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Guest commentary: The real truth about utility rates
A recent document, “The Truth About Utility Rates”, by Butch Neylon, inaccurately describes Marco Island’s utility operations as out of control. For a utility that has won State awards as “best operating utility”, fairness is essential. Neylon’s report has many misleading, contradictory and false statements that need correction. Let’s take them one at a time – first his statement, then the facts.
Statement: “When Marco Island purchased the utility in November of 2003, City Council committed to no rate increases other than a cost of living for five years. Between 2003 and 2006 rates rose 9%”
Fact: Misleading. Implies that rates exceeded cost of living increases. Water rates were increased only by cost of living adjustments in this period. No other rate increases were made.
Statement: “Also in 2005, the utility added “Irrigation Conservation Rates”, which effectively increase water costs to many single family homes by more than 50%”
Fact: Misleading. The conservation rates were developed based on lot sizes which assured a level of fairness not found in other cities. Over 90% of water users have conserved and have not seen any increases in water costs. Most of the remaining 10% have made adjustments to their water use. Conservation has worked and there has been a 12% reduction in water usage.
Statement: “Additionally, all master meter accounts, mostly condominiums, were hit with base water rate increases…..between 2005 and 2006”.
Fact: Neylon contradicts himself about the need for this increase. At the March 5, 2007, City Council meeting he stated that he “feels that master meter condos are not paying their fair share”. The utility had an obligation to correct a significant inequity in master meter base rates; that is, master metered condos were being charged only 25% of what all other users were paying for the same service. Accordingly, after months of negotiations, a fair adjustment was phased in.
Statement: “A similar base rate increase for master meter accounts for wastewater services is on the horizon”
Fact: False and a typical scare tactic. This issue had been reviewed and there are no plans to adjust base rates for master meter wastewater services.
Statement: In February, 2007 a plan to increase all utility rates by 2% for each of four years…was put into place for paving as a result of the STRP” and “In October of 2007,….the utility levied another 8%”
Fact: Misleading. The total 16% authorized rate increase was to reduce the costs of sewer completion (STRP) by shifting a portion of the common expenses of plant upgrades and paving to all utility users. Residents indicated a preference for this utility rate adjustment rather than using property taxes in the June, 2007 referendum.
Statement: “All together 25% in rate increases in four short years”
Fact: Misleading. The only annual increases that the utility has ever requested were for cost of living adjustments totaling 13% in four years. The special rate increases in 2007 were forced on the utility as a way of reducing the cost of the STRP and was implemented after residents showed a preference for this option in the June, 2007, referendum.
Statement: “The utility still intends to add another 10% in rate hikes by October, 2009, and continue the 8% paving hike indefinitely”
Fact: False. The only authorized future rate increases are 2% in 2008 and 2% in 2009. In addition, the presently authorized 8% “paving” hike is not “indefinite” and is eliminated in six years.
Statement: “Our City Council regulates our utility rates with no State oversight”.
Fact: Every municipal owned utility is regulated this way. State oversight did not give local citizens regulatory or political control over rates. City Council fought to assure our utility was not purchased by other municipalities 600 miles away which would have resulted in no regulatory or political control.
Statement: “That is an effective 14% decrease, not a 17% rate increase, in the next two years only if the STRP is halted”
Fact: False. Utility rate making is a highly complex process that involves dozens of variables, professional projections, and an expert review of operating costs, revenue projections and required expenditures. The City asked Public Resources Management Group, a recognized leader in utility rate analysis, for an independent review of the rate impact of terminating the STRP. They concluded that up to a 33% rate increase in both water and sewer for 25 years for all users would be necessary to pay off the wasted investment involved in termination of the STRP
Statement: “We must redirect our focus on producing and distributing reuse water”
Fact: The STRP will help do just that. This is another contradiction by Neylon. If the STRP is terminated we will lose 250 million gallons of reuse water a year. This amounts to a loss of 12% of our irrigation needs and would be water not restricted by any drought conditions.
Comments
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The truth, thank you! Neylon and the lot are liars. Of course, they always try to spin the facts.
#1 Posted by Sailor on January 13, 2008 at 11:01 a.m. (Suggest removal)
If you're fortunate enough to live in Hideaway Beach, you can see Mr. Arceri spin his pro-sewer yarn in person tomorrow (wednesday) morning. Honestly, he's getting as pathetic as George W., lecturing to hand-picked crowds in closed venues.
#2 Posted by MarcoJimbo on January 15, 2008 at 10:56 a.m. (Suggest removal)
I don't know what's going on here but I posted here a few hours ago and my post is now gone. I used no questionable language nor did I make any false allagations. I guess this paper is now in full censorship mode.
#3 Posted by Lolala on January 16, 2008 at 9:16 a.m. (Suggest removal)
Mr. Arceri, do we poor smucks in the single family homes who will pay $20K+ in sewer assessments get reuse water?
Answer—NO! Not a drop goes to us.
That water goes to the hotels, condos, and to irrigate all the freshly planted medians and grass by the new sidewalks. Note that on Collier Blvd., those are watered at all times of the day and night—I’ve seen them spraying away at high noon. Seems that is a violation of a city ordinance—but City staff obviously is exempt from following the same rules as do citizens.
#4 Posted by Avenger on January 16, 2008 at 9:33 a.m. (Suggest removal)
hey marcojimbo...we got arceri stopped from his crap in hideaway....did not happen...made a few phone calls.....goodbye arceri.
#5 Posted by van on January 16, 2008 at 10 p.m. (Suggest removal)
hey john....since i live near you i see the police come by your house on each shift...driveby....what in the world is that for? go stick your head in the sewer!
#6 Posted by van on January 16, 2008 at 10:02 p.m. (Suggest removal)
Whoever is writing about re-use water for homes is probably a supporter of Neylon, et al. Because as is the case with almost all that they have to say, this statement is full of bologna. There is not enough wasterwater produced on Marco Island, even with 100% sewers, to deliver re-use water to homes. JMr. Neylon has this idea that has been totally rebuffed by SFWMD and determined to never be allowed or permitted by SFWMD to use raw water, our precious drinking water, and mix it with re-use water to sell to condos as re-use water if the STRP is stopped. Again, as with almost all of his ideas, not going to happen. We need a permit from SFWMD to do it, and they will not issue ut.
We also have no place to store any excess, other than what we are pumping into the ground, after treatment.
So, CAVEMAN, please listen to reason, there is no water to sell you, with or without a pipe to deliver it !!!
Ed Issler
#7 Posted by lauralbi1 on January 17, 2008 at 9:51 a.m. (Suggest removal)
Laural, no one believes anything you say. You have lied for so long and so egregiously in your comments on this web site. Add in the nasty things you do like posting a comment to several LTRs yesterday, which had nothing to do with the content of the letter. You repeatedly posted some article allegedly from the Orlando Sentinel, and a 1989 article at that, saying that a Marco Island citizen did illegal things. Notice your posts have been removed. I’m surprised that you are still allowed to post. At this point in your online career, you do more good for whomever your are against than the guys you are for. You are notorious for your lies. So keep it up, Laural!
#8 Posted by Avenger on January 17, 2008 at 7:04 p.m. (Suggest removal)
The past councils have had a remarkable ability to sell snake oil as organic milk. Mr. Neylon is correct that residents were promised that there would be no rate hikes other than COLA hikes for 5 years after the utility was purchased. The promise is a matter of public record and is why the citizens voted for the bond issue. (I did not.)
Shortly after we bought the utility we had a huge water rate hike under a different name. The city imposed "tiered" rates ... the more you use, the higher the rate you pay. The Finance Director assured everyone that the tiered system was "revenue neutral." How this could be when the lowest rate dropped by a penny a thousand gallons while the other two tiers increased by up to $1.41 per thousand gallons insults the intelligence of any citizen. But our Finance Director, under John Arceri's guidance, continued with this absurdity. I pointed this out to the council and was shouted down. The city also assured everyone that the tiers took into account the size of the lots and that no one who followed the city's suggested irrigation schedule would pay a higher water bill. I calculated the amount of water I would use for my modest lot if I followed the city's recommendations and found I'd be in the highest tier; my water bill would double. I gave these calculations to the council and I was laughed at.
John, we've had enough of your rotten bul--hit! Go fund a foundling home somewhere.
Ed Foster
#9 Posted by EdFoster on January 18, 2008 at 5:35 p.m. (Suggest removal)
Intersting that John Arceri does not deny the rate increases exist. He only says that Butch's understanding of why they were imposed is "misleading". Well that's Arceri's opinion isn't it. An intelligent and reasonable person can decide if that equates to spin or not. Arceri does stretch the truth a bit when he says the 8% hike for road reservacing is temporary. I doubt anyone believes this council or the one Arceri hopes we have in the future will reduce any rates. If you really want to save the money you have, vote for those that promise to rollback these rate hikes, vote for Batte, Hall, Neylon and Guidry. Why would anyone vote to give their government more money?
#10 Posted by Hawke1 on January 19, 2008 at 7:54 a.m. (Suggest removal)
So what. I'm voting for the candidates that promise to reduce utility rates or roll back existing rates designed simply to increase revenue. Why would anyone vote to give their hard earned cash to the government? Vote for Batte, Hall, Guidry and Neylon and keep your money for yourself and your family.
#11 Posted by Lolala on January 22, 2008 at 6:22 a.m. (Suggest removal)
everyone needs to vote for 3 anti-sewer candidates and waldack.....whoooopeeee.
#12 Posted by van on January 23, 2008 at 10:41 p.m. (Suggest removal)
Anybody going to vote for the bartender and the failed property speculator? Or how about the Councilman that can't remember how many times he voted to screw the residents? I can't imagine how anyone in their right mind could vote for a bunch of losers to run their city. The rich, powerful and elitists will spend their money to keep their control of our City come hell or highwater. Vote to give our city back to the residents and the taxpayers, vote for Batte, Hall, Neylon and Guidry.
#13 Posted by Hawke1 on January 26, 2008 at 6:40 a.m. (Suggest removal)
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