HomeMy WebLinkAboutDocumentation_Regular_Tab 16_09/10/2009~` VILLAGE OF TEQUESTA
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~~~~ AGENDA ITEM TRANSMITTAL FORM
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1. VILLAGE COUNCIL MEETING:
Meeting Date:
September 10, 2009 Meeting Type: Regular Ordinance #: N/A
Consent Agenda: Resolution #: 29-09
Originating Department: Finance
2. AGENDA ITEM TITLE: (Wording form the SUBJECT line of your staff report)
Adoption of a revised schedule of fees and charges for the provision of water services
3. BUDGET /FINANCIAL IMPACT:
Accounts -All Water Service Revenue Amount of this item: 7% Increase in fees and
accounts charges
Current Budgeted Amount Available: Amount Remaining after item:
N/A - RY2010 Budget N/A
Budget Transfer Required: No Appropriate Fund Balance: No
4. EXECUTIVE SUMMARY OF MAJOR ISSUES: (This is a snap shot description of the agenda item)
Village Council to adopt a revised schedule of fees and charges relating to the provision of water
services rendered by the Village.
5. APPROVALS:
Dept. Head:
Attorney: (for legal sufficiency)
Finance Director:
Yes ^ No ^
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Village Manager: ~-Td~~'
• SUBMIT FOR COUNCIL DISCUSSION:
• APPROVE ITEM: ^
• DENY ITEM: ^
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FINANCE DEPARTMENT
DATE: AUGUST 24, 2009
TO: MICHAEL R. COUZZO, VILLAGE MANAGER
FROM: JOANN FORSYTHE, FINANCE DIRECTOR
RE: RESOLUTION 29-09 ADOPTING A REVISED SCHEDULE OF FEES AND
CHARGES FOR THE PROVISION OF WATER SERVICES RENEDERED
Attached is the above mentioned ordinance adopting a revised schedule of fees and charges for the
provision of water services rendered.
Also attached is a letter from Public Resources Management Group, Inc., supporting and explaining the
need fora 7% rate adjustment.
8/24/094:39 PM
RESOLUTION NO.29-09
A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF
TEQUESTA, FLORIDA, ADOPTING A REVISED SCHEDULE OF FEES AND
CHARGES FOR THE PROVISION OF WATER SERVICES RENDERED BY
THE VILLAGE OF TEQUESTA FOR ITS CITIZENS AND OTHER MEMBERS
OF THE PUBLIC; REPEALING RESOLUTION 19-08; PROVIDING THAT THIS
SCHEDULE OF FEES AND CHARGES SHALL BE AVAILABLE FOR
INSPECTION AT ALL TIMES AT THE VILLAGE HALL DURING REGULAR
BUSINESS HOURS; PROVIDING AN EFFECTIVE DATE; AND FOR OTHER
PURPOSES.
WHEREAS, the Village Council of the Village of Tequesta, Florida, desires to adopt a
revised schedule of fees and charges relating to the provision of water services rendered by the
Village for the citizens of the Village of Tequesta and for other members of the public; and
WHEREAS, the Village Council desires to incorporate all such fees and charges assessed in
accordance with Section 74-61 of the Code of Ordinances into one comprehensive fee schedule; and
WHEREAS, the Village Council desires to make certain the schedule of fees and charges is
available for inspection such that any member of the public may be aware of the cost of each and
every service provided by the Village Department of Utilities.
NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE
VILLAGE OF TEQUESTA, PALM BEACH COUNTY, FLORIDA, AS FOLLOWS:
Section 1: The Village Council of the Village of Tequesta, Florida, hereby officially
repeals Resolutions 19-08, and adopts the revised Schedule of Fees and Charges attached hereto as
AExhibit A@ and made part hereof as if fully set forth herein.
Section 2: This duly adopted Schedule of Fees and Charges shall be available at the
Village Hall for inspection by the public during normal business hours.
Section 3: This Resolution shall take effect September 10, 2009.
THE FOREGOING RESOLUTION WAS OFFERED by Council Member
who moved its adoption. The motion was seconded by Council Member ,and
being put to vote, the vote was as follows:
"Exhibit A" Water Rate Res. 29-09
Ezhibit "A"
Village of Teguesta
Water Utilities Fees and Charges
Monthly Water Service Charges
A. Residential and Non-Residential Rate Schedule -Base Facilities Charges -The
Base Facilities Charge is the minimum monthly charge and is based on meter size and
monthly billing period as follows:
Meter Size Basic Facilities Char e
5/8" or 3/4" $13.01
1" $32.49
1.5" $65.13
2" $104.00
3" $195.02
4" $325.00
6" $650.02
B. Metering ofMulti-family Buildings (M.F.) - Where a single meter is installed in a
water connection serving amulti-family structure, the minimum monthly service
charge shall be not less than an amount equal to the number of dwelling units
multiplied by the minimum charge fora 5/8 inch meter or installed meter size,
whichever is greater.
In the event there is a single meter measuring quantities of water for two (2) or more
residential units, the gallons measured and charged pursuant to the terms of this
section shall be prorated by dividing the total number of gallons metered by the
number of units included on the single meter.
C. Metering of Multi-Unit Buildings -Non-Residential - In the case of any non-
residential multi-unit building housing more than one (1) business or entity, each
business or entity therein shall be metered individually. Monthly minimum service
charges shall be based on the established charge by meter size. Where an existing
single meter is installed in a water connection serving two (2) or more businesses or
entities, the minimum monthly service charge shall also be based on the established
charge by meter size. Fire protection charges for fire lines shall be separately
included; see paragraph number 3 hereinbelow.
Page 1 of 5
"Exhibit A" Water Rate Res. 29-09
2. Quantity Rate for Residential and Non-Residential Accounts -Applicable to all
quantities of water shown by meter readings to have been delivered.
A.
Quantity Step Rate
Per 1,000 allons or fraction thereof Amount
Ste 1 $2.07
Ste 2 $3.47
Ste 3 $4.72
Ste 4 $6.05
B.
Gallons e Allowance er Quanti Ste Rate Table
Meter Size Ste 1 Ste 2 Ste 3 Ste 4
S/8" or 3/4" 1 - 12,000 12,001 - 25,000 25,001 - 40,000 Above 40,000
1" 1 - 30,000 30,001 - 62,000 62,001 - 100,000 Above 100,000
1.5" 1 - 60,000 60,001 - 125,000 125,001 - 200,000 Above 200,000
2" 1 - 96,000 96,001 - 200,000 200,001 - 320,000 Above 320,000
3" 1 - 180,000 180,001 - 375,000 375,001 - 600,000 Above 600,000
4" 1 - 300,000 300,001 - 625,000 625,001 -1,000,000 Above 1,000,000
6" 1 - 600,000 600,001 -1,250,000 1,250,001 - 2,000,000 Above 2,000,000
3. Fire Protection Charge
A. Monthly Charge. See Section 74.63, Village Code of Ordinances
Within the Village $1.26 monthly
Outside the Village $1.58 monthly
B. Private Fire Connections - * The following monthly service charges shall apply to
private fire lines for sprinkling systems or other fire protection systems:
Meter Size Amount
2" $8.93
3" $20.39
4" $36.96
6" $89.23
8" $152.95
10" $199.40
No taps will be allowed which may be used for other than fire protection purposes; and there
shall be no connection with any other source of water.
Page 2 of 5
"Exhibit A" Water Rate Res. 29-09
4. Meter Installation Charge -All water meters shall be installed by the Village of Tequesta,
and the charge for making such meter installations or replacement of a meter of a different
size upon request of the customer shall be as follows (all meters installed remain the property
of the Village):
A.
B.
Meter Installation Onl
Meter Size Amount
5/8" $176.56
3/4" $201.77
1" $227.01
1.5" $453.98
2" $693.58
Above 2" Actual Cost Plus 10%
Meter Installation with Water Main Tap
(includes service line -maximum 100 LF
Meter Size Amount
5/8" $580.09
3/4" $605.32
1" $718.80
1.5" $958.40
2" $2068.15
Above 2" Actual Cost Plus 10%
Interrupted Service Charges
A. Meter Turn On (New Accounts) .............................................$31.52
B. Meter Turn On or Turn Off; Customer Request (vacation orclose-out of account)
(1) Tequesta Residents
during business hours .................................... ............. $18.91
non-business hours ...................................................... $40.07
(2) Non-Tequesta Residents
during business hours .....................................................$23.63
non-business hours ........................................................$50.09
C. Meter Turn-Off; for Non-Payment - 4x min. monthly service charge for the specific
meter
D. Transfer of Service ............ . . . ................................................ $12.61
Page 3 of 5
"Exhibit A" Water Rate Res. 29-09
6. Capital Connection Charge
Meter Size Water
5/8" or 3/4" $2,686.08
1" $6,715.13
1.5" $13,430.28
2" $21,488.44
7. Security Deposits
Meter Size Amount
5/8" or 3/4" (ad' er index $75.68
1" 3x month Service Char e $97.49
1.5" 3x month Service Char e $195.41
2" (3x month Service Char e) $311.99
3" (3x month Service Char a $585.03
4" (3x month Service Char e $975.02
6" (3x month Service Char e) $1,950.05
8. Interest on Deposits See Section 74-68., Village Code of Ordinances.
9. Meter or Hydrant Re-location for Customer's Convenience -Actual cost plus 10% of all
related charges. See Section 74-69., Village Code of Ordinances.
10. Emergency Bulk Water Service Rate, per 1,000 gallons ............................. $1.83
11. Capacity Reservation Fee (monthly per ERU) .........................................$9.22
12. Automatic Annual Rate Adjustment -See Sections 74-72. and 74-73., Village Code of
Ordinances.
13. Water Restriction Surcharge Adjustment -See Section 74-74., Village Code of
Ordinances.
14. Miscellaneous Fees and Charges
A. Returned Check - $25.00 if the face value does not exceed $50.00; $30.00 if the
face value is more than $50.00 but does not exceed $300.00; $40.00 if the face value
is more than $300.00, or 5% of the face amount of the check, whichever is greater.
B. Late Payment Fees - 1 % of outstanding delinquent amount with a minimum
charge of $5.00.
Page 4 of 5
"Exhibit A" Water Rate Res. 29-09
C. Past Due Amounts on Disconnected Service - A 1% per month penalty will be
charged on all past due amounts after discontinuance of service plus any and all costs
associated with securing collection of the past due amount
D. Meter Re-read .................................................................... $12.61
E. Meter Testin
5/8" or 3/4" ......................................................................................$56.77
1" .............................................................................$69.35
12" ................................................................................................... $81.97
2" ...........................................................................$113.49
F. Field Premise Visit ........ . . . ...................................................... $18.91
G. Line Location Services ...........................................................$50.46
H. Plan Review .............................3% ofthe construction cost, $150.00 minimum
I. Inspection Fee. Per Visit ........................................................... $72.14
15. Tampering with Turned-Off Service
A. Removal charge ........................................................................ $88.78
B. Re-installation charge
5/8"or3/4" ....................................................................................................... .
. $221.96
1" or Larger ......................................................................Actual
Cost
C. Destruction of meter related equipment
(1) Assessment for replacement of meter or meter related equipment
(2) A minimum of $27.75 administrative charge per occurrence
16. Surcharge -Customers Outside the Village - 25% surcharge on monthly rates, fees, and
charges.
Sep 2009 -Resolution - Exhibit A -Utility Fee Exhibit
Page 5 of 5
Public Resources Management Group, Inc.
DRAFT
August 13, 2009
Mr. Michael R. Couzzo, Jr.
Village Manager
Village of Tequesta
345 Tequesta Drive
Tequesta, FL 33469-0273
Subject: Water System Rate Adjustment
Dear Mike:
As you know and previously at the request of the Village of Tequesta (the "Village"), Public
Resources Management Group, Inc. (PRMG) prepared a Financial Forecast and Revenue
Sufficiency Report dated October 8, 2008 (the "Sufficiency Report"). The purpose of this report
was to develop a financial forecast of the water system revenues and expenditures to identify the
ability of the System to finance the overall operating and capital needs of the water system and to
identify any potential rate adjustments that may be required, in addition to any annual price index
rate adjustments that may be enacted by the Village Council as allowed by the Village's current
Rate Ordinance. The financial forecast included in the Sufficiency Report was for a five year
projection period ending September 30, 2012.
As referenced in the Sufficiency Report which was subsequently presented to the Village
Council, PRMG identified the need for additional rate adjustments based on the assumptions
recognized in the report. Specifically, the analysis recognized the need to adjust the water
system revenues by 7.00% on January 1, 2009, which would be in addition to the price index
adjustment that was made effective on October 1, 2009 by the Village. Also, the Sufficiency
Report also identified the need to adjust rates in the future, based in part on the need to fund
certain capital improvements to the water system. The recommended rate adjustment as
identified in the Sufficiency Report and presented to the Village Council was postponed and not
adopted by the Council.
Since the preparation of the financial forecast, the Village's Comprehensive Annual Financial
Report (CAFR) for the Fiscal Year 2008 was prepared and issued. Based on information
contained in the CAFR and other financial information made available to PRMG, it appears that
the actual operating results for the Fiscal Year 2008 (especially as it related to revenues and
operating expenses) were very close to the projections contained in the Sufficiency Report. This
comparison is shown on Table 1 below. The only material difference between the actual results
and the initial forecast essentially is the amount of capital re-investment assumed to be funded
from rates. It should also be noted that depreciation expense is not considered as an Operating
Expense as defined in the Loan Agreement between the Village and Bank of America, N.A.
associated with the 2008 Promissory Note (the "Loan Agreement"). It should be noted that by
K:\1056-OS\Corresp\Water System Rate Adj 8-13-2009.doc
Mr. Michael R. Couzzo, Jr.
Village of Tequesta
August 13, 2009
Page 2
DRAFT
including depreciation expense as an operating expense as reflected in the CAFR in accordance
with generally accepted accounting principles, a net loss was reported for the water system for
the Fiscal Year 2008. For the purposes of determination of the revenue sufficiency from rates, a
cash funding of a renewal and replacement fund (which was a funding requirement in the
resolution that authorized the previously outstanding bonds that were refunded by the Promissory
Note) or a capital account is recognized. Also, the funding of the principal and interest expense
on the 2008 Promissory Note is also recognized as a requirement from rates since it is a "claim
on the financial resources of the System"; the CAFR does not include the payment of principal
on any debt or loans as an expense.
Overall, it appears that the actual operations of the water system are generally consistent with the
projections initially reflected in the Sufficiency Report as shown below. The only exception to
the analysis was the savings derived from the refunding of the Series 1998 Bonds and a reduction
in capital fund allocations.
Table 1
Comparison of Fiscal Year 2008 Financial Results
Fiscal Year 2008
Sufficiency Rpt. [1] Village CAFR [2]
System Revenues and Income: [3)
Charges for Services $3,413,958 $3,463,564
Miscellaneous Income and Connection Fees 57,694 39,955
Investment Income 63,107 72,811
Total System Revenues and Income $3,534,759 $3,576,330
Expenditure and Deposit Requirements:
Operating Expenses, Less Depreciation [4] $2,731,406 $2,633,929
Annual Debt Service Payments -Series 1998 Bonds [5] 388,547 320,969
Annual Debt Service Payments - 2008 Promissory Note 113,108 113,108
Annual Debt Service Payments -BOA / VP (Tropic Vista) 44,722 45,135
Minimum Deposit to Renewal and Replacement Fund [6] 187,115 0
Additional Deposit to Renewal and Replacement Fund [7] 93,557 0
Deposit to Operating Reserves for Capital [8] 0 260,000
Capital Outlay Funded by Operations /Reserves 112,500 50,453
Total Expenditure and Deposit Requirements $3,670,955 3 378 459
Net Available for Other System Purposes 136 196 197 871
Footnotes on following page.
Mr. Michael R. Couzzo, Jr. DRAFT
Village of Tequesta
August 13, 2009
Page 3
Footnotes from table on preceding page.
[lj Amounts shown derived from estimates included in the Sufficiency Report for Fiscal Year 2008.
[2] Amounts shown derived from the Fiscal Yeaz 2008 Comprehensive Armual Financial Report and other financial information made
available to PRMG.
[3] Amounts shown do include connection fees which are considered as recurring revenue associated primarily with Tropic Vista water
assessment program.
[4] Depreciation expense is considered as anon-cash expense and not included (consistent with Loan Agreement for rate covenant purposes
also). If depreciation expense was recognized, a net operating loss for the Fiscal Year 2008 would have resuhed. Amounts shown also
include other fiscal chazges as reflected in CAFR.
[5] Includes benefits received from refunding Series 1998 Bonds by the 2008 Promissory Note; it should be noted that the annual debt
payments in Fiscal Yeaz 2009 are anticipated to be $475,095 which is less than the 2008 debt service requirements.
[6] Required by Band Resolution; assumed to equal 5% of previous year total system revenue far purposes of this analysis. The annual
funding requirement is not a requiremerrt per the Loan Agreement.
[7] Based on financial forecast and need to accrue funds for future capital expenditures, Sufficiency Report recognized an additional
deposit to the Renewal and Replacement Fund to provide funds for future capital needs as identified in the report.
(8] Recognizes deposit from rates for capital funding; such amount is in lieu of the funding of the Renewal and Replacement Fund which
is no longer a requirement since not a condition of the Loan Agreement (the Series 1998 Bonds Resolution does not apply since no
bonds were outstanding as of fiscal yeaz that were issued under such resolution). It is prudent that an annual allowance for capital
funding be made each year from rates to support the going concern (creditworthiness) of the System.
Although PRMG has not updated its financial analysis since the presentation of the Sufficiency
Report last year, it appears that the overall recommendations (which includes an increase in
capital funding) of the need for future rate adjustments is still considered be appropriate and
prudent. Accordingly, we would still suggest that the Village consider the adoption of a 7% rate
adjustment as initially presented in the Sufficiency Report to be made effective on or about
October 1, 2009. Also if the Village were to adopt the rate adjustment, this would be in addition
to the price index rate adjustment that the Village should implement as part of its annual
indexing program effective October 1, 2009 (for Fiscal Year 2010).
It should be noted that several other public utilities in Southeast Florida have been materially
raising rates for a variety of reasons, including i) continued reduced water sales due to the
ongoing water restrictions and general conservation efforts mandated by the South Florida Water
Management District (SFWMD); ii) continued effects of the ongoing downturn in the economy;
iii) the need to fund the alternative water resource projects based on the results of the Lower East
Coast Water Supply Plan as commissioned by the SFWMD; iv) continued effects of inflation on
the cost of operations and capital re-investment; and v) other factors. The following is a
summary of utility rate adjustments (either adopted or planned to be adopted) that PRMG is
aware of for the Village's information.
(Remainder of page intentionally left blank)
Mr. Michael R. Couzzo, Jr.
Village of Tequesta
August 13, 2009
Page 4
• Boynton Beach
• Cape Coral
• Charlotte County
• Dania Beach
• Davie
• Fort Lauderdale
• Hollywood
• Lake Worth -Water
• Lake Worth -Sewer
• Marco Island
• Margate
• North Port
• Plantation
• Polk County
• Sunrise
• Tampa
• West Palm Beach
68% FY 2009 Through 2013
48% FY 2010 Through 2014
16% FY 2009 Through 2012
52% FY 2009 Through 2011
139% FY 2008 Through 2011
26% FY 2009
29% FY 2010
88% FY 2010 Through 2014
55% FY 2010 Through 2014
27.7% FY 2010 Through 2011
44% FY 2009 Through 2011
15.6% FY 2010 Through 2011
34.9% FY 2010 Through 2011
21.6% FY 2009 Through 2012
40% FY 2009
21.5% FY 2009 Through 2012
75.6% FY 2008 Through 2011
DRAFT
In addition, it is also anticipated that the Village of Wellington, Town of Jupiter, the Cities of
Oakland Park, Cooper City, and Boca Raton, and Palm Beach and Martin Counties will be
adjusting rates in the near future (either through a formal rate study or by an annual index; the
amount of the rate adjustments are not known at this time). As can be seen, the request for an
increase by the Village is relatively low when compared to the recent rate activity of other South
Florida utilities.
In order to provide additional information regarding the existing and recommended rates for the
Village, a comparison of the monthly cost of providing water service fora 5/8 by 3/4 inch water
meter at various usage levels was prepared. This comparison is shown on Table 2 at the end of
this letter. Also included on Table 2 is a comparison are bills calculated under the rates of other
neighboring Florida utilities as of the billing month of July 2009. The monthly bills for the
various Florida utilities used for the comparison are exclusive of local taxes. The 5/8 by 3/4 inch
meter comparison was prepared since this represents the majority of the Village's water
residential customers and the majority of the customers for the other utilities reflected in the
comparison. As can be seen on the comparison on Table 2 and as summarized below, the
System rates produce bills for the Village which is comparable in amount when compared to the
other neighboring utilities.
Mr. Michael R. Couzzo, Jr. DRAFT
Village of Tequesta
August 13, 2009
Page 5
Average Monthly Water Bill at 10,000 Gallons of Use
Amount
Village of Tequesta:
Existing Rates $31.46
Recommended Rates [1] 33.71
Other Neighboring Utilities [2] $41.67
[l] Reflects existing rates adjusted by a rate increase of 7% applied
uniformly to such rates; does not include any poterrtial price index
rate adjustments which are not known at this time.
[2] Amourd derived from Table 2 at end of letter.
In summary, based on our understanding of the current financial position of the water system, the
future capital needs previously identified for the system, and in order to continue to maintain the
overall creditworthiness of the system, we would agree that the imposition of the 7% rate
adjustment is prudent and should be considered by the Village Council. We would also
recommend that the Village may want to update the financial forecast and plan to identify any
potential issues that may occur in the future for strategic planning purposes. If the Village were
to implement the 7% rate adjustment, this adjustment should be in addition to any price index
adjustment which is annually implemented as an inflation hedge on the cost of operations. It is
expected that the adjusted rates for water service would still be competitive with the rates
charged be other neighboring public utilities for potable water service.
We appreciate the opportunity to be of service to the Village and the support provided by the
Village staff with respect to our general review of the water system rates as documented in this
letter.
Very truly yours,
Public Resources Management Group, Inc.
Robert J. Ori
President
Attachment