Minutes 04-17-00MINUTES OF THE SPECIAL CITY COMMISSION WORKSHOP ON UTILITY RATE
STUDY HELD IN THE CHAMBERS, BOYNTON BEACH, FLORIDA, ON MONDAY,
APRIL 17, 2000, AT 6:30 P.M.
PRESENT:
ALSO PRESENT:
Gerald Broening, Mayor
Ronald Weiland, Vice Mayor
William Sherman, Mayor Pro Tem
Bruce Black, Commissioner
Kurt Bressner, City Manager
Dale Sugerman, Assistant City Manager
James Cherof, Assistant City Attorney
Sue Kruse, City Clerk
Mayor Broening called the meeting to order at 6:35 P.M.
Mayor Broening turned the meeting over to Assistant City Manager, Dale Sugerman,
who presented information on the stormwater, water and wastewater rate study results
as contained in the report by Camp, Dresser & McKee (CDM) entitled "Stormwater,
Water and Wastewater Rate Study, Final Draft Report, dated March 15, 2000.
Mr. Sugerman introduced the members of the Utilities Department who were present,
indicating that that they had acted in concert with the consulting engineers, Camp
Dresser & McKee, to produce the subject report. He recognized the presence in the
audience of the following people: John Guidry, Utilities Director; Mark Law, Deputy
Utilities Director; Bob Kenyon, Deputy Utilities Director; Peter Mazella, Assistant to
Utilities Director; Barbara Conboy, Administrative Coordinator from Utilities and Messrs..
Dan Anderson and Donald Munksgaard from Camp, Dresser & McKee.
Stormwater, Water and Wastewater Rate Study -- An Historical Perspective
As background for the rate study report results, Mr. Sugerman stated that the report was
a direct result of a commitment Staff made to the City Commission during the November
15, 1999 Stormwater Workshop held at City Hall. This rate study was one of five action
items committed to that evening.
Mr. Sugerman reviewed some of the stormwater and general utility activities that took
place over the past 18 months in the City.
In November of 1998 Tropical Storm Mitch dropped 13.15 inches of rain on BoYnton
Beach, causing many parts of the city to experience significant drainage problems and
some localized flooding. Mr. Sugerman pointed out the difference between drainage
problems and flooding. Drainage problems result when the stormwater system gets
overwhelmed because there is nowhere for the stormwater to go and the system cannot
handle all the water. Streets, parks and ballfields fill up with water when the system gets
overwhelmed but no water gets into any structures. Flooding is when homes and
businesses take on water and property becomes damaged or destroyed.
In January of 1999 the first Stormwater Utility Workshop was held and at that meeting
many stormwater topics were covered and a background and history of the City's
MEETING MINUTES
WORKSHOP ON UTILITY RATE STUDY
BOYNTON BEACH, FLORIDA
April 17, 2000
stormwater utility was given. 1) The City has not had stormwater utility for very long; 2)
The South Florida Water Management District controls stormwater overall in this part of
the state and our system dumps into their system; and c) The Environmental Protection
Agency (EPA) regulates cities and their stormwater systems through the NPDES permit.
Because the City does hold an NPDES permit, there will be a number of very expensive
obligations over the course of the next seven years to control and treat the City's
stormwater runoff; 4) A discussion was held concerning the fact that the only source of
funds available for stormwater maintenance and improvements in this City is the $1.00
per Equivalent Residential Unit (ERU) fee currently collected in the monthly utility bill;
and 5) It was discovered that compared to just about every other stormwater system run
by cities throughout the state of Florida, the City of Boynton Beach had the third lowest
ERU fee in the state - on average 300 to 400% below all other cities, a situation that has
existed for many, many years. Lastly, that evening some time was spent reviewing
some of the most severely affected areas in the community, including most of the more
mature areas of town east of 1-95 served exclusively by the old swale system and some
specific neighborhoods including Industrial Avenue and Costa Bella. At the conclusion
of the January 1999 workshop an action plan was developed.
The action plan that evening had three steps:
1)
It was determined that it would be appropriate to develop a specific plan
for dealing with the established neighborhoods east of 1-95. It was also
determined to perform a swale inventory and to develop a swale
maintenance improvement plan. That work has been completed.
2)
It was decided to make some immediate short-term repairs to some of the
critical intersections and in some of the neighborhoods having the most
serious problems. Some of these minor improvements have also been
completed.
3) Design work was instituted for Costa Bella and Industrial Avenue.
In May of 1999 the City's consulting engineer began their swale inventory and
maintenance study. That report was delivered to the City in September of 1999.
Most of the summer of 1999 was used to make most of the short-term improvements
mentioned earlier, getting them in place for the rainy season expected last fall.
On October 15, 1999 Hurricane Irene hit. In comparison to Tropical Storm Mitch the
year before, Hurricane Irene was off the charts. The City received 18.35 inches of rain
in a 24-hour period. There was less flooding with Hurricane Irene than there had been
with Tropical Storm Mitch. It was Mr. Sugerman's firm belief that less flooding was
experienced during Hurricane Irene because of all the short-term improvements that the
City had made to the system over the previous eight months.
One month after Hurricane Irene, on November 15, 1999, the City Commission held the
second Stormwater Workshop. The purpose of this workshop was to deliver and review
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MEETING MINUTES
WORKSHOP ON UTILITY RATE STUDY
BOYNTON BEACH, FLORIDA
April 17, 2000
the results of the swale inventory and maintenance study. At the conclusion of the
review of the study, another action plan was created. This included five steps:
1)
2)
3)
4)
5)
The stormwater division of the Utilities Department was to continue to
make additional short-term improvements called for in the previous
workshops.
The staff, with the assistance of the consulting engineers, CDM, would
complete the design for improvements on Industrial Avenue and the
Costa Bella neighborhood.
In order to fund the proposed swale improvement program and any
neighborhood improvements, the City would need to take a look at
adjusting the monthly stormwater fee of $1.00 per ERU. It seemed the
only way to do so was to conduct a rate study. Rate studies are the
preferred method of changing rates because a rate study uses an
engineering, scientific approach to ensure that the customer is getting
exactly what they are paying for, nothing more and nothing less. The rate
study approach was used to insure that the utility system is being fair and
equitable with all of its customers in regard to what is being improved in
the system, what those improvements will cost and how much the
customer will have to pay for those improvements. Since the City
decided to do a rate study on the stormwater system, it made sense to
take a look at all of the rates for the three utilities including water and
wastewater as well as stormwater. In this way a fair and equitable rate
for all three utilities could be provided to all customers.
At the urging of former Commissioner Henderson Tillman, the City was
asked to look at alternative improvement options and the costs
associated with delivering those alternatives.
The City was asked to search for alternative funding for accomplishing all
of the planned improvements.
Since the November workshop, the City has undertaken all five action steps. The short-
term improvements have been instituted and are continuing. CDM was asked to finish
the design on Industrial Avenue and Costa Bella and they provided a proposal to the
City. The City Commission rejected that proposal and the search continues for another
engineering firm to complete this work. Initial screening has been accomplished and a
short list is available at this time.
Stormwater, Water and Wastewater Rate Study Final Draft Report Results -
Presentation and Discussion
Mr. Sugerman stated that the report contained step-by-step justification for the
expenditures of funds necessary to accomplish all that needed to be accomplished in the
stormwater, water and wastewater operations over the next several years. Mr.
Sugerman stated that the report was in draft form so it is still subject to amendment.
Recommendations
Based on the analysis done in the Stormwater, Water and Wastewater Rate Study,
CDM developed the following recommendations:
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MEETING MINUTES
WORKSHOP ON UTILITY RATE STUDY
BOYNTON BEACH, FLORIDA
April 17, 2000
Adopt a two-part fee-in-lieu-of capital charge for the stormwater system to
recover the cost of improvements for water quality and quantity in the
downtown watershed area.
Adopt an adjustment in the monthly stormwater utility fee. Based on the
cost of service considerations, an adjustment from $1.00 per month per
ERU to $6.00 is fully justified.
Continue to monitor the financial performance of the water system to
determine if and when any adjustments to rates might be necessary.
Consider adoption of an annual adjustment of stormwater, water and
wastewater rates, either positively or negatively. Such an annual
adjustment would provide for maintaining rate sufficiency without the
need for a detailed rate study every year at budget time.
Mr. Sugerman stated that he would be presenting an analysis of the consultant's 75-
page draft report including recommendations and results. Mr. John Guidry, Utilities
Director, would be presenting an innovative and creative solution for some of the
stormwater problems, and lastly a variety of funding alternatives would be explored and
discussed.
Mr. Sugerman presented and analyzed the tabular information from the report on a
section-by-section basis and answered questions throughout the presentation. The
complete report is attached to and made a part of the original minutes and is available
for review in the City Clerk's office.
Questions and Answers
Vice Mayor Weiland inquired about the 1992 and 1996 revenue bond issues and when
they would be paid back.
Ms. Barbara Conboy of Utilities stated that they were 30-year bonds and the money is
close to being spent. Mr. Sugerman stated that it would be rare to keep a bond issue on
the books for all thirty years and that while you are doing the improvements and revenue
is coming in to support them, the bonds are paid off early or are rolled into a later bond
issue.
The analysis indicated that in order to support the planned improvements in the
stormwater system it would be necessary to consider a $13.1M bond issue this year.
Vice Mayor Weiland asked if the numbers in the tables were estimates and Mr.
Sugerman replied that they were. Vice Mayor Weiland's concern was that he had seen
many projects come back with a greater than expected actual cost. Mr. Sugerman
indicated that it may be necessary to select which of the projects could actually be done.
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MEETING MINUTES
WORKSHOP ON UTILITY RATE STUDY
BOYNTON BEACH, FLORIDA
April 17, 2000
An outline of all the utility capital improvements that are currently underway and those
that are planned through the year 2004 was distributed to those in attendance.
Commissioner Black asked for an explanation of the $909,000 for additional office space
in Table 4-12 to replace portables. Mr. Sugerman responded that this was an
improvement in the administration building where many people had been housed in
portable units. This will allow them to be brought inside.
In reference to Table 4-11 impact fees, Commissioner Fisher asked why the impact fees
go down from $1.4M to $700,000. Mr. Dan Anderson of the Utility Department
responded that they had been conservative in the figures and did not want to overstate
the amount of receipts and impact fees so as not to come up short. He continued by
saying that if an increase in the water rates had been deemed necessary they would
have taken a more critical look at the issue of impact fee receipts.
Vice Mayor Weiland said that he had gone on a tour of the City last April and that the
water plant was one of the stops. His recollection was that it had been built for the future
and that a Phase 3 and Phase 4 could be added on. He asked for clarification on the
$600,000 for the 3MG tank. Mr. Sugerman replied that this was an ASR well for
withdrawal of water from the ground.
Commissioner Fisher asked if the figures would change if fluoridation were added and
Mr. Sugerman replied that they would not - that fluoridation was covered in the current
operating budget.
Vice Mayor Weiland noted that the unincorporated areas in the Boynton Beach service
area paid 25% more for water than the City residents and asked whether Ocean Ridge
did the same.
Mr. Pete Mazella of the Utilities Department responded that Ocean Ridge had a long-
standing agreement with the City. They own their own water system. They pay the City
of Boynton Beach to do any maintenance that is required on the system. They are sold
the water at the same rate as the incorporated City residents.
In the last section of the report the consultants recommended that wastewater rates
remain the same, that water rates remain the same for the time being but that they be
scrutinized closely for the next few years, and that stormwater rates be modified from
$1.00 per ERU to $6.00 per ERU.
Vice Mayor Weiland asked if an analysis for an increase to $5.00 per ERU had been
done and Mr. Sugerman replied that it had not.
Commissioner Fisher asked if a $4.00 per ERU increase could be considered, and
believed that it would not be a good idea to jump to charging the most in Palm Beach
County. Mayor Broening responded that the City's rates had been Iow for a long time
and that it needed to "catch up". Vice Mayor Weiland believed that even at $6.00 the
City would have a deficit until just before 2004 and recommended staying with the $6.00
until at least that time when any further adjustments could be made.
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MEETING MINUTES
WORKSHOP ON UTILITY RATE STUDY
BOYNTON BEACH, FLORIDA
April 17, 2000
In reference to the annual rate adjustment recommended by the consultant, Mr.
Bressner stated that if the Commission so desired, an annual evaluation of the
stormwater in addition to the water and sewer rates ought to be considered. Mr.
Bressner said that while the City should try to maintain some consistency in its rate
structure, the surrounding communities would probably also be raising their rates and
while Boynton Beach may be on the high end for a short time, if the plan as
recommended by the consultant were to be followed, Boynton Beach would be in the
lower third as far as overall costs were concerned.
Vice Mayor Weiland asked if it were necessary to do a rate study every time the rate
was raised. Mr. Sugerman said he did not believe it was a requirement by law but that
the City's bondholders want to make sure that enough money is being collected to
operate and make the P & I payments.
The consultant's recommendation on Fee In Lieu of Capital Charge idea was discussed.
This would be an impact fee just for the customers served by the new downtown water
quality improvement area, Pond B. Each new customer using Pond B to satisfy their
own on-site drainage requirements would need to pay an impact fee of $2.28 per S.F. of
impervious area for the privilege of tying into Pond B. The City could then begin to
recover a portion of its cost for building Pond B. Mr. Sugerman said, in response to a
question from Vice Mayor Weiland, that this impact fee would be required in addition to
the City-wide $6.00 per ERU.
Commissioner Fisher asked if this impact fee could be broken down into percentages
and proportionately allocated to the users. Mr. Sugerman said that it would be
complicated but it could be done.
Mr. Sugerman stated that if the $6.00 per ERU rate were not acceptable, it would be
necessary to downsize the proposed improvements.
Commissioner Fisher noted that in the domain of water services there was no deficit and
asked if it would be possible to transfer money between funds. Mr. Sugerman
responded that the purpose of having the utilities stand alone was to provide fair and
equitable service to all customers.
Mr. Sugerman introduced Mr. John Guidry, Director of Utilities, who presented an
"outside-the-box solution". Mr. Guidry passed out copies of his presentation entitled
"Stormwater Aquifer Storage and Recovery Well".
This idea encompasses a public conveyance system utilizing stormwater for green
space irrigation. The available resources to accomplish this project are:
· Lift Station 359 (old Sewage Treatment Plant adjacent to 1-95)
° 1.50 acres of City-owned land available for a detention pond and
a filtering mechanism for developing stormwater and subsequent
treatment prior to storing the water in an Aquifer Storage and Recovery
Well (ASR)
According to Mr. Guidry's report, stormwater management from the viewpoint of
collection into a retention/detention pond for treatment prior to discharge into a receiving
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MEETING MINUTES
WORKSHOP ON UTILITY RATE STUDY
BOYNTON BEACH, FLORIDA
April 17, 2000
body of water is standard practice used worldwide; however, the application of ASR for
storage and subsequent recapture of the resource for irrigation has not been proved as
feasible or permitted at the present time. The technolgy is in place for ASR relative to
providing drinking water as has been done successfully for the last ten years by the City
in its East Water Treatment Plant.
A feasibility study would be required for providing an appropriate level of comfort for the
regulatory authorities in the following areas:
·
·
·
·
Feasibility must by established with the help of an outside professional
favorable national reputation for skill and experience.
· ASR
· Site Investigation
· Pond and treatment dynamics
· Pumping facilities
Pipelines
Outfall
Collection areas
Potential irrigation use
having a
Mayor Broening asked what the feasibility consultant would cost and Mr. Guidry stated
that plus or minus $5,000 it would probably cost $20,000. Mayor Broening thought it
was an interesting idea and wondered what percentage of the City's total stormwater
could be handled by such a facility. Mr. Guidry said that would be subject to the
feasibility study.
Mayor Broening also asked if there would be a migration problem. Mr. Guidry
responded that the underground injection control rules list the sphere of influence from
well-to-well as one mile. The City is clear as far as the mile area from the ASR well at
the east plant.
Commissioner Black asked what the likelihood would be of getting a demonstration grant
for this project. He stated that if the project had transferability to other locations in the
State there could possibly be funds available through the EPA. Mr. Guidry remarked
that the EPA would not be providing funds but that the South Florida Water Management
District had indicated a willingness to listen, depending on the results of the feasibility
study.
Mayor Broening thanked Mr. Guidry for the presentation and thought the idea had a lot
of potential. He supported the feasibility study and said that if Boynton Beach could be
the first to do this it would have wide publicity value as well as providing an economic
benefit to all the citizens of Boynton Beach. The Mayor stated that a consensus would
be appropriate at this time.
Mr. Bressner stated that since this was not in the budget, an authorization at the
Commission level for a Request for Quote for the feasibility consultant would be in order.
Staff could report back to Commission on the possibilities for consultants and, ultimately,
the results of the study.
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MEETING MINUTES
WORKSHOP ON UTILITY RATE STUDY
BOYNTON BEACH, FLORIDA
April 17, 2000
Commissioner Fisher asked if the State would be paying for it? Mr. Bressner said that it
would be up to the City on the front end but that some costs might be recovered at a
later time. He recommended making it contingent upon the City's getting a
demonstration grant for the construction work so the only out-of-pocket cost would be
the feasibility study.
Mr. Sugerman presented Alternative Sources of Funding. There were three alternatives:
1) Grants
Mr. Sugerman said the City had already received some grants for stormwater
improvements. In 1998 the City received $300K for the Lake Worth Lagoon Partnership
grant program for Pond B; and it received another $350K in 1999. This means that
against $8.5M in improvements, the City has received $550,000 in grants.
2) Loans
The State revolving loan program was mentioned. In November of 1999 the City
submitted a non-binding request form to the Florida Department of Environmental
Protection to be on their "Acceptable" list. The pool is only $8M statewide with a 20 year
loan at 3.75 or 4.50%, about the same as the revenue bonds.
3) Creation of Special Assessment Districts
The City would establish a particular boundary in the City where certain improvements
would be made and the City would determine the type of improvements to be made.
The cost of those improvements would be assessed on the property owner's tax bill. It
would be a non ad valorem assessment. Payments by the property owners would be
made over time and if this were done the value of the assessment district would be
carved out of the City improvements. Of the $13.1M in improvements planned, any
assessments from that and the City's cost of doing the City-wide improvements would be
reduced. This could reduce the size of the bond issue that is required. This could cause
the new ERU rate to go from the $6.00 mentioned earlier to $5.95 but the actual
calculations are not done yet. (See Question and Answer section for further comments
on this item.)
Mayor Broening suggested that the Commission 1) instruct Staff to frame an ordinance
based on the study results and recommendations; 2) look for a bond issue and not
complicate the issue with special assessments, and 3) ask for Staff to come back to the
Commission with more information on the feasibility study for the "out of the box"
stormwater solution.
Vice Mayor Weiland asked about the special assessment issue. Mayor Broening stated
that his idea was not to complicate the issue with special assessments by district. He
believed that grants would be a possibility also but that the City should really look to a
bond issue since it would be funded by the expectation of a rate increase that would be
self-fulfilling.
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MEETING MINUTES
WORKSHOP ON UTILITY RATE STUDY
BOYNTON BEACH, FLORIDA
April 17, 2000
At this point Mayor Broening looked to the other members of the Commission for
consensus on the three items mentioned above and a nodding of the heads of the
Commissioners signified such consensus.
Mr. Sugerman thanked Staff for all the hard work that had gone into the rate study
report.
Mayor Broening asked for comment from the audience. Hearing none, the public
audience was closed.
Vice Mayor Weiland moved to adjourn the meeting, seconded by Commissioner Black
and unanimously approved. The meeting was properly adjourned at 9:10 P.M.
CITY OF BOYNTON BEACH
~v~ayor
V~ce Mayor
ATTEST:
Ma~,or Pro Tem
Cit~Clerk - ' -
Recording Secretary
(Three Tapes)
~orr~issioner
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I City of Boynton Beach, Florida
Stormwater, Water and
Wastewater Rate Study
March15, 2000
Final Draft Report
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1
Final Draft Report
for
City of Boynton Beach, Florida
Stormwater, Water and Wastewater Rate Study
March 15, 2000
~Camp Dresser & McKee Inc.
1601 Belvedere Road, Suite 211 South
West Palm Beach, Florida 33406
CDM Project No. 6276-27182-010.RT.REP
Contents
Section I Introduction
1.1
1.2
1.3
1.4
Section 2
Section 3
3.1
3.2
Section 4
4.1
~.2
4.3
4.4
4.5
5.1
5.2
5.3
6.1
" 6.2
6.3
I 6.5
6.6
Section 7
7.1
7.2
Authority ..................................................................................... ~ ............................. 1-1
Purpose and Scope ................................................................................................... 1-1
Outline of the Report ............................................................................................... 1-3
Prevailing Rates ........................................................................................................ 1-3
System Growth
Fee-In-Lieu-Of Capital Charge
General ........................................................................................................... ~ ........... 3-1
Development of Fee-In-Lieu-Of Capital Charge .................................................. 3-1
Projection of Revenue Requirements
General .................. ' ..................................................................................................... 4-1
Operating Expenses ................................................................ . ................................. 4-1
4.2.1 Historical and Budgeted Operating Expenses ......................................4-1
4.2.2 Projected Operating Expenses ................................................................. 4-6
Existing Debt Service ............................................................................................. 4-13
Renewal and Replacement Program ................................................................... 4-13
Capital Improvement Program ............................................................................ 4-17
4.5.1 Stormwater System ................................................................................. 4-17
4.5.2 Water System ........................................................................................... 4-17
4.5.3 Wastewater System ................................................................................. 4-20
Projection of Revenues at Prevailing Rate
Actual and Budgeted Revenues ............................................................................. 5-1
Projection of Interest Earnings ......................................................... : ..................... 5-1
ProjectiOn of Revenues at Prevailing Rate ............................................................ 5-5
Projection of Revenues, Expenditures and Cash Flows at Prevailing Rates .... 5-5
Calculations of Rate Adjustments
Stormwater System .................................................................................................. 6-1
Water System ............................................................................................................ 6-1
Wastewater System .................................................................................................. 6-3
Combined Systems ................................................................................................... 6-3
Comparison o~ Rates with Neighboring Jurisdictions ........................................ 6-3
Annual Adjustment of Rates .................................................................................. 6-6
Summary and Recommendations
Summary .................................................. i ........................................... ~ .................... 7-1
Recommendations .................................................................................................... 7-2
Camp Dresser & McKee Inc.
6276'27182-010.RT.REP
bs5070'0/'14/00
Tables
Table 1-1
Table 1-2
Table 4-9
Table 4-10
....... Table 4-11
I ~ Table4-12
~ Table4-13
Table 5-1
Table 5-2
Table 5-3
Table 54
Table 5-6
Table 2-1
Table 3-1
Table 4-1
Table 4-2
Table 4-3
Table 4-4
Table 4-5
Table 4-6
Camp Dresser & McKee Inc.
6276-27182-010. RT.REP
bs5070~3/14/00
Prevailing Water System Rates ......................................................... 1-4
Prevailing Wastewater User Charges .............................................. 1-5
Projected System Growth .................................................................. 2-2
Development of Stormwater System Fee-In-Lieu-Of
Capital Charges ............................................................................. ~ ..... 3-2
Annualized Fiscal Year 1999 Operating Expenses and Allocation
to Systems ........ ~ ................................................................................... 4-2
Budgeted Fiscal Year 2000 Operating Expenses and Allocation
to Systems ............................................................................................ 4-4
Projection of Stormwater System Current Expenses ..................... 4-7
Projection of Water System Current Expenses ............................... 4-9
Projection of Wastewater System Current Expenses ................... 4-11
Existing Debt Service Requirements and Allocations to
Systems ............................................................................................... 4-14
Water System Renewal and Replacement Program ................ ,... 4-15
Wastewater System Renewal and Replacement Program .......... 4-16
Stormwater System Capital Improvement Program ................... 4-18
Water System Capital Improvement Program ............................. 4-19
Water System Capital Improvement Program: Capacity
Expansion Portion ................................................... : ........................ 4-21
Water System Capital Improvement Program: Non-Capacity
Expansion Portion ...; ........................................................................ 4-22
Wastewater System Capital Improvement Program ................... 4-23
Annualized Fiscal Year 1999 Operating Revenues and Allocation
to Systems ...................... ~ ..................................................................... 5-2
Budgeted Fiscal Year 2000 Operating Revenues and Allocation to
Systems .................................................................................................. 5-3
Projection of Interes~ Earnings at prevailing Rates ...................... .. 5-4
Projection of Stormwater System Revenues at Prevailing
Rates ..................................................... · ................................................ 5-6
Projection of Water System Revenues at Prevailing Rates ........... 5-7
Projection of Wastewater System Revenues at Prevailing
Rates ..................................................................................................... 5-8
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I Table 5-7
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Table 5-8
Table 5-9
Table 5-10
Table 6-1
Table 6-2
Table 6-3
Camp Dresser & McKee Inc.
6276-27182-010.RT. REP
Projection of Stormwater System ReVenues, Expenditures and
Cash Flows at Prevailing Rates ......................................................... 5-9
Projection of Water System Revenues, Expenditures and Cash
Flows at Prevailing Rates ................................................................ 5-10
Projection of Wastewater System Revenues, Expenditures and'
Cash Flows at Prevailing Rates ....................................................... 5-11
Projection of Combined System Revenues, Expenditures and Cash
Flows at Prevailing Rates ................................................................ 5-13
Projection of Stormwater System Revenues, Expenditures and
Cash Flows with Rate Adjustment 5/1/00 ..................................... 6-2
Projection of Combined System Revenues, Expenditures and Cash
Flows with Stormwater Adjustment 5/1/00 ............. ..................... 6-4
Comparison of Average Monthly Bills with Neighboring
Jurisdictions ......................................................................................... 6-5
Executive Summary
Summary
The City of Boynton Beach, Florida (the City), authorized Camp Dresser & McKee Inc.
(CDM) to perform this Stormwater, Water and Wastewater Rate Study on August 27,
1999. The purpose of this rate study is to update the rates charged for utility services
to maintain the financial integrity of the combined enterprise fund for these three
services. The period of analysis for this rate study is budgeted Fiscal Year 2000
through Fiscal Year 2004.
The prevailing water rates of the City have separate classes for residential and
commercial customers. A base monthly charge is levied on each account, and an
indining block structure is used to charge for metered water Outside
usage.
City
customers are levied a 25 percent surcharge as allowed by State statute. For the
wastewater system, a base monthly charge is levied on each customer account, and a
charge imposed usage. A cutoff of 7,000 gallons per
uniform
is
for
metered-w~ter
month for the volume charge is applied to residential wastewater service customers.
As with the water system, a 25 percent outside City surcharge is imposed. A monthly
stormwater utility fee of $1.00 per equivalent residential unit (ERU) is imposed on all
developed property within the corporate limits.
water wastewater systems is expected to follow the projected
Growth
of
the
and
population growth of the City as set forth in the Consumptive Use Permit. The
projected growth rate is slightly over two percent through the end of the rate studY
period. For the stormwater system, the annual growth rate is projected as half that of
...... the :water and wastewater systems, or about one percent annually through the rate
~ study period.
~ A tWo-part fee-in-lieu-of capital charge has been developed with respect to the
~~~ stormwater system. This one-time fee is intended to recover the cost of capital
facilities constructed to benefit the downtown improvement area. Part of the facilities
%~~ 5 are designed for water quality improvements, and are intended to benefit only the
'~'~ 48.9 acres of the downtown water quality improvement area. Two-thirds of the total
~~1' capital costs are estimated as related to these quality improvements, resulting in a
~%71 charge of $2.10 per square foot of impervious area. One third of the cost is associated
~ with stormwater quantity benefits for the entire 460.8 acres of the downtown
waterShed, yielding a charge of $0.18 per square foot of
impervious
area.
~~ To update the rates using a cost of service approach, it is necessary to identify and
~' project revenue requirements annually for each system through the end of the rate
~~: study period. The categories of revenue requirements consist of operating expenses,
"~ debt service on existing and future bonded indebtedness, renewal and replacement
k~~ requirements, minor capital outlays, and capital improvement expenditures. The
&~,,7 Fiscal Year 2000 budget is the basis used to project revenue requirements.
Camp D~esser & Mc. Kee Inc. ES-1
~.~,,~.od0o.j,.,~~
Executive Summary
Allocations of the operating expenses in the various cost centers to the three
systems are based on discussions with City staff. Operating, or current, expenses
are projected using a three percent annual inflation rate. Variable costs, primarily
electricity and chemicals, are projected with inflation compounded by the growth
in the system, while only inflation is applied to fixed operating expenses. For the
stormwater system, it is anticipated that increased costs beyond inflation will be
associated with an additional stormwater maintenance crew beginning in April
2001, and swale maintenance beginning in Fiscal Year 2002.
The City has two debt issues outstanding with respect to the utility system: the
Series 1992 Revenue Bonds, and the Series 1996 Revenue Bonds. The percentage of
debt service associated with each of the three systems is based on an analysis of the
benefit afforded to each of them.
· Concerning renewal and replacement requirements, the City has projected annual
requirements for this category of expenditures, which are adjusted for inflation.
· The City has provided it's planned capital improvement program for each of the
three systems Over the rate study period. Various sources of funds are available to
pay the costs of these improvements, including the Series 1990 Bond Construction
Fund, the Series 1992 Bond Construction, the Series 1996 Bond Construction Fund,
the Utility General Account, future bond proceeds, interest earnings on the balance
of funds, and capital charge receipts. The sources of funds have been designed to
utilize fully the existing bond funds before issuance of additional debt. Also,
approximately $8.4 million of the Utility General Account is applied to capital
needs during the course Of the rate st_udy period, leaving a projected balance of $13
million at the end of Fiscal Year 2004 in this account; The fUnding also
contemplates the issuance in Fiscal Year 2000 of approximately $15 million
principal amount of bonds to finance a portion of the stormwater system capital
improvements program.
Revenues at prevailing rates are projected for each of the three systems. The annual
growth in fees and charges' for services are projected at the growth rates of the
systems. Interest earnings and miscellaneous revenues are allocated to each system
based on information provided by City staff. Interest earnings are projected at a 4.5
percent rate applied to annual average balance of funds. By deducting the annual
revenue requirements from revenues at prevailing rates, annual surpluses and deficits
are computed for each system. The annual percentage adjustments in rates to
eliminate the deficits are computed as a percentage of the charges for services.
[] For the stormwater system, adjustments for charges for services ranging from 243
percent to 494 percent are projected as necessary.
· For the water system, adjustments to rates of less than five percent are projected as
required through the rate study period.
CD~I~I~ Camp Dresser & McKee Inc.
6276-27182-010.RT. REP
ES-2
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Camp Dresser & McKee Inc.
Executive Summary
As a result of the surpluses projected in all years for the wastewater system, no
adjustment in user charges are projected as necessary over the course of the rate
study period.
In addition to projecting annual surpluses and deficits for each system individually to
assess the needs for rate adjustments, it is also important to examine these cash flows
on a combined system basis. At prevailing rates for the combined systems, annual
surpluses are generated through Fiscal Year 2002, and cumulative surpluses are
projected through the end of the rate studY period. Another parameter that must be
considered on a combined system basis is coverage of principal and interest on
outstanding plus prospective debt. A minimum debt service coverage factor of 1.10 is
required on all debt. For the combined systems Bt prevailing rates, this minimum
coverage factor is favorably exceeded in all years during the rate study period.
To eliminate the annual deficits for the stormwater system on a stand-alone basis, an
adjustment to the monthly stormwater fee from $1.00 per ERU to $6.00 per ERU
Would be required.
Recommendations
Based on the analysis undertaken in this Stormwater, Water and Wastewater Rate
Study, we have developed the following recommendations:
Adopt a two-part fee-in-lieu-of capital charge for the stormwater system to recover
the cost of improvements for water quality and quantity in the downtown
watershed area. ~
Adopt an adjustment in the monthly stormwater utility fee. Based on cost of
service considerations, an adjustment from $1.00 per month per ERU to $6.00 is
fully justified.
· Continue to monitor the financial performance of the water system to determine if
and when any adjustments to rates might be necessary.
Consider adoption an annual adjustment of stormwater, water and wastewater
rates, either positively or negatively. Such an annual adjustment would provide for
maintaining rate sufficiency without the need for a detailed rate study every year at
budget time.
ES-3
Section 1
Introduction
1.1 Authority
The City of Boynton Beach (the City) authorized Camp Dresser & McKee Inc. (CDM)
to prepare this Stormwater, Water and Wastewater Rate Study by issuance of
Purchase Order No. 99307, dated August 27, 1999.
1.2 Purpose and Scope
The purpose of this rate study is to update the rates charged for stormwater, water
and wastewater service to maintain the financial integrity of the combined enterprise
fund for these three services. The City is also contemplating the issuance of.
additional parity revenue bonds to finance improvements to the stormwater, water
and wastewater systems. The scope of work also provides for the preparation of a
letter report in support of the City's prospective issuance of additional debt.
The detailed tasks of the scope of work for this rate study are as follows:
· Task 1 - Data Request and Review
Immediately upon receipt of written notice to proceed, CDM will submit a data
request letter to the City setting forth the nature and desired format of data to
perform the study. After receipt of requested data, CDM will review the
information and advise the City of any additional data needs.
· Task 2 - Projection of Customer Parameters
Based on information furnished by the City, CDM will project future customer
growth annually for the five-year rate study period.
Task 3 - Project Revenues at Prevailing Rates
CDM will project revenues at prevailing rates separately for the stormwater
system, the water system, and the wastewater system for each of the next five
years.
· Task 4 - Develop Fee-In-Lieu-Of Stormwater Capital Cost Charge
Using the planned capital improvement projects for the downtown redevelopment
program, CDM will develop a fee-in-lieu-of capital cost charge. The annual
receipts from this Source of capital contribution will be projected for each of the
years of the rate study period.
1-1
Task 5 - Project Revenue Requirements
Based on the City's five-year capital improvement program, and working in
conjunction with the financing team, CDM will project the annual debt service
associated with each of the three systems. The capacity expansion percentages
associated with 'the debt service for each system will also be estimated.
CDM will project separately for each of the three systems the annual revenue
requirements comprising: operating expenses; debt service; renewal and
replacement requirements; minor capital outlays; and, capital improvements.'.
Task 6 - Project Annual Net Revenues, Cash Flows, and Surpluses/(Deficits)
.
Camp Dresser & McKee Inc.
6276-27182-010, RT. REP
Under this task, CDM will project separately for.each system the annual net
revenues, cash flows, and surpluses or defidts, at prevailing rates.
Task 7 - Project Annual Percentage Adjustments in Rates Required
Section 1
Introduction
Based on the results of Task 6, CDM will project, separately for each system, the
annual percentage adjustments in rates required to meet the revenue requirements.
Task 8 - Develop Recommended Annual Adjustments in Rates
CDM recognizes that the annual percentage adjustments in rates computed in Task
7 that are required for self-sufficiency of each system may not be feasible. This task
provides for phasing in of across-the-board rate adjustments over the next five
years to approach self-sufficiency ~of each.systerm ............. ~ :.._
Task 9 - Comparison of Rates with Other Local Utilities
CDM will compare the proposed rates with those of selected utilities in
neighboring jurisdictions.
Task 10 - Prepare Draft Rate Study Report
CDM will prepare a draft rate study report setting forth aH assumptions,
calculations, findings, conclusions and recommendations. CDM will provide the
City with five. copies of the draft report.
Task 111 - Prepare Final Rate Study Report
After receipt of the City's comments concerning the draft report, CDM will
incorporate those comments into a final rate study report. CDM will provide the
City with 10 copies of the final report.
1-2
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,!
Section I '
IntroduCtion
· Task 12 - Prepare Engineer's Letter Report in Support of Debt IssUance
CDM will attend five meetings for the project,-including the formal presentation of
the final rate study report to the City Commission.
1.3 Outline of the Report
Section 1 of this report is an introduction.
Customer growth is projected in Section 2 of this report.
Section 3 develops the fee-in-lieu stormwater capital charge.
Section 4 projects the revenue requirements separately for each of the three systems.
Revenues at prevailing rates are projected in Section 5 for each of the three systems.
.... Re//enues~ expenses, and cash flOwS at pre~ailing rates are ~/I~0 p~0jected. T15ese caSh
flows at prevailing rates are then presented on a combined basis, including debt
service coverage on combined debt.
Section 6 computes the adjustments in rates necessary for each system during the rate
study period. A comparison of rates in other jurisdictions is made with the City's
prevailing and recommended rates.
Section 7 of the report presents a summary and recommendations.,
1.4 Prevailing Rates
The prevailing water system rates are presented in Table 1-1. The prevailing
wastewater system user charges are set forth in Table 1-2.
The City's Ordinance No. 093-72 established stormwater utility fees. That ordinance
established each residential dwelling unit as an equivalent residential unit (ERU),
with commercial or industrial ERUs equal to 1,937 feet. The monthly
square
stormwater utility fee rate established by Ordinance No. 093-72 is $1.00 per ERU.
Based on CDM's knowledge of the City's existing stormwater, water and
wastewater systems, and without conducting any site visits, CDM will prepare an
engineer's letter report in support of the revenue bond issue. Capital improvement
projects to be financed with the issuance of the new money portion of the debt will
be discussed in general terms, without providing detailed justification. Maximum
use will be made of the final rate study report in preparing the engineer's letter
report without the creation of significant additional information. CDM will
provide the City with one version of the draft and a final engineer's letter report.
DRAFT
TABLE 1-1
CITY OF BOYNTON BEACH, FLORIDA
PREVAILING WATER SYSTEM RATES (1)
Inside Outside
Item City City
Residential:
Base Monthly Charge
Commodity Charges (per 1,000 Gal.):
3,000 - 6,000 gal.
6,001 - 9,000 gal.
9,001 - 12,000 gal.
12,001 - 15,000 gal.
15,001 - 25,000 gal.
25,001 - 50,000 gal.
50,001 - 75,000 gal.
Over 75,000 gal.
Commercial:
Base Monthly Charge -:
Commodity Charges (per 1,000 Gal.):
3,000 - 6,000 gal.
6,001 - 9,000 gal.
9,001 - 12,000 gal.
12,001 - 15,000 gal.
15,001 - 25,000 gal.
25,001 - 50,000 gal.
50,001 - 75,000 gal.
Over 75,000 gal.
$6.65
1.58
1.66
1.75
1.85
1.96
2.08
2.21
2.35
$10:64'
1.58
1.66
1.75
1.85
1.96
2.08
2.21
2.35
$8.31
1.98
2.08
2.19
2.32
2.45
2.60
2.77
2.94
$13.30
1.98
2.08
2.19
2.32
2.45
2.60
2.77
2.94
(1) Adopted by Ordinance No. 90-35, effective October 1, 1993.
Rate_Study.xls Section 1 3/8/00; 1:52 PM
DRAFT
TABLE 1-2
YNTON 13EAC
;TEWAT!"R U.~
Item
Residential & Commercial:
Base Monthly Charge
Commodity Rate (per 1,000 Gal. Of potable water) (2)
Monthly Charge If No Water Meter
Adol}ted b/Ordin ~, effect v
Corr moditf charg ~1 custor~
will [,e bas 9d upo~ ;ewer u., a
Con; merci ~1 acco~ ed wast~ ;v
total water usage.
Section I
CITY OF BOYNTON BEACH, FLORIDA
PREVAILING WASTEWATER USER CHARGES (1)
Inside Outside
City City
$10.13 $12.66
1.54 1.93
19.74 24.67
(1) Adopted by Ordinance No. 90-35, effective October 1, 1993.
(2) Commodity charge for residential customers (both inside and outside City)
will be based upon a maximum sewer usage of 7,000 gallons per month.
Commercial accounts will be billed wastewater charges based upon
3/8/00;2:03 PM
Section 2
System Growth
This section of the rate study projects growth of the systems. Based on discussion
with City staff, an appropriate basis to use for projecting growth in the customer
parameters of the water and wastewater systems is the population growth projected
in the City's consumptive use permit. Accordingly, Table 2-1 uses the projected
population to determine the annual ~growth rates for these two systems. As c~n be
seen in the upper Portion of Table 2- "L_ ~t-owth rate in all years is 2.06 percent. This
value will be used in subsequet' ~ections to project revenues at prevailing rates:
While the water and wastewater systems serve customers both inside and outside the
City, the stormwater system serves customers only within the municipal limits. City
staff estimates that the growth rate inside the City is about half the overall rate.
Hence, as shown in the lower portiOn of Table 2-1, an annual growth rate of 1.03
percent is projected. This value will be used in subsequent sections to project
revenues at prevailing rates.
Camp Dresser & McKee Inc.
S27~-~718~-010.RT. REP
2-1
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1.1.. mw<
o,,,$ ~ ~
~wm ~ o ~
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Section 3
Fee-In-Lieu-Of Capital Charge
3.1 General
6276-27'~82-010. RT, REP
'Many levy a capital charge upon parcels within
stormwater
ufiHfies
fee-in-lieu-of
their service areas for the purpose of defraying capital costs incurred on their behalf.
Instead of requiring that each parcel construct the necessary facilities on site to
retain/detain the stormwater they generate, the municipality constructs the facilities
required for the service area, and then recovers the cost through a one-time capital
charge.
This section develops a fee-in-lieu-of capital ch~.ge for the downtown water quality
improvement area. The fee will actually consist of two part& One part is for the
water qUality improvements which benefit only the area within the 48.9-acre
downtown water quality improvement area. The other part is for the improvements
managing stormwater quantity that provide benefits throughout the entire 460.8-acre
downtown watershed.
3.2 Development of Fee-In-Lieu-Of Capital Charge
Table 3-1 develops both portions of the one-time fee-in-lieu-of capital charge. The
table is described in detail below.
In the upper portion of the table, the total area and the impervious area of the
downtown water quality improvement area are presented under the quality column.
Also, characteristics for the entire downtown watershed area are presented to enable
.... calculation of the capital costs associated with managing water quantity.
~ The middle portion of Table 3-1 presents the costs associated with the downtown
~~~~ project. An estimated two-thirds of the total project costs are considered related to the
water quality improvements within the downtown water quality improvement area,
and the remaining one-third of costs are associated with stormwater quantity
throughout the downtown watershed. Estimated costs for the design/build of the
improvements are added to contract costs to date plus the costs of land to yield total
costs of the downtown improvements.
L% ~ The capital cost recovery mechanism is identified in the bottom portion of Table 3-1.
The mechanism is recovery of the capital costs on the basis of square feet of
impervious area. The costs of the improvements will be defrayed from two sources:
=ti ip d =d evied uP° Pt°pe y
downtown improvement area. So as not to double charge the property owners in the
downtown improvement area, the present worth of the principal payments related to
these improvements is deducted from the total costs per square foot of impervious
area to yield the charge. The present value of principal payments is estimated as 41.14
percent of the total costs per square foot. The $2.10 per square foot quality capital
charge component should be levied only within the downtown water quality
Camp Dresser &. McKee Inc. 3-1
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DRAFT
TABLE 3-1
CITY OF BOYTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER SYSTEM RATE STUDY
DEVELOPMENT OF STORMWATER SYSTEM FEE-IN-LIEU:OF CAPITAL CHARGES
Estimated Costs
Item Quality Quantity
DOWNTOWN IMPROVEMENT AREA CHARACTERISTICS:
Total Area (Acres) (1)
Impervious Area Percentage (1)
Impervious Area (Acres) (2)
48.9 460.8
71.7% 43.8%
35.1 201.9
ESTIMATED COSTS OF DOWNTOWN IMPROVEMENTS: (3)
Contracts to Date (4)
Estimated Construction Costs (5)
Direct Costs of Land (6)
$894,993 $447,496
3,465,000 1,732,500
1,091,033 545,517
Total Costs of Downtown Improvements
$5,451~026 $2,725~513
CAPITAL COST RECOVERY MECHANISM:
Total .Cost Per Square Foot of Impervious Area (7)
Less: Present Worth of PrinciPal payment of Debt Service for Downtown Improvements (8)
Yields: Rate to be Charged Per Square Foot of Impervious Area
$5.57 $0.31
($1.47) ($0.13)
$2.10 $0.18
(1) Estimated by CDM in January 1999 engineering analysis. Quality costs are associated with only the Downtown
Water Quality Improvement Area. Quantity costs are associated with the entire Downtown Watershed.
(2) Equals acreage of Total Water Quality Improvement Area multiplied by Impervious Area Percentage.
(3) Equals two-thirds of total estimated cost for each tine item. One-third is considered associated with
water quantity.
(4) Based on information provided by City staff. Excludes direct costs of land.
(5) Based on estimated costs for design/build.
(6) Estimated by City staff.
(7) Equals Total Costs of Downtown Watershed Improvements divided by Impervious Area of
Water Quality Improvement Area in square feet (43,560 square feet per acre).
(8) Equals 41.14% of Total Cost Per Square Foot of Impervious Area. Percentage is computed as present worth of preliminary
principal repayment schedule for Series 2000 Revenue Bonds divided by deposit to construction fund.
Rate_Study.×ls Section 3 3/8/00;2:07 PM
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~1~ Carap Dre~er & Md<~e Inc.
Section 3
Fee-In-Lieu-Of Capital Charge
improvement area; whereaS, the $0.18 per square foot quantity capital charge
component should be levied throughout the downtown watershed.
3-3
Section 4
Projection of Revenue Requirements.
4.1 General
This section of the report develops revenue requirements for each of the three
systems. Revenue requirements comprise the following cost categories:
,, Operating expenses;
· Debt service on existing and future bonded indebtedness;
· Renewal and replacement requirements;
· Minor capital outlays; and,
· Capital improvement program expenditures.
Each of these expenditure categories is developed in detail below.
4.2 Operating Expenses
4.2.1 Historical and Budgeted Operating Expenses
The Utilities Department prepares detailed operating expense budgets and actual
expense statements that classify costs into the various cost centers by line item. For
purposes of this rate study, the line items may be conveniently grouped into
personnel and related expenses, other operating expenses, minor capital outlays, and
transfers. Of these four categories, the minor capital outlays are not a "current
expense" within the meaning of the bond covenants, and are therefore not treated as
operating expenses. For all cost centers except General Administration, transfers
capture the costs associated with self-insurance, and are a true "current expense"
category. The costs for vehicle replacement is not included in the transfers line item,
but rather as a minor capital outlay. Under General
Administration,
transfers
captures the costs associated with services provided to utilities by other City
departments.
Table 4-1 presents the annualized costs for Fiscal Year 1999, based on actual expenses
for 10 months of the year. Table 4-2 presents budgeted costs for Fiscal Year 2000.
Utility staff proVided the bases for costs in each
allocating
cost
center,
as
listed
below:
· Water Distribution: 100 percent to the water system;
· Public Water Operations (treatment): 100 percent to the water system;
· Public Water Maintenance: 100 percent to the water system;
· Wastewater Collection: 100 percent to the wastewater system;
Camp Dresser & McKee Inc. 4-1
6276-27182-0t O.RT.REp
bsSO68k3/10/O0
DRAFT
TABLE 4-1
CITY OF BOYNTON BEACH, FLORIDA
ANNUALIZED FISCAL YEAR t999 OPERATING EXPENSES AND ALLOCATION TO SYSTEMS (1) *
Total Allocation to System
Cost Center Amount Stormwater Water Wastewater
Water Distribution:
Personnel & Related Costs $801,689 $0 $801,689 $0
operating Expenses 309,510 0 309,510 0
Minor Capital Outlay 160,661 0 160,661 0
Transfers 24,266 0 24,266 0
Total Water Distribution $1,296,127 $0 $1,296,127 $0
Public Water Operations:
Personnel & Related Costs $1,034,965 $0 $1,034,965 $0
Operating Expenses: 0 0 0
Electricity 592,123 0 592,123 0
Chemicals 531,376 0 531,376 0
All Other 124,014 0 124,014 0
Minor Capital Outlay 25,206 0 25,206 0
Transfers 32,238 0 32,238 0
Total Public Water Operations $2,339,921 $0 $2,339,921 $0
Public Water Maintenance:
Personnel & Related Costs $460,219 $0 $460,219 $0
Operating Expenses 190,723 0 190,723 0
Minor Capital Outlay 54,893 0 54,893 0
Transfers 14,824 0 14,824 0
Total Public Water Maintenance $720,659 $0 $720,659 $0
Wastewater Collection:
Personnel & Related Costs $625,322 $0 $0 $625,322
Operating Expenses 152,141 0 0 152,141
Minor Capital Outlay 217,525 0 0 217,525
Transfers 16,374 0 0 16,374
Total Wastewater Collection $t,011,362 ' ' $0 $0 $1,011,362
Wastewater Pumpinq Stations:
Personnel & Related Costs
Operating Expenses:
Electricity
Chemicals
All Other
Minor Capital Outlay
Transfers
Total Wastewater P.S.
Wastewater Treatment Plant:
Contractual Services
Other Operating Expenses
Minor Capital Outlay
Transfers
Total Wastewater Plant
Laboratory Services:
Personnel & Related Costs
Operating Expenses
Minor Capital Outlay
Transfers
Total Laboratory Services
$532,562 $0 $0 $532,562
160,943 0 0 160,943
69,569 0 0 69,569
146,804 0 0 146,804
106,866 0 0 106,866
14,705 0 0 14,705
$1,031,4~9 $0 $0 $1,031,449
$2,024,567 $0 $0 $2,024,567
(332,972) 0 0 (332,972)
0 0 0 0
0 0 0 0
$1,691,594 $0 $0 $1,691,594
$237,450 $0 $237,450 $0
88,387 0 88,387 0
29,612 0 29,612 0
8,066 0 8,066 0
$363,515 $0 $363,515 $0
Rate_Study.xls
* Footnotes on following page.
Section 4
3/8/00;2:07 PM
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DRAFT
TABLE 4-1 (Continued)
CITY OF BOYNTON BEACH, FLORIDA
ANNUALIZED FISCAL YEAR 1999 OPERATING EXPENSES AND ALLOCATION TO SYSTEMS (1)
Total Allocation to System
Cost Center Amount Stormwater Water Wastewater
Utility Construction:
Personnel & Related Costs $209,186 $69,729 $69,729 $69,729
Operating Expenses 41,142 13,714 13,714 13, 714
Minor Capital Outlay 141,219 47,073. 47,073 47,073
Transfers 7,342 2,447 2,447 2,447
Total Utility Construction $398,889 $132 963 $132,963 $132,963
Utility Administration:
Personnel & Related Costs
Operating Expenses ,,
Minor Capital Outlay
Transfers
Total Utility Administration
$971,816 $46,144 $522,758 $402,914
292,802 113,903 157,504 121,396
34,826 1,654 18,734 14,439
35,261 1,674 18,967 14,619
$1,334,706 $63 375 $717,963 $553 367
General Administration:
Personnel & Related Costs $0 $0 $0 $0
Operating Expenses 30,238 1,436 16,265 12,536
Minor Capital Outlay 2,804 133 1,509 1,163
Transfers 5,909,249 280,587 3,I78,694 2,449,967
Total General Administration $5,942,291 $282,156 $3,196,468 $2,463,666
Stormwater Maintenance:
Personnel & Related Costs $214,266 $214,266 $0 $0
Operating Expenses 94,414 94,414 0 0
Minor Capital Outlay 58,249 58,249 0 0
Transfers 5,806 5,806 0 0
Total Stormwater Maintenance $372,734 $372,734 $0 $0
Customer Relations: ........ .__; ::~ :~
Personnel & Related Costs $269,227 $89,742 $89,742 $89,742
Operating Expenses 154,634 51,545 51,545 51,545
Minor Capital Outlay 0 0 0 0
Transfe rs 4,595 1,532 1,532 1,532
Total Customer RelaUons $428 456 $142 819 $142,819 $142,819
Cashiedn,q:
Personnel & Related Costs $136,573 $45,524 $45,524 $45,524
Operating Expenses 7,165 2,388 2,388 2,388
Minor Capital Outlay 0 0 0 0
Transfers 254 85 85 85
Total Cashiering $143,993 $47,998 $47,998 $47 998
City Hall at the Mall:
Personnel & Related Costs $25,223 $8,408 $8,408 $8,408
Operating Expenses 4,240 1,413 1,413 1,413
Minor Capital Outlay 0 0 0 0
Transfers 91 30 30 30
Total Cashiering $29,554 $9,851 $9,851 $9,851
(1) Taken from City's Summary Budget Report for each cost center shown. Allocation to each
system based on information provided by City staff. Costs annualized by multiplying 10 months
of costs by 12/10's. For electricity and chemicals, 11 months and 12 months, respectively, of
actual expenses used.
Rate_Study.xls Section 4 3~8~00;2:13 PM
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DRAFT
TABLE 4-2
CITY OF BOYNTON BEACH, FLORIDA
BUDGETED FISCAL YEAR 2000 OPERATING EXPENSES AND ALLOCATION TO SYSTEMS (1) *
Total Allocation to System
Cost Center Amount Stormwater Water Wastewater
Water Distribution:
Personnel & Related Costs $860,989 $0 $860,989 $0
Operating Expenses 549,227 0 549,227 0
Minor Capital Outlay 131,400 0 131,400 0
Transfers 15,370 0 15,370 0
Total Water Distribution $1,556,986 $0 $1,556,986 $0
Public Water Operations:
Personnel & Related Costs
Operating Expenses:
Electricity
Chemicals
All Other
Minor Capital Outlay
Transfers
Total Public Water Operations
Public Water Maintenance:
Personnel & Related Costs
Operating Expenses
Minor Capital Outlay
Transfers
Total Public Water Maintenance
Wastewater Collection:
Personnel & Related Costs
Operating Expenses
Minor Capital Outlay
Transfers
Total Wastewater Collection
Wastewater Pumpinq Stations:
Pemonnel & Related Costs
Operating Expenses:
Electricity
Chemicals
All Other
Minor Capital Outlay
Transfers
Total Wastewater P.S.
Wastewater Treatment Plant:
Contractual Services
Other Operating Expenses
Minor Capital Outlay
Transfers
Total Wastewater Plant
Laboratory Services:
Personnel & Related Costs
Operating Expenses
Minor Capital Outlay
Transfers
Total Laboratory Services
$1,078,776 $0 $1,078,776 $0
650,000 0 650,000 0
558,000 0 558,000 0
175,573 0 175,573 0
0 0 0 0
21,767 0 2t 767 0
$2,484,116 $0 $2,484 116 $0
$536,242 $0 $536,242 $0
227,508 0 227,508 0
62,000 0 62,000 0
9,823 0 9,823 0
$835,573 $0 $835,573 $0
$717,590 $0 $0 $717,590
293,050 0 0 293,050
158,700 0 0 158,700
12,978 0 0 12,978
$1,182,318 $0 $0 $1,182,318
$526,291 $0 $0 $526,291
200,000 0 0 200,000
200,000 0 0 200,000
443,299 0 0 443,299
356,200 0 0 356,200
8,802 0 0 8,802
$1,734,592 $0 $0 $1,734 592
$2,000,000 $0 $0 $2,000,000
0 0 0 0
15,000 0 0 15,000
0 0 0 0
$2,015,000 $0 $0 $2,015,000
$253,610 $0 $253,610 $0
66,138 0 66,138 0
40,150 0 40,150 0
5,308 0 5,308 0
$365,206 $0 $365,206 $0
* Footnotes on following page.
Rate_Study.xls Section 4 3/8/00;2:14 PM
DRAFT
TABLE 4-2 (Continued)
CITY OF BOYNTON BEACH, FLORIDA
BUDGETED FISCAL YEAR 2000 OPERATING EXPENSES AND ALLOCATION TO SYSTEMS (1) *
Total Allocation to System
Cost Center Amount Stormwater Water Wastewater
Utility Construction:
Personnel & Related Costs
Operating Expenses
Minor Capital Outlay
Transfers
Total Utility Construction
Utility Administration:
Personnel & Related Costs
Operating Expenses
Minor Capital Outlay
Transfers
Total Utility Administration
General Administration:
Personnel & Related Costs
Operating Expenses
Minor Capital Outlay
Transfers
Total General Administration
Stormwater Maintenance:
Personnel & Related Costs
Operating Expenses
Minor Capital Outlay
Transfers
Total Stormwater
............................................. Maintenance
Customer Relations:
Personnel & Related Costs
Operating Expenses
Minor Capital Outlay
Transfers
Total Customer Relations
Cashiering:
Personnel & Related Costs
Operating Expenses
Minor Capital Outlay
Total Cashiering
Transfers
City Hall at the Mall:
Personnel & Related Costs
Operating Expenses
Minor Capital Outlay
Transfers
Total City Hall at the Mall
$264,797 $88,266 $88,266 $88,266
83,015 27,672 27,672 27,672
12,400 4,133 4,133 4,133
5,073 1,691 1,691 1,691
$365,285 $121,762 $121~762 $121 762
$1,063,779 $57,675 $534,674 $471,430
281,075 -15,239 141,273 124,563
67,850 3,679 34,103 30,069
15,865 860 7,974 7,031
.$1~428,569 $77,453 $718,023 $633,092
$10,000 $542 $5,026 $4,432
27,600 1,496 13,872 12,23I
0 0 0 0
4,973,615 269,656 2,499,825 2,204,134
$5,011,215 $271,695 $2,518~723 $2,220,797
$235,737 $235,737 $0 $0
195,671 195,671 0 0
115,800 115,800 0 0
3,901 3,901 0 0
$551,109 $551 109 - $0 $0
$339,374 $113,125 $113,125 $113,125
388,046 129,349 129,349 129,349
82,000 27,333 27,333 27,333
541 180 180 180
$809,961 $269~987 $269~987 · $269t987
$120,338 $40,113 $40,113 $40,113
3,504 1,168 1,168 1,168
2,000 667 667 667
101 34 34 34
$125,943 $41,981 $41,981 $41,981
$27,206 $9,069 $9,069 $9,069
9,716 3,239 3,239 3,239
0 0 0 0
99 33 33 33
$37,021 $12,340 $12~340 $12,340
(1) Taken from City's Summary Expenditures - Budget Year 1999 ~ 2000 for each cost center shown.
Allocation to each system based on information provided by City staff.
Rate_Study.xls Section 4 3/8/00;2:15 PM
Section 4
Project of Revenue Requirements
· Wastewater Pumping Stations: 100 percent to the wastewater system;
· Wastewater Treatment Plant: 100 percent to the wastewater system;
· Laboratory Services: 100 percent to the water system;
· Utility Construction: 33 percent to each system;
· Utility Administration and General Administration: a multi-step process is used to
compute this allocation. First, the total operating expenses for all cost centers '
except Utility Administration and General Administration are sUmmed for each of
the three systems. Then, the sum for each system is divided by the sum for the
combined systems to yield a This is then used allocate
percentage.
percentage
to
all of the line items to each of the three systems.
· Stormwater Maintenance: 100 percent to the stormwater system;
· Customer Relations: 33 percent to each system;
· Cashiering: 33 percent to. each system; and,
· City Hall at the Mall: 33 percent to each system.
4.2.2 Projected Operating Expenses
To project operating (or "current") the budgeted for Fiscal Year
expenses,
expenses
2000 are used aS the base and escalated to reflect the anticipated effects of growth and
inflation.
Table 4-3 projects operating expenses for the stormwater system by cost center and
classification. All costs associated with the stormwater system are considered fixed,
and thus escalated only by the effects of inflation. For of this
purposes
study,
inflation is assumed to be at a rate of three percent annually. As can be seen,
projected costs are rounded off to the nearest $1,000 beginning in Fiscal Year 2001.
In addition to increases in costs resulting from inflation, higher levels of service are
antidpated for the stormwater system. Beginning in April 2001, the City eXpects to
add another stormwater crew with a cost of $168,000. The additional
personnel
operating cost of equipment to be used by the crew is estimated at $15,000. annually
beginning in April 2001. Additional swale maintenance is also contemplated by the
City beginning costs associated with this additional
Fiscal
Year
2002.
The
maintenance relate to contracted services.
projects operating expenses water system by cost center and
Table
4-4
for
the
classification. Electricity and chemicals under Public Water Operations are
considered to be variable costs, which are affected both by inflation and system
/0oC~,rT~7~Dresser & McKee Inc 4-6
..
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DRAFT
TABLE 4-.3
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER RATE STUDY
PROJECTION OF STORMWATER SYSTEM CURRENT EXPENSES
Cost Center
Utility Construction:
Personnel & Related Costs (3)
Operating Expenses (3)
Transfers (3)
Total Utility Construction
Fiscal Year
Actual Budgeted Projected
1999 (1) 2000 (2) 2001 2002 2003 2004
$69,729 $88,266 $91,000 $94,000 $97,000 $100,000
13,714 27,672 29,000 30,000 31,000 32,000
2,447 1,691 2,000 2,000 2,000 2,000
$85,890 $117,628 $122,000 $126,000 $130,000 $134,000
$46,144 $57,675 $59,000 $61,000 $63,000 $65,000
13,903 15,239 16,000 16,000 16,000 16,000
1,674 860 1,000 1,000 1,000 1,000
$61,722 $73,775 $76,000 $78,000 $80 000 $82,000
$0 $542 $1,000 $1,000 $1,000 $1,000
1,436 1,496 2,000 2,000 2,000 2,000
280,587 269,656 278 000 286,000 295,000 304,000
$282,023 $271,695 $281000 $289,000 $298,000 $307,000
$214,266 $235,737 $329,000 $428,000 $441,000 $454,000
94,414 195,671 209,000 329,000 500,000 679,000
5,806 3,90t 4,000 4,000 4,000 4,000
$314,485 $435,309 - $542,000 $761,000 $945,000 $1,137,000
Utility Administration:
Personnel & Related Costs (3)
Operating Expenses (3)
Transfers (3)
Total Utility Administration
General Administration:
Personnel & Related Costs (3)
Operating Expenses (3)
TranSfers (3)
Total General Administration
Stormwater Maintenance:
Personnel & Related Costs (3) (4)
Operating Expenses (3) (5)
Transfers (3)
· Total. Sto rmwa~e_ r M ai_nt_en_a_n .ce_. ~
Customer Relations:
Personnel & Related Costs (3)
Operating Expenses (3)
Transfers (3)
Total Customer Relations
$89,742 $113,125 $117,000 $121,000 $125,000 $129,000
51,545 129,349 133,000 137,000 141,000 145,000
1,532 180 0 0 0 0
$142,819 $242,654 $250,000 $258,000 $266,000 $274,000
$45,524 $40,113 $41,000 $42,000 $43,000 $44,000
2,388 1,t68 1,000 1,000 1,000 1,000
85 34 0 0 0 0
$47,998 $41,314 $42,000 $43,000 $44,000 $45 000
$8,408 $9,069 $9,000 $9,000 $9,000 $9,000
1,413 3,239 3,000 3,000 3,000 3,000
30 33 0 0 0 0
$9,851 $12,340 $12,000 $12,000 $12,000 $12,000
$944,788 $1,194,715 $1,325,000 $1,567,000 $1,775,000 $1,991,000
Cashiering:
Personnel & Related Costs (3)
Operating Expenses (3)
Transfers (3)
Total Cashiering
City Hall at the Mall:
Personnel & Related Costs (3)
Operating Expenses (3)
Transfers (3)
Total City Hall at the Malt
Grand Total Current Expenses
* Footnotes on following page.
Rate_Study.xls Section 4 3/8/00;2:17 PM
DRAFT
I
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I Footnotes to Table 4-3:
· (5) Beginning in April 2001, includes annual amount of $15,000 for additional operating costs associated with equipment used by
_ ! ~nddFi~is~lTet;~m2~t4erfo~rsewW'~leAImSa°iinr;;l~ad~cSe!l~o0's~s00a/; ~iSF~salca~e~era2r0:~02(~0$12e0v0~'0s~; ~iSreC;Is~;:;e2d0a0s3~aesn~r~b3e0d~'n00F0ootnote (3).
I Rate Study.xls Section 4 318100;2:11 PM
DRAFT
TABLE 4-4
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER RATE STUDY
PROJECTION OF WATER SYSTEM CURRENT EXPENSES *
Cost Center
Fiscal Year
Actual Budget Prelected
1999 (1) 2000 (2) 2001 2002 2003 2004
Water Distribution:
Personnel & Related Costs (3) $801,689 $860,989 $887,000 $914,000 $941,000 $969,000
Operating Expenses (3) 309,510 549,227 566,000 583,000 600,000 618,000
Transfers (3) 24,266 15~ 370 16,000 16~000 f 6~000 16~000
Total Water Distribution $1,135,465 $1~425~586 $1,459~000 $1~513,000 $1~557~000 $1~603,000
Public Water Operations:
Personnel & Related Costs (3) $1,034,965 $1,078,776 $1,111,000 $1,144,000 $1,178,000 $1,213,000
Operating Expenses:
Electricity (4) 592,123 650,000 683,000 718,000 755,000 794,000
Chemicals (4) 531,376 558,000 587,000 617,000 649,000 682,000
All Other (3) 124,014 175,573 181,0.00 186,000 I92,000 198,000
Transfers 32~238 21 ~767 22~000 23~000 24~000 25~000
Total Public Water Operations $2~314,716 $2,484~116 $2~584~000 $2~688,000 $2~798~000 $2~912~000
Public Water Maintenance:
Personnel & Related Costs (3) $460,219 $536,242 $552,000 $569,000 $586,000 $604,000
Operating Expenses (3) 190,723 227,508- 234,000 241,000 248,000 255,000
Transfers (3) 14~824 9~823 10,000 10~000 10~000 10~000
Total Public Water Maintenance $665~766 $773~573 $796~000 $820~000 $844,000 $869,000
Laboratory Services:
Personnel & Related Costs (3)
Operating Expenses (3)
Transfers (3)
Total Laboratory Services
Utility Construction:
Personnel & Related Costs (3)
Operating Expenses (3)
Transfers (3)
Total Utility Construction
Utility Administration:
Personnel & Related Costs (3)
Operating Expenses (3)
Transfers (3)
Total Utility Administration
General Administration:
Personnel & Related Costs (3)
Operating Expenses (3)
Transfers (3)
Total General Administration
Customer Relations:
Personnel & Related Costs (3)
Operating Expenses (3)
Transfers (3)
Total Customer Relations
Cashierinq:
Personnel & Related Costs (3)
Operating Expenses (3)
Transfers (3)
Total Cashiering
City Hall at the Mall:
Personnel & Related Costs (3}
Operating F_xpenses (3)
Transfers (3)
Total City Hall at the Mall
Grand Total Current Expenses
$237,450 $253,610 $261,000 $269,000 $277,000 $285,000
88,387 66,138 68,000 70,000 72,000 74,000
8~066 5~308 5,000 5~000 5~000 5,000
$333~903 $325~056 $334~000 $344~000 $354~000 $364~000
$69,729 $88,266 $91,000 $94,000 $97,000 $100,000
13,714 27,672 29,000 30,000 31,000 32,000
2~447 1~691 2,000 2,000 2~000 2,000
$85~890 $117~628 $122~000 $126,000 $130~000 $134,000
- $522,758 $534,674 -$551,000 $568,000 $585,000 $603J3QO
157,504 141,273 146,000 150,000 155,000 160,000
18~967 7~974 8~000 8~000 8,000 8~000
$699,229 $683,921 $705,000 $726,000 $748~000 $771~000
$0 $5,026 $5,000 $5,000 $5,000 $5,000
16,265 13,872 14,000 14,000 14,000 14,000
3,178~694 2~499~825 2~575,000 2~652~000 2~732~000 2~814~000
$3,194,960 $2~518,723 $2~594~000 $2~671~000 $2,751~000 $2,833,000
$89,742 $113,125 $117,000 $121,000 $125,000 $129,000
$51,545 129,349 133,000 137,000 141,000 145,000
1~532 180 0 0 0 0
$142~819 $242~654 $250~000 $258~000 $266~000 $274~000
$45,524 $40,113 $41,000 $42,000 $43,000 $44,000
2,388 1,168 1,000 1,000 1,000 1,000
85 34 0 0 0 0
$47~998 $41,314 $42~000 $43,000 $44~000 $45~000
$8,408 $9,069 $9,000 $9,000 $9,000 $9,000
1,413 3,239 3,000 3,000 3,000 3,000
30 33 0 0 0 O
$9~851 $12~340 $12~000 $12~000 $12,000 $12~000
, $8,630~597 $8,624~911 $8,908~000 $9,201,000 $9,504,000 $9~817,000
* Footnotes on following page.
Rate_Study. xls Section 4 3/8/00;2:11 PM
DRAFT
Footnotes to Table 4-4:
(1) Taken from Table 4-1.
(2) Taken from Table 4-2.
(3) Considered a fixed cost.' Inflated beyond Fiscal Year 2000 at an annual rate of:
(4) Considered a variable cost. Inflated beyond Fiscal Year 2000 at an annual rate of:
of water demands using the annual percentage growth rotes set forth in Tabte 2-1.
3.00% .
3.00% , compounded by growth
Rate_Study.xls Section 4 3/8/00;2:19 PM
Section 4
Project of Revenue Requirements
growth. Hence, the budgeted Fiscal Year 2000 costs for these two line items are
escalated by the system growth projected in Table 2-1, and compounded by inflation,
assumed to be three percent annually. All other costs are considered to be fixed, and
are escalated only by the three percent annual inflation factor. Projected costs are
rounded off to the nearest $1,000 begh2-dng in Fiscal Year 2001.
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Table 4-5 projects operating expenses for the wastewater system by cost center and
classification. Electricity and chemicals trader Wastewater Pumping Stations are
considered to be variable costs, which are affected both bY inflation and system.
growth. Hence, the budgeted Fiscal Year 2000 costs for these two line items are
escalated by the system growth projected in Table 2-1, and compounded by inflation,
assumed to be three percent armuaIly. Also, 20 percent of the Wastewater Treatment
Plant contractual services line item is estimated to comprise variable costs, Which are
projected in the same manner: Ail other costs are considered to be fixed, and are
escalated only by the three percent annual inflation factor. Projected costs are
rounded off to the nearest $1,000 beginning in Fiscal Year 2001.
4.3 Existing Debt Service
Currently, the City has two revenue bond debt issues outstanding with respect to the
utility systems, the Series 1992 Revenue Bonds and the Series 1996 Revenue Bonds.
City staff has provided information concerning the application of the proceeds of
these two debt issues to the three systems. This information has been used to allocate
the debt service associated with the debt issues to each of the systems, as shown in
Table 4-6. The annual principal and interest payments have been taken from the
Official Statement for the Series 1996 Utility System Revenue Bonds.
4.4 Renewal and Replacement Program
The City has also provided budgeted and projected expenditures with respect to its
renewal and replacement program for the water and wastewater systems. For Fiscal
Year 1999, budgeted values are used. Thereafter, annual estimates of renewal and
replacement expenditures in Tables 6 and 7, respectively, of the document titled
"Proposal and Funding Plan, August 1999, Opportunity for Utilities Expansion
(Period: 2000 - 2004)/' are used as the basis for projections in the rate study. Annual
costs from those tables have been escalated at three percent annually to reflect the
anticipated effects of inflation.
The City has no renewals and replacements budgeted or projected with respect to the
stormwater system. All stormwater system costs are considered as operating
expenses, minor capital expenditures, or capital improvements.
Table 4-7 presents the projections of renewal and replacement expenditures
concerning the water system. Included in this table are projections of funding
sources. Of the total available monies in the Renewal, Replacement and Improvement
(PR&I) Account as of the 'beginning of Fiscal Year 1999, $3,600,000 is apportioned to
Camp Dresser &. McKee Inc.
4-11
6276-27182-010,RT, REP
DRAFT
TABLE 4-5
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER RATE STUDY
PROJECTION OF WASTEWATER SYSTEM CURRENT EXPENSES
Cost Center
Fiscal Year
Actual Budget Proiected
1999 (1) 2000 (2) 2001 2002 2003 2004
Westewater Collection:
Personnel & Related Costs (3) $625,322 $717,590 $739,000 $761,000 $784,000 $808,000
Operating Expenses (3) 152,141 293,050 302,000 311,000 320,000 330,000
Transfers (3) 16,374 12,978 13,000 13,000 13,000 13,000
Total Wastewater Collection $793,837 $1,023,618 $1,054,000 $1,085,000 $1,117,000 $1,151,000
Wastewater Pumping Stations:
Personnel & Related Costs (3) $532,562 $526,291 $542,000 $558,000 $575,000 $592,000
Operating Expenses:
Electricity (4) 160,943 200,000 210,000 221,000 232,000 244,000
Chemicals (4) 69,569 200,000 210,O00 221,000 232,000 244,000
All Other (3) 146,804 443,299 457,000 471,000 485,000 500,000
Transfers 14,705 8,802 9,000 9,000 9,000 9,000 ·
Total Wastewater P,S. $924,584 $1,378,392 $1,428,000 $1,480,000 $1,533.000 $1,589,000
Wastawater Treatment Plant:
Contractual Services (5) $2,024,567 $2,000,000 $2,068,000 $2.139,440 $2,213,363 $2,289,814
Other Operating Expenses (3) (332,972) 0 0 0 0 0
Transfers (3) 0 0 0 0 0 0
Total Wastewater Plant $1,691,594 $2,000,000 $2.068,000 $2,139,440 $2.213,363 $2,289,814
Utility Construction:
Personnel & Related Costs (3) $69,729 $88,266 $91,000 $94,000 $97,000 $100,000
Operating Expenses (3) 13,714 27,672 29,000 30,000 31,000 32,000
Transfers (3) 2,447 1,691 2,000 2,000 2,000 2,000
Total Utility Cons~uction $85,890 $117,628 $122,000 $126,000 $130,000 $134,000
Utility Administration:
Personnel & Related Costs (3) $402,914 $471,430 $486,000 $501,000 $516,000 $531,000
Operating Expenses (3) 121,396 124,563 128,000 132,000 136,000 140,000
Transfers (3) 14.619 7.031 7,000 7,000 7,000 7,000
- ' - Total Ufil~y Administration $553,367 $603;024 $621,000 $640,000 $659,000 $678,000
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General Administration:
Personnel & Related Costs (3)
Operating Expenses (3)
Transfers (3)
Total General Administration
$0 $4,432 $5,000 $5,000 $5,000 $5,000
12,536 12,231 I3,000 13,000 13,000 13,000
2,449.967 2,204,134 2,270,000 2,338,000 2,408,000 2,480,000
$2,463,666 $2,220,797 $2,288,000 $2,356,000 $2.426,000 $2,498,000
Customer Relations:
Personnel & Related Costs (3) $89,742 $113,125 $117,000 $121,000 $125,000 $129,000
Operating Expenses (3) 51,545 129,349 133,000 137,000 141,000 145,000
Transfem (3) 1 ~532 180 0 0 0 0
Total Customer Relations $142,819 $242,654 $250,000 $258,000 $266,000 $274,000
Cashierino:
Personnel & Related Costs (3) $45,524 $40,113 $41,000 $42,000 $43,000 $44,000
Operating Expenses (3) 2,388 1,168 1,000 1,000 1,000 1,000
Transfers (3) 85 34 0 0 0 0
Total Cashiering $47 998 $41,314 $42,000 $43 000 $44,000 $45,000
CiN Hall at the Mall:
Personnel & Related Costs (3) $8,408 $9,069 $9,000 $9.000 $9,000 $9,000
Operating Expenses (3) 1,413 3,239 3,000 3,000 3,000 3,000
Transfers (3) 30 33 0 0 0 0
Total City Hall at the Mall $9,851 $12,340 $12,000 $12.000 $12,000 $12.000
Grand Total Currant Expenses $6,713,607 $7,639,768 $7,885,000 $8,139,440 $8,400,363 $8,670,814
* Footnotes on following page.
Rate_Study.xls Section 4 3/8/00;2:20 PM
Footnotes to Table 4-5:
Rate_Study.xls
DRAFT
(1) Taken from Table 4-1.
(2) Taken from Table 4-2.
(3) Considered a fixed cost. Inflated beyond Fiscal Year 2000 at an annual rate of: 3.00% .
(4) Considered a variable cost. Inflated beyond Fiscal. Year 2000 at an annual rate of: 3.00% , compounded by growth
of water demands using the annual percentage growth rates set forth in Table 2-1.
(5) Of total budgeted costs for Fiscal Year 2000, 20% considered to be variable, and 80% considered to be fixed. Each component
projected as described in foot~etes (4) and (3), respectively.
Section 4
3/8/00;2:21 PM
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DRAFT
TABLE 4-8
CITY Of BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
EXISTING DEBT SERVICE REQUIREMENTS AND ALLOCATIONS TO SYSTEMS
Fiscal Year
Item 1999 2000 2001 2002 2003 2004
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Sedes 1992Revenue Bonds:
Total Annual Principal & interest (1) $1,410,938 $1,410,938 $1,410,938 $1,410,938 $1,410,938 $1,410,938
Amount Allocated To:
Stermwater System (2) 0 0 0 0 0 0
Water System (3) 1,269,844 1,269,844 1,269,844 1,269,844 1,269,844 1,269,844
Wastewater System (4) 141,094 141,094 141,094 141,094 141,094 141,094
Series 1996 Revenue Bonds:
Total Annual Principal & Interest (1) $1,203,223 $1,203,223 $2,418,223 $2,412,333 $2,417,878 $2,664,038
Amount Allocated To:
Stermwater System (5) 440,861 440,861 886,037 883,879 885,910 976,104
Water System (6) 298,038 298,038 598,994 597,535 598,908 659,882
Wastewater System (7) 464,324 464,324 933 192 930,919 933,059 1,028,052
Total Existinq Debt Service:
Total Annual Principal & Interest (8) $2,614,161 $2,614,161 $3,829,161 $3,823,271
Amount Allocated To:
st~rmwater System (9) 440,861 440,861 .886,037 ' 8831879
Water System (9) 1,567,883 1,567,883 1,868,838 1,867,379
Wastewater System (9) 605,418 605,418 1,074,286 1,072,013
$3,828,816
885,910
1,868,753
1,074,153
$4,074,976
976,i04
1,929,726
1,169,146
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(1) Taken from page 17 of Official Statement for Sedes 1996 Utility System Revenue Bonds.
(2) Based on information furnished by City staff, percentage associated with system is: 0.00%
(3) Based on information furnished by City staff, percentage associated with system is: 90.00%
(4) Based on information furnished by City staff, percentage associated with system is: 10.00%
(5) Based on information furnished by City staff, percentage associated with system is: 36.64%
(6) Based on information furnished by City staff, percentage associated with system is: 24.77%
(7) Based on information fumished by City staff, percentage associated with system is: 38.59%
(8) Equals sum of annual principal and interest for Series 1992 Bonds plus Series 1996 Bonds.
(9) Equals sum of annual principal and interest for Series 1992 Bonds plus Series 1996 Bonds allocated to systems as shown.
Rate_Study.xls Section 4 3/8/00;2:22 PM_
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DRAFT
Item
TABLE 4-7
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE I~UND RATE STUDY
WATER SYSTEM RENEWAL & REPLACEMENT PROGRAM
Fiscal Year
1999 2000 -- 2001 2002 2003 2004
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Sources of Funds:
RR&I Account Beginning Balance (1)
Transfer from Operations (2)
Interest Earnings (3)
Total Sources of Funds
Uses of Funds: (4)
Replace Membrane Elements - West WTP
Telemetry
Pumps & Adustable Speed Drives - West WTP
Well Rehab. Program (4 wells/year)
Sludge Pump Repl. Program (E.WTP, 2/year)
Slaker Replacement (E.WTP)
Electric Valve Actuator Replacement
High Service Pump Replacement
Replace Computer Equipment'
Scrubber and Chemical Pump Replacement
Water Main Replacement
Water Meter Replacement
Recoating Aedal Crossings
Replabe Computer Equipment '
Subtotal
Allowance for Contingencies (2% of Subtotal)
Total Uses of Funds
Ending Balance: (5)
$3,600,000 $2,992,116 $21852,385 $1,985,333 $1,372,733 $828,293
347,856 675,169 659,968 701,160 713,220 725,880
0 0 0 0 0 0
$3,947,856 $3,667,285 $3,312,353 $2,686,493 $2,085,953 $1,554,173
$100,000 $52,000 $106,000 $109,000 $113,000' $116,000
5,000 0 0 0 0 0
50,000 0 80,000 0 0 0
70,000 82,000 85,000 93,000 96,000 99,000
4,000 6,000 5,000 5,000 6,000 6,000
0 0 64,000 0 0 0
15,000 0 0 0 0 0
40,000 46,000 53,000 44,000 45,000 46,000
103,000 31,000 11,000 11,000 11,000 12,000
40,000 0 11,000 11,000 23,000 23,000
200,000 412,000 424,000 437,000 450,000 464,000
300,000 309,000 424,000 437,000 ,450,000 464,000
0 26,000 27,000 27,000 28,000 29,000 ...........
5,000 31,000 ~ 11;000 11,000 11,000 12,000
$937,000 $995,000 $1~301,000 $1,288,000 $1,233,000 $1,271,000
18,740 19,900 26,020 25,760 24,660 25,420
$955,740 $1,014,900 $1,327,020 $1,313,760 $1,257,660 $1,296,420
$2,992,116 $2,652,385 $1,985,333 $1,372,733 $828,293 $257,753
(1) For Fiscal Year 1999, equals portion of 10/1/98 balance allocated to water system. Thereafter, equals Ending Balance from prior year.
(2) For Fiscal Year 1999, equals portion of amount recommended by City's consulting engineer of $1,182,500. Thereafter, equals Total Revenues
from preceding year from Table 5-5 multiplied by 6.0%.
(3) Included in interest earnings in Table 5-5.
(4) Fiscal Year 1999 taken from City's "Budget Year 1998-99, Utilities Renewal & Replacement - Water". Future years taken from
"Proposal and Funding Plan, August 1999," Table 6, and escalated by 3% annually beyond their 1999 levels as estimated by the City.
(5) Equals Total Sources of Funds less Total Uses of Funds.
Rate_Study.xls Section 4
318/00;2:22 PM
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Section 4
Project of Revenue Requirements
the water system. Transfers in from operations, discussed subsequently in Section 5,
are the other source of funding for renewals and replacements.
Table 4-8 presents the projections of renewal and replacement expenditures with
respect to the wastewater system. Included in this table are projections of funding
sources. Of the total available monies in the RR&I Account as of the beginning of
Fiscal Year 1999, $463,261 is apportioned to the wastewater system. Transfers in from
operations, discussed subsequently in Section 5, are the other source of funding for
renewals and replacements.
It is important to note that while the ending balance for the water system declines
over time the balance for the wastewater systemjs actually expected to grow slightly
over time. In addition, the City has the Utility General Account, which maybe used
for lawful purposes of the utility system, including renewals, replacements and
improvements. As of the beginning of Fiscal Year 1999, the balance in this Utility
General Account was $17,497,411, and it continues to grow. Hence, more than
adequate funding is available for any necessary renewals and replacements, and thus
rate pressure should not be created to achieve a certain level of annual transfers from
operations into the RR&I Account, particularly with respect to the water system.
4.5 Capital Improvement Program
4.5.1 Stormwater System
The st0rmwater system capital improvement program is presented in Table 4-9. The
capital expenditures are grouped as being financed either by construction funds from
the Series 1996 Revenue Bonds, or from other sources, including proceeds from the
anticipated Series'2000 Revenue Bonds. It should be noted that the most effident use
of available funds on hand, subject to maintaining adequate reserves, may be the
application of existing non-restricted reserve funds to some of the costs previously
identified for funding by the Series 2000 Revenue Bonds.
The upper portion of Table 4-9 presents the antidpated sources of funding for the
capital improvements, including assumptions as to the application of monies on hand
in the Series 1996 Construction Fund and the Utility General Account. All available
monies from the Series 1996 Construction Fund after their application to the water.
and wastewater capital improvement programs are applied to the stormwater system.
Investment earnings are estimated based on the average annual balance of available
funds assuming a 4.5 percent interest rate.
Cost information for the various projects was provided by City staff. Recent estimates
for design/build were used to estimate the annual expenditures associated with the
Phase 1 Downtown Improvements.
Camp Dresser & McKee Inc.
6276-27182-010.RT. REp
bsSO68k3/l~O0
4-16
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DRAFT
Item
TABLE 4-8
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
WASTEWATER SYSTEM RENEWAL & REPLACEMENT PROGRAM
Fiscal Year
1999 2000 2001 2002 2003 2004
Sources of Funds:
$463,261 $1,048,005 $1,354,929 $1,383,253 $1,405,393 $1,419,673
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RR&I Account Beginning Balance (1)
Transfer from Operations (2) 834,644 681,264 689,284 731,040 743,580 756,780
Interest Earnings (3) 0 0 0 0 0 0
Total Sources of Funds $1,297,905 $1,729,269 $2,044,213 $2,114,293 $2,148,973 $2,176,453
Uses of Funds: ('4)
Insituform Sewer Main Repair
Sewer Main and Manhole Renewal/Replacement
Purchase 28 Replacement Pumps Each Year
Replace Computer Equipmen[
Convert Dry pit Pumping Stations to Submersible
Recoating Aedal Crossings
Subtotal
Allowance for Contingencies (2% of Subtotal)
Total Uses of Funds
Endinq Balance: ('5)
$90,000 $155,000 $212,000 $219,000 $225,000 $232,000
50,000 52,000 106,000 137,000 141,000 145,000
100,000 103,000 159,000 164,000 169,000 174,000
5,000 31,000 11,000 11,000 11,000 12,000
0 0 133,000 137,000 141,000 145,000
0 26,000 27,000 27,000 28,000 29,000
$245,000 $367,000 $648,000 $695,000 $715,000 $737,000
4,900 7,340 12,960 13,900 14,300 14,740
:' $249,900 $374,340 $660;960 $708~00 $729;300 $751,740
$1,048,005 $1,354,929 $1,383,253 $1,405,393 $1,419,673 $1,424,713
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(1) For Fiscal Year 1999, equals portion of 10/1/98 balance allocated to wastewater system. Thereafter, equals Ending Balance from prior year.
(2) For Fiscal Year 1999, equals balance of total amount recommended by City's consulting engineer of $1,182,500. Thereafter, equals 6.0% of
Total Revenues from preceding year from Table 5-6.
(3) Included in interest earnings in Table 5-6.
(4) Fiscal Year 1999 taken from City's "Budget Year 1998-99, Utilities Renewal & I~eplacement - Wastewater". Future years taken from
"Proposal and Funding Plan, August 1999," Table 7, and escalated by 3% annually beyond their 1999 levels as estimated by the City.
(5) Equals Total Sources of Funds less Total Uses of Funds.
Rate_Study.xts Section 4
3/8/00;2;31 PM
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DRAFT
TABLE 4-9
CITY Of BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
STORMWATER SYSTEM CAPITAL IMPROVEMENT PROGRAM
Fiscal Year
Item 1999 2000 2001 2002 2003 2004
Sources of Funds:
Balances Applied:
Sedes 1996 Construction Fund
Utility General Account
Total Beginning Balance (1)
Series 2000 Bonds Construction Fund (2)
Net Revenues from Operations (3)
Fee-In-Lieu-Of Capital Charge Receipts (4)
Interest Earnings (5)
Total Sources of Funds
$13,204,355 $0 $0 $0 Sa $0
0 0 315,000 0 0 0
$13,204,355 $11,303,651 $17,684,296 $9,934,546 $6,475,650 $3,186,259
0 13,160,700 0 0 0 0
0 0 0 0 0 0
0 100,000 100,000 100,000 100,000 100,000
539,296 630,945 607,750 361,105 212,609 70,639
$13,743,651 $25,195,296 $18,392,046 $10,395,650 $6,788,259 $3,356,899
Uses of Funds:
Sedes 1996 Bond Projects: (6) Phase 1 Downtown Improvements
SW 4th Ave. to BB Blvd., 1-95 to Seacrest
Intracoastal Ouffalls to be Replaced/
Retined& Oil/Grit Separator
Swale Development
French Drain Const. - Ex'filtration Trench
Total Series 1996 Bond Projects
Other Projects: (7)
Industrial Ave./Lake Boynton Estates Dr.
$2,180,000 $3,465,000 $1,732,500 $0 $0 $0
120,000 120,000 0 0 0 0
100,000 100,000 200,000 0 0 0
30,000 50,000 50,000 50,000 0 0
10,000 110,000 100 000 100,000 0 0
$2,440,000 $3,845,000 $2,082,500 $150,000 $0 $0
$0
........ Swale .Redevelopment City-Wide .......... 0
Cesta Bella 0
Downtown Stermwater - Phases 2 & 3 0
Total Other Projects $0
Additional Equipment for New Stormwater Maint. Crew (8) 0
Total Uses of Funds $2,440,000
Endinq Balance:
$1,000,000 $2,000,000 $0 $0 $0
2~266,000 2,334,000 2,404,000 2,476,000 3,333,000
200,000 400,000 0 0 0
515,000 1,326,000 1,366,000 1,126,000 0
$3,981,000 $6,060,000 $3,770,000 $3,602,000 $3,333,000
0 315,000 0 0 0
$7,826,000 $8,457,500 $3,920,000 $3,602,000 $3,333,000
$11,303,651 $17,369,296 $9,934,546 $6,475,650 $3,186,259 $23,899
(1) Equals sum of Balances Applied plus Ending Balance from prior year.
(2) Based on preliminary analysis from underwriters, with a total issue size of $15.3 million.
(3) No transfer from operations anticipated.
(4) Annual receipts estimated by City staff.
(5) Estimated at a rate of 4.5% on the average balance of funds.
(6) Taken from City's "Stormwater Projects Funded by 1996 Series Bond," Exhibit B, Page 3, Revised 3/17/99. Costs not escalated.
(7) Based on City's "Proposal and Funding Plan, August 1999," Table 3. Costs are escalated at an annual rate of 3% beyond their 1999 levels
as estimated by the City.
(8) For purchase of following equipment for new stormwater crew: tandem axle vac-con truck; large combination backhoe; 10-yard dump truck; and
utility body pickup truck,
Rate_Study.xls Section 4 3/8/00;3:00 PM
Section 4
Project of Revenue Requirements
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4.5.2 Water System
The water system capital improvement program is presented in Table 4-10. For each
project, City staff has estimated the percentage associated with capacity expansion to
serve new customer growth inffte water system. Costs shown in Table 4-10 are total
capital costs estimated by the City for each project.
Table 4-11 presents the portion of the water system capital improvement program
related to capacity expansion. The cost shown for each project is the total project cost
estimated in Table 4-9 multiplied by the associated capacity expansion percentage.
Water system impact fees, which may be applied only to capacity expansion related
costs, are one of the sources of ftmds for the projects. As can be seen it is assumed
$4.1 million from the Utility General Account is applied to fund the projects .cost in
Fiscal Year 2004. (Alternatively, another series of revenue bonds could be issued.)
Beyond Fiscal Year 1999, receipts of water system impact fees are projected at an
annual rate half that actually experienced in Fiscal Year 1999. Annual investment
earnings are estimated based on a 4.5 percent interest rate applied to the average
balance of available funds.
The non-capacity expansion portion of the water system capital improvement
program is presented in Table 4-12. For each project, the annual cost is simply
computed as the total cost from Table 4-10 less the respective cost from Table 4-11.
Monies on hand from the Series 1990 Bond Construction Fund plus a portion of the
Series 1996 Bonds Construction Fund and the Utility General Account are applied to
defray the costs of these project. Transfers from the Utility General Account are
projected for Fiscal Years 2000 and 2001. The same approach is used in projecting
· investment earnings as was.-done in previous tables, . ,
4.5.3 Wastewater System
Table 4-13 presents the wastewater system capital improvement program. For each
project, City staff has provided an estimate of the percentage associated with capacity
expansion to serve new customer growth. Only the design of the wastewater
treatment plant expansion is considered.to be capacity expansion related; however, no
costs are programmed for this design during the rate study period.
The upper portion of Table 4-13 sets forth the sources of funding applied to the capital
improvement projects. Monies remaining in the Series 1992 Bonds Construction Fund
plus a portion of the Series 1996 Bond Conktruction Fund are applied to defray the'
capital costs. Also, transfers from the Utility General Account are projected in Fiscal
Years 2002 through 2004. Investment earnings are projected employing the same
assumptions as described previously.
~ Camp Dresser & McKee Inc.
6276-271 ~-010.RT. REP
bs5068~3/10/00
4-19
DRAFT
TABLE 4~10
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
WATER SYSTEM CAPITAL IMPROVEMENT PROGRAM
Capacity
Expansion %
Project (1) 1999
Fiscal Year
2000 2001 2002 2003 2004
Sedes 1996 Bond Projects:
Add'L Office Space to Replace Portables 0% $909,318
Add'l. ASR @ 3 MG Tank 100% 0
Mains to Phase Out Prviate Wells 0% 0
Total Series 1996 Bond Projects $909,318
Other Proiects: (3)
4 mgd WTP Uprating - Phase 3 100% $0
Building Expansion 100% 0
ASR Welt 100% 0
Nicl'Jes Boulevard 0% 0
Site improvements ~ Phase 2 0% 0
Combined Treatment Study 0% 0
2" Water Main Replacement 0% 0
12" Water Main - San Castle Overlook 0% 0
Total Other Projects $0
Grand Total Project Costs $909,318
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$23,631 $0 $0 $0 $0
600,000 0 0 0 0
125~000 0 0 0 0
$748,631 $0 $0 $0 $0
$0 $424,000 $2,185,000 $2,251,000 $5,101,000
258,000 265,000 2,732,000 0 0
0 53,000 328,000 0 0
129,000 ' 0 0 0 0
618,000 0 0 0 0
52,000 27,000 0 0 0
i;030,000.' 1,061,0b6
0 0 0
0 32,000 102,000 0 0
$2,087,000 $1,862~000 $5,347,000 $2,251,000 $5~101~000
$2,835,631 $1,862,000 $5~347,000 $2,251,000 $5t101,000
(1) Estimated furnished by City staff.
(2) Taken from City's "Potable Water Projects Funded by 1996 Series Bond," Exhibit B, Page 1, Revised 3/17/99. Costs not escalated.
(3) Based on City's "Proposal and Funding Plan, August 1999," Table l. Does not include costs prior to Fiscal Year 2000. Costs are
escalated at an annual rate of 3% beyond their 1999 levels as estimated by the City.
Rate_Study.xls Section 4
3/8/00;3:06 PM
DRAFT
TABLE 4-11
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND PATE STUDY
WATER SYSTEM CAPITAL iMPROVEMENT PROGRAM: CAPACITY EXPANSION PORTION
Fiscal Year
Item 1999 2000 2001 2002 2003 2004
Sources of Funds:
Balances Applied:
Water System Impact Fee Fund
Series 1996 Bond Construction Fund
Utility General Account
Total Beginning Balance (1)
Sedes 2000 Bonds Construction Fund (2)
Net Revenues from Operations (3)
Water System Impact Fees (4)
Interest Earnings (5)
Total Sources of Funds
$3,450,216 $0 $0 $0 $0 $0
682,000 0 0 0 0 0
0 0 0 0 0 4,100,000
$4,132,216 $5,770,312 $5,868,421 $6,089,555 $1,716,323 $4,307,660
0 0 0 0 0 0
0 0 0 0 0 0
1,420,192 700,000 700,000 700,000 700,000 700,000
217,904 256,109 263 134 171,767 42,337 94,822
$5,770,312 $6,726,421 $6,831,555 $6,961,323 $2,458,660 $5,102,482
Uses of Funds:
Series 1996 Bond Proiects:
Add'L Office Space to Replace Portables $0 $0 $0 $0 $0 $0
Add'l. ASR @ 3 MG Tank 0 600,000 0 0 0 0
Mains to Phase Out Prviate Wells 0 0 0 0 0 0
Total Sedes 1996 Bond Projects $0 $600,000 $0 $0 $0 $0
Other Pmiects:
4 mgd WTP Uprating - Phase 3 $0 $0 $424,000 $2,185,000 $2,251,000 $5,101,000
Building Expansion 0 258,000 265,000 2,732,000 0 0
ASR Well · 0 0 53,000 328;000 0 0
Nicldes Boulevard 0 0 0 0 0 0
Site Improvements - Phase 2 0 0 0 0 0 0
Combined Treatment Study 0 0 0 0 0 0
2" Water Main Replacement 0 0 0 0 0 0
12" Water Main - San Castle Overlook 0 0 0 0 0 0
Total Other Projects $0 $258,000 $742,000 $5,245,000 $2,251,000 $5,101,000
Total Uses of Funds $0 $858,000 $742,000 $5,245,000 $2,251,000 $5,101,000
Endinq Balance: (7) $5,770,312 $5,868,421 $6,089,555 $1,716,323 $207,660 $1,482
(1) Equals sum of Balances Applied plus Ending Balance from prior year.
(2) Proceeds sized so as to have non-negative ending balances in all years.
(3) Assumed to be $0.
(4) Fiscal Year 1999 actual. Assumed to be 50% of Fiscal Year 1999 actual in future years.
(5) Estimated at a rate of 4.5% on the average balance of funds.
(6) Equals respective entdes from Table 4-10 multiplied by corresponding Capacity Expansion %.
(7) Equals Total Soumes of Funds less Total Uses of Funds.
Rata._Study~ds Section 4 3/8/00;3:06 PM
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DRAFT
TABLE 4-12
CITY OF BOYNTON BEACH, FLORIDA ~
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
WATER SYSTEM CAPITAL [MPROVEMENT PROGRAM: NON-CAPACITY EXPANSION PORTION
Fiscal Year
Item 1999 2000 2001 2002 2003 2004
Sources of Funds:
Balances Applied:
Sedes 1990 Bend Construction Fund
Sedes 1996 Bond Construction Fund
Utility General Account
Total Beginning Balance (1)
Series 2000 Bonds Construction Fund (2)
Net Revenues from Operations (3)
Interest Earnings (4)
Total Sources of Funds
Uses of Funds: (5)
Series 1996 Bond Pmiects:
Add'l. Office Space to Replace Portables
Add'l. ASR @ 3 MG Tank
Mains to Phase Out Prviate Wells
Total Series 1996 Bond Projects
Other Pmiects:
4 mgd WTP Uprafing - Phase 3
Building Expansion
ASR Well
Nickles Boulevard
Site Improvements - Phase 2
Combined Treatment Study
2" Water Main Replacement
12" Water Main - San Castle Overlook
Total Other Projects
Total Uses of Funds
Ending Balance:
$1,512,058 $0 $0 $0 $0 $0
1,170,000 0 0 0 -0 0
0 80,000 1,175,000 0 0 0
$2,682,058 $1,952,973 $1,193,729 $102,247 $2,553 $2,668
0 0 0 0 0 0
0 0 0 0 0 0
100,233 43,387 28,518 2,306 115 120
$2,782,291 $1,996,360 $1,222,247 $104,553 $2,668 $2,788
$909,318 $23,631 $0 $0 $0 $0
0 0 0 0 0 0
0 125,000 0 0 0 0
$909,318 $148,631 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
0 0 0 0 0 0 .......
0 0 0 0 0 0 .....
0 129,000 0 0 0 0
0 618,000 0 0 0 0
0 52,000 27,000 0 0 0
0 1,030,000 1,061,000 0 0 0
0 0 32,000 102,000 0 0
$0 $1,829,000 $1,120,000 ' $102,000 $0 $0
$909,318 $1,977,631 $1,120,000 $102,000 $0 $0
$1,872,973 $18,729 $102,247 $2,553 $2,668 $2,788
(1) Equals sum of Balances Applied plus Ending Balance from pdor year,
(2) Assumed to be $0 for this analysis.
(3) Assumed to be $0 for this analysis.
(4) Estimated at a rote of 4.5% on the average balance of funds.
(5) Equals respective entries from Table 4-10 minus corresponding entry from Table 4-11.
(6) Equais'Tota! Sources of Funds less Total Uses of Funds.
Rate._Study.xls Section 4
3/8/00;3:07 PM
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DRAFT
TABLE 4-13
CITY OF BOYNTON BEACH, FLORIDA '
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
WASTEWATER SYSTEM CAPITAL IMPROVEMENT PROGRAM
Fiscal Year
Item 1999 2000 2001 2002 2003 2004
Sources of Funds:
Balances Applied:
Series 1992 Bond Construction Fund
Series 1996 Bond Consb'uction Fund
Utility General Account
Total Beginning Balance (1)
Net Revenues from Operations (2)
Wastewater System Impact Fees (3)
Interest Earnings (4)
Total Sources of Funds
Uses of Funds:
Sedes 1996 Bond Projects: (5)
Master Lift Station Rehab. 309, 316,319 (0% Expansion)
Convert Dry Pit L.S. to Submersible (0% Expansion)
Total Series 1996 Bond Projects
Other Projects: (6)
City's Share of WWTP Biosolids Project (0% Expansion)
City'~s S~hare of Chlorine Study - WWTp (0% Expansion)
- : -' ' ~l'ot~'l Other Projects
Total Uses of Funds
Ending Balance: (7)
$42,121 $0 $0 $0 $0 $0
1,400,000 0 0 0 0 0
0 0 0 900,000 920000 940,000
$1,442,121 $893,516 $380,552 $1,061,377 $937,825 $940,165
0 0 0 0 0 0
0 0 0 0 0 0
51,395 28,036 11,925 23,748 20,640 20,746
$1,493,516 $921,552 $392,477 $1,085,125 $958 465 $960,911
$500,000 $438,000 $0 $0 $0 $0
100,000 103,000 106,000 109,000 0 0
$600,000 $541,000 $106,000 $109,000 $0 $0
$0 $0 $93,825 $718,725 $718,725 $718,725
0 0 31,275 239,575 239,575 239,575
$0 $0 $125,100 $958;300 $958,300 $958,300 "
$600,000 $541,000 $231,100 $1,067,300 $958,300 $958,300
$893,516 $380,552 $161,377 $17,825 $165 $2,611
(1) Equals sum of Balances Applied plus Ending Balance from pdor year.
(2) Assumed to be $0 for this analysis.
(3) Impact fees are shown as an available source of funding only to the extent that capacity expansion expenditures are projected.
Currently, approximately $1.7 million of wastewater impact fees are on hand. Their application is restricted to capacity expansion related
expenditures, which in this table is only for design of wastewater treatment plant expansion, no costs for which are projected.
(4) Estimated as 4.5% of average annual balance of funds.
(5) Taken from City's "Wastewater Projects Funded by 1996 Sedes Bond," Exhibit B, Page 2, Revised 3117199. Costs are escalated at 3.0% annually
beyond their 1999 levels as estimated by the City.
(6) Based on City's "Proposal and Funding Plan, August 1999," Table 2. Does not include costs prior to Fiscal Year 2000. Costs are
escalated at an annual rate of 3% beyond their 1999 levels as estimated by the City. Cost for biesolids project and chlorine study estimated by City.
(7) Equals Total Sources of Funds less Total Uses of Funds.
Rate_Study.xls Section 4 3/8/00;3:13 PM
!
I Sec!ion. 5
I Projection of Revenues at Prevailing Rate
5.1 Actual and Budgeted Revenues -
I Table 5-1 presents operating revenues for Fiscal Year 1999. Year-to-date revenues for
10 months were annualized by multiplying the actual amounts by 12/10. Input from
City staff was used in allocating revenues to each of the systems.
I Table 5-2 shows the budgeted operating revenues for Fiscal Year 2000 and indicates
their allocation to each of the systems. City staff Provided information to allocate the
I revenues to each of the three systems.
I . 5.2 Projection of Interest Earnings
Table 5-3 projects interest earnings on various accounts that are considered to
comprise operating' revenues. Each of the accounts is described below.
I The balance in the Water and Sewer Revenue Account as of the beginning of Fiscal
Year 1999 is assumed to remain constant over the rate study period. These monies are
I considered to represent the working capital of the utility. Interest earnings are
assumed at an annual rate of 4.5 percent on the average balance.
I The Utility General Account represents unrestricted reserves that are available for all
lawful purposes. The beginning balance as of October 1, 1998 of $17,497,411 is
allowed to accumulate until expended on capital projects based on the sources and
I. uses of funds in Section 4. Interest earnings are assumed to accumulate at an annual
rate of 4.5 percent on this account. .
I ~~ Customer deposits are assumed to remain at a constant level over the rate study
~ '~ period, recognizing the fairly uniform system growth rate, and the fact that deposits
are returned to customers after they have a good payment history.
established
I.... ~~ Interest earnings on customer deposits are assumed to be earned at an annual rate of
4.5 percent.
I ~2~ Interest earnings are assumed to be earned both on the debt service reserve funds and
~ '~>~ the revenue bond sinking fund at the same interest rate is used as on the other funds.
I ~ The RR&I Account is also projected to earn interest at an annual rate of 4.5 percent on
~ ~ the annual average balance.
~ The retained eamings balance as of the beginning of Fiscal Year 1999 is assumed to
I ~ ~x. .,~ remain constant over the rate study.period, and be kept as an additional reserve.
~' (This may actually be a fairly conservative assumption since the cumulative surplus
I shown in Table 6-2 is projected to grow to over $12 million by the end of the rate
study period.) Interest earnings are projected at a rate of 4.5 percent.
I CDM Camp Dresser & Mcree Inc. 5-1
Camp Dresser & McKee Inc.
6276-27182~010. RT. REP
Section 5
Projection of Revenues at Prevailing Rate
with the cumulative surplus projected to grow to over $13 million by the end of Fiscal
Year 2004. Thus, no annual rate adjustments would be necessary.
Table 5-10 projects the revenues, expenditures and cash flows' for the combined
stormwater, water and wastewater systems for the rate study period. Because the
revenues pledged .to service the debt issued with respect to the utility system
comprise the stormwater, water and wastewater revenues combined, a line is
included in this table showing the debt service coverage on all debt, both existing and
additional. As can be seen, the projected debt service coverage in all years is more
than adequate to meet the minimum requirement, without any adjustment in ra~e
levels. At prevailing rates, combined revenues are projected to be insufficient in
Fiscal Years 2003 and 2004 to cover all transfers to the RR&I Account plus minor
capital outlays; however, over the course of the rate study period, a cumulative
surplus would remain.
5-12
DRAFT
TABLE 5-1
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND
ANNUALIZED FISCAL YEAR 1999 OPERATING REVENUES AND ALLOCATION TO SYSTEMS (1) *
Total
Item Amount
Allocation to System
Stormwater Water Wastewater
Charges for Services:
Subdivision Ordinance Procedure (2)
Water Sales
Water Connection Fee
Water Service Charges
Sewer Service Charges
Stormwater Utility Fee
Televise Sewer Lines
Total Charges for Services
Investment Income:
Interest Earnings (3)
Other Operating Revenues: (2)
Sale of Surplus Material
Ocean .Ridge Utility Tax Admin. Charge
Bad Debt Recoveries
Miscellaneous Income
Total Miscellaneous Income
Operating Transfers In:
Transfers from Sanitation (4)
Total Operating Revenues
$30,984 $0 $15,492 $15,492
10,210,806 0 10,210,806 0
113,684 0 113,684 0
73,800 0 73,800 0
10,434,542 0 0 10,434,542
587,527 587,527 0 0
31,636 0 0 31,636
$21,482,980 $587,527 $10,413,782 $10,481,670
$1,639,183 $81,959 $778,612 $778,612
$9,500
544
10,286
100,506
$0 $4,750 $4,750
· 0 272 272
0 5,143 5,143
0 50,253 50,253
$120,836 $0 $60,418 $60,418
$101,108 $33,703 $33,703 $33,703
$23,344,108 $703,189 $11,286,515 $11,354,403
(1) Taken from City's Revenue Report. Allocation to each system based on information provided by
City staff. Costs annualized by multiplying 10 months of revenues by 12/10's.
(2) Allocated 50% to the water system and 50% to the wastewater system.
(3) Of total, 5% allocated to stormwater, with remainder split equally between water and wastewater.
(4) Allocated equally to each of the three systems.
Rate_Study.xls Section 5
3/8/00;3:09 PM
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TABLE 5-2
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
BUDGETED FISCAL YEAR 2000 OPERATING REVENUES AND ALLOCATION TO SYSTEMS (1) *
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Total
Item Amount
AIIocat on to System
Stormwater Water Wastewater
Charges for Services:
Subdivision Ordinance Procedure (2)
Water Sales
Water Connection Fee
Water Service Charges
Sewer Service Charges
Stormwater Utility Fee
Televise Sewer Lines
Total Charges for Services
Investment Income:
Interest Earnings (3)
Other Operating Revenues: (2)
Sale of Surplus Matedal
Ocean Ridge Utility Tax Admin, charge
Bad Debt Recoveries
Miscellaneous Income
Total Miscellaneous Income
Operating Transfers In:
Transfers from Sanitation (4)
Total Operating Revenues
$35 000
10,249 518
120 000
150 000
10,931 911
602 612
42 500
$22,131 541
$0 $17,500 $17,500
0 10,249,518 0
0 120,000 0
0 150,000 0
0 0 10,931,911
602,612 0 0
0 0 42,500
$602,612 $10,537,018 $10,991,911
$960,000 $48,000 $456,000 $456,000
$0 $0 $0 $0
400 0 :200 200
5,000 0 2,500 2,500
7,500 0 3,750 3,750
$12,900 $0 $6,450 $6,450
$101,108 $33,703 $33,703 $33,703
$23,205,549 $684,315 $11,033,171 $11,488,064
(1) Taken from City's Detail Revenues Budget Year 1999/2000. Allocation to each system based on
information provided by City staff.
(2) Allocated 50% to the water system and 50% to the wastewater system.
(3) Of total, 5% allocated to stormwater, with remainder split equally between water and wastewater.
(4) Allocated equally to each of the three systems.
Rate_Study.xls Section 5 3/8/00;3:09 PM
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TABLE 5-3
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
PROJECTION OF INTEREST EARNINGS AT PREVAILING RATES
Fiscal Year
Item
Actual Estimated Projected
1999 2000 2001 2002 2003
2004
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Water & Sewer Revenue Fund:
Average Annual Balance (1)
Annual Interest Earnings (2)
Utility General Account:
Beginning Balance (3)
Expenditures (4)
Beginning Balance less Expenditures
Average Annual Balance
Annual Interest Earnings (2)
Customer Deposits:
Average Annual Balance (5)
Annual Interest Earnings (2)
Bond Requirements:
Series 1992 Debt Service Reserve:
Average Annual Balance (6)
Annual Interest Earnings (2)
Series 1996 Debt Service Reserve:
Average Annual Balance (7)
Annual Interest Earnings (2)
Annual Debt Service:
Average Annual Balance (8)
Annual Interest Earnings (2) ,
Renewal, Replacement & Improvement Account*
Ave~ Ann~U~l :B~lah~e (9) '. _ - '
Annual Interest Earnings (2)
Retained Earnin,qs:
Average Annual Balance (10)
Annual Interest Earnings (2)
$9,654,066 $9,654,066 $9,654,066 $9,654,066 $9,654,066 $9,654,066
$434,433 $434,433 $434,000 $434,000 $434,000 $434,000
$17,497,411 $18,284,794 $19,025,810 $18,358,810 $18,264,810 $18,145,810
0 80,000 1,490,000 900,000 920,000 5,040,000
$17,497,411 $18,204,794 $17,535,810 $17,458,810 $17,344,810 $13,105,810
$17,497,411 $18,244,794 $18,280,810 $17,908,810 $17,804,810 $15,625,810
$787,383 $821,016 $823,000 $806,000 $801,000 $703,000
$1,104,638 $1,104,638 $1,104,638 $1,104,638 $1,104,638 $1,104,638
$49,709 $49,709 $50,000 $50,000 $50,000 $50,000
$3,600,000 $3,600,000 $3,600,000 $3,600,000 $3,600,000 $3,600,000
$162,000 $162,000 $162,000 $162,000 $162,000 $162,000
$1,939,180 $1,939,180 $1,939,180 $1,939,180 $1,939,180 $1,939,180
$87,263 $87,263 $87,000 $87,000 $87,000 $87,000
$1,307,081 $1,307,081 $1,914,581 $1,911,636 $1,914,408 $2,037,488
$58,819 $58,819 $86,000 $86,000 $86,000 $92,000
$4,051,691 $4,023,717 $3,687,950 $3,073,356 $2,513,046 $1,965,216
$182,326 $181,067 $166,000 $138,000 $113,000 $88,000
$3,133,342 $3,133,342 $3,133,342 $3,133,342 $3,133,342 $3,133,342
$141,000 $141,000 $141,000 $141,000 $141,000 $141,000
Annual Interest Earnings:
Total (11) $1,902,933 $1,935,307 $1,949,000 $1,904,000 $1,874,000 $1,757,000
Allocated to:
Stormwater System (12) $95,147 $96,765 $97,000 $95,000 $94,000 $88,000
Water System (13) $903,893 $919,271 $926,000 $905,000 $890,000 $835,000
Wastewater System (13) $903,893 $919,271 $926,000 $905,000 $890,000 $835,000
(1) Actual balance at 9/30/98 assumed to remain for duration of rate study pedod.
(2) Based on a rate of 4.5% applied to the average annual balance. Beginning in Fiscal Year 2001, rounded to nearest $1,000.
(3) Equals beginning balance less expenditures from prior year plus annual interest earnings from prior year.
(4) Equals sum of annual expenditures from Tables 4-9 through 4-13.
(5) Actual balance at 9/30/98, assumed to remain for duration of rate study period.
(6) Equals amount of bond proceeds applied to the Series 1992 Bonds debt service reserve fund.
(7) Equals amount of bond proceeds applied to the Series 1996 Bonds debt service reserve fund.
(8) Equals one-half of the Total Annual Principal & Interest from Table 4-6.
(9) Equals the sum of the average annual balances from Tables 4-7 and 4-8.
(10) Actual balance at 9/30/98 assumed to remain for duration of rate study period.
(11) Equals sum of annual interest earnings from individual funds and accounts.
(12) Of total, 5% allocated to stormwater system.
(13) Equals 50% of total annual interest earnings after allocation to stormwater system.
Rate_Study.xls Section 5 3/8/00 3:12 PM_
Section 5
Projection o'f Revenues at Prevailing Rate
The sum of the projected interest earnings are apportioned among the three systems.
Five percent of the total is allocated to the stormwater system, with the balance
divided equally between the water system and the wastewater system.
5.3 Projection of Revenues at prevailing Rate
Table 5-4 projects revenues at prevailing rate levels for the stormwater system.
Budgeted Fiscal Year 2000 stormwater utility fee revenues are increased annually by
the 1.03 percent growth annual rate taken from Section 2. Interest earnings are added,
as are operating transfers in from sanitation.
Table 5-5 projects revenues at prevailing rates for the water system. Budgeted Fiscal
Year 2000 revenues for the categories of water sales, connection fees, and service
charges are increased annually by the growth rate developed in Section 2. Interest
earnings and miscellaneous revenues are added to yield total annual revenues.
Table 5-6 projects revenues at prevailing rates for the wastewater system. Budgeted
Fiscal Year 2000 revenues for sewer service charges are increased annually by the
growth rate developed in Section 2. Revenues for subdivision ordinance procedure
and televising of sewer lines are maintained at their budgeted Fiscal Year 2000 levels.
Other operating revenue sources as shown are added to yield total annual revenues.
5.4 Projection of Revenues, Expenditures and Cash ·
Flows at Prevailing Rates
Table 5-7 projects revenues, expenditures and cash flows at prevailing rates for the
stormwater system, The additional principal and interest shown are preliminary
estimates furnished by the financial advisors for the series 200OB0nd proceeds
presented in Table 4-9. As can be seen, total operating expenses exceed total
operating revenues in all years, resulting in negative values for net revenues. After
deducting annual principal and interest requirements, and minor capital outlays, the
annual deficit continues to grow throughout the rate study period. The last line in
Table 5-7 indicates the annual percentage adjustment in rates that would be required
to eliminate the deficit in each year. It should be noted that the percentages indicated
do not assume that adjustments in prior years have been implemented.
Table 5-8 projects water system revenues, expenditures and cash flows at prevailing
rates. As can be seen, net revenUes available for other purposes are negative in all
years beginning in Fiscal Year 2000. However, through Fiscal Year 2002, the
adjustments in rates required to eliminate the annual deficits would be minimal, and
are within the accuracy of the projections. For Fiscal Years 2003 and 2004, an
adjustment on the order of three to five percent would be required to achieve self-
sufficiency of the water system.
Table 5-9 projects wastewater system revenues, expenditures and cash flows at
prevailing user charge rates. As shown, positive surpluses are projected for all years,
5-5
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TABLE 5-4
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
PROJECTION OF STORMWATER SYSTEM REVENUES AT PREVAILING RATES
Fiscal Year
Item
Actual Budgeted Proiected
1999 2000- 2001 2002 2003 2004
SYSTEM GROWTH PROJECTIONS
Annual Growth Rate:
Percentage Annual Increase (1)
REVENUE PROJECTIONS
Charges for Services:
Subdivision Ordinance Procedure (3)
Stormwater Utility Fee (4)
Total Charges for Services
Interest Earnings (5)
Miscellaneous Revenues (3)
Operating Transfers in from Sanitation (3)
Total Revenues
1.03% 1.03% 1.03%
$o $o $o $o $o $o
587,527 602,612 609,000 615,000 B21,000 627,000
$587,527 $602,612 $609,000 $615,000 $621,000 $627,000
81,959 48,000 97,000 95,000 94,000 88,000
0 0 0 0 0 0
33,703 33,703 34,000 34,000 34,000 34,000
$703,189 $684,315 $740,000 $744,000 $749,000 $749,000
(1) Taken from Table 2-1.
(2) Calculated annual increase in Projected Population.
(3) Projected to remain at budgeted Fiscal Year 2000 levels.
(4) Projected to grow beyond budgeted Fiscal Year 2000 level at Percentage Annual Increase rate.
(5) Taken from Table 5-3.
Rate_Study.xls Section 5
3/8/00;3:15 PM.
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TABLE 5-5
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER. WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
PROJECTION OF WATER SYSTEM REVENUES AT.PREVAILING RATES
Fiscal Year
Item
Actual Budgeted Prelected
1999 2000 2001 2002 2003
2004
SYSTEM GROVVT'H PROJECTIONS
Annual Growth Rate:
Projected Population (1)
Percentage Annual Increase (2)
REVENUE PROJECTIONS
Charges for Services:
Subdivision Ordinance Procedure (3)
Water Sales (4)
Water Connection Fee (4)
Water Service Charges (4)
Total Charges for Services
Interest Earnings (5)
MiSCellaneous Revenues (3)
Operating Transfers in from Sanitation (3)
99,158 101,203 103,291 105,421
2.06% 2.06% 2.06% 2.06%
$15,492 $17,500 $18,000 $18,000 $18,000 $18,000
10,210,806 10,249,518 10,461,000 10,677,000 10,897,000 11,122,000
113,684 120,000 122,000 125,000 128,000 131,000
73,800 150,000 153,000 156,000 159,000 162,000
$10,413,782 $10,537,018 $10,754,000 $10,976,000 $11,202,000
778,612 456,000 926,000 905,000 890,000
60,418 6,450 6,000 6,000 6,000
0 0 0 0 0
$11,433,000
835,000
6,000
0
Total Revenues $11,252,813 $10,999,468 $11,686,000 $11,887,000 $12,098,000 $12,274,000
(1) Taken from City's Consumptive Use Permit.
(2) Calculated annual increase in Projected Population.
(3) Projected to remain at budgeted Fiscal Year 2000 levels.
(4) Projected to grow beyond budgeted Fiscal Year 2000 level at Percentage Annual Increase rate.
(5) Taken from Table 5-3.
Rate_Study.xls Section 5
3/8/00;3:17 P__M
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Item
TABLE 5-6
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
PROJECTION OF WASTEWATER SYSTEM REVENUES AT PREVAILING RATES
Fiscal Year
Actual Budgeted Proiected
1999 2000 2001 2002 2003 2004
SYSTEM GROWTH PROJECTIONS
Annual Growth Rate:
Projected Population (1)
Percentage Annual Increase (2)
REVENUE PROJECTIONS
Charges for Services:
Subdivision Ordinance Procedure (3)
Sewer Service Charges (4)
Televise Sewer Lines
Total Charges for Services
Interest Earnings (5)
Miscellaneous Revenues (3)
Operating Transfers in from Sanitation (3)
Total Revenues
99,158 101,203 103,291 105,421
2.06% 2.06% 2.06% 2.06%
$15,492 $17,500 $18,000 $18,000 $18,000 $18,000
10,434,542 10,931,911 11,157,000 11,387,000 11,622,000 11,862,000
31,636 42,500 43,000 43,000 43,000 43,000
$10,481,670 $10,991,911 $11,218,000 $11,448,000 $11,683,000 $11,923,000
778,612 456,000 926,000 905,000 890,000 835,000
60,418 6,450 6,000 6,000 6,000 6,000
33,703 33,703 34,000 34,000 34,000 34,000
$11,354,403 $11,488,064 $12,184,000 $12,393,000 $12,613,000 $12,798,000
(1) Taken from City's Consumptive Use Permit.
(2) Calculated annual increase in Projected Population.
(3) Projected to remain at budgeted Fiscal Year 2000 levels.
(4) Projected to grow beyond budgeted Fiscal Year 2000 level at Percentage Annual increase rate.
(5) Taken from Table 5-3.
Rate_Study.xls Section 5
3/8/00;3:18 PM:
TABLE 5-7
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
PROJECTION OF STORMWATER SYSTEM REVENUES, EXPENDITURES AND CASH FLOWS AT PREVAILING RATES
Fiscal Year
Actual Budgeted Projected
Item 1999 2000 2001 2002 2003
2004
Revenues: (1 ~
Total Charges for Services $587,527 $602,612 $609,000 $615,000 $621,000 $627,000
Interest Earnings 81,959 48,000 97,000 95,000 94,000 88,000
Miscellaneous Revenues 0 0 0 0 0 0
Operating Transfers in from Sanitation 33,703 33,703 34,000 34,000 34,000 34,000
Total Revenues $703,189 $684,315 $740,000 $744,000 $749,000 $749,000
Total Current (Operating) Expenses (2) $944,788 $1,194,715 $1,325,000 $1,567,000 $1,775,000 $1,991,000
Net Revenues ($241,598) ($5t0,400) ($585,000) ($823,000) ($1,026,000) ($1,242,000)
Annual Principal & Interest:
Existing (3) $440,861 $440,861 $886,037 $883,879 $885,910 $976,104
Additional (4) 0 360,000 845,143 839,863 829,427 734,103
Total Annual Principal & Interest $440,861 $800,861 $1,731,180 $1,723,742 $1,715,337 $1,710,207
Net Revenues After Debt Service
Transfers to Ren. Repl. & Improvement Fund (5)
Minor Capital Outlays (6)
Net Revenues Available for Other Purposes (7)
Cumulative Surplus/(Deficit) (8)
Annual % Adjustment to Eliminate Deficit (9)
($682,459) ($1,311,261) ($2,316,180) ($2,546,742) ($2,741,337) ($2,952,207)
0 0 0 0 0 0
107,109 151,612 133~000 137,000 141,000 145,000~
($789,568) ($1,462,873) ($2,449,I80) ($2,683,742) ($2,862,337) ($3,097,207).
($789,568) ($2,252,441) ($4,701,621) ($7,385,363) ($10,267,700) ($13,364,907)
134.39% 242.76% 402.16% 436.38% 464.14% 493.97%
(1) Taken from Table 5-4.
(2) Taken from Table 43.
(3) Taken from Table 4-6.
(4) Preliminary estimates provided by financial advisors.
(5) All stormwater system expenditures are budgeted and projected as either current expenses or capital expenditures.
(6) Fiscal Year 1999 taken from Table 4-1; Fiscal Year 2000 taken from Table 4-2. Beyond Fiscal Year 2000, annual amounts equal the
average values for Fiscal Years 1999 and 2000, increased by 3.0% annually for inflation.
(7) Equals Net Revenues After Debt Service less Transfers to Renewal, Replacement & Improvement Fund less Minor Capital Outlays.
(8) Equals Cumulative Surplus/(Deficit) from prior year plus Net Revenues Available for Other Purposes in current year.
(9) Equals negative values of Net Revenues Available for Other Purposes divided by Total Charges for Services in corresponding year.
Rate_Study.xls Section 5
3~8/00;3:42 PM
DRAFT
TABLE 5-8
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
PROJECTION OF WATER SYSTEM REVENUES, EXPENDITURES AND CASH FLOWS AT PREVAI LING RATES
Fiscal Year
Actual Budgeted Projected
Item 1999 2000 2001 2002 2003
2OO4
Revenues: (1)
Total Charges for Services $10.,413,782 $10,537,018 $10,754,000 $10,976,000 $11,202,000 $11,433,000
Interest Earnings 778,612 456,000 926,000 905,000 890,000 835,000
Miscellaneous Revenues 60,418 6,450 6,000 6,000 6,000 6,000
Operating Transfers in from Sanitation 0 0 0 0 0 0
Total Revenues $11,252,813 $10,999,468 $11,686,000 $11,887,000 $12,098,000 $12,274,000
Total Current (Operating) Expenses (2) $8,630,597 $8,624,911 $8,908,000 $9,201,000 $9,504,000 $9,817,000
Net Revenues $2,622,216 $2,374,557 $2,778,000 $2,686,000 $2,594,000 $2,457,000
Annual Principal & Interest:
Existing (3) $1,567,883 $1,567,883 $1,868,838 $1,867,379 $1,868,753 $t ,929,726
Additional (4) 0 0 0 0 0 0
Total Annual Principal & Interest $1,567,883 $1,567,883 $1,868,838 $1,867,379 $1,868,753 $1,929,726
Net Revenues After Debt Service
Transfers to Ren. Repl. & Improvement Fund (5)
Minor Capital Outlays (6)
Net Revenues Available for Other Purposes (7)
Cumulative Surplus/(Deficit) (8)
Annual % Adjustment to Eliminate Deficit (9)
$1,054,333 $806,674 $909,162 $818,621 $725,247 $527,274
347,856 675,169 659,968 701,160 713,220 725,880
337,687 299,786 328 000 338,000 348,000 358,000-
$368,790 ($168,281) ($78,806) ($220,539) ($335,973) ($556,606)
$368,790 $200,509 $121,703 ($98,836) ($434,808) ($991,415)
N/A 1.60% 0.73% 2.01% 3.00% 4.87%
'(1) Taken from Table 5-5.
(2) Taken from Table 4-4.
(3) Taken from Table 4-6.
(4) NO additional debt assumed to be issued for this case.
(5) Taken from Table 4-7.
(6) Fiscal Year 1999 taken from Table 4-1; Fiscal Year 2000 taken from Table 4-2. Beyond Fiscal Year 2000, annual amounts equal the
average values for Fiscal Years 1999 and 2000, increased by 3.0% annually for inflation.
(7) Equals Net Revenues After Debt Service less Transfers to Renewal, Replacement & Improvement Fund less Minor Capital Outlays.
(8) Equals Cumulative Surplus/(Deficit) from prior year plus Net Revenues Available for Other Purposes in current year.
(9) Equals negative values of Net Revenues Available for Other Purposes divided by Total Charges for Services in corresponding year.
Rate._Study.xls
Section 5
3/8/00;3:42 PM
DRAFT
TABLE 5-9
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
PROJECTION OF WASTEWATER SYSTEM REVENUES, EXPENDITURES AND CASH FLOWS AT PREVAILING RATES
Fiscal Year
Actual Budgeted. Projected
Item 1999 2000 2001 2002 2003
2OO4
Revenues: (1)
Total Charges for Services $10,481,670 $10,991,911 $11,218,000 $11,448,000 $11,683,000 $11,923,000
Interest Earnings 778,612 456,000 926,000 905,000 890,000 835,000
Miscellaneous Revenues- 60,418 6,450 6,000 6,000 6,000 6,000
Operating Transfers in from Sanitation 33,703 33,703 34,000 34,000 34,000 34,000
Total Revenues $11,354,403 $11,488,064 $12,184,000 $12,393,000 $12,613,000 $12,798,000
Total Current (Operating) Expenses (2) $6,713,607 $7,639,768 $7,885,000 $8,139,440 $8,400,363 $8,670,814
Net Revenues $4,640,796 $3,848,296 $4,299,000 $4,253,560 $4,212,637 $4,127,186
Annual Principal & Interest:
Existing (3) $605,418 $605,.418 $1,074,286 $1,072,013 $1,074,153 $1,169,146
Additional (4) 0 0 0 0 0 0
Total Annual Principal & Interest $605,418 $605,418 $1,074,286 $1,072,013 $1,074,153 $1,169,146
Net Revenues After Debt Service
Transfers to Ren. Repl. & Improvement Fund (5)
Minor Capital Outlays (6) ·
Net Revenues Available for Other Purposes (7)
Cumulative Surplus/(Deficit) (8)
Annual % Adjustment to Eliminate Deficit (9)
$4,035,379 $3,242,879 $3,224,714 $3,181,547 $3,138,484 $2,958,040
834,644 681,264 689,284 731,040 743,580 756,780
337,687 299,786 328,000 338,000 348~000 358,000
$2,863,047 $2,261,828 $2,207,430 $2,112,507 $2,046,904 $1,843,260
$2,863,047 $5,124,876 $7,332,306 $9,444,813 $11,491,717 $13,334,977
N/A N/A N/A N/A N/A N/A
(1) Taken from Table 5-6.
(2) Taken from Table 4-5.
(3) Taken from Table 4-6.
(4) No additional debt assumed to be issued for this case.
(5) Taken from Table 4-8;
(6) Fiscal Year 1999 taken from Table 4-1; Fiscal Year 2000 taken from Table 4-2. Beyond Fiscal Year 2000, annual amounts equal the
average values for Fiscal Years 1999 and 2000, increased by 3.0% annually for inflation.
(7) Equals Net Revenues After Debt Service less Transfers to Renewal, Replacement & Improvement Fund less Minor Capital Outlays.
(8) Equals Cumulative Surplus/(Deficit) from prior year plus Net Revenues Available for Other Purposes in current year.
(9) Equals negative values of Net Revenues Available for Other Purposes divided by Total Charges for Services in corresponding year.
Rate Study.×ls Section 5 3/8/00;3:43 PM
DRAFT
TABLE 5-10
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
PROJECTION OF COMBINED SYSTEM REVENUES, EXPENDITURES AND_CASH FLOWS AT PREVAILING RATES (1)
Fiscal Year
Actual Budgeted Projected
Item 1999 2000 2001 2002 2003
2OO4
Revenues:
Total Charges for serVices $21,482,980 $22,131~,541 $22,581,000 $23,039,000 $23,506,000 $23,983,000
IntemstEarnings 1,639,183 960,000 1,949,000 1,905,000 1,874,000 1,758,000
Miscellaneous Revenues 120,836 12,900 12,000 12,000 12,000 12,000
Operating Transfers in from Sanitation 67,406 67,406 68,000 68,000 68,000 68,000
Total Revenues $23,310,405 $23,171,847 $24,610,000 $25,024,000 $25,460,000 $25,821,000
Total Current(Operating) ExPenses $16,288,991 $17,459,394 $18,118,000 $18,907,440 $19,679,363 $20,478,814
Net Revenues $7,021,414 $5,712,453 $6,492,000 $6,116,560 $5,780,637 $5,342,186
Annual Principal & Interest:
Existing $2,614,161 $2,614,161 $3,829,161 $3,823,271 $3,828,816 $4,074,976
Additional 0 360,000 845,143 839,863 829,427 734,103
Total Annual Principal & Interest $2,614,161 $2,974,161 $4,674,304 $4,663,134 $4,658,243 $4,809,079
Debt Service Coverage on All Debt: (2)
Net Revenues After Debt SerVice
Transfers to Ren. Repl. & improvement Fund
Minor Capital Outlays
Net Revenues Available for Other Purposes
Cumulative Surplus/(Deficit)
2.69 1.92 1.39 1.31 1.24 1.11
$4,407,253 $3,098,292 $2,662,839 $2,293,289 $1,951,821 $1,267,210
1,182,500 1,356,433 1,349,252 1,432,200 1,456,800 1,482,660
782,484 751,184 789,000 813,000 837,000 861,000
$2,442,269 $990,675 $524,587 $48,089 ($341,979) ($1,076,450)
$2,442,269 $3,432,944 $3,957,531 $4,005,620 $3,663,641 $2,587,191
(1) Unless otherwise indicated, each line is the sum of respective lines from Tables 5-7, 5-8, and 5-9.
(2) Equals N,et Revenues divided by Total Annual Principal & Interest.
Rate_Study.xts Section 5 3/8/00;3:44 P~.
Section 6
Calculations of Rate Adjustments
6.1 Stormwater System
The prevailing monthly rate for the stormwater system is $1.00 per month per ERU.
As demonstrated in Table 5-7, at prevailing rates, the revenues are insufficient to
recover the operat/ng expenses of the stormwater system. When all revenue
requirements of the stormwater system are considered, annual deficits at prevailing
rates grow from a level of over $1.4 million in Fiscal .Year 2000, to over $3 million in
Fiscal Year 2004, yielding a cumulative deficit of over $13 million.' As the last line in
Table 5-7 shows, an adjustment of 494 percent would be necessary to meet all revenue
requirements of the stormwater system by the end of the rate study period.
Table 6-1 has been prepared to show a pro forma projection of revenues,
expenditures and cash flows with respect to the stormwater system, assuming an
adjustment irt rates from $1.00 per month to $6.00 per month per ERU, effective May
1, 2000. Such an adjustment allows for the issuance of additional debt to finance the
stormwater system capital improvement program, as presented in Table 4-9.
Approximately $13.16 million in net proceeds from the Series 2000 RevenUe Bonds
would be available in Fiscal Year 2000. The adjustment in stormwater rates would
allow this system to cover all operating expenses, provide a minimum of 110 percent
coverage on outstanding and prospeCtive debt, and defray the costs of projected
minor capital outlays. (The minor deficit in Fiscal Year 2000 after payment of minor
capital outlays could be eliminated by deferring some of the costs to the following
year, or applying funds on hand in the Utility General Account.)
~i ' '~ Because of the very significant revenue requirements projected for the stormwater
~- ~~ system over the next five Years, the adjustment to $6.00 per month per ERU is
~~ comvletely justified in terms of recover/ng the full cost of service. We recommend
~~ that i~f tiffs adjustment meets the local policy position of the City Commission, the full
~' .~ adjustment to $6.00 per month per ERU be adopted.
6.2 Water
System
~ ~ As Table 5-8 shows, only very minimal adjustments in water rates would be required
~ for the water system to stand on its own through Fiscal Year 2002. These adjustments,
~t~ rangmg' from less than one percent to 2.01 percent, are within the accuracy of our
~ projections; actual financial performance may be better than projected, in which case
~ no adjustments may be required through Fiscal Year 2002. At this time, we
'~ recommend that the City not adjust the water rates. We further recommend that the
~ ~ ~ City monitor the financial performance of the water system during the next three
'~ years, and revise the projectiOns periodically to define more precisely the timing and
· level of any-rate adjustments necessary.
6276-27182-010.RT. REP
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Section 6
Calculations of Rate Increases
6.3 Wastewater System
Table 5-9 projects the financial performance of the wastewater system over the rate
study period. As can be seen, significant levels of surpluses are generated in all years,
with projections for accumulating a surplus in excess of $13 million at the end of
Fiscal Year 2004. The City has the flexibility to reduce its wastewater rates to an
appreciable extent, and still have the wastewater system remain self-sustaining.
However, the City is currently contemplating the issuance of additional revenue bond
indebtedness in the near term, the pledged revenues for which are the combined.
stormwater, water, and wastewater system rates.' By maintaining the prevailing
wastewater user charges, the combined pledge of revenues would be viewed by the
financial community more strongly from a credit, perspective.
6.4 Combined Systems
Table 6-2 presents a pro forma of the combined stormwater, water and wastewater
systems over the rate study period with an adjustment in the stormwater rates
effective May 1, 2000. As can be seen, debt service coverage is projected to be more
than adequate in each of the years. Furthermore, on a combined basis, all revenue
requirements are met, with a surplus generated in all years.
It should be noted that the cumulative surplus of the combined systems is projected to
grow to over $12 million by the end of the rate study period. This projected healthy
picture could allow the City to grow its total reserves to levels greater than projected
in Table 5-3.
6.5 Comparison of Rates with Neighboring
Jurisdictions
It is useful to compare the City's existing and proposed rates with those in
neighboring jurisdictions. For purposes of this comparison, the cities of Deerfield
Beach, Delray Beach and West Palm Beach, and Palm Beach County are selected. An
average monthly usage of 8,000 gallons for a single family home is used to compute
the rates. Table 6-3 presents the average' monthly bills for the several jurisdictions.
The City's water monthly bill is the lowest of all jurisdictions. With the exception of
Palm Beach County, the City's monthly wastewater bill is the lowest of all
jurisdictions, and is only $0.31 per month greater'than Palm Beach County. On a
combined basis, the City's total monthly utility bill with the recommended
adjusb-aent would rank in the middle of the five jurisdictions.
Camp Dresser &. McKee Inc.
6-3
DRAFT
TABLE 6-1
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
PROJECTION OF STORMWATER SYSTEM REVENUES, EXPENDITURES AND CASH FLOWS WITH RATE ADJUSTMENT 511/00
Fiscal Year
Actual Adjusted Projected
Item 1999 2000 2001 2002 2003 2004
Revenues: (1)
Total Charges for Services (2) $587,527 $1,858,054 $3,654,000 $3,690,000 $3,726,000 $3,762,000
Interest Earnings 81~959 48,000 97,000 95,000 94,000 88,000
Miscellaneous Revenues 0 0 0 0 0 0
Operating Transfers in from Sanitation 33,703 33,703 34,000 34,000 34,000 34,000
Total Revenues
Total Current (Operating) Expenses (3)
Net Revenues
Annual Principal & Interest:.
Existing Total Principal & Interest (4) $440,861 $440,861 $886,037 $883,879 $885,910 $976,104
Series 2000 Rev. Bond Prin. & Interest (5) 0 360,000 845,143 839,863 829,427 734,103
Total Annual Principal & Interest
Debt Service Covera,qe: (6) (0.548) 0.930 1.421 1.306 1.212 1.107
Net Revenues After Debt Service ($682,459) ($55,819) $728,820 $528,258 $363,663 $182,793
Transfers to Ren~ RepL & Improvement Fund (7) 0 0 0 0 0 0
Minor Capital Outlays (8) 107,109 151,612 133,000 137,000 141,000 145,000
Net Revenues Available for Other Purposes (9)
Cumulative Surplus/(Deficit) (10)
$703,189 $1,939,756 $3,785,000 $3,819,000 $3,854,000 $3,884,000
$944,788 $1,194,715 $1,325,000 $1,567,000 $1,775,000 $1,991,000
($241,598) $745,042 $2,460,000 $2,252,000 $2,079,000 $1,893,000
$440,861 $800,861 $1,731,180 $1,723,742 $1,715,337 $1,710,207
($789,568) ($207,431) $595,820 $391,258 $222,663 $37,793
($789,568) ($997,000) ($401,179) ($9,921) $212,741 $250 535
(1) Taken from Table 5-7, except where otherwise noted.
(2) Assumes an adjustment from $1 .{30 per month per ERU to $6.00 per month per ERU, effective 5/1/00.
(3) Taken from Table 4-3.
(4) Taken from Table 4-6.
(5) Estimated by underwriters to maximize debt capacity with proposed adjustment.
(6) Equals Net Revenues divided by Total Annual Principal & Interest.
(7) All stormwater system expenditures are budgeted and projected as either current expenses or capital expenditures.
(8) Fiscal Year 1999 taken from Table 4-1; Fiscal Year 2000 taken from Table 4-2. Beyond Fiscal Year 2000, annual amounts equal the
average values for Fiscal Years 1999 and 2000, increased by 3.0% annually for inflation.
(9) Equals Net Revenues After Debt Service less Transfers to Renewal, Replacement & Improvement Fund less Minor Capital Outiays.
(10) Equals Cumulative Surplus/(Deficit) from prior year plus Net Revenues Available for Other Purposes in current year.
Rate_Study.xls Section 6 3/14/00;1:58 PM~
DRAFT
TABLE 6-2
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER ENTERPRISE FUND RATE STUDY
PROJECTION OF COMBINED SYSTEM REVENUES, EXPENDITURES AND CASH FLOWS WITH STORMWATER ADJUSTMENT 5/1/00 (1)
Item
Fiscal Year
Actual Adjusted Projected
1999 2000 2001 2002 2003 2004
Revenues:
Total Charges for Services $2i,482,980 $23,386,983 $25,626,000 $26,114,000 $26,611,000 $27,118,000
Interest Earnings 1,639,183 960,000 1,949,000 1,905,000 1,874,000 1,758,000
Miscellaneous Revenues 120,836 12,900 12,000 12,000 12,000 12,000
Operating Transfers in from Sanitation 67,406 67,406 68,000 68,000 68,000 68,000
Total Revenues $23,310,405 $24,427,288 $27,655,000 $28,099,000 $28,565,000 $28,956,000
Total Current (Operating) Expenses $16,288,991 $17,459,394 $18,118,000 $18,907,440 $19,679,363 $20,478,814
Net Revenues $7,021,414 $6,967,894 $9,537,000 $9,191,560 $8,885,637 $8,477,186
Annual Principal & IntereSt:
Existing Total Principal & Interest
Series 2000 Rev. Bond Pdn.& Interest
Total Annual Principal & Interest
Debt Service coverage: (2)
Net Revenues After Debt Service
Transfers to Ren. Repl. & Improvement Fund
Minor Capital Outlays
Net Revenues Available for Other Purposes
Cumulative Surplus/(Deficit)
$2,614,161 $2,614,161 $3,829,161 $3,823,271 $3,828,816
0 360,000 845,143 839,863 829,427
$2,614,161 $2,974,161 $4,674,304 $4,663,134 $4,658,243
2.69 ' -; 2134 2.~4 1.97 ' ~ :'; 1.9~'
$4,407,253 $3,993,733 $4,862,696 $4,528,426 $4,227,394
1,182,500 1,356,433 1,349,252 1,432,200 1,456,800
782,484 751,184 789,000 813,000 837,000
$2,442,269 $1,886,117 $2,724,444 $2,283,226 $1,933,594
$2,442,269 $4,328,386 $7,052,830 $9,336,056 $11,269,650
$4,074,976
734,103
$4,8O9,O79
1.76
$3,668,107
1,482,660
861,000
$1,324,447
$12,594,097
(1) Unless otherwise indicated, each line is the sum of respective lines from Tables 5-8, 5-9, and 6-1.
(2) Equals Net Revenues divided by Total Annual Principal & Interest.
Rate_Study.xls
Section 6
3/14/00;2:01 PM
DRAFT
TABLE 6-3
CITY OF BOYNTON BEACH, FLORIDA
STORMWATER, WATER AND WASTEWATER RATE STUDY
COMPARISON OF AVERAGE MONTHLY BILLS WITH NEIGHBORING JURISDICTIONS
Average Monthly Residential Bill (1)
Jurisdiction Stormwater. Water Wastewater Total
City of Boynton Beach (Inside):
Existing Rates
Recommended Rates
City of Deerfleld Beach (Inside):
City of Delray Beach (Inside)
City of West palm Beach (inside)
Palm Beach County
$1.00 $14.71 $20.91 $36.62
$6.00 $14.71 $20.91 $41.62
(2) $18.32 $21.79 $40.11
$4.50 $18.81 $26.22 $49.53
$3.40 $16.67 $23.13 $43.20
(2) $15.45 $20.60 $36.05
(1) Based on a single family home with 8,000 gallons per month usage.
(2) The cost of stormwater management is included, in the General Fund, and is not a
separate monthly charge.
Rate_Study.xls Section 6 3/14/00;1:57 PM
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Section 6
Calculations of Rate Increases
6.6 Annual Adjustment of Rates
Annual changes in costs resulting from the effects of inflation are a normal part of
utility operations. In addition, more stringent regulatory requirements can exert
upward pressure on costs, while technological advances can mitigate the effects of
cost increases. A technique used by utilities to modify rates in response to changes in
costs, either upward or downward, is the application of an annual adjustment.
Annual adjustments can be accomplished in a number of ways. The approach desired
by the City is to develop an adjustment based on a formula that uses the changes in
unit prices of certain cost line items applied to changes in annual quantities. BeCause
of the differing nature of the three systems, different formulas may be appropriate for
each system. ..
It is important to note that the following adjustment formulas are preliminary at this
time. A number of technical issues must'be considered to assure that the intent of the
adjustments, as described in the preceding paragraph, is accomplished without any
.unanticipated effects. Similarly, the suggested formulas will require substantial data
collection efforts beyond what City staff currently performs. The burden imposed by
this additional data gathering may be found to outweigh the benefits of the detailed
formulaic approach.
The stormwater system has little in the way of variable costs, and much of the annual
differences in cost may result from adjustments to labor rates and actual labor hours
incurred. Accordingly, an appropriate formula for modifying the stormwater fee on
an annual basis is to adjust it by the change in labor costs. The change in labor cost
can result from a combination in the salary and fringe benefit rates and the change in
total annual labor hours from budget to actual. The following formula is suggested:
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Let uCv% = unit cost variance % for labor = [(actual weighted hourly labor rate for
year) - (budgeted weighted hourly labor rate for year)]/(budgeted weighted
hourly labor rate for year).
· Let LHV% = labor hour variance % = [(actual number of labor hours for year) -
(budgeted labor hours for year)]/(budgeted labor hours for year).
Let TBLC = total budgeted labor cost.
· Let LCV = labor cost variance.
· Therefore, LCV = [(I+UCV%) x (I+LHV%) -1] x TBLC.
· Let TBSF = total budgeted stormwater fees.
· Let SRA% = stormwater rate adjus .tment % (across-the-board).
· Therefore, SRA% = LCV/TBSF.
6-6
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Isser & McKee Inc
Section 6
Calculations of Rate Increases
For the water system, the costs of personnel, electricity and chemicals comprise
significant portions of annual revenue requirements. For the labor component, the
same formulaic approach as described for the stormwater system is recommended.
For the electricity and chemical components, the formula wouid reflect the changes in
the unit costs of these components, coupled with the changes in the numbers of units
(kilowatt hours or pounds, respectively) per million gallons of finished water
produced, coupled with the change in total annual finished water production.
Because the changes in variable costs may be offset to some extent by a change in
revenues generated by the commodity charges, the change in commodity charge.
revenues should also be considered. The following formula is suggested using one
chemical ("Chemical A") as an example for the individual variance analyses, but is
applicable to all chemicals and electricity:
Let UCV%^ = unit cost variance % for Chemical A = [(actual weighted unit cost for
year) - (budgeted weighted unit cost for year)]/(budgeted weighted unit cost for
year).
Let DRV%^ = dosage rate variance % for Chemical A = [(actual pounds per million
gallons produced for year) - (budgeted pOunds per million gallons produced for
year)]/(budgeted pounds per million gallons for year).
Let FWPV%^ = finished water production variance % = [(total actual finished water
produced for the year) - (budgeted finished water produced for the
year)]/(budgeted finished water produced for the year).
Let TBCC^ = total budgeted cost of Chemical A for the year.
Let CVC^ = cost variance of Chemical A. (Similarly, CVC~ = cost variance for the
Nth chemical; CVCE = cost variance for electricity.)
Therefore, CVC^ = [(1+ UCV%^) x (I+DRV%^) x (I+FWPV%^) -1] X TBCC^.
· Let WCRA% = water commodity rate adjustment % (across-the-board).
· Let AWCCR = actual water commodity charge revenues for the year.
· Let BWCCR = budgeted water commodity charge revenues for the year.
· If (AWCCR - BWCCR) > (CVC^ +...+ CVCN + CVCE), then WCRA% = [(AWCCR -
BWCCR) - (CVC^+...+ CVCN + CVC~)]/BWCCR.
· If (CVC^ +...+ CVCN + CVCE) > (AWCCR - BWCCR), then WCRA% = [(CVC^+...+
CVC~ + CVCE) - (AWCCR- BWCCR)I/BWCCIC
6-7
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Section 6
Calculations of Rate Increases
The recommended formula for the wastewater system includes the same items as for
the water system. The formula would reflect the change in unit cost of treatment
coupled with the change in total annual thousand gallons treated. Because the
changes in treatment costs may be offset to some extent by a change in revenues
generated by the commodity charges, the change in commodity charge revenues
should also be considered. The following formula is suggested:
· Let UCV% = unit cost variance % for wastewater treatment = [(actual unit cost for
year) - (budgeted unit cost for year)]/(budgeted unit cost for year).
Let WWVV% = wastewater volume variance % = [(total actual City'~ wastewater
metered for the year) - (budgeted City's wastewater metered for the
year)]/(budgeted City's wastewater metered for the year).
· Let WWCRA% = wastewater commodity rate adjustment % (across-the-board).
Let WWTCV = wastewater treatment cost variance for the year.
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· Let TBWWTC = total budgeted wastewater treatment cost.
· Therefore, WWTCV = [(I+UCV%) x (1+ WWVV%) - 1] x TBWWTC.
· Let AWWCCR = actual wastewater commodity charge revenues for the year.'
· Let BWWCCR = budgeted wastewater commodity charge revenues for the year.
· If (AWWCCR - BWWCCR) > WWTCV, then WWCRA% = [(AWWCCR - BWCCR)
- WWTCV]/BWWCCR.
· If WWTCV > (AWWCCR - BWWCCR), then WWCRA% = [WWTCV - (AWCCR -
BWCCR)]/BWCCR.
We recommend that each_year after the adjustments are computed using the above
formulas, an alternative calculation be used to validate their reasonableness. This
alternative calculation would be much more computationally straightforward and
would employ a commonly used index. We suggest that the percentage change in the
US Department of Labor Consumer Price Index for All Urban Consumers -CPI (U)
from June of the previous year to lane of the current year be obtained. This
percentage change would be multiplied by the percentage operating expenses for
each system comprise of total revenue requirements for each system. The resulting
percentage change for each system would be the limiting value that the formula
percentage adjustments could not exceed.
6-8
Section 7
Summary and Recommendations
7.1 SUmmary
Section 1 of this report is the introduction, presenting the scope of work for the study,
the outline of the report, and the prevailing stormwater, water and wastewater rates.
Section 2 projects the growth of the utility system. Based on information furnished by
the 'City, the population growth projection rate of approximately two percent
annually developed for the consumptive use permit ~is reasonable for applicatior{ to
the water and wastewater system. Because the stormwater system serves only
customers within the municipal limits, and the growth rate within the City is less than
outside the City, an annual growth rate of approximately one percent is used for the
customer base of this system.
Section 3 of this report develops two components of a fee-in4ieu-of charge to recover
capital costs associated with the stormwater system. Both components are designed
to be recovered by a charge per square foot of impervious area. One component .
relateS to water quality improvements, with a charge of $2.10 per square foot to be
levied only within the downtown water quality improvement area. The other
component relates to water quantity, and the $0.18 per square foot charge has been
developed to be levied throughout the downtown watershed.
Revenue requirements of the stormwater, water and wastewater systems are
developed separately in Section 4. Revenue requirements comprise operating
expenses, debt service on outstanding revenue bond indebtedness, debt service on
~ prospective additional debt,.reneWal and replacement requirements, minor capital
~ outlays, and capital improvements. The City has significant reserves of funds on
............ hand that are available to finance capital improvements, and these monies are applied
4 to the extent allowed by policy guidelines to minimize the requirements for additional
'~" '-'~~ debt and hence additional debt service.
Section 5 of this report projects revenues at prevailing rates separately for each of the
'~ three systems. Net revenues, cash flows, and annual surpluses/deficits are also
projected for each system, and on a combined basis. The result of these projections is
~ to demonstrate that significant adjustments will be required for the stormwater
~ system to be self-sustaining during the rate study period. With respect to the water
~ system, only minimal rate adjustments, if any, should be required before Fiscal year
.~ 2003; thereafter, a rate adjustment on the order of three to five percent may be
~'~i~ necessary. No adjustment is projected as necessary for the wastewater system during
the rate study period; indeed, sigrdficant annual smt>luses are projected to be
~ generated from this system throughout the next five years.
Camp Dresser &. McKee Inc. 7-1
I'! Calculati°ns °f rate adjustments are Presented in Secti°n 6 °f this rep°rt' 13y adjus ' g
r ERU, this system can
The debt capacity
oximately $15 million in
ystem capital
ems will exhibit financial
for issuance of additional
I ' ' parity debt. . .. ' .
II 7.2_ Recommen4atio.ns ....... '' Water andWastewi'ter '
recommendations is set
I I ' forth below.. .......
ieu of capital charge
I I SYstem for the re_cov, ery of.c~sts,a;sociated wi~ the do,w~, t. own stormwater
e levied on the basis of
f $2.10 per square foot is
I calculated fo.r application _wi,th~,t~he downtow~n w.a. ter q, ua!ity improvement area. A
ed for application
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II I Withres..p;C.tmt%the%?orOmnwt~altYerU~ety;aats;% oWne ~:~on~Insee~dicetha~nt~c~i~%~ aand%Pdi2~tment
I I to k6.00 per month per ERU is fully justified. AdOPtion of ~uch an adjustment by May
d indebtedness to finance
~ I ~ the st°rmwat-er system capital im'p~°vements pr°gram' do not recommend any
however, recommend
f the water system to
t may be necessary. The
to be very strong over the
arges is recommended
I I ~ We also recommend that the City adopt, aspart of its rate ordinance, a provision
for
y means of a formula.
I · ~ The purpose_ of this adjustment is to _mi_tig_ate the...effect, s of ',inflation and to recognize
ect operating costs to a
· Accordingly, it is
for the changes in unit
ater system, the formula
water system, the changes
I I ~..~.. _ in _th.~_u_rdtc°sts'°fpers°rmel'electricityandchemicalsw°uldbeappr°priate' With
Section 7
Summary and Recommendations
regard to the wastewater system, the same components selected for the water system
could be used plus the annual change in the unit cost of wastewater treatment.
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CDM Camp Dresser & McKee Inc.
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bs5072~3/14/00
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