Item 7B
AGENDA ITEM #7B
JULY 12, 2004
CITY OF ATLANTIC BEACH
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: Restructuring of Water and Sewer Rates
SUBMITTED BY: Jim Hanson, Cit~___v M_ana
DATE: July 2, 2004
BACKGROUND: Attached for your consideration is an ordinance that restructures the city's
water and sewer rates as outlined in the staff report presented in the June
28, 2004 meeting and as described by the city's rate consultants in
previous meetings. The main reason for the restructuring is to create a
water conservation rate that complies with requirements from the St. Johns
River Water Management District to provide a strong fmancial signal to
large residential users for conservation. This rate revision also
accomplishes several other goals set fourth at the beginning of this process
including the elimination of the sewer capital generation charge, a change
the base rate structure so that it is more in line with water and sewer rates
used by other utilities and to amend the commercial water base charges to
reflect meter size similar to the way Atlantic Beach has charged for
commercial sewer base rates in the past and more in line with other water
and sewer companies. This restructured rate will also increase the city's
revenues by an estimated $392,000 per year.
The changes to the commercial water base charges are phased in over a
'"'" four-year period. The Commission expressed a desire to phase in the
commercial rates when the proposed rates were discussed several months
ago during a workshop. The total additional revenue estimated from this
change in charges is just under $12,000 next year and will grow to a total
of $47,666 per year at the end of the four-year phase in period.
~" The biggest impact of this rate restructuring will be felt by the largest
residential water users, which make up a very small percentage of the
city's total customers. They may experience substantial increases in cost,
'~ particularly those that use over 20,000 gallons per month. A great
majority of the city's water customers use between 3,000 and 7,000
~ gallons per month. For these customers, this rate restructuring will result
in an increase in their bills ranging between 0 and 5%. Some of the
smallest customers will actually see a decrease in their monthly charges
~, because of the way the base charge is handled and the elimination of the
capital generation charge.
BUDGET: Adopting the restructured water and sewer rates as proposed will result in
an estimated increase in city revenues of $392,000 per year.
~"
AGENDA ITEM #7B
JULY 12, 2004
RECOMMENDATION: That the City Commission receive input from the public on the proposed
rate restructuring during the two commission meetings in July and adopt a
,~. revised rate structure that satisfies the requirements of the Water
Management District as well as the other goals set forth at the start of this
rate restructuring project as outlined earlier in this report.
AGENDA ITEM #7B
JULY 12, 2004
ORDINANCE 80=04-69
AN ORDINANCE AMENDING CHAPTER 22 UTILITIES,
ARTICLE II, WATER WORKS SYSTEM, SECTION 22-27
DELETING (1) CUSTOMERS WITHIN CITY, (a) SINGLE UNITS,
(b) MULTIPLE UNITS, AND DELETING SECTION 22-27(2)
CUSTOMERS OUTSIDE THE CITY. ADDING SECTION 22-27 (1)
MONTHLY WATER BASE FACILITY CHARGES, PROVIDING
FOR SPECIFIC RATES FOR RESIDENTIAL, COMMERCIAL
AND IRRIGATION BASE FACILITY CHARGES AND
PROVIDING FOR A PHASED IN INCREASE IN COMMERCIAL
WATER BASE FACILITY CHARGES BASED ON METER SIZE
OVER A FOUR YEAR PERIOD, ADDING SECTION 22-27(2)
SCHEDULE OF WATER VOLUME CHARGES, PROVIDING FOR
THE IMPLEMENTATION OF AN BLOCK RATE STRUCTURE
AND CREATING SECTION 22-27(2)(a) ESTABLISHING RATES
AND BLOCKS FOR THE SINGLE FAMII.Y UNITS, CREATING
SECTION 22-27(2)(b) ESTABLISHING RATES AND BLOCKS
FOR THE COMMERCIAL UNITS AND CREATING SECTION 22-
27(2)(c) ESTABLISHING RATES AND BLOCKS FOR THE
SINGLE UNIT IRREGATION ACCOUNTS AND CREATING
SECTION 27(2)(d) ESTABLISHING RATES AND BLOCKS FOR
THE MULTIPLE UNIT AND COMMERCLAL ACCOUNTS,
ADDING SECTION 22-27(3) CUSTOMERS OUTSIDE THE CITY.
AMENDING ARTICLE III, WASTE WATER SYSTEM, DIVISION
7, SEWER RATES AND CHARGES, SECTION 22-166 MONTHLY
BASE CHARGE TO RENAME THE CHARGE. WASTE WATER
BASE FACILITY CHARGE, TO CHANGE THE CHARGE
AMOUNT FOR ALL CLASSES AND TO DELETE SECTION 22-
166(c) MONTHLY BASE SURCHARGE FOR REVENUE
GENERATION. TO AMEND SECTION 22-167 SCHEDULE OF
WASTE WATER VOLUME CHARGES DELETING SECTION 22-
167(a), ~(a)(1), (a)(2) AND REPLACING THEM WITH SECTION 22-
167 (a) ESTABLISHING A BLOCK RATE STRUCTURE, (a)(1)
ESTABLLSHING RATES AND BLOCKS FOR SINGLE FAMILY
INDIVIDUAL METERED HOMES, (a)(2) ESTABLISHING RATES
AND BLOCKS FOR MULTI-UNIT RESIDENTIAL AND ALL
COMMERCIAL UNITS AND DELETING SECTION 22-176
REVENUE GENERATION SYSTEM ESTABLISHED, DELETING
SECTION 22-177 DISPOSITION OF REVENUES FOR SEWER
SYSTEM CAPITAL IMPROVEMENTS, DELETING SECTION 22-
178 USE OF ACCRUED FUNDS, DELETING SECTION 22-179
CERTIFICATION OF REVENUE GENERATION SYSTEM,
DELETING 22-180 ANNUAL DEPOSIT TO SEWAGE SYSTEM
CAPITAL IMPROVEMENT ACCOUNTS AND TO PROVIDE AN
EFFECTIVE DATE.
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AGENDA ITEM #7B
JULY 12, 2004
WHEREAS, Due to declining sales and increased costs of providing services, it
is necessary for the City to generate additional revenues to fund operations and
improvements of the water and sewer utility, and
WHEREAS, the City has determined that additional revenues are also necessary
to meet the City's continued bond coverage requirements, .and
WHEREAS, the City has been directed. by the St. Johns Water Management
District to adopt a water conserving rate structure as a condition of the renewal of the
City's consumptive use permit, and
WHEREAS, the conservation rates are to be applied to residential customers
only. Commercial and multiple unit residential accounts have less control over
discretionary water use, and
WHEREAS, the City is also adopting water conserving rates for irrigation
accounts, and
~, WHEREAS, the current water rate structure has no provision for charging
different base amounts for meters of different sizes. The City is phasing in base charges
for commercial water customers that vazy according to meter size, and
WHEREAS, the City has met the grant funding requirements of the Federal
Environmental Protection Agency and is therefore deleting all reference to the previously
charged State Revenue Generation Chazge. The City is instead going to generate that
same revenue by increasing the sewer base charge amount for all customers inside and
outside the City.
NOW, THEREFORE, BE IT ENACTED BY THE CITY COMMISSION
ON BEHALF OF THE PEOPLE OF THE CITY OF ATLANTIC BEACH,
FLORIDA, that;
Section 1. Chapter 22 of the City Code of Ordinances be amended as
follows:
Sec. 22-27. Charges for water service.
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 aze
hereby fixed and established as follows:
AGENDA ITEM #7B
JULY 12, 2004
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(1) Monthly Water Base Facility Charges for customers inside the City:
A monthly water base facility charge will be levied upon each connection in
accordance with the following:
Residential
Single-family residential and single-family X6.35 per account
individual-metered mobile homes
Multifamil residential 4.77 er unit
Master-metered mobile homes $4.77 per site
Travel trailers 4.77 er site
HoteUmotel 4.77 er room
HoteUmotel with kitchen $4.77 er room
Commercial
Master-metered commercial 6.35 er unit
Restaurants, laundries, and car wash Based on meter size phase in table
connections below
All other commercial customers Based on meter size phase in table
below
Irri ation
All Residential $6.35 der account
All Commercial Based on meter size phase in table
below
Water base facility charges for the commercial classifications are based upon the
meter size and theX will become effective as follows:
~*
AGENDA ITEM #7B
JULY 12, 2004
Meter size (in
inches Effective
Immediately ~ Effective
October 1, 2005 Effective
October 1, 2006 Effective
October 1, 2007
5/8 or 3/4 6.35 $6.35 $6.35 $6.35
1 $6.75 $7.14 $7.54 $7.94
11/~ $8.73 $11.11 13.49 $15.88
2 $11.11 $15.88 $20.64 $25.40
3 $17.46 $28.58 $39.69 $50.80
4 24.61 $42.86 $61.12 79.38
6 $44.45 $82.55 $120.65 $158.75
8 68.26 130.18 $192.09 254.00
X21 Schedule of Water Volume Charees for customers inside the City
(a.~ Single Units.
„~, There aze hereby-established inclining block volume charges for
Single-family residential and single-family individual-metered
mobile homes, per account as follows:
(d.) Multiple unit and Commercial Irri ation
Block Upper Limit
Gallons er Month Rate per Thousand
Gallons
1 3,000 $0.21
2 8,000 $1.74
3 13.000 $2.04
4 18,000 $3.06
5 Over 18.000 4.60
(b. Multi le Units.
There are hereby-established an inclining block volume charge for
all multi-unit residential and multi-unit commercial accounts as
follows:
Block Upper Limit
Gallons er Month Rate per Thousand
Gallons
1 2,000 0.21
2 Over 2,000 1.74
(c.) Single Unit Irrigation
There aze hereby-established an inclining block irrigation volume
chazae for all Single-family residential and single-family
individual-metered mobile homes 'per account as follows•
Block Upper Limit
Gallons er Month Rate per Thousand
Gallons
1 13.000 $2.04
2 18,000 $3.06
3 Over 18,000 $4.60
AGENDA ITEM #7B
JULY 12, 2004
There are hereby-established an inclining block volume charge for
~"" all multi-unit residential irrigation accounts and all commercial
irrigation accounts as follows:
Block Upper Limit
Gallons er Month Rate per Thousand
Gallons
1 3,000 0.21
2 Over 3.000 $1.74
(3) 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 for both monthly water base facility
~ charges and water volume charges.
Section 2. Chapter 22, Article III, Wastewater System. Division 7 be
amended as follows:
Sec. 22-166. Monthly Wastewater BBase Facili Ceharges .
Wastewater Base Facility charges will be levied monthly as follows:
(a) Monthly wastewater base facility charge for customers inside the City.
A monthly base charge ~~+,,.o~„o a„n.,,.~ .,..a +.,>e..+., ~.,e „o..+~ lei ~ ~c~
' will be levied upon each connection in
accordance with the following:
An equivalent residential unit (ERU) is defined as a wastewater
connection that delivers three hundred (300) gallons per day (gpd) of
typically domestic wastewater flow to the waste stream, or equivalent to a
residence serviced by athree-fourths (3/4) inch water meter.
Residential
Single-family residential and single-family
individual-metered mobile homes, per
account $-~?~ $13.29 per account
Multifamil residential, er unit n~ Q'~ 9.97 er unit
Master-metered mobile homes 9:7-5-x ~?~5 9.97 er u~-site
Travel trailers g.6~-x $~?2-~ 7.98 er site
HoteUmotel 8~9-~ ~'~ 6.65 er n~room
HoteUmotel Wwith kitchen 9:69-~ r'~ $7.98 er broom
Commercial
Master-metered commercial Q'~ 13.29 er unit
Restaurants, laundries, and car wash
connections Q'~ 13.29 x ERU factor
All other commercial customers $~~ 13.29 x ERU factor
AGENDA ITEM #7B
JULY 12, 2004
The ERU factor for the commercial classification is based upon meter size
as follows:
Meter size in inches) ERU factor
5/8 or 3/4 $1.00
1 1.28
1 1~2 2.08
2 2.88
3 5.60
4 10.00
6 20.00
(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.
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Sec. 22-167. Schedule of wastewater volume charges.
AGENDA ITEM #7B
JULY 12, 2004
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(a) 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 er Month Rate per Thousand
Gallons
1 3,000 0.45
2 13,000 3.69
3 Over 13,000 $0.00
(2) Multi-unit residential and all commercial units as follows:
Block Upper Limit
(Gallons per Month, per Rate per Thousand
Gallons
Unit
1 3,000 0.45
2 Over 3,000 3.69
(h) 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.
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AGENDA ITEM #7B
JULY 12, 2004
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AGENDA ITEM #7B
JULY 12, 2004
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Section 3. This ordinance shall take effect immediately upon its adoption.
Passed by the City Commission on first reading this day of July, 2004.
Passed by the City Commission on second and final reading this day of July, 2004.
John S. Meserve
Mayor /Presiding .Officer
Approved as to form and correctness:
Alan C. Jensen, Esquire
City Attorney
ATTEST:
~,,, Maureen King, CMC
City Clerk