Water rate hike proposal requires proper perspective
March 25, 2010
With the Tampa Bay area's unemployment rate at 13 percent and many workers living on reduced pay, this is not a good time for a rate increase of any type.
Some increase seems unavoidable, but Tampa Bay Water's proposal to raise the wholesale rate it charges local governments is badly timed for an additional reason: It comes after the public answered pleas by the utility and local officials to conserve water during the severe drought.
To be fair to the utility, which provides drinking water to most of the region, selling less water is not the entire story. Unlike last winter and early spring, this year the region has enjoyed adequate rainfall, so people haven't needed to water gardens, plants and yards as often. That has saved water.
Further, housing foreclosures have resulted in water accounts being closed. That also has reduced water use and revenue.
Water use in the region has dropped so much this year that the groundwater pumping levels of regional wellfields have been as low as 40-some million gallons per day, officials say.
That's a far cry from the 1980s and 90s, when the region relied too much on groundwater, and pumping levels routinely exceeded 100 million gallons a day, damaging wetlands, drying up lakes and causing other problems.
In considering Tampa Bay Water's proposal for a rate increase, the public should keep this historical perspective in mind.
If approved by the utility's board, the resulting boost of $1.52 per month for a household using 8,000 gallons of water a month isn't too much to pay for a diversified water supply that doesn't overwhelm the environment. (The utility says it mistakenly calculated the impact to these customers at $1.20 a month, as previously reported).
To move away from the reliance on groundwater, Tampa Bay Water developed much-needed alternative water supplies and facilities. These include a massive regional reservoir, which is now full, with 15 billion gallons; a 25-million-gallon-per-day desalination plant that recently started working at capacity; and a 66-million-gallon-a-day surface water treatment plant that is being expanded.
These alternative sources and facilities are much more expensive than groundwater pumping and still must be paid for. More than two-thirds of the utility's budget goes to retire debt and pay for electricity and chemicals, so there's not much flexibility.
The expenses are well worth it. The destructive groundwater pumping of the past should not be repeated, and residents are receiving quality water.
There is another positive, too: Planners say the utility's current system of providing water will be sufficient for the region for at least five more years and possibly longer, delaying the need to build more projects at public expense. This is because growth has slowed significantly.
But any rate increase warrants serious questioning by the board. Members should examine how the utility devises its rates. The proposal released last week calls for raising the current wholesale rate of $2.40 for every 1,000 gallons sold to member governments, to about $2.59.
Residents and local governments have been forced to cut expenses. Tampa Bay Water shouldn't be any different.
To their credit, utility administrators, in developing the proposed budget, have targeted three positions to cut and reduced expenditures by nearly $11 million, or a little over 6 percent. The total budget would drop from the current $176 million to $163.7 million.
If, after a thorough review, including salaries, the board can't find ways to further reduce expenses without jeopardizing its obligations to local governments, a small rate increase may be unavoidable. But it still wouldn't be too high a price for the public, which is benefitting from a diverse water supply.
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