ORANGE PARK – Residents shouldn’t expect a water rate raise anytime soon, according to a recent water study contracted by the town.
The town recently saw a five-percent reduction in water rates and following that, the council voted to contract a water study with Jacksonville-based Stantec to see them conduct a water rate fairness analysis. During the most recent Orange Park council meeting held March 19, Stantec representatives Mike Burton and Patrick Luce dived deep into water rates, scenarios and more, but their presentation concluded with the recommendation to forego any changes to the existing rate structure.
“We recommend no change to the existing rate structure as it is compliant with current rate-making practices,” Luce said.
Before getting to this conclusion, though, Luce took the council and audience through some of the numbers that led them to there, specifically a model of the town’s financial plan over the next five years and 10 years.
According to Luce, if one were to look over the 10-year projection, there’s a healthy reserve sitting above the targeted eight months of reserves, and this includes the recent five-percent reduction to rates. The town’s reserves currently could keep the town afloat for eight months of operation and with the current rates, in ten years, the town would still be sitting on enough reserve to do that, Luce said.
Luce compared the town to the other surrounding areas like Green Cove Springs and Neptune Beach. Currently, Orange Park residents use roughly 4,000 gallons of water a month, per household. That number places Orange Park in below Atlantic Beach, Green Cove Springs, the Clay County Utility Authority-covered residents and above Jacksonville Beach and Neptune Beach.
“In the foreseeable future, we’re not seeing any need to raise rates,” Luce said. “As we move into the future, there’s going to be additional changes in this graph [the graph comparing Orange Park to other areas] and how you compare to your neighbors because you won’t be changing your rates ... but it’s possible these other communities will be increasing their rates.”
Vice Mayor Ron Raymond stopped Burton and Luce to ask why they didn’t look at the 100 biggest water users in town to find out if they’re being properly charged. According to Burton, that’s not a question Stantec was contracted to answer as that would fall more in line with an audit.
Instead, Stantec relied on Orange Park staff to ensure that residents, hotels and assisted living facilities are being charged properly.
“We come and look at your billing system and we look and see what accounts are on your billing system,” Burton said. “We don’t go out and do an audit of each account and say, ‘Okay, this is properly categorized as commercial versus single family,’. We assume your staff is doing that and [Town Manager Sarah Campbell] just indicated that you are.”
Raymond questioned how Stantec could properly make a recommendation, to which Burton responded that by using the data given to them by town staff, along with the data Stantec collected in their study, they were able to come to a conclusive recommendation.
Campbell explained that Stantec had properly completed the study within the parameters the council member tasked them with.
As Luce and Burton reached the end of their presentation, they finished with three conclusions: revenue is sufficient to recover revenue requirements, water revenue is slightly over recovering water costs and sewer is under recovering sewer costs and that Stantec recommends no change to the existing rate structure as it is compliant with the current rate-making practices.
Because the recommendation was for Orange Park to simply continue as they were, the town council did not make a motion or vote.