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Time to stop the UEP song and dance

November 11, 2008
Cape Coral Daily Breeze
You put your yes vote in,

You take your yes vote out,

You put your yes vote in

And you shake things all about.

You do the Hokey-Pokey,

And you turn your vote around

That’s what it’s all about! *

When it comes to its record on the on-again, off-again plans to expand utilities into the Cape Coral neighborhoods dubbed Southwest 6-7, the Cape Coral City Council has the old nursery school song-and-dance down to an art: Its reasoning has become hokey and its decision-making pokey.

Council just cannot commit. And for no good reason.

While members who are on record as favoring the expansion flip to the “no” side to gain political leverage, the owners of the 6,200 affected properties — and the rest of us paying monthly fees for water, sewer and “dual” water services — have no idea when and how the project is going to impact our pocketbooks.

This is wrong and it’s time — no, it’s way past time — to stop the playground choreography and pay attention to a basic economic predicate: Bills always come due.

In the case of the UEP, it’s some $6.5 million in design costs already spent for the Southwest 6-7 expansion. It’s the per-user costs of the new $96 million reverse osmosis water treatment plant half-way completed in the north Cape. It’s all the other costs to be paid for within the per-user rate structure as the massive billion-dollar citywide expansion creeps toward its 2017 finish line.

As we stated on these pages back in July when Mayor Eric Feichthaler vowed to break a council deadlock delaying the project’s start, the elected board can and should address property owners’ concerns and then get the project moving.

The primary issue on the public side is, of course money — around $10,792 for an average homesite, plus $6,750 in impact fees, plus connection costs, plus costs associated with removing any on-site septic systems.

We agree, these costs are considerable in the best of times, which the present absolutely is not.

Understand, though, that residents have never been opposed to the installation of water and sewer services. Most agree — and count us among them — that the expansion of utility services is necessary to the long-term health of our still largely undeveloped community.

Opposition has centered around the costs and the city’s audit-documented lack of oversight as charges burgeoned beyond what property owners could bear.

The city, and the current economic strife, have brought costs down well below the two most recent expansion phases but neither the council nor property owners should count on any savings being indefinite. This is a primary reason we have supported, and support, moving forward now.

The economic realities property owners face should not, however, be ignored.

For those homeowners who can’t pay cash — and who can’t borrow because of the decline in housing costs — the city continues to offer two options, deferred payment and a time payment plan.

Deferred payment allows residents to pay nothing for up to 10 years. The time payment plan, which allows the charges to be spread over 20 annual payments, adds the cost of the assessment and impact fee — now called a “capital expansion fee” — to the property tax bill.

These are viable, if not painless, options as the interest rates charged are low, an estimated 6.2 percent rate for the deferred payment plan, 5.75 for the amortized plan.

Councilman Jim Burch has also suggested a short-term interest deferment. While not enough information has been gathered as to the financial impact of such a plan, it’s worth working the numbers as it may be less costly than throwing away money already spent if the project remains on hold.

Council should at least explore this option.

Council should address one other area as well.

A reconfiguration of the fee structure, added this go-around for SW 6-7, unfairly burdens the owners of undeveloped properties while also requiring more money up front from homeowners paying cash.

The city proposes to require lot owners to pay the impact fee portion of the expansion bill long before many will actually impact the system. To accomplish this, officials have changed the name of the levy to an “expansion fee.”

While assessments come due for all property owners when the project gets under way, the impact fee portion was never due until the property owner actually hooked up to the system. For lot owners, that meant when they built on the property. Now, they will need to pay the total amount up front although they are not impacting the system at all.

City officials defend the upfront “capacity expansion fee” by saying it’s a “reservation fee.” That’s just another bureaucratic tap dance.

Call it a capacity expansion fee, call it a reservation fee and it’s still an impact fee — and a hefty one at that. The proposal fails the “rational nexus test” which says he who pays must benefit and so is open to legal challenge.

Let something positive come out of this policy-making debacle and revisit this proposed change in how — and when — property owners pay.

In fact, nix this component outright.

Then put the expansion vote for Southwest 6-7 back on the table one last time. Take one more hard look at the financial components with an eye towards the property owners affected — and the rest of us who pay utility fees, too. Then move forward. We’ve delayed long enough.

— Breeze editorial

( * With all due respect — and apologies — to Roland Lawrence LaPrise, the Ram Trio and Acuff-Rose Music Inc.)



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