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Exh 7EAGENDA ITEM #7E SEPTEMBER 23, 2002 ORDINANCE N0. 80-02-65 AN ORDINANCE OF THE CITY OF ATLANTIC BEACH, FLORIDA INCREASING THE MONTHLY STORM WATER UTILITY FEE BY AMENDING CHAPTER TWENTY TWO, UTILITIES ARTICLE IV STORM WATER MANAGEMENT, DIVISION 2 RATES AND CHARGES, SECTION 22-335. FEES; PROVIDING FOR INTENT; PROVIDING FOR THE ADOPTION OF A NEW .RATE; PROVH)ING FOR SEVERABH,ITY; PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the cost of mauitaining the storm water utility system has risen dramatically since the utility was created; and WHEREAS, the long term goal of the City is to some day recover the entire cost of the storm water utility system through user fees; and WHEREAS, the current rzte of $3.00 per ERU per month is insufficient to recover those costs, and WHEREAS, the City Cornmission of the City of Atlantic Beach, Florida desires to adopt a higher monthly fee per ERU for storm water utility operations, NOW THEREFORE, BE IT ENACTED BY THE CITY COMMISSION ON BEHALF OF THE PEOPLE OF THE CITY OF ATLANTIC BEACH, FLORIDA: that; SECTION 1. Intent It is the intent of the City of Atlantic Beach Florida to raise the monthly fee for storm water utility services from $3.00 to $4.00 per equivalent residential unit (ER(~. SECTION 2. Section 22-335 Fees; is amended as follows: Sec. 22-335. Fees. (a) ERU rate. The fee per ERU billing unit shall be :acc ,:~"°-~ four dollars ($4.00) per month. SECTION 3. SEVERABILITY The provisions of this ordinance are declared to be severable and if any section, sentence, clause or phrase of this ordinance shall, for any reason, be held to be invalid or unconstitutional, such decision shall not affect the validity ofthe AGENDA ITEM #7E SEPTEMBER 23, 2002 ORDINANCE NO. 80-02-65 CITY OF ATLANTIC BEACH PAGE TWO remaining sections, sentences, clauses and phrases ofthis ordinance, but the same shall remain in effect, it being the legislative intent that this ordinance shall stand notwithstanding the invalidity of any part. SECTION 4. REPEALER All ordinances in conflict herewith are, to the extent of such conflict, hereby repealed. SECTION 5. EFFECTIVE DATE This ordinance shall take effect immediately upon its passage by the City Commission of the City of Atlantic Beach, Florida. Passed by the City Commission on Srst reading this day of September 2002. Passed by the City Commission on second reading this day of September 2002. John S. Meserve Mayor /Presiding Officer Approved as to Form and Correctness Alan C. Jensen, Esquire City Attorney ATTEST: Maureen King, CMC City Clerk AGENDA ITEM #7E SEPTEMBER 23, 2002 City of Atlantic Beach Revenue Sufficiency Analysis Storm Water Utility Fund Purpose: The object of this analysis is to highlight the issue of storm water utility fees in relation to the programmed expenses related to providing that service. Background: As of Fiscal Year 2001, all estimated costs for providing storm water related services including maintenance; debt service and small local projects have been captured in one place. The costs of maintenance of the storm water collection system have previously been recorded in the General Fund, where the crews that do the maintenance have been budgeted. Now that the costs have been accumulated in one place, compazing that total with the revenues generated, it is clear that the fees do not begin to recover the cost. As a result, funding for this program is heavily subsidized from the General Fund and the Gas Tax fund. Revenue and Cost Comparison: Below is a table showing the estimated revenues with existing rates, increased rate as proposed and total costs expressed in terms of a rate that would be necessary to pay for that service. Revenues Dollars Dollars er ERU From Existing Rates $269,631 $3.00 From $1/ERU increase $89,877 $1.00 Total Bud eted Revenues $359,508 $4.00 Ex eases Personal Services $250,209 $2.79 O erating Ex eases $382,639 $4.29 Ca ital Outla $40,000 $.45 Debt Service $331,148 .$3.69 Total Ex enses• $1,003,996 $11.17 Amount of subsidized costs $644,488 $7.17 Summary: As you can see from the table above, the Storm Water Utility would require an $11.17 per ERU rate to recover 100% ofthe estimated costs. This cost analysis is based on the proposed budget for FY-2003 without any fimding for the Storm Water Master Plan. Recommendation: For this budget and fixture budgets, the City needs to do all possible to m;n;m;ze costs and. determine if it is our intent to recover all costs with fees, or continue with the subsidy. Currently there is more subsidy than revenues generated from rates. The increased level of service of the storm water maintenance program competes directly for General Fund and Gas Tax Fund revenues and should be evaluated with street maintenance, and all other General Fund program expenditures in mind.