so there is a way to go. Mullins said the city was still eight or nine years away from meeting $45 target, and limiting increases to every other year won’t achieve it.
“This has to be done to establish our reserves just to pay for the loan. The loan itself is $10.1 million,” he said.
Nugent complained that delays and increased costs have negatively impacted the city’s ability to set aside more reserve funding for repayment. If things had been better managed, he said, the citizens wouldn’t be so burdened.
“We can’t keep asking citizens for more and more money,” he said.
Commissioner Janice Mortimer said because the city needed revenue for the improvements, it had no choice. She asked the manager to explain what happens if the city continues to delay raising the money it will need for repayment.
“The city literally goes broke trying to repay this loan,” he said. The annual payment is $376,000.
Mullins also countered Nugent’s claim about project cost increases being passed off to customers by saying the amount of the loan never increased. USDA provided additional grant funding instead.
In addition to repaying the loan, the rates must also provide operational funding for the water and wastewater departments. Commissioner Shannon Smith said the city had been losing money in the water and sewer business because of its prior rate structure. The departments need to make money, not subsidize water usage, he said.
Commissioners also countered Nugent’s claim that the project has been mismanaged and “drug out.”
“The project hasn’t changed. The overrun came from the cost of everything going up over the years,” Mayor Scott Roberts said. “To come back and mention that it’s a mismanagement of the department is so far off, I don’t even know where to begin with that.”
“It has nothing to do with delays,” Roberts said of the cost increases, which were covered by grant funding. “This is the same project that we were under DEP sanctions to get stuff started and changed, and that was before my time, and the commission was wise enough to get this project started, and we’re just finishing up.”
The city hasn’t spent money on the project above what was supposed to be spent, Roberts said. The city needs to raise the funds to repay its debt and overcome the funding deficit that Smith mentioned.
Roberts said he wanted it to be clear that there had been no mismanagement of the departments or project funding.
The first reading of the ordinance was approved 4-1, with Nugent dissenting. When finalized, the ordinance will raise the base rate and consumption charge by 5% for both sewer and water service.
For most customers, the base rate will increase to $21.88 for water and $39.42 for wastewater inside the city limits, and $32.82 for water and $59.15 for wastewater outside the city limits. Consumption rates vary depending on usage.
Duties ordinance finalized
The commission approved the second and final reading of an ordinance to shift oversight of the finance department from the city clerk to the city manager. This will support the manager’s role in preparing the city’s budget while maintaining the clerk’s role as city treasurer, overseeing collection and spending of revenue.
The vote was 3-2, with commissioners Danny Nugent and Shannon Smith opposing the change.
Police referendum set
Commissioners also set a referendum for the Nov. 5 general election. Starke voters will be asked if the police chief should remain an elected officer. The police department has been disbanded, and the former police chief has resigned. The commission has redefined it as a ceremonial position with an annual salary of $1.
If voters say yes, the city charter will be amended to remove reference to a police chief, police department and their respective powers from the charter.
Should a future commission fund a police department, the head of that department would be a city employee, not an elected official.
Commissioners unanimously approved the ordinance.
