The City of Gulf Breeze is expected to hold a Public Hearing on an increase in water and sewer rates and a 3 percent surcharge for South Santa Rosa Utility customers at their Monday City Council meeting. After the hearing, the City council could implement the utility bill increase and make it effective as soon as the middle of this month.
The proposal for the rate increase and surcharge came from SSRUS board members and the City earlier this year.
According to Deputy City Manager Curt Carver, the rate increase side of the deal came from SSRUS board members while the surcharge issue came out of City budget deliberations.
“The SSRUS board, who in looking in their budget, saw that their operational margin was less than 2 percent. They had a study done years ago showing the margin should be 15 percent higher than their operational expenses. So that got them into ‘We had this study, and recommended 15 percent… so we are way low’,” Carver said. “They asked staff to come back with options.”
That was when the staff suggested a 5 percent margin suggesting SSRUS implement it over the next 5 years instead of all at once to help soften the blow on utility customers.
The surcharge, according to Carver, was something that came out of budget negotiations.
The City claimed the utility service provider had not taken advantage of state authorized surcharges in the past that could have been tagged onto customer’s bills.
The city had the right to mandate a surcharge of up to 25 percent, but declined, proposing a 3 percent surcharge instead. With the increase, SSRUS will generate an additional $150,000 or more in revenue annually.
The increase and surcharge will only effect customers living outside of the City limits of Gulf Breeze.
SSRUS has nearly 6,000 customers in that area.
“The City was looking at the equity of things. City customers pay 5 percent utility tax on water, while SSRUS customers do not,” Carver said.
The deputy city manager said there is also a decline in county aid for the utility service provider, which prompted the City and SSRUS to look at different ways to increase cash flow.
Carver said that since residents living outside of the city limits have access to things like the City Parks and Recreation amenities, the City felt it was unfair for them not to bring them up to par with city residents.
“The 3 percent surcharge is a way to provide a degree of equity between SSRUS customers and city customers….these residents who pay city taxes,” Carver said.
Carver said the rate increase means a typical customer who has four or five people living in their home and uses 5,000 gallons a month can expect to see around a $5 increase.