Fort Walton Beach Council minutes — 08-20-1992 Workshop — reading text

11lo MINUTES OF THE COUNCIL WORKSHOP MEETING OF THE CITY OF FORT WALTON BEACH, FLORIDA AUGUST 20, 1992 INTRODUCTION A workshop meeting of the City Council of Fort Walton Beach, Florida, was held on Thursday, August 20, 1992, at 5:30 p.m., in the Council Chambers at City Hall, with the following members present: Mayor William J. Roberts, III Councilmen: Cissy Wyninegar, Mayor Pro tempore Nick Nicholson Bob Campbell Vie Deal Chris Gibson Tom Maney Absent: John Hambleton Also Present: Chuck Keeler, City Manager; Helen Spencer, City Clerk; Charlie Evans, Director of Finance; Department Heads; Media CALL TO ORDER The Mayor Pro Tem called the meeting to order at 5:30 p.m. CITY MANAGER The City Manager read a memo announcing his resignation effective December 31, 1992. Council will discuss at the Committee of the Whole meeting on Monday, September 24th, how to proceed with hiring a replacement. WATER AND SEWER FUNDS Ned McMath, of Baskerville-—Donovan, reviewed the options to the proposed water and sewer rate schedules that would provide an incentive for conservation by the large water users, and limit increases to those customers who used minimum amounts of water each month. WATER FUND Mr. McMath reviewed the options on the water rate schedules as follows: In FY 1993, implement first phase of conservation schedule by increasing charge for water usage over 10,000 gallons/month from $0.70/1000 gallons to $1.00/1000 gallons. Also, reduce the minimum water usage block from 0 to 4000 gallons down to 0 to 3000 gallons. All other rates per 1000 gallons and minimum bills remain the same as currently in effect. In FY 94, implement second phase of conservation schedule by increasing charge for water usage over 10,000 gallons to $1.30/1000 gallons. Also, increase all customers having billing code #1 (3/4" and 1" meters) by $1.50 for the first 3000 gallons. Above 3000 gallons, charge $1.20/1000 gallons up to 10,000 gallons. This limits the increase to those customers who use minimum amounts of water ($5.50 vice $6.85 for residential customers as originally proposed). Approximately 20% of the residential water customers use 3000 gallons/month or less. l 1 6 Budget Workshop 8-20-92 WATER FUND (CONT. ) Mr. McMath then reviewed the impact of the projected revenue and revenue requirements on the unrestricted water contingency fund (initial balance $2,550,000) over the next five years. The phased implementation of new water rates requires a draw down of the reserve funds in FY 1993, then repays the fund over the next three years. Based on a projected near break even year in 1996, it would be appropriate to review the rates again at this time or at an earlier date if revenues or expenses vary Significantly from projections. The question was asked whether $400,000 a year transfer to the general fund in lieu of a franchise fee is typical. Mr. McMath responded it is an accepted practice and is done with a number of municipal systems, but he does not know the percentages that are typical, however, he would be happy to check the guide. Brief discussion was held on projected water rates based on average gallons used. David deVaux remarked if the water contingency fund were only $2 million, they would not need to raise the rates. Discussion ensued on the question of an adequate amount in the contingency fund. In response to the question on an amount of a comfortable figure, the Finance Director commented it took 30 years to build up a reasonable amount of money in these funds, and their philosophy is to adopt a fee where the system will pay for itself and not necessarily build up the reserve or deplete it other than a nominal amount each year. During extensive discussion on the question of the size of the contingency fund based on the age of the system, population, and the condition of various factors, the desire was expressed for an objective evaluation of all the factors to help determine a solid rationale on the amount actually required in the contingency fund. Mr. McMath commented it could be approached logically by dealing with the known facts, and there could be a basis for establishing a reserve fund; he would be willing to assist staff if that is Council's desire. The City Manager remarked they should obtain professional advice to get the facts to establish a policy on the amount of the reserve. The Public Works Director felt they could contact some people for information, and the work can be done in-house. When asked if the investigation on the size of the contingency fund would fall within the purview of the contact as it exists now, or if it is an additional charge to the City, Mr. McMath responded it would be included under the contract they have with the City right now, but it is not an assigned task, and their budget has been spent on the water and sewer system rate study to establish the cost of the system. It was agreed the investigation can be done in-house. Budget Workshop 8-20-92 l 1 7 SEWER FUND Mr. McMath next reviewed the options that would phase in the required sewer rate increase over the next three or four years, and the impact of the projected revenue and revenue requirements on the unrestricted sewer contingency funds over the next four years. In FY 1993, raise the minimum monthly service charge to $6.00 and the usage charge per 1000 gallon to $1.73. Residential usage remains capped at 16,000 gallons. The charge per 1000 gallons is sufficient to meet the cost of treatment. Mr. McMath then reviewed the impact of the projected revenue and revenue requirements on the unrestricted sewer contingency fund over the next five years. Phased implementation of new sewer rates over four years requires a draw down of the reserve funds to support revenue requirements. Depending upon Councils desire to maintain or rebuild these reserves, a more aggressive implementation schedule may be necessary. Baskerville-Donovan would also recommend considering a reuse water system utility charge as an additional source of revenue when the project is completed at the end of 1992. Similar discussion ensued on the question of an appropriate amount which should be held in _ the contingency fund, based on inflow/infiltration, customer usage, and costs associated with operation of the entire system. During discussion it was requested that Baskerville-Donovan return with a phased implementation on the sewer over two years and to show what the contingency fee would be in two years instead of four years. Mayor Roberts and Councilman Deal left the meeting at 6:30 p.m. BUDGET WORKSHOP During brief discussion on how to proceed from this SCHEDULE point, it was agreed to discuss at the Committee of the Whole on Monday, August 24th, the meetings dates and times of future budget workshops as well as the length of the meetings and how they would like to divide the general fund. The Finance Director pointed out the public hearing is scheduled for three weeks from tonight, September 10th. ADJOURNMENT There being no further business, the meeting adjourned at 6:35 p.m. “Who A | CITY CLERK 7 118