A divided Flagler Beach City Commission voted 3-2 to raise the cost fall city-provided utilities–water, sewer and garbage–by 8.5 percent, to match inflation, and the stormwater fee by 42 percent.
The stormwater fee increase appears much larger than it is only because the base fee from which it’s increasing is low. The fee is increasing from $9.50 to $13.50 a month, or $48 a year, in a city where most serious storms now bring howls of complaints in their wake about needed improvements to stormwater infrastructure.
Combining all four costs, the average residential utility bill’s base fees in Flagler Beach will rise from $91 to just under $103, or about $12 a month–$144 a year.
Commissioners Ken Bryan, Jane Mealy and Deborah Phillips approved the increase. Commissioners Eric Cooley and James Sherman voted against. Neither had opposed an increase. They opposed a last-minute additional increase. “We had the options all worked out. We all agreed on the options,” Cooley said. “It was there was a consensus. I’m not okay with changing it. To get even higher, it’s already really high.”
By the time the city commission took a vote last Thursday, it had discussed the issue extensively at two or three previous meetings. Early in the discussions it was Cooley who was pushing for higher rate increases than proposed by the city administration at the time. City Manager William Whitson was proposing only a 1.72 percent increase in water and sewer base rates, not including flow rates, and a 7 percent increase in garbage rates. The stormwater increase was to be $4 all along.
Whitson revised the rates, and at a previous meeting, the commission had agreed to an 8 percent increase for water, sewer and garbage.
On Thursday, Mealy said that still would not cover all costs. “Last time we were concerned about things not being sufficient to cover the cost,” she said. “And if we can make it sufficient by another half percent, see how people felt about that.”
“8.5 percent was the consensus for the southeast region inflation rate,” Whitson said. “So 8, 8.5, anywhere in there gets you where you need to go. It’s up to the commission.” According to the Bureau of Labor Statistics, as of October, the annualized inflation rate for the South Atlantic states was 8.3 percent, after peaking at 9.8 percent in June. It has been falling every month since June.
“We had this all worked out last meeting. Did something change?” Cooley asked.
“Not that I’m aware, sir,” Rhonda Allen, the city’s finance director, said.
The 8 or 8.5 percent increases to the three utilities only matches the current, annualized inflation rate in the United States, so Flagler Beach would only be keeping up with costs rather than getting ahead of them. Flagler Beach does not have an automatic annual inflation adjustment to its water fees, as Palm Coast does.
“Eight and a half percent is a four year high,” Whitson said. “We don’t anticipate it continuing to go along that track. As a matter of fact, I heard on the news today, that trajectory for inflation was beginning to slide the other way. So where will the number end up? I don’t know. But right now we’re at a 40-year high. So the question is, do you want to keep up with that or do you want to kind of get close and hope to catch up later?”
The commission was following up on a rate study conducted at the city’s request. Cooley said that based on that study, the 8 percent increase would be sufficient to keep up with current costs, especially with inflation trending down. But mealy pressed for 8.5, and had agreement from Bryan and Phillips.
“For years, we said we’re raising taxes so we don’t want to raise utility bills,” Mealy said, explaining her approach. “Then we ended up eventually having to raise the utility bills. And we raised in these huge percentages.” She said if the city had taken a more gradual approach, there’d have been no need for the more sticker-shock like increases. She said she, too, is on a fixed income. (Social Security recipients will see an 8.7 percent increase in their checks starting in January.) “It’s been said and I’m beginning to believe it, that growth does not paying for itself.”
The city’s water and sewer division has projected revenue of $16.3 million this year, $13.4 million next year, but water and sewer fees, including flow charges, will generate only a third of that: $5.7 million. The higher figure reflects a state revolving fund loan of $8.2 million plus smaller grants, all of which are earmarked for system improvements. The city is rebuilding its very old sewer plant. Its expenses for the water and sewer division this year will exceed $15 million. The additional increase in fees is designed to minimize or eliminate a projected deficit in 2023-24 and 2024-25.
The sanitation fund runs on a roughly $1.5 million budget, but was still looking at small operating deficits this year and next. The stormwater fund is looking at a deficit next year despite the substantial increase in fees, because of $2.5 million in expected spending on capital improvements. Flagler Beach residents may think their stormwater fee is increasing steeply. But for a coastal town, it’s not.
The stormwater fee in Palm Coast–a city whose stormwater system just weathered Hurricane Ian’s 15-inch drenching with remarkable efficiency–is in the midst of more than doubling its stormwater fee: it was $11.65 in 2018. It will be $23.95 a month in 2024, a 106 percent increase in that span.
A full breakdown of the fee schedule is below, though–since it was the last-available document on Thursday–it’s based on 8 percent increases, not 8.5 percent.flagler-beach-utilities-costs-2023