Florida Governmental Utility Authority [FGUA] review: Overcharge and above national charge for service

This response serves to address the concern submitted by Mr. George Gerges dated November 19th, 2024. The Florida Governmental Utility Authority (FGUA) is a not-for-profit entity, and the only revenue source is from the properties connected to the water or wastewater system. One of the duties of the FGUA Board is to make sure the FGUA rates are sufficient to pay all FGUA operating costs and repay the debts incurred for the bonds that are sold to finance the purchase of the utility and needed large capital projects. Like many other utilities, the FGUA uses an independent rate consultant - Public Resources Management Group, Inc. (PRMG) - to review the number of current and projected customers, the daily expenses of running the utility, and the amount that must be held in escrow to repay the bonds. The report suggests any rate increases necessary for the current year, and projects rates necessary for future years. The report is shared with the host county government and FGUA Board as well as publically in an open rate hearing (if a rate change is required). Rate hearings are typically held on a weeknight, in a local library, community center, or other large room with public access. The hearing is advertised in a legal ad in the daily newspaper, online at www.fgua.com and on customer bills in the weeks before the hearing. At the public hearing, the rate consultant and FGUA financial staff give a presentation on the costs incurred by the utility, and the amount of revenue required to pay the daily expenses and debt. Rates for the FGUA are compared to local utilities and other utilities in Florida. Members of the public are encouraged to ask questions and make suggestions at the hearing. This meeting takes place prior to the Board making a decision on the rate implementation. This is done so that all comments from the host government and the public can be shared with the Board. A rate increase can be made for 1 year, or a multiple-year time frame, such as 3 or 5 years, based on the rate consultant’s report. If a multiple year increase is passed, a new rate hearing is not required each year. Often the rate consultant will only suggest a small cost of living adjustment based on the United States Consumer Price Index (CPI). A CPI increase does not require a public hearing as long as it is not higher than 75% of the index. Rate increases are usually adopted at the September Board meeting and go into effect on October 1, which is the first day of the fiscal year. One emergency rate increase can be adopted at other times of the year if revenue is not sufficient to pay the daily costs of running the utility. This is rare but has occurred in FGUA systems. Each FGUA system has its own budget and revenue and is responsible for paying its own bills. Customers from one system are not responsible for any debt in another system. That is why the rates for each system are studied, calculated, and passed independently, in order to keep the rates as low as possible. Large capital improvement projects and line expansion projects are carefully evaluated and expenses monitored in each system to keep costs to a minimum and still maintain the systems at maximum efficiency. The FGUA continues to seek federal grant monies when available to assist with needed capital improvement costs, this in turn affects impact to customer rates. While I cannot speak to the rates Ms. Gerges paid in Syracuse, NY, I can advise, there are many variables affecting system rates, these include water and wastewater treatment processes, infrastructure quality, population density, water usage patterns, and mandated regulatory compliance. No two systems face the same challenges and economies of scale determine what share of the burden each customer receiving the service will need to pay. The model utilized by the FGUA is a common rate making/ billing standard utilized throughout the utility industry as outlined in the Florida Administrative Code and the Public Service Commission. I hope this information is helpful. Should Mr. Gerges have any questions he should feel free to contact me Donna Lizotte, Community Services Representative on behalf of the FGUA at (239) 898-9247 or via email to donna.lizotte@fgua.com.
Submitted: 12/9/24