Okaloosa County BOCC — August 16, 2016 — Adoption of MSBU Street Lighting Rate Resolution — agenda request

BOARD OF COUNTY COMMISSIONERS AGENDA REQUEST DATE: August 16, 2016 TO: Honorable Chairman and Members of the Board FROM: Jason Autrey SUBJECT: Adoption of MSBU Street Lighting Rate Resolution DEPARTMENT: Public Works BCC DISTRICT: ALL STATEMENT OF ISSUE: Adoption of a Rate Resolution in support of the revised Municipal Services Benefit Unit (MSBU) street lighting ordinance approved on July 19, 2016. The rate resolution has a one year adjustment period to account for balances that are individually forwarded; following years all accounts will be serviced off a base rate. BACKGROUND: On July 19, 2016 the Board adopted an Ordinance consolidating forty-seven separate street lighting MSBU's into a single unit. Pursuant to the Ordinance, the Board is required to adopt a Rate Resolution for the establishment of the rates to be applied beginning October 1, 2016. There are several issues that should be addressed in the implementation of the rates for street lighting services. These are as follows:  A service rate is established which allocates the total cost of street lighting services to all properties within the street lighting MSBU on pro rata basis. In addition to the service rate, an administrative component consisting of an additional reserve amount of 20% is included on the service rate to arrive at the base rate. The 20% administrative component shall be allocated in the following manner: 10% for contingency, 5% for cost of collection to the Water and Sewer Department, and 5% to the Public Works Department for administration of the MSBU.  The base rate for street lighting services to eventually be charged to each property within the street lighting MSBU would normally be established at twenty-seven dollars ($27.00) per year (charged on the Water and Sewer Utility Bill in an amount of two dollars and twenty- five cents ($2.25) per month). However, several of the prior MSBU’s had accumulated substantial surpluses and deficiencies under the prior rates. To assure that properties which contributed toward that surplus would receive benefits from those payments, those properties would be charged a discounted rate in the initial year until the surplus is eliminated. Similarly, those prior MSBU’s which had accumulated a deficiency would be charged a premium rate in the initial year until the deficiency is eliminated. Once each of those areas eliminate the accumulated surplus or deficiency, they will be charged the base rate. OPTIONS: Approve/Disapprove. RECOMMENDATIONS: Approve the adoption of the Rate Resolution for the consolidated Okaloosa County street lighting Municipal Services Benefit Units. RECOMMENDED BY: APPROVED BY: John Hofstad, County Administrator