City Stormwater, Streetlight Rates to be Examined

New Port Richey’s stormwater and streetlight utilities are operating at a deficit, and City Finance Director Douglas Haag has recommended that the city find a way to make the utilities’ revenues offset their expenses.

So on Tuesday night, the City Council authorized New Port Richey officials to hire a consultant to study the assessment rates of the two utilities and propose updates to them. 

The consultant selected, Tallahassee-based Government Services Group, would be be paid $23,000 for the work. The group has offered to study the utilities' costs, project annual revenue requirements and suggest updates to rates that will allow the city to meet those requirements.

New Port Richey hasn’t formally examined the rates of its stormwater and streetlight utilities since the early years of the 21st century. The stormwater rate has not changed since 2001.

The city stormwater utility fund budget for the current fiscal year has an operating deficit of $155,600. The city’s streetlight utility has an operating deficit of $68,000.

The only vote Haag asked the City Council to take Tuesday was to select a consultant to study the city’s utility rates.

"It's been long overdue," he said.

Haag recommended in a memo before his presentation to the council Tuesday that the city ultimately establish a policy for stormwater and streetlight utilities to break even and set rates at a sufficient level to offset expenses over 3-5 years.

He also recommended the City Council eventually ponder instituting an automatic annual rate increase for both utilities and that the street lighting utility be separated from the general fund, which has subsidized the utility's revenue shortfalls.

He said later that those recommendations "along with any change in recommended rates would come back to Council for final approval."

“We’re trying to really implement better business practices,” City Manager John Schneiger said. 

A financial consultant recommended last year that utilities like stormwater and street lighting servicess be made self-sustaining.

An important reason for this is to reduce strains on the city’s general fund, which pays for police, fire rescue, parks and recreation, library and other services. 

The city has a stormwater master plan that calls for $3.2 million to be spent on capital improvements projects over the next four years. The city was hoping to trim this cost by 50 percent by usng grants from Southwest Florida Water Management District, but recent cutbacks at Swiftmud may jeopardize that plan.

The city also needs $320,000 to pay for equipment during those four years.

The revenues of streetlighting and stormwater utilities have fallen short of meeting expenses over the past several years.

The New Port Richey streetlight utility budget is part of the city general fund, and the general fund has subsidized the utility’s past deficits. Assesments are based on the streetlight budget and the square footage of a home. The owner of a home of 1,500-2,000 square feet currently gets an annual bill for $26.07.    

The city’s stormwater utility fund, which the city was required to set up by federal law in 2001, has subsidized revenue shortfalls with money from reserves.

From the fund's creation in New Port Richey to present day, property owners have annually paid $40.32 per 2,629 square feet of impervious area on their land. 

The general fund used to be subsidized by the city's Community Redevelopment Agency.

The CRA has wracked up debt that city officials have said totals $22 million.

Now the general fund has started subsidizing the CRA. In 2013, the general fund will likely need to subsidize the CRA’s debt service.

“You thought last budget season was bad,” Deputy Mayor Rob Marlowe said at a past meeting. “This next one is going to be scary.”

Last year during budget discussions, .

Property owners came out in force against the hike. They complained that it was tied to a property's square footage, and owners of larger property would be required to pay more than owners of smaller properties. The city council voted against the measure.

Haag is requesting that future streetlighting assessments use methods of recouping costs that are different; for example, charging all property owners the same amount.

He said that this would require an ordinance change.