1 water and wastewater capital charges utilities department orange county board of county...
TRANSCRIPT
1
Water and Wastewater Capital Charges
Utilities Department
Orange County Board of County Commissioners
April 5, 2011
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Presentation Outline
• Purpose• Background• 2008 Update • Issues• Summary
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Purpose
• Provide the Board with an overview of our Water and Wastewater Capital Charges
• Discuss Commissioner Thompson’s initiative to offer a Capital Charge payment plan for small business
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Presentation Outline
• PurposePurpose• Background• 2008 Update 2008 Update • IssuesIssues• SummarySummary
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Background
• Capital Charges Paid by developers
for infrastructure to serve growth
Mechanism for growth to “pay its own way”
Used only for growth related projects
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Background
• Capital Charges Discretionary source
of funding Cannot exceed full
cost recovery Can be set below
full cost recovery Reduces the burden
on existing rate payers
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Background
• Current Charges Based on 2004
study Phased in over
time Set at full cost
recovery Considered future
alternative water infrastructure
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Background
• Current Charges Water
– $1,950 per ERC– 350 GPD
Wastewater– $3,668 per ERU– 300 GPD
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Presentation Outline
• PurposePurpose• BackgroundBackground• 2008 Update • IssuesIssues• Summary Summary
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2008 Update
• Assumed groundwater and alternative water as sources of supply 5 year planning
horizon used for groundwater
10 year planning horizon used for alternative water
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2008 Update
Charges AdjustmentWater
Current $1,950Update $2,603 + $653 33.5%
Wastewater Current $3,668Update $3,673 + $ 5 0.1%
CombinedCurrent $5,618Update $6,276 + $658 11.7%
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2008 Update
• Findings presented to BCC July 2009 BCC Direction
– Postpone implementation of updated charges
– Maintain existing Capital Charges at current levels
– Update the report in two years
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Presentation Outline
• PurposePurpose• BackgroundBackground• 2008 Update2008 Update • Issues• Summary Summary
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Issues
• Engage consultant Capital Charge
Update– Revenue Sufficiency
Analysis
• Economic climate Explore alternative
payment options• Revenue Bond issue
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IssuesWater and Wastewater
Operating Revenue
$80
$90
$100
$110
$120
$130
$140
$150
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10
Mill
ion
s
Flat Revenues
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IssuesWater & Wastewater
Capital Charge Revenue
$0
$10
$20
$30
$40
$50
$60
$70
FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10
Mil
lio
ns
84% Reduction
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Issues
Water Capital ChargeYear-end Cash Balances
$0
$10
$20
$30
$40
$50
$60
FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11
Mil
lio
ns
100% Reduction
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IssuesWastewater Capital Charge
Year-end Cash Balances
$0
$10
$20
$30
$40
$50
$60
$70
$80
FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11
Mil
lio
ns
100% Reduction
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Issues
• Alternative payment arrangements Installment Financing Deferral
• Interest and Administrative Costs
• Security Instruments
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Issues
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Issues
• Toho Water Authority Alternative Payment
Options– Subject to availability or
Funds– Since October 2003– Limited eligibility– Term– Interest
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Issues
• Toho Water Authority Installment Plan Eligibility
– Retrofit to central service– Charitable / Non-Profit organizations– Industrial or Warehouse with potential to create
5 or more jobs– Affordable Housing Projects– Projects within the Kissimmee CRA– Commercial properties who covenant not to
subdivide or convert to condo ownership– Lessees with the written consent of the property
owner
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Presentation Outline
• PurposePurpose• BackgroundBackground• 2008 Update2008 Update • IssuesIssues• Summary
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Summary
• Capital Charge amounts are still set at 2004 calculated amounts
• Operating Revenue is flat• Capital Charge revenues are down 84%• Capital Charge cash balances are down
100%• Bond financing will be required within
the next two years to fund our capital improvements program
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Summary
• Majority of utilities do not offer payment options
• Developing an installment plan for capital charges is not recommended
• Moving forward Proceed with Capital Charge study update Evaluate revenue sufficiency Return to the Board later this year
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Water and Wastewater Capital Charges
Utilities Department
Orange County Board of County Commissioners
April 5, 2011