The following is the third installment of our “A simple question” series, this time directed to the six city commission candidates.
Vying for Seat 1 are Despina George, 62, 224 Whispering Pines Circle; Barry Hand, 51, 22 Apaco Street; George Mahr, 72, 212 Avenue C; and Ramon Lopez, 53, 16 Adams Street. In the race for Seat 2, Adrianne Elliott, 21 129 22nd Avenue, is running against Torben Madson, 57, 40 16th Street.
Early voting, at the county supervisor of elections office at 47 Avenue F, runs from Saturday, Aug.24, to Saturday, Aug. 31, daily from 8:30 a.m. to 4:30 p.m.
On Election Day, Sept. 3, votes will be cast at the Fort Coombs Armory, and all registered voters within the city limits can vote in these two non-partisan races, as well as in the mayor’s race.
If any candidate receives more than 50 percent of the votes cast, that will race will be decided on Sept. 3. If not, then the top two vote-getters proceed to the Sept. 17 run-off.
Voters can vote by mail in the Sept. 3 election, but cannot in the Sept. 17 runoff. Please direct any questions to the office of Supervisor of Elections Heather Riley, at 653-9520.
The question this week:
The city has embarked on a seven-year effort regarding its water-and-sewer rates, designed to end the existing default and repay millions of dollars owed the state. This has meant a rise in the fixed monthly Sewer User Fee, and higher per gallon rates for users, and will mean a modest but steady increase in those rates over the next few years. Do you support a continuation of this policy? Do you have any proposals that would lead to a lowering of water and sewer bills to users, and if so, please specify them.
The following are the candidate’s answers, in reverse alphabetical order, beginning with the race for Seat #1.
There is confusion concerning the city of Apalachicola’s financial structure. The city operates its daily financial activities from a general fund. This fund raises monies from taxes, grants, and fees, and its expenditures are for public safety, public works, sanitation, parks and recreation, library and general government service.
The city also has Enterprise Funds (EF) which generally are distinct, separate and accounted for differently than the general fund. EF are used to account for operations that are financed and operated in a manner similar to private business enterprise and where costs are recovered through user charges. The city has three EFs: the water and wastewater fund, Scipio Creek fund and Battery Park fund.
The city has implemented two programs to ensure the financial health and reliability of the water and wastewater systems fund:
1) The city has for many years charged its utility users a monthly Sewer User Fee (SUF). The SUF was initially established as a means for collecting monies to pay the city’s wastewater plant debt obligation. It is difficult to determine where these funds were used. In Sept. 2018, the city manager took control of the loan accounting and increased the SUF monthly fees to $29 and $95 for residential and commercial users, respectively. Collection of the SUF (approximately $46,000 monthly) through June 2026 will allow the city to pay its debt in full, ending a long history of financial missteps.
The SUF is a sound financial method for repaying the debt; however, I believe that the commercial rate needs to be tiered based on wastewater plant usage. The total amount collected for commercial SUF should not change; some rates unfortunately will go higher and some lower.
2) On Oct. 17, 2017, the Florida Rural Water Association issued its rate study findings and recommendations for the city of Apalachicola water and wastewater system. The report illustrated the water and wastewater revenues were not adequate to meet projected expenditures, debt service, and provide for a renewal and replacement fund. Based on this report, the city significantly increased the rates in Oct. 2018. The report recommends additional rate increase over the next two years; however, these rates may partially be reduced by the SUF funds provided separately. I would recommend the association assist the city manager in performing a current rate study to determine the appropriate rates. Let’s end the cycle of “kicking the can down the road.”
Also, the report indicates that 36 percent of the water pumped and processed is “lost.” The association considers 10 percent acceptable. By reducing the water loss, expenses could be reduced for electricity, chemicals and filter media. A water audit can be performed at no charge by the association. I would recommend that the association perform the audit.
The increased utility rates have had a significant impact on Apalachicola’s economically disadvantaged. If elected, I need your help in developing a plan to ease this burden. One simple suggestion is to have a way to donate by adding a contribution to a donor’s utility bill.
I do not support the continuation of this policy. Residents of Apalachicola should not be held responsible for the accrual of debt due to financial mismanagement. The city needs to prioritize a commitment to discovering alternative and ongoing streams of diverse revenue in order to responsibly pay for the city's sewer and water obligations. For example, the city can continuously research and apply for grants to offset the budgets of various departments, ensure that the funds are allocated specifically for their intended use, and rebalance revenue to assist in the payment of the sewer and water debt.
Secondly, the city must commit to an elimination of all extraneous spending and apply saved revenue to the sewer and water bill. Finally, the city should reorganize debt, as possible, to lower interest repayment terms. Again, the savings can be applied to the sewer and water debt.
Also, the city needs to implement an affordable payment plan for those who are on a monthly fixed income or in situations of emergency need in order to prevent the hardship of the disruption of shutoffs. It is critical that the financial operations of the city are fiscally responsible, transparent, and frequently reviewed and balanced to avoid financial problems in the future and to continue to grow a prosperous Apalachicola.
There is normal concern and in some cases panic among the citizens, because of the increase in sewer user fee and higher water rates. The citizens will soon cast their vote towards mayoral and city commissioner candidates, whom they believe will serve them best concerning their increased water rates.
This is an important issue for all of us. Therefore it must be treated with care, concern and compassion. I support the current city plan of a continuation of paying the city’s debt off for the next few years, so that rates will ultimately decrease.
However, I support seeking mediums to formulate other plan(s) to immediately implement ways that will decrease the city’s water services. I would propose the city seek to sell some of its property(s) that are not providing any usage services at this time. This would immediately give the city residents monetary relief on their water services.
I have a concern that the rates will increase while the debt is being paid off. This is why the commission has be open to other ideas, that will produce other revenues for the city. I would also propose that the city commission would seek special appropriation from the state legislature. We must be forward thinking to resolve this issue, for the sake of its citizens.
The city committed to a two-prong plan to address both the delinquent payments of over $700,000 and to provide sufficient revenues to pay the current annual loan payments of $432,032. That plan includes the sale of surplus property to address the delinquency, and adjustment to water and sewer rates and fees over a three-year period.
The city has not followed through on its plan to sell surplus property, although the commission voted to do so in August of last year. The first year of water and sewer rates and fee adjustments are in place.
Following through with this plan is not a suggestion. A 2017 audit conducted by the Inspector General of the Florida DEP contained the recommendation that if the city failed to take action that DEP “should take progressive steps to enforce its rights...” In other words, DEP could force collection by establishing rates, appointing a receiver to manage the water and sewer system, and withholding any revenue or tax sharing funds due to the city.
The city has reached this critical point after years of thumbing its nose at its powerful creditor. We must now begin to act in good faith.
Now that one year of rate and fee increases are in effect, we need to follow through with the plan to sell surplus property. We should also cut spending where possible, and transfer the savings from the general fund to the water and sewer fund to accelerate payment of the delinquency. It is generally not a good practice to make such transfers, but it is appropriate in our case as our current situation is in part due to raiding the water and sewer fund by transfers to the general fund to pay administrative expenses. Transfers back to the water and sewer fund would not only be fair, but would be a positive step in showing our resolve.
If we take these steps, it is my hope that the new commission can work with the state (directly and not through paid lobbyists or others) to allow relief to our citizens by renegotiating the terms of our debt. In the meantime, we need to explore interim options to provide relief to our most vulnerable citizens.
The problem with our city's finances has been long in the making and there is no silver bullet that will provide an overnight fix. What's going to fix this problem is proven leadership and tight management of our resources with a focus on reducing the debt. The formula for fixing this problem is simple in that we need to spend less, increase revenue, sell unused assets and pay down the debt with the focus on the default debt. The challenge is in the details.
We are paying out about $50,000 every quarter to reduce the default debt which is a burden that has landed on our shoulders. To help relieve that burden, I believe that we can sell off unused land that we no longer need to cut into that debt. There are also several items that we can work on to reduce costs that do not impact jobs or services.
First, I will not be taking any pay from the city if I am elected. That is an immediate savings of over $6,000 per year. In addition we should eliminate the $30,000 cost of the lobbyist. We can also reduce legal costs by controlling those costs at the time of the hiring of our new attorney, while also requiring detailed billing for services. As an attorney I believe those savings can exceed $20,000 annually. We also must focus on reducing utility costs for the City which now exceed $100,000. Those savings, and any others we can find, should be applied directly to reduce the default debt.
To get to our goals there will be ongoing challenges but with every step that we take in the right direction, we will move closer to our goal of financial stability.
Price hikes: “a necessary evil” some say. However, this plan of action rakes the most vulnerable citizens of Apalachicola over the coals and punishes local business owners with rates that perhaps wouldn’t be outrageous if it weren’t for the poor quality of our water and sewer.
Rates should be dropped back to a feasible level for residents. It’s the obligation of the city to protect the people of this town, especially when fiscal mismanagement on the city’s part has led us to this point.
Other avenues of debt repayment are readily available by means of surplus real property owned by the city, accounting for the massive amounts of water not billed, and budget cuts to staunch the bleeding. Surplus property must be assessed and sold for the highest net or leased upon agreement in order to maximize the revenue of these investments. It’s worth mentioning that at the Battery Park Marina (10 Foot Hole), hundreds of thousands of gallons of water are not billed monthly. I suggest metering and billing each tenant for both their water and power consumption, ensuring everyone is paying their fair share.
The city budget requires cuts across the board that won’t be easy, alas, the future of our home is at stake. I personally will not be accepting city salary or benefits if elected in order to help ease this financial burden. In times of strife, we must make sacrifices, and the city must begin to lead by example in this regard, instead of simply expecting the citizens to pick up the pieces.