Water Rate Increase Less than Reported

by Mayor Karen Golonka, on behalf of the Members of theTown of Jupiter Town Council

Beginning this month (July 1), water rates for the average Jupiter household will increase about 9.8%, less than the 20% which had been prematurely reported by several news outlets. At their June 3 rate hearing meeting, the Jupiter Town Council voted 4-1 to reduce the utility's annual Renewal and Replacement fund allocation by approximately $1 million in the short term, which off-set some of the financial impact created by water restrictions. The result is a revised rate increase structure more manageable in the current economic climate than the original rate hike proposals of 27% and 20%.

For a single family household using 10,000 gallons per month, the 9.8% increase translates into about $2.70 more per month. The new rates maintain a conservation-based structure, with rates per 1,000 gallons increasing in blocks as more water is used. Therefore commercial and industrial businesses which are large water users will see a higher increase. The Council will review the effect of the rate increase and revenue impacts in January.

The rate increase was necessary due to water restrictions imposed by the South Florida Water Management District (SFWMD). Conservation efforts resulted in a reduction in usage levels by millions of gallons, and a decline in revenues that threatened the utility's long-term financial health. Because the District has broadly applied restrictions across the region, communities like Jupiter have been prohibited from leveraging their investments in alternative water supplies and technologies to off-set the impact of the restrictions. Through May, the Utilities Department had lost $3.6 million in projected revenue -- a loss that will continue if the SFWMD's 2-day rule becomes permanent.

Water customers should be aware that the Council was cautioned by their rate consultant that this more modest increase would not be sufficient unless the South Florida Water Management District granted an additional irrigation day.

Many residents have stated that the Utilities Department needed to "tighten its belt". It is important for water customers to know that indeed this was the first approach taken by the Town. With less water production, the utility has been able to realize savings by purchasing smaller quantities of production chemicals and materials. Together with across-the-board reductions in expenditures, this has resulted in lower operating costs. However, since approximately 80% of the utility's costs are fixed items such as maintenance and operation of the plant and water lines, power, and bond debt service payment -- further significant reductions are difficult.

The Town Council and members of Town staff have been working proactively to influence the SFWMD as it prepares to set permanent irrigation restrictions. Ultimately this could result in increasing the number of irrigation days for Jupiter from 2 to 3 times per week. Last month, Mayor Golonka and Councilor Kuretski spoke before the SFWMD Board urging them to grant relief to entities such as Jupiter who have made investments to reduce demand on the surficial aquifer through alternative water supplies. The SFWMD Board is expected to continue taking input, with a decision later in the year.

The Council's challenge has been to balance the needs of the residents and customers today with their long-term need for a very stable, reliable, and high-quality water utility. In the end, the proposal adopted on June 3rd was a balance of short-term and long-term needs, with a rate still lower than most water utilities in the area. Investment in future renewal and replacement projects was reduced compared to previous years, but the level of service Jupiter customers have come to expect has been maintained.