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Home My WebLink About2002 04 22 Regular B Implementation of the Utility/Stormwater Rate Study COMMISSION AGENDA ITEM B I CONSENT INFORMATIONAL PUBLIC IffiARING- REGULAR X . April 22, 2002 Meeting ~-:nEPT ;IY Authorization REQUEST: Utility Department Presenting Alternatives for Implementation of the Utility/Stormwater Rate Study. PURPOSE: The purpose of this Board item is for the City Commission to direct staff on the implementation of the recommendations and alternatives presented in the Utility and Stormwater Rate Study. CONSIDERA TIONS: The City Commi~sion reviewed the water, wastewater, and stormwater rate and charge study at the workshop on November 12' 2001. An additional workshop was conducted on March 4,2002 to review the capital improvement program included in the rate study. Three options for implementation as well as other issues were discussed in November and staff needs a final decision in order to proceed with implementation. The main issues for discussion are: · Implementation of the water and wastewater rates over 1, 2 or 3 year period. · Reclaimed water charges/metering. · Other miscellaneous Water and Wastewater Fees. · Monthly StormwaterFee Public Resource Management Group prepared the study and they will be on hand to review the options again and answer questions. A copy of their presentation is attached to this agenda. .. Regular Agenda Item B April 22, 2002 Page 2 RECOMMENDATION: Staff makes the following recommendations: · Implementation of the water and wastewater rates over 1, 2 or 3 year period 1 It is recommended to adopt the two-year option to reduce the impact on the customers ,and not allow the fund balance to diminish significantly. · Reclaimed water charges/metering. It is recommended that all reclaimed services be metered over the next 12 months as a way to control consumption and add customers utilizing the existing supply. Option 2 of the rate options is recommended to recover the operating costs and meter installation cost. · Other miscellaneous Water and Wastewater Fees. It is recommended that the service availability charges be adopted as proposed and also that a 25% surcharge be added to the rate structure for non-City customers. · Monthly StormwaterFee It is recommended that Alternative 1 is adopted which would increase the monthly stormwater fee to $3.25 to maintain current operations, fund. mosquito control, and fund deferred, current. and future capital needs. IMPLEMENTA TION: An ordinance will be brought back incorporating the final direction. We are required to provide 30 days notification to all customers of any proposed rate adoption hearings, which will be done through the water bill. ATTACHMENTS: I. PRMG Presentation COMMISSION ACTION: 01> City of Winter Springs, Florida. Wt W t t. d. ~ 'I ~ . i '( I ""f/:' r"" r .~ : i (; r ; - I i - , ; __, I .., a ~er, as ~ewa ~er an_ _.__~ S't t R;' t d' C'h: . S't d - r . ( -. ~ ( '~- I ',( :. '. (! (. ".:': I (~, ; '__, ':" I '. !. ~. , ormwa era e an,-, .",-~-,arge ,J' ;,uy ~ - Presented By: Public Resources Management Group, Inc. ~ )> ---i ---i )> o :r rn Z ---i Z o . . April 22, 2002 What Are We Addressing? - -- · Monthly Water and Wastewater User Charges · Reclaimed Water Charges · Other Miscellaneous Water and Wastewater Fees . Monthly Stormwater Fees e 2 19 - - ... - ~~ -..IIISI~ W:A'T'-E"R' A, N.D:. W' fA: S.-.T-...E....WiA. T-:.'E---:R'~' ,.--.- .-" " ! i f' ;' ,'" / j ,'" . :..- : -- - ".. __,_'!!f" _.1 _.j ,,_ . ..~ ..../ ___"_m ."'" . 'j!!.l _.. .__, ,.,...,._..i ,_, __ USE.... R--!!Y C;H-. .A'-, R..~G(-.E.~-S.: .. , -." - __. ..00 ... _.~ _.".____., _~~ fJ 3 (9' .-... Water' and Wastewater Mo,nthly User Fees Require Rate Adjustments · Previously Enacted Rate System Adjustments - East System (Tuscawilla) Rates Have Not Increased Since 1991 - West System Rates Have Not Increased Since 1984 - Exception was 1998 When Water Conservation Blocks were Adopted · Over These Time Periods, System Operating Costs Have Risen (Inflation Rate Averaged 2.3% Per Year) e 4 IH .- ~' Issue: Water and Wastewater Month.ly _ ~.., User Fees Require Rate Adjustments (can't) -- -- · System Benefits Have Minimized Need for Rate Adjustments Over Last Several Years - High Historical Customer Growth Levels (325-550 Accounts Per Year Over Recent Period) - Improvements in Technology - Restruc~ured Debt Reduced Net System Cost ($385,000 Reduction in Annual Debt Payments Realized) . · All Possible Benefits Have Been Realized Ilmplellj1ented 5 HI' Issue: Water and Wastewater Monthly User Fees Require Rat.e Adjustments (con~t.) -- · Fund Balances Have Been Diminished Operating Fund Expensec:t $0.4 Million on Reclaimed Water Projects Over Last Five Years (Over $ 4.0 MM Debt Financed From Rates) Budgeted Use of Fund Balances in FY2002 = $0.5 MM · Regulatory Requirements Impacting System Costs Sludge Disposal Costs ($48K to $150K Over Last Three Years) Operation and Maintenance of Reclaimed Water System ., Customer Growth Recently Experienced Projected to Diminish I 6 19 Need: Rate Adju~tment of Appro}ximat.ely 17.25% - · Eliminates Utility Budget ,Deficiency Projected for Fiscal Year 2002 - Approximately $0.5 Million Currently Estimated to be Funded From Cash Reserves · Revenue Increase Will Meet System Operating and Capital Needs through Projection Period (FY 2002 to 2006) · Equates to 1.0% Annual Compound Rate Increase if Performed Each Year Since 1984 (Consumer Price Index e Average - 2.3% per Year) 7 HI' CITY OF WINTER SPRINGS Monthly Rates for Water and Wastewater Usage of 6,000 Gallons Historical and Forecast Consumer Price Index (CPI) Adjustments vs. Proposed 17.25% FY 2002 Rate Increase $65.00 $60.00 "f::. .f::. ' $55.00 ~6 ' .f::. .. $50.00 $45.00 ..[] .l3-..[3. ..[3- $40.00 ~.~-~-~.-o $35.00 . , , . "",..,rt, ^r.. ~.)v.vv . ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ * ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ -.- Historical and Forecast With CPI Adjustments - Historical and Forecast With 50% CPI Adju~tments -+- Proposed 17.25% Rate Increase in FY 2002 10 Rate Adjustment Options -.-- · Option 1 - System-wide One Time Increase of 17.250A> · Option 2 - System-wide Two'Year Increases of 9.250/0 per Year · Option 3 - System-wide Three Year Increases of 6.75% per Year 9 w" R- e~.s. ults o. f: p... .~Or p.'ose-d Ai d~:iU: !str'm, (len, it;-s - I'.-II,~' ..~ _ _.. __ I ~ t!) .. _ _,_'9.. _I _ ..<7 ,,; ... · Allows Preservation of Adequate Working Capital Reserves · Provides Funding Mechanism for Future System Renewals and Replacement of Assets (Accrues Funds For Future) · "Across-The-B~ard" Rate Adjustments Serve to Minimize Impact to Low End User · Rates Remain Competitive with Surrounding Utilities II 10 ~ - ~. I~.,l - ~~ -BIII:Ill R"~E'.- C". LA, I'MED" . Wi A' T" --E'-'-;R...-~ R..", iAT' '..-'CE---~.S'- A' N',.D." , .-."-- ..~. ,. . ,.' -:' ,- :-_._!J , '. , -,' r ' ,.- . ,- " ~ i-" , . ,i -- - _. -. .- -- -'~~-".. ." - -'. -~ _ _D ~-_ ____..".= ' __ _.. _0J0. __..._~ OTHER MISCELLANEOUS CHARGES . 11 (I Issue: Reclaimed Water Rate Adjustments .- · Rates Have Not Been Adjusted Since Originally Impleme'nted in 1989 · Benefit - Existing Reclaimed Customers Pay One- Fifth the Amount the Equivalent Potable Water Customer Pays for Irrigation · Reclaimed System is Not Self-Supporting and Reduces Available Funds From WaterlWastewater e System · Metering vs. Non-Metering Residential Class 12 m Issue: Reclaimed Water Rate Adjustment (con 't.) - 13 19 ~ . 1?:~~, I ~~cd ~ .. 1959 _ ~". :n:. . - Service A vaUability Charges ..~ ~mEI · Assigns Growth-Related Capital Costs to Those Customers Responsible for Such Additional Costs · Generally Labeled as "Growth Paying Its Own Way" Water System Char~er ERC Existinq Proposed $392.00 $515.00 Wastewater System $1,890.00 $2,195.00 . 14 II' Or-. .t.h,er M, ,iscel:l:a:- in! leoUi 'S Ch:8- irig' i8S - . ~ ~ -~!!!!I.~ ~ ~.!!!J - .~ i! ~ .!!!" ~ .. -, .~ ~ .i!!J ~ !!!!I -BIll · Reviewed Other Fees and Charges for the Provision of Certain Services Performed By the Utility Meter Installation I Tap-In Charge Returned Check Charge Application Fee Service Reinstatement Fee Inspection Fee Meter Reinstallation Charge Late Payment Fee Water Line I Meter Tampering Fee e Fire Protection Charge (New Fee) 15 19- - ~ __'......""".,11PNii...........:M~ S- TO' 'R-- MWA TER 11 __I .1 I f = rJ _J ._rr _" = ~ ~ _ ill 16 IH Issue: Sto.rmwater Utility Syst.em Requires Rate Adjustmen.t --- .........- -- - -..-.ow" · Current Stormwater Rates Have' Not Been Adjusted Since 1992 · Anticipated Shortfall of Approximately $107,000 Anticipated in Fiscal Year 2002 · Require Funds to Perform Needed Improvements That Have Been Deferred for Several Years Little Lake Howell Culvert ($156,000) Gee Creek Sedimentation Pond ($122,000) No Name Creek Drainage and Swales ($190,000) II! Operating Reserves Budgeted to Decrease During Course of Fiscal Year 2002 17 Em Need: Rate Adjustment to Existing Stormwater Fees of Approximately $1.21 Per Month · Increased Revenue Will Provide Sufficient Funds to Maintain Current Level of Operations · Additional Funds Will Also Support Mosquito Control Program and Projects Identified in Five Year Capital Program - · Three Alternatives Have Been Provided for the City's fJ Consideration 18 ~~mIilI ID e R~ tAd'. t' t' 0 t.~ 'ae ~'. ~. .Jus:.'mlenj:' r~)p J,ons ~ - RlJLlI!lIl:~-=-'.lItJI!'<i('nc"'~'!:'\"M-:':>h','il~ Rates Comparable to Monthly Fee Recommended in City;s Stormwater Master Plan 19 IB- - . ~ l~~l _ __....T?U~ .. - , " COMMISSION DIRECTION e I -. 20 19'