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Vero to move South Beach water customers to county rates

STORY BY LISA ZAHNER (Week of April 10, 2014)

With Indian River Shores customers already receiving county water, sewer and reuse rates, and a vote set for Tuesday to shift South Beach and mainland county customers on Vero’s water-sewer system to county rates, Vero’s own city residents likely will be the only ones left paying the old city rates by mid-summer.

City Manager Jim O’Connor said there’s no plan to convert the approximately 60 percent of water-sewer customers inside the city to county rates, because, according to city staff, certain classes of commercial customers and high-volume users would pay more. O’Connor said this hypothesis is based upon a recent water-sewer optimization study GAI Consultants performed for the city.

Councilwoman Pilar Turner said she has not heard any complaints from city ratepayers about remaining on the Vero rates. “I guess in the absence of city ratepayers demanding to go on county rates, city residents will stay the way they are,” she said.

“Obviously the city rates are better for high-volume users and the lower volume users subsidize that,” she said. “But if we want to focus on conservation, it would make sense to switch everyone over to the county rates.”

Turner said she has heard from Vero water-sewer Director Rob Bolton, from consultants and from her colleague, Vice Mayor Jay Kramer, that county rates are higher.

But, she said, there’s been no flood of complaints from Shores residents about hikes in their bills after being converted to county rates, so she’s skeptical that Vero rates are anything but what she’s seen in rate comparisons presented by utility activists Dr. Stephen Faherty and CPA Glenn Heran – which show that county rates are substantially lower in most cases.

Depending upon meter size and average monthly consumption, Heran’s figures show the cost disparity between city and county rate structures for single-family residential water-sewer customers is 22 percent for the smallest meter to 67 percent for the largest size meter.

O’Connor said switching the Shores to county rates since October 2012 has been “revenue-neutral.”

“I’ve been told the same thing, but I have not seen the numbers,” Turner said, adding that she will request those figures again prior to the April 15 vote. “I asked for data and all I was given was the GAI study saying that it was revenue-neutral.”

Should the city switch all its customers to county rates, Vero would effectively be giving up any control over its revenues, as the county could reduce its rates and force Vero to follow suit.

O’Connor said the computer programming for switching South Beach and mainland county customers over to county rates is already in place, but time would be needed to establish the number of equivalent residential units (ERUs) for customers being converted.

Single-family homes are one ERU regardless of square footage of the house. Multi-family buildings are billed differently depending upon how they are metered and commercial customers are assigned a certain number of ERUs for billing purposes. The more ERUs a business is assigned, the more water can be consumed before the per-gallon charge is bumped up to a higher rate. The first 3,000 gallons of water and sewer charges per ERU are billed at a lower rate, with the price per gallon rising from there.

City staff had said it would take 90 to 120 days to make all those calculations and to switch the South Beach customers over once the council takes a final vote. The matter is expected to sail through, as there’s been no opposition so far.