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July 17, 1992
• GEE&JENSON
Engineers-Architects-
Planners,Inc
Village of Tequesta
Post Office Box 3273
Tequesta, Florida 33469-0273
Attn: Mr. Thomas G. Bradford, Village Manager
Re: Water Rate Adjustments
Dear Mr. Bradford: '
Pursuant to our agreement, dated May 15, 1992, we are pleased to present herein our
findings and recommended adjustments to the Village of Tequesta's schedule of water
rates and charges. The schedule of water rates and charges have not effectively
changed since September 1984, except for instituting conservation step rates in May
1989. The proposed adjustments discussed herein are necessitated by increases in
operating costs, primarily caused by the proposed 44 percent increase in the bulk water
purchase rate from Jupiter. The proposed adjusted rates and charges, in addition to
providing for the fiscal requirements, will continue to encourage water conservation
among all classes of users.
The approach contained in this report for determining the proposed rate adjustments
consists of:
1. Identifying the historic demands and characteristics of the various user
classes in the system, including usage for each of the existing step
gallonage allowances.
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2. Projecting system demands for fiscal year 1993 by alternative step
gallonage allowances.
3. Identifying the fiscal requirements of the system by functional operating
tasks pursuant to the fiscal year 1993 proposed budget.
4. Equitably allocating the projected fiscal requirements among the users.
5. Identifying approximate costs for demands above the Step 1 gallonage
allowance to account for the additional charges associated with
conservation rates.
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One Harvard Circle•West Palm Beach,Florida 33409-1923.407/683-3301 •FAX 407/686-7446
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VILLAGE OF TEQUESTA
Mr. Thomas G. Bradford
July 17, 1992 - Page 2
In identifying the historic system demands and characteristics of the various user classes
we have obtained and analyzed certain data from the water billing records. Our analysis
indicates that a typical single family connection uses approximately 11,400 gallons per
month, as shown on Table 1, together with average usage of other types of connections.
The results shown on Table 1 are the averages of a 12 month period ending in May of
1992. a
TABLE 1
USER CONNECTIONS AND DEMAND ANALYSIS
MONTHLY FLOW PER
METERS UNITS FLOW UNIT/METER
RESIDENTIAL (x 1,000 gal.) (gal.)
SINGLE FAMILY 3,963 3,976 45,226 11,400
MULTI-FAMILY 74 1.874 16.145 9.700
TOTAL/AVERAGE 4,037 5,774 63,371 11,000
NON-RESIDENTIAL
5/8 INCH 240 2,770 11,600
1.0 INCH 53 2,623 50,600
1.5 INCH 21 1,464 66,500
2.0 INCH 26 4,131 165,200
3.0 INCH 1 149 149,000
4.0 INCH 3 727 242,300
6.0 INCH • 0 N/A N/A
Our analysis further identified, as shown on Table 2, the demands per sub-service area
and by existing step gallonage allowance. This analysis indicated that, of the total water
metered 88.9 percent was in Step 1 (below 30,000 gallons per month), 6.37 percent was
in Step 2 (between 30,000 and 50,000 gallons per month) and 4.73 percent was in Step
3 (above 50,000 gallons per month).
VILLAGE OF TEQUESTA
Mr. Thomas G. Bradford
July 17, 1992 - Page 3
TABLE 2
12 MONTH SUMMARY OF STEP RATES
June 1991 Through May 1992 (1,000's of Gal.)
STEP 1 STEP 2 STEP 3 TOTAL % OF MGD
TOTAL
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JUPITER COLONY
AMOUNT 43,168 7,724 6,405 57,297 6.30% 0.16
% OF TOTAL 75.34% 13.48% 11.18% 100.00%
PALM BEACH CO.
AMOUNT 131,055 6,221 2,782 140,058 15.40% 0.39
% OF TOTAL 93.57% 4.44% 1.99% 100.00%
MARTIN CO.
AMOUNT 202,944 25,195 20,145 248,284 27.30% 0.69
% OF TOTAL 81.74% 10.15% 8.11% 100.00%
JUPITER
AMOUNT 89,526 940 3,209 93,675 10.30% 0.26
% OF TOTAL 95.57% 1.00% 3.43% 100.00%
TEQUESTA
AMOUNT 341,804 17,880 10,469 370,153 40.70% 1.03
% OF TOTAL 92.34% 4.83% 2.83% 100.00%
TOTAL
AMOUNT 808,497 57,960 43,010 909,467 100.00% 2.53
% OF TOTAL 88.90% 6.37% 4.73% 100.00%
The existing gallonage allowances with steps at 30,000 and 50,000 gallons do not
adequately represent a full measure of conservation pressure. We suggest that
consideration be given to reducing the step gallonage allowances to 15,000 and 30,000
gallons. Projections of water demands based on these step gallonage allowances are
shown below in Table 4.
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VILLAGE OF TEQUESTA
Mr. Thomas G. Bradford
July 17, 1992 - Page 4
TABLE 4
PROJECTED WATER DEMANDS
(1,000'S OF GAL.)
AMOUNT . PERCENT
STEP 1 -567,920 62.3
STEP 2 242,737 26.63
STEP 3 100.970 11.07
TOTAL 911,627 100.00
The fiscal requirements of the system consist of the Operating and Maintenance
Expenses (O&M), and the debt service associated with past debt obligations. The O&M
expenses, as presented in the proposed fiscal year 1993 budget, are separated into three
functional areas of service:
1. Pumping and Storage which is associated with the purchase of bulk water
from Jupiter,the treatment of raw water, providing storage and high service
pumping.
2. Distribution which is associated with the maintenance of water distribution
mains and water meters together with monthly reading of the water meters
throughout the service area.
3. Administration which is associated with the supervisory, financial, record
keeping, billing, customer service and other similar administrative functions
for the system.
Debt Service consists of the payment of principal and interest on the $1,525,000 Series
1985 Revenue bonds and securities purchase contract obligations. The fiscal
requirements projected for fiscal year 1993 are shown below in Table 5.
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VILLAGE OF TEQUESTA
Mr.-Thomas G. Bradford
July 17, 1992 - Page 5
TABLE 5
FISCAL REQUIREMENTS FOR 1993
O&M EXPENSES
PUMPING AND STORAGE
LABOR $156,000
OPERATIQNS 248,870
WATER PURCHASE 750.000
SUBTOTAL PUMPING AND STORAGE $1,154,780
DISTRIBUTION
LABOR $207,395
OPERATIONS 42,780
SUBTOTAL DISTRIBUTION 250,175
ADMINISTRATIVE
LABOR $147,090
OPERATIONS 244.790
SUBTOTAL ADMINISTRATIVE 391.880
TOTAL O&M EXPENSES $1,796,925
DEBT SERVICE
SERIES 1985 $188,005
PURCHASE OBLIGATION 140,000
TOTAL DEBT SERVICE 328,005
TOTAL FISCAL REQUIREMENT $2,124,930
The current water rate structure provides for two payment components consisting of the
Monthly Base Charge and the Commodity Charge. The Monthly Base Charge is a fixed
amount per class of user which is paid by all customers connected to the system. The
Commodity Charge consists of rates per 1,000 gallons of water metered each month.
The rate structure currently provides for three commodity rates pursuant to the amount
of water metered each month. These commodity rates are commonly referred to as
conservation rates in that the progressively higher rates per 1,000 gallons are intended
to promote water conservation through higher costs for higher usage.
Separation of net fiscal requirements (fiscal requirements less applicable revenues from
other operating sources) between the monthly base and commodity charges are itemized
in Table 6. In general, the separation represents those capital, administrative and
distribution costs to be funded through the Monthly Base Charge and those treatment,
storage, water purchase and distribution costs to be funded through the Commodity
Charge.
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VILLAGE OF TEQUESTA
Mr. Thomas G. Bradford
July 17, 1992 - Page 6
TABLE 6
ALLOCATION OF NET FISCAL REQUIREMENTS
MONTHLY COMMODITY
BASE CHARGE CHARGE
PUMPING & STORAGE $ 0 . $1,154,870
DISTRIBUTION 187,631 62,544
ADMINISTRATIVE 257,192 134,689
DEBT SERVICE 336.740 0
SUBTOTAL $781,563 $1,352,103
LESS OTHER OPERATING REVENUES 132.862 0
NET FISCAL REQUIREMENTS $648,701 $1,352,103
Projections of the number of connections and ERC's by the four primary service classes,
for fiscal year 1993, are shown below in Table 7. One ERC for the purpose of this report
is equal to a residential dwelling unit using 329 gpd or as calculated pursuant to industry
standards for equivalencies per meter size.
TABLE 7
METERS AND ERC'S PER SERVICE CLASS
SERVICE CLASS METERS ERC'S
RESIDENTIAL SINGLE FAMILY* s 3,981 3,994
RESIDENTIAL MULTI-FAMILY 74 1,859
NON-RESIDENTIAL GENERAL SERVICE
•5/8-INCH METER 228 228
1.0-INCH METER 45. 114
1.5-INCH METER 15 75
2.0-INCH METER 21 168
3.0-INCH METER 1 15
4.0-INCH METER 3 75
6.0-INCH METER 0 • 0
SUBTOTAL 4,368 6,528
NON-RESIDENTIAL VILLAGE OF TEQUESTA 31 . 102
TOTAL 4,399 6,630
* includes an average of 18 units in excess of the 1992 total to account for
an additional 36 units. expected in fiscal 1993.
The Base Monthly Charge per residential dwelling unit and or ERC, which is derived by
dividing the net fiscal requirements of$648,701 by the projected number of ERC's 78,984
(6,528 x 12) is $8.28, say$8.30. The commodity rate per 1,000 gallons of metered water,
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VILLAGE OF TEQUESTA
Mr. Thomas G. Bradford
July 17, 1992 - Page 7
which is derived by dividing the net fiscal requirements of $1,352,103 by the !total
projected metered water in thousands of gallons of 911,627 as shown on Table 4 is
$1.48.
This report proposes that the conservation rates, in addition to providing for the
commodity costs determined above, also prcwide funds to mitigated costs associated
with excess usage above an ERC of 329 gallons per day (gpd). The costs cali be
equated to the facilities required to provide the capacity for such excess usage. In
determining the step rates, the cost of additional facilities is equated to a monthly debt
service based on an interest rate of 8 percent and (useful life) of 30 years for Step 2 and
10 years for Step 3. The monthly debt service is divided by the representative monthly
flows resulting in the-incremental charge for each step rate shown in Table 8. As an
example, the Step 2 upper limit of 30,000 gallons per month represents an average
demand of 987 gpd, or 3 times a 329 gpd ERC. The facility cost for such excess
capacity is currently estimated at approximately $1,700 per ERC. Funded through
revenue bonds such costs, using a useful life of 30 years, result in a monthly debt service
requirement of$25.13 or an incremental cost of$0.84 per 1,000 gallons. The approach
is similar for the Step 3 consumption amounts, except that an average daily flow of 1,644
gpd and a 10 year useful life term is utilized giving an incremental cost of$1.69 per 1,000
gallons.
TABLE 8
• CONSERVATION RATES
FACILITY USEFUL DEBT SERVICE
GPD FACTOR COSTS LIFE PER MO. 1.000 GAL RATE
STEP 1 329 1.0 $1.48
STEP 2 987 3.0 $3,395 30 $25.13 $0.84 $2.30*
STEP 3 1,644_- 5.0 $6,795 10 $84.39 $1.69 $3.20*
* ROUNDED
A review of other system charges indicated that an adjustment to the Fire Hydrant Charge
for those outside the Village limits is necessary for uniformity. An analysis indicated that
the Village of Tequesta residents pay $100 per hydrant per year for a total of$13,300 or
net charge of $0.60 per water meter. Currently the charge for those outside the Village
is $0.50 per month per meter, therefore an adjustment to $0.60 per month per water
meter to those outside the Village provides uniform fire hydrant rates.
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VILLAGE OF TEQUESTA
Mr. Thomas G. Bradford
July 17, 1992 - Page 8
In summary, the adjustments to the schedule of user rates and charges determined
herein are as.follows:
Base Monthly Charges:
a) Single Family Residential $8.30 per dwelling unit
b) Multi-Family Residential $8:30 per dwelling unit
c) Non-Residential
5/8-inch meter $8.30
1.0-inch meter $20.75
1.5-inch meter $41.50
2.0-inch meter $66.40
3.0-inch meter $124.50
4.0-inch meter $207.50
6.0-inch meter $415.00
Gallonage Rates
Step 1 $1.48
Step 2 $2.30
Step 3 $3.20
Gallonage Allowances per Step:
Single Family all meter sizes and Multi-Family per dwelling unit
Step 1 0 through 15,000
Step 2 15,001 through 30,000
Step 3 30,001 and greater
Non-Residential
Meter
Size Step 1 Step 2 Step 3 •
5/8-inch 15,000 30,000 30,001 and Greater
1.0-inch . 37,500 75,000 75,001 and Greater
1.5-inch 75,000 150,000 150,001 and Greater
2.0-inch 120,000 240,000 240,001 and Greater
3.0-inch 225,000 450,000 450,001 and Greater
4.0-inch 375,000 750,000 750,001 and Greater
6.0-inch 750,000 1,500,000 1,500,001 and Greater
Fire Hydrant Charge •
Village of Tequesta - per year per fire hydrant $100.00
Outside the Village of Tequesta - per month per water meter $0.60
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VILLAGE OF TEQUESTA
Mr. Thomas G. Bradford
July 17, 1992 - Page 9
Please note that all single family connections, regardless of meter size, are charged a
• monthly base charge of $8.30 per month and limited to the initial step gallonage
allowances. Non-residential connections are charged a monthly base charge pursuant
to the meter size and have increasing step allowances according to the meter size.
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A comparison between the existing and proposed.monthly water charges at various
usage levels is provided in Table 10. The monthly water charges shown are for in-Wage
customers and do not include any utility tax or surcharge. Attached to this letter is a
schedule for additional comparison which identifies other typical 10,000 gallon water
charges associated with other utilities in Palm Beach County and other areas of Florida.
The adjusted rates and charges, together with other sources of revenues, including an
8.0 percent surcharge for Palm Beach and Martin Counties, results in$2,603,357 of Gross
Revenues and provides a debt service coverage of 2.42 which is in excess of the
minimum requirement of 1.25, as shown below in Table 9.
TABLE 9
PROFORMA OPERATING STATEMENT
REVENUES:
WATER SERVICE CHARGES $ 650,189
GALLONAGE CHARGES 1,721,920
SURCHARGES 83,386
FIRE HYDRANT.CHARGES 31,862
OTHER INCOME 1,000
INTEREST INCOME 100,000
CONNECTION CHARGES 15.000
GROSS REVENUES $2,603,357
O&M EXPENSES 1.796.925
NET REVENUES $ 806,432
DEBT.SERVICE & TRUSTEE FEES 336.740
BALANCE $ 469,692
DEBT SERVICE COVERAGE
NET REVENUES $806,432 2.42
DEBT SERVICE $330,740
VILLAGE OF TEQUESTA
Mr. Thomas G. Bradford
July 17, 1992 - Page 10
TABLE 10
COMPARISON OF TYPICAL MONTHLY WATER CHARGES
DIFFERENCE
USAGE EXISTING PROPL SED AMOUNT PERCENT
0 $8.30 $8.30 $ 0 0
5,000 $13.55 $15.80 $2.25 16.6
10,000 $18.80 $23.30 $4.50 23.9
20,000 $29.30 $42.30 $13.00 44.4
30,000 $39.80 $65.30 $25.50 64.1
50,000 $95.80 $129.30 $33.50 35.0
The information and data presented herein clearly identifies that the cost of operating the
system has increased and water usage, predominantly by certain areas within the single
family user class, remains significantly higher than goals set forth in the Comprehensive
Plan. The adjustments to the rates have been designed to uniformly allocate the fiscal
requirements to all users of the system. Adjustments to the step gallonage allowances
are intended to assist in promoting further water conservation, specifically that used for
irrigation, while not presenting an undue economic constraint to commercial customers.
We recommend that the Village proceed to adopt the adjusted rates and step gallonage
allowances identified herein with an effective date as of the first billing period subsequent
to the date of adoption.
We wish to express or appreciation to the Village staff for their assistance in this matter
and thank the Village Council for the opportunity to be of service.
•Very truly yours,
Marco H.•Rocca CMC
MHR/mr
91-004/060
VILLAGE OF TEQUESTA WATER SYSTEM
SURVEY OF TYPICAL WATER CHARGES
FOR SINGLE FAMILY 10,000 GALLON SERVICE
UTILITY MONTHLY CHARGE
Tequesta Water System* Current $19.30 �,..
Proposed 23.10
ACME Improvement ,District* 22.48
Juno Beach Utilities 20.82
Lake Worth Utilities* 11.97
Palm Beach County Utilities* 16.10
Riviera Beach Utilities* 13.48
Seacoast Utilities 18.20
Town of Jupiter Water System 20.82
West Palm Beach Utilities* 7.29
Martin County Utilities* North 25.30
South 13.70
Cape Coral Utilities* 24.85
Plantation Utilities West 22.09
East 14.29
Central 19.69
Sanibel Island Utilities* 45.00
Sarasota Utilities 26.91
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*Utilities with Step Rates
91-004/060
July 9, 1992