OKEECHOBEE – Some residents in Okeechobee’s southwest area were shocked to receive Sept. 5 letters from the Okeechobee Utility Authority advising them the rate for connecting to sewer service would quadruple on Oct. 1.

The letter from OUA Executive Director John Hayford states: “Currently anyone connecting to the OUA wastewater system 4” vacuum sewer lateral would pay $600 (this represents the fee at a 75% reduction). The new proposed rate will increase to an estimated $2,555. The wastewater capital connection charge will be going from $876 (reduced rate) to $3,732.”

Property owners may elect to use a payment plan. Either a 5-year payment plan at 1% interest or a 10-year payment plan at 1.5% interest.

Property owners who either pay the full amount or sign up for a payment plan before Oct. 1 will be charged the old, discounted rates. Those who choose to wait to pay or sign up after Oct. 1 will be charged the full rate.

The decision to allow the discount rate to “sunset” came at the Aug. 29 meeting of the OUA Governing Board.

“For many years, OUA has charged only 25% of the fee established by the rate consultant for the cost of water and sewer connections,”  Hayford explained at that meeting. He said the county is anticipating a big surge in new home construction with planned developments for more than 9,000 new homes.

"If these developments happen, at the reduced rate, this would bring in about $4 million for water connections and $8 million for sewer connections. If they charge the full rate, that would bring in $16 million for water connections and $32 million for sewer connections.

"As we look forward to the developments coming in with the different developers, if it happens, all this development with a 25% recovery, a 75% reduction.

“It’s real money and we’re looking at some big projects in the near term,” Hayford explained.

“If the rate charges were at their full capacity, we would have the capital money to do these projects like water main installations, some other wastewater installation improvements or even better, we could pay down some of our existing debt. By paying down the debt, that would lower the debt service charges which would potentially lower the base service charges that we charge on water and sewer,” he said.

This temporary rate reduction is done on an annual basis. Every year, this reduction expires and in order for the reduced rate plan to continue, the board must vote on the rate reduction for another year.

“When you look at drilling a well, and you’re putting a water treatment system in, you’re looking at upwards of $5,000. Our fees are considerably less,” Hayford said.  The current water connection rate, if charged at 100% is $1,803. “Septic tank and drain field are anywhere from $10,000 to $20,000. We’re talking about fees being $3,500.”

“For new construction, it’s no brainer for the better price,” Hayford continued.

“Where the problem comes in is when we put infrastructure and folks have to tie in, when they have a perfectly good well or septic tank. This is an additional expense that they don’t need. We’re looking at the service area in the Southwest and Pine Ridge. What I would propose to you is that if you would allow the current rate structure to sunset and the fees to go back up, as staff we would send out letters right now this month to all the pending connections in the southwest service area saying ‘Come in. Sign a payment agreement now and lock into the lower rates. If you choose to do that after Oct. 1, your rates will be higher.’

“It’s a very low interest rate. You have to pay a certain amount down and the minimum payment is $40. If you pay 25% down and a minimum of $40 a month, could take 10 years,” he explained.

Hayford said all rate payers are paying every month for debt service. Paying down some of that debt could help all the customers.

Some board members were concerned about what will happen to Treasure Island property owners where sewer lines are planned in two to three years.

Hayford said in the future they could do a temporary reduction again or they could reduce the amount of down payment required.

OUA board voted unanimously to let the 75% rate reduction sunset.

OUA Board of Directors meets at the OUA Main Office. Anyone wishing to speak to the board may pick up an agenda application from the main office, 100 SW 5th Ave., Okeechobee. According to the OUA website, the next meeting is planned for Sept. 17 at 8 a.m.  For more information, call 863-763-9460.