Item 7FAGENDA ITEM # 7F
SEPTEIygER 8, 2008
STAFF REPORT
City of Atlantic Beach
Commission Meeting
AGENDA ITEM: Utility Rate Increase ORDINANCE NUMBER 80-08-78
DATE: September 3, 2008
SUBMITTED BY: Nelson Van Liere, Finance Director
BACKGROUND: During the development of the Operating Budget for the fiscal year
ended September 30, 2007, staff estimated that at a minimum it
would be necessary to raise utility rates by ten percent for three
years in a row to fund the ongoing operations of the utility and to
provide enough revenues for the additional debt service required to
fund the planned capital improvements. Those rate increases have
already been adopted.
The rate increases previously adopted were what we call, "across
the board", meaning that all components of the rate are adjusted by
the same percentage. However, because our rate structure includes
inclining block rates for volume, a reduction in sales has a
disproportionate negative effect on volume revenues. The rate
increases in place assume that volume sold would increase over
time, when in fact the sales have decreased. The rate structure in
place is designed to have the high volume users subsidize the low
users volume users while recovering the total cost of providing the
services. Since the high volume users are conserving and we have
lost some customer base, it becomes necessary to obtain more
revenues from the first block of volume charges that almost every
customer uses. This is done by increasing the rates on the lower
block, (the first three thousand gallons), and decreasing the
scheduled rate increases for the higher consumption blocks.
This proposed ordinance keeps in place the scheduled revenue
increases, but changes the structure so that those increases are
obtained on the first block of consumption for 2008 and 2009.
BUDGET: The intent of this ordinance is to provide a revenue neutral
adjustment to the utility rates already scheduled to go into effect on
October 1, 2008 and October 1, 2009. This ordinance will increase
the bills of some customers while lowering others, having no
overall effect on the proposed budgeted revenues.
RECOMMENDATION: Approve Ordinance 80-08-78
ATTACHMENTS: Ordinance 80-08-78
Water and Sewer Rate Comparison Chart
REVIEWED BY CITY MANAGER:
AGENDA ITEM # 7F
SEPTEMBER 8, 2008
ORDINANCE NO. 80-08-78
AN ORDINANCE AMENDING CHAP'JCER 22 UTILITIES,
ARTICLE II, WATERWORKS SYSTEM, SECTION 22-27
CHAItGE5 FOR WATER SERVICE, TO PROVIDE A
REVENUE NEUTRAL SHIFT IN VOLUME CHARGES BY
INCREASING THE LOWEST BLOCK RATE AND
DECREASING THE UPPER BLOCK RATES EF'F`i~1~TIVE
OCTOBER 14, 2008 AND AGAIN FOR .OCTOBER 1, 2009:
AND AMENDING ARTICLE III WASTEWATER SYSTEM,
DIVISION SEVEN, SEWER USER RATES AND CHARGES,
SECTION 22-167 SCHEDULE OF WASTEWATER
VOLUME CHARGES TO PROVIDE A REVENUE
NEUTRAL SHIFT' IN VOLUME CHARGES BY
INCREASING THE LOWEST BLOCK RATE AND
DECREASING THE UPPER BLOCK RATES FOR
RESIDENTIAL AND COMMERCIAL CUSTOMERS
EFFECTIVE OCTOBER 14, 2008 AND AGAIN OCTOBERl,
2009, AND PROVIDING FOR SEVERABILITY, AND
PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, the City has previously adopted increased water and sewer rates for
the purpose of generating sufficient revenues to fiord current operating costs and
infrastructure improvements, and
WHEREAS, the proposed operating budget for the fiscal year ended September
30, 2009 reflects the already passed ten percent increase in the utility rates. The City's
code also includes an additional ten percent increase in utility rates for fiscal year 2010,
and
WHEREAS, the City has experienced declining sales due to conservation and a
reduction in customers causing the rates to be insufficient to generate the needed
revenues as ProJ~~ and
WHEREAS, the City has determined that a restructuring of the current rites
would better address the revenue requirements by concentrating the increase on the first
block of consumption, and
NOW, THEREFORE, BE IT ENACTED BY THE CITY COMMISSION ON
BEHALF OF THE PEOPLE OF THE CITY OF ATLANTIC BEACH, FLORIDA,
that;
SECTION I. Chapter 22 Utilities, of the Code of Ordinances of the City of Atlantic
Beach, Florida is hereby amended to read as follows:
Article II, Waterworks System:
Sec. 22-27. Charges for water strvice.
AGENDA ITEM # 7F
SEPTEMBER 8, 2008
The reasonable rates, rentals, fees and other charges for the use of the services and
facilities of the city waterworks system are hereby found and determined to be and are
hereby fixed and established as follows:
(2) Schedule of water volume charges for customers inside the city:
a. Single units. There are hereby-established inclining block volume charges for
single-family residential and single-family individual-metered mobile homes, per account
as follows:
Block Upper Limit
(Gallons per Month) Rate per Thousand
Gallons Effective
October 14.2008 Effective
October 1, 2009
1 3,000 ~3 ~8- 0.60 $9:3-1- 1.02
2 8,000 $~2 $2~-2- 2.02 ?44$2.02
3 13,000 $2:38 $~~ 2.38 X88-$2.38
4 18,000 $3-3H ~1~$3.56 X4-3-)-$3.56
5 Over 18,000 $S3~ ~5-s11- 5.37 $6:59-$5.37
b. Multiple units and commercial accounts. There are hereby-established an
inclining block volume charge for all multiunit residential and multiunit commercial
accounts as follows:
Block Upper Limit
Gallons per Month Rate per Thousand Effective Effective
(per unit) Gallons October 14.2008 October 1, 2009
1 2,000 ~5 ~8- 0.60 $9:31- 1.02
2 Over 2,000 x-2$2 ~~$2.02 ~?44- 2.02
c. Single unit irrigation. There are hereby-established an inclining block irrigation
volume charge for all single-family residential and single-family individual-metered
mobile homes, per account as follows:
Block Upper Limit
(Gallons per Rate per Thousand Effective Effective
Month) Gallons October 14.2008 October 1, 2009
1 13,000 $2-.38 2.38 ~?gg-$2.3g
2 18,000 $3-56 X12- 3.56 ~4.3~$3.56
3 Over 18,000 $3.3'~ $~~ 5.37 ~i:59- 5.37
d. Multiple unit and commercial irrigation. There are hereby established an
inclining block volume charge for all multiunit residential irrigation accounts and all
commercial irrigation accounts as follows:
Block Upper Limit
(Gallons per Rate per Thousand Effective Effective
Month) Gallons October 14, 2008 October 1, 2009
1 3,000 $9:2-5 $0~~ 0.60 $0:3)- 1.02
2 Over 3,000 $2~2 ~~ 2.02 e ." $2.02
AGENDA ITEM # 7F
SEPTEMBER 8, 2008
ARTICLE III WASTEWATER SYSTEM
Division Seven, Sewer user rates and charges,
Sec. 22-167. Schedule of wastewater volume charges.
(a) Customers inside the city. There are hereby established block volume charges for
customers inside the city as follows:
(1) Single-family residential and single-family individual-metered mobile homes, per
account as follows:
Block Upper Limit
(Gallons per
Month) Rate per
Thousand
Gallons ~cr ~~;_,~
"~"`-"T` Effective
October 14,
2008 Effective
October 1, 2009
1 3,000 $9:52 $O:S'~$1.00 0~3-$1.48
2 13,000 $4:39 $4~-3- 4.30 X29- 4.30
3 Over 13,000 $9:89 $0.00 $0.00
(2) Multiunit residential and all commercial units as follows:
Upper Limit
Block
(Gallons per Rate per
Thousand
~ffeetive Effective
October 14
Effective
Mounh
per
Gallons
E~leber-1, 30~'~ , October 1, 2009
tl 2008
1 3,000 $9:52 ~8~57--$1.00 1.48
2 Over 3,000 $4.39 ~3- 4.30 X5-29-$4.30
(b) Customers outside the city. The rates applicable to customers outside of the city
shall be one and one-quarter (1.25) times the rates above.
SECTION 2. Severability
If any section, sentence, clause, or phrase of this ordinance is held to be invalid or
unconstitutional by any court of competent jurisdiction, then said holding shall in
no way affect the validity of the remaining portions of this ordinance.
SECTION 3. Effective Date
This Ordinance shall take effect upon its final passage and adoption.
Passed by the City Commission on first reading this _ Day of September, 2008.
Passed by the City Commission on first reading this Day of October, 2008.
John S, Meserve
Mayor /Presiding Officer
AGENDA ITEM # 7F
SEPTEMBER 8, 2008
Approved as to form and correctness: ATTEST:
Alan C. Jensen, Esquire
City Attorney
Donna Bartle
City Clerk
AGENDA ITEM # 7F
SEPTEMBER 8, 2008
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--~-Jacksonville Beach 16.60 22.77 28.94 35.11 41.28 49.26 57.24 65.22 73.20 81.18 89.16
-•Neptune Beach 19.51 26.71 33.91 41.11 48.31 55.51 64.41 73.31 82.21 91.11 100.01
-Atlantic Beach 25.21 26.06 26.91 27.76 34.71 41.66 48.61 55.56 62.51 69.86 77.21
~E-JEA 13.84 19.48 25.12 30.76 36.40 42.04 47.68 53.32 58.96 64.60 70.24
--~E--Atlantic Bch Outside 31.51 32.58 33.64 34.70 43.39 52.08 60.76 69.45 78.14 87.33 96.51
-~~ Atlantic Beach Proposed 25.21 26.81 28.41 30.01 36.33 42.65 48.97 55.29 61.61 68.29 74.97