Money would pay for citywide water and sewer infrastructure upgrades.
MARY ESTHER — To help the city fix its aging and failing infrastructure, property owners soon could see an almost 19% hike in their property tax rate and start being charged more on their water and sewer bills.
At 6 p.m. Monday, the Mary Esther City Council will be asked to adopt a property tax rate of 5.03 mills for fiscal 2020 and give final approval to a plan to borrow $30 million to pay for a citywide water and sewer infrastructure rehabilitation project. The new budget year starts Oct. 1.
“For the past 30 years, no attention was given to (water and sewer) capital improvements,” City Manager Steve Holsinger said Tuesday. “The fact is, the city neglected their responsibilities to maintain the system in a contemporary fashion. Now things are breaking far too frequently. We can’t just Band-Aid it anymore.”
With final approval, the city would borrow $30 million from the state’s revolving fund with a 1.8% fixed interest rate for 20 years. The first 10 years of debt service is projected to total between $15 million and $20 million.
Holsinger believes the entire water and sewer system project could be completed in about 15 years or less.
About 1,900 of Mary Esther’s 4,000 or so residents are water and sewer customers. City officials recently sent them letters about the possible $30 million loan and what it will cost them.
“There would be a 10% across-the-board increase in water and wastewater fees per year in the first three years of the project to help pay the debt service,” Holsinger said.
The average resident who pays about $70 a month for water and sewer service would see an increase of about $7 in his or her monthly bill in the first year. Year two would see another 10% increase, followed by another 10% hike in year three.
The proposed millage rate hike would lead to an additional charge of about $20 per residential parcel, Holsinger said. Local option half-cent sales tax money also would be used to help pay off the loan.
“We’ve never borrowed money in Mary Esther before,” Councilwoman Charlotte McKamy said at last week’s council meeting. “We have a proud tradition of that. That’s great. But this (citywide water/sewer project) has to be done.”
Bill Miller was one of several city residents at the meeting who wasn’t thrilled with the possible higher water/sewer charges.
“It seems like a huge increase,” said Miller, who noted that many Mary Esther residents live on Social Security and have limited incomes.