After months of dialogue between parties, and over two hours of discussion Thursday, the St. Cloud passed a resolution to turn over the management and operations of the city’s water utility to Toho Water Authority. The motion carried 3-2, with Council members Keith Trace, who asked questions of a number of Toho and city staff, and Dave Askew voting against it.
The agreement is not a sale of the utility, but gives Toho Water its operational responsibilities. It’s a 60-year agreement, although St. Cloud has the option to review and can cancel the management arrangement at each 15-year interval.
There will be a transition plan leading up to an Oct. 1 transfer, but Council member Linette Matheny asked staff to move to the Roho rate structure as quickly as possible.
Toho Executive Director Todd Swingle gave the Council a lengthy presentation. He noted that there will be a single fee structure (the one Matheny would like the utility to be under quickly) and that about 76 percent of St. Cloud utility customers would see rates drop; those who see it increase would be high-end reclaim users. Swingle estimated $20 million savings for St. Cloud customers over five years.
“It’s a benefit to both organizations,” Swingle said.
Among his other points:
- Toho can meet the increasing needs of potable water in the city. Reclaim water improvements in St. Cloud are needed immediately – and planned. TWA can handle the residential and commercial expansion northeast into the Sunbridge development, getting reclaim service to areas currently unserved and into areas of high growth, and that TWA can increase the reliability of the city’s system at a lower cost.
- Overall, the city would save $35 million in costs over the next 15 years, while reducing the dependency on single water sources, which increases reliability. Cost savings allow for transition to TWA rates with no surcharges. Swingle noted that “The better your systems are integrated, the less you’ll spend,” Swingle said. “Toho and St. Cloud can’t achieve those cost savings on our own.”
- The plan eliminates need for upgrading Water Treatment Plant No. 2, which is in a poorly-located plant based on future growth – those resources and time can go into upgrades at Plant No. 4, the one found to be responsible for sending resin into the city water system and discoloring it in early 2020. It also delays a need for investment in an expensive Cypress Lake project.
- All St. Cloud utility employees will be offered Toho employment, with service time, pension balance and leave time transferred. There’s no intent to eliminate filled positions, Swingle said, and the goal is to assign employees to St. Cloud assignments if desired. All employees would receive at least the minimum wage of their pay grade or a $2,000 increase, whichever is greater, and Swingle said Toho has budgeted $500,000 for employee raises transferring to Toho.
- Toho will eventually maintain a customer service presence in City Hall, with a transition to kiosks to pay bills using all forms of payment. The St. Cloud utility would transition to Toho’s billing system by October 2023, with the two systems running parallel until then.
- St. Cloud two voting seats on the Toho Board of Supervisors, and one non-voting ex-officio member who will be a seated member of the City Council — it's the same level of representation the city of Kissimmee and Osceola County receive.
- Toho would allocate $1 per customer for community events and donations.
The plan had its detractors, like Councilmen Trace and Askew, who, while realizing there’s a benefit to the transfer, called it “a major decision.”
“It’s one of the city’s largest assets. This seems like it was news that was just thrown at us and our citizens,” he said.
Resident Teresa Mailhot spoke at the meeting, saying that the word “managing” is semantics if TWA is buying the utility.
“Sixty years is a lifetime. If this was a good thing for the citizens you would have had city meetings and public input,” she said. “If it’s such a good thing, let the citizens vote on it, put it on the ballot in November.”
Council members Kolby Urban and Linette Matheny made and seconded the motion to approve the resolution.
“I understand there are concerns, but we can’t keep kicking the can down the road on this issue, and if we don’t take action, rates are going to go up, that’s a matter of fact,” Urban said.
Matheny noted the city’s water utility has been a conversation for six years. “This is not a negative reflection of the service of the utility. When this came forward, I looked at it from every perspective,” she said. “With this deal, $32.5 million of debt goes away; that’s unheard of.”
Mayor Nathan Blackwell was the plan’s swing vote, noting it’s a good proposal for city utility employees, many who would get a raise.
“We’ll still be able to provide quality service,” he said. “It’s good for our employees, and it’s certainly financially advantageous to the city.”
