Fort Walton Beach Council minutes — 10-14-14--special--utility rate study — reading text

267 4$ Draft Minutes City of Fort Walton Beach Special Meeting of the City Council of Fort Walton Beach Tuesday, October 14, 2014 5: 00 PM 107 Miracle Strip Parkway Fort Walton Beach, FL 32548 CALL TO ORDER 5: 00 PM Meeting was called to order on October 14, 2014 at Council Chamber, 107 Miracle Strip Parkway, Fort Walton Beach, FL. Attendee Name . x, 4,% guitle _____ . t Vq#: -" ._ z:.- Z Ft Arrzked r--. 7.;_ Mike Anderson Mayor Present Bobby Griggs Council Seat 1 Present joyce gossom Council Seat 2 Present John Mead Council Seat 3 Present Mike Holmes Council Seat 4 Present Amy Jamieson Council Seat 5 Present Bull Rigdon Council Seat 6 Present Dick Rynearson Council Seat 7 Present PLEDGE OF ALLEGIANCE PUBLIC COMMENTS None. Utility Rate Study The City Manager presented background information on the Utility Rate Study and noted the City has historically completed rate studies every five years, with the last study done in 2010. He reported there has never been a Rate Study for the Stormwater Fund. The City Manager informed that the City entered into a continuing contract for Utility Financial Consulting Services to Raftelis Financial Consultants and Mr. Mike Rocca of the firm was present to discuss his findings. Mr. Rocca began with discussion on water and wastewater and the primary issues of appropriateness of rate structure, operational and capital improvement projects ( CIP) revenue sufficiency, debt capacity and debt service coverage, and sufficient reserves. Mr. Rocca stated the first primary issue is the State Revolving Fund ( SRF) Loan which is due on November 15, 2014, and that an amendment is being processed to reduce and extend the payment date to July 15, 2015. City Council of Fort Walton Beach Page 1 Printed 10/ 21/ 2014 268 Special Meeting Minutes October 14, 2014 Mr. Don Berryhill of the Berryhill Group discussed the process of the SRF Loan. Mr. Rocca also discussed the increase of the wastewater flow/ cost increases and that the current CIP contains provisions to reduce Infill & Infiltration ( I & I) and treatment cost. Also discussed was how to address revenue shortfalls by providing a new wastewater charge structured to diminish over time as the CIP reduces I & I; utilizing low interest loans in lieu of pay as you go funding; and adjusting user rates for inflation and need. A required rate adjustment schedule was discussed that would begin with an increase of 9. 00% in FY 2014/ 15 and decrease to 2. 50% by FY 2018/ 19. Mr. Rocca turned discussion to stormwater and the primary issues of insufficient cash flow to address ongoing CIP and the need to adjust stormwater fees. He discussed fee adjustments beginning in FY 2014/ 15 of$ 0. 50, increasing to $ 0. 75 in FY 2015/ 16, and reducing to $ 0. 25 in FY 2016- 17 to FY 2018/ 19, with a final fee of$ 5. 00 for stormwater. Mr. Rocca discussed the recommendations for the water, wastewater and stormwater including 1) establishing a diminishing base charge and rate based on the County's treatment costs associated with metered wastewater flows representing excessive I& I; and 2) instituting a policy to update the diminishing base charge and rate for each fiscal year commencing October 1, 2015 and each fiscal year thereafter where excessive wastewater flow is anticipated. Additional recommendations included adopting the schedule discussed for water, wastewater and stormwater rates, with an effective date of October 14, 2014 and each succeeding October 1 through October 1, 2018; re- evaluating the water and wastewater rate structure and rates, and the stormwater fee periodically or whenever significant changes occur in the cost, debt service or method of delivery of services; and authorize consolidation of water, wastewater and stormwater into one enterprise fund but keep them in two different divisions. Sandra Atkinson, business owner in the City, received clarification on the SRF Program and process. The City Attorney advised that resolutions would be needed to make the changes to the City's Comprehensive Fee Schedule and will be brought forward to the next meeting. The vote on the motion to adopt the Utility Rate Study as presented by Raftelis Financial Consultants, Inc. to include the recommendations discussed, and authorization for Staff to make the necessary changes to the Comprehensive Fee Schedule, carried by a vote of 6 to 1 with Griggs opposed. RESULT: APPROVED [ 6 TO 1] MOVER: Bull Rigdon,.Council Seat 6 SECONDER: Amy Jamieson; Council Seat 5 AYES: gossom, Mead, Holmes,.Jamieson, Rigdon, Rynearson NAYS: Bobby Griggs City Council of Fort Walton Beach Page 2 Printed 10/ 21/ 2014  f Special Meeting 269 Minutes October 14, 2014 ADJOURNMENT: 5: 48 pm Approved: CO 60, Mayor: 1 / ' irL2 Attest: ity Clerk City Council of Fort Walton Beach Page 3 Printed 10/ 21/ 2014