KEY LARGO -- The biggest looming challenge for the Key Largo Wastewater Board is paying down $81 million in debt accrued through the construction of the island's sewer system.
The four candidates running in November for two at-large seats on the board agree that reducing that debt will be a primary concern in the next term.
The district currently pays about $6.5 million annually in debt service with revenue of about $8 million, but in 2017 there is a scheduled $21 million balloon payment that poses a financial challenge. Money for that payment has not been put aside.
The district is reviewing two options to help with the payment, including the Stan Mayfield state grant that could bring it between $15 million and $20 million.
Along with the county, the Key Largo Wastewater Treatment District is lobbying the state government to parcel out money from the $200 million Mayfield grant for a second year. The first $50 million came through this year and is expected to be divvied up for sewer projects on Cudjoe Key and in Islamorada.
The wastewater district and the county have a gentleman's agreement that some of the money would go to Key Largo.
Another option for the district would be to pay down the debt through money from the county's one-cent infrastructure sales tax, if voters approve its extension during the Nov. 6 election. The board recently passed a resolution encouraging voters to support the tax because it could bring money to Key Largo.
Board member Charlie Brooks said if funds from the Mayfield grant do not come through for the district it could borrow money as a temporary escape. With low interest rates on the market, Brooks said he would consider securing another loan that has a lower rate than the current loan.
Brooks added that the Monroe County Commission has a vested interest to see that the district pays down its debt.
"If the district were to go belly-up, the county would inherit the debt," Brooks said. "In essence, they have to protect themselves."
Board member Robby Majeska said the county should recognize the district for its success in providing advanced treatment to Key Largo and earmark a portion of any future money from the Mayfield grant for Key Largo.
"We have been treated by the county as the orphaned child," he said.
At a recent meeting, County Administrator Roman Gastesi underestimated the Key Largo district's debt at around $15 million, which is about $65 million off.
"It is indicative of the county's understanding," Majeska said.
Challenger Mike Black said the district could consider issuing low-interest bonds to take care of the balloon payment. However, seeking grant money should be the first priority, he said.
"We shouldn't be punished because we built first," Black said.
Black also said the board needs to rectify the debt situation before focusing on reducing costs for customers.
Majeska has proposed lowering the base rate for customers and increasing the usage rate to reward those who conserve water. Majeska says the change would be revenue neutral.
Challenger Steve Gibbs also says it is possible to reduce rates for customers sooner rather than later.
Gibbs said he plans on finding ways to reduce costs and be more frugal with the ratepayers' money.
"Key Largo residents and business owners have shouldered a heavy burden in order to provide a working collection and treatment system ahead of most of Monroe County," he said. "Now we have to use common sense and leave no stone unturned to relieve ratepayers any way we can."
As for the debt and coming balloon payment, Gibbs said the board needs to continue to fight for the state grant money. He said he has not ruled out securing a loan with a lower interest rate.
"At this point I must keep an open mind to all possibilities," Gibbs said. "As the time nears, there may be other options on the table."