Maitland borrows $10 million to fund utilities

After years of being clogged down by dwindling revenue, Maitland’s utility department received a jolt of $10 million to fix up city infrastructure after the City Council unanimously voted to take out an eight-figure loan on Monday.

City residents will help finance the loan through their faucets, as the city last year approved incremental utility rate increases to pull the utility fund from underwater. City Finance Director Jerry Gray said according to annual city reports prior to introducing the first 15.1 percent increase in water rates and a 13.8 percent bump in sewer rates, which took effect in January of this year, the city’s utility fund was running $497,000 in the red as of 2014. That money, he said, was being supplemented by surplus reserves.

Now, Gray said, with additional increases scheduled through 2019 and the money provided by the loan, the city will be able to cover improvement costs to keep clean water flowing to the city’s 3,000 utility users.

“We needed a shot in the arm,” he said.

Residents and businesses using Maitland utilities will see the largest increase in rates this year, with prices bubbling up 17.1 percent for water and 12.2 percent for sewer beginning Oct. 1. Gray said the increases then slow for the next three years going up 6 percent for water and 4 percent for sewer each fiscal year through 2019. These figures were calculated from the results of a utility rate study done by the city in 2014.

Gray said that estimates show that the average homeowner who uses 6,000 gallons of water a month will go from having paid approximately $50 a month for combined water and sewer in 2014, to around $75 for the same amount in 2019.

As of 2015, Gray said Maitland ranked in the middle ground for utility rates in Central Florida. While Maitland residents currently pay roughly $14.48 for 6,000 gallons of water, an August 2014 rate study showed that residents in Altamonte Springs paid around $19 for the same amount, while utility users in Winter Park paid $16.08. Adding to that in sewer costs, an average Maitland customer now pays $43.39 for sewer, while in Altamonte Springs residents would pay $27.90 and Winter Parkers paid $38.33 for the same amount.

Gray said the city had been hesitant to increase water rates during the recession, and is paying for it now by catching up to the price needed to keep the utility service self-sufficient. That, he said, combined with a looming deadline of many city pipelines aging out of “useful service” age needing replacement in the coming years called for the need of the loan and increased service rates.

“Now that we have the cash, we can move a lot more of these projects up and get them done sooner,” Gray said.

Those projects include renovations to two city lift stations, which transport wastewater throughout the city, and installing necessary backflow devices.