10-17-2011 - Utility Rate Study Workshop CITY COUNCIL OF EDGEWATER
UTILITY RATE STUDY WORKSHOP
OCTOBER 17, 2011
5:00 P.M.
COUNCIL CHAMBERS
MINUTES
CALL TO ORDER
Mayor Thomas called the Utility Rate Study Workshop to order at 5:00
p.m. in the Council Chambers.
ROLL CALL
Mayor Michael Thomas Present
Councilman Justin Kennedy Present
Councilwoman Gigi Bennington Present
Councilman Michael Ignasiak Present
Councilman Ted Cooper Present
City Manager Tracey Barlow Present
City Clerk Bonnie Wenzel Present
City Attorney Aaron Wolfe Present
MEETING PURPOSE
City Manager Barlow described the purpose of the workshop was to
present where they were with the Water & Sewer Utility Rate Study.
He then turned the meeting over to the Rate Consultant, Michael Burton
with Burton & Associates.
Michael Burton, Burton & Associates, went through the attached
Powerpoint Presentation.
Mr. Burton stopped the presentation before he got to the Owner vs.
Tenant Billing in order for Council to ask questions about the first
half of the presentation.
Councilman Ignasiak stated he was looking at a 35% increase over the
next five years on their bill. He felt this was rather significant.
He questioned this being the structure percentage they need to
maintain their operating capital, do their replacement funds, and
prepare for the future and if this was the minimum level or a higher
level set with a bit of variance in between. Mr. Burton informed him
yes and that this was the level that would be necessary if they take
the revenues they have been producing and the budgeted costs and with
the projections they identified what was appropriate escalation
factors. Councilman Ignasiak asked if they based projections on
assumed increases and costs in other areas. Mr. Burton explained they
tried to be reasonable but conservative. Councilman Ignasiak asked if
1
Council Utility Rate Study Workshop
October 17, 2011
anything was put in for future expansion. Mr. Burton stated he would
have to defer to staff about what was in there that was an expansion
for the capital program. He further commented on a growth curve and
customers in demand.
Councilman Kennedy spoke of having impact fees that would ride along
with that. City Manager Barlow explained they didn't waive the impact
fees associated with water /sewer based on the existing bond they are
paying off. He further spoke of what the impact fees that are
currently being waived were intended for.
Environmental Services Director Brenda Dewees identified the capital
that was included in the Rate Study was for potential regulations
coming about and any capital improvements they will need for the aging
infrastructure.
Councilman Kennedy felt one of the most important things was the
recommendation that they revisit this every year.
Mr. Burton answered questions presented by Councilman Cooper regarding
the $7 million infrastructure being in there and figuring a half a
million dollars in debt service for the ten years; and the amount of
surplus with regard to the annual debt service.
Ms. Dewees explained for Councilman Cooper that it is more costly for
sewer over water because on a general scale they have a lot more
infrastructure that requires electricity on the sewer side as well as
additional treatment costs. The City has 50 lift stations for sewer
compared to 20 wells for water.
Councilman Cooper asked if part of the problem was the permitting fee
being paid to St. Johns to discharge effluent into the Indian River.
Ms. Dewees explained if they weren't discharging the permit fee
wouldn't go away. They would still have to be permitted through DEP
and they have an annual average that they are allowed to permit.
Councilman Cooper questioned this affecting the charge. Ms. Dewees
explained the difference would be if they had potential reclaimed
customers where they would have that revenue coming in.
Councilman Cooper was looking for efficiencies and inefficiencies. He
asked if they were doing anything wrong or if there was any way they
could save money without putting the burden on the taxpayer. Mr.
Burton informed him Edgewater was the third lowest in the surveying
area. He felt they would come out pretty good because they have low
rates compared to everyone else. He felt they were pretty efficient
as they stand right now.
Councilman Cooper commented on looking to improve escalating sales to
hook up to the reclaimed water. He asked about the 6% automatic
increase. City Manager Barlow informed him it was a year ago and was
2
Council Utility Rate Study Workshop
October 17, 2011
for a five year program. Councilman Cooper commented on the 6%
handling everything in the first two years. He further spoke of the
jump going into the third year, especially in Stormwater. If they are
ahead of the scale at that time, he felt they may be able to hold the
line on 6 %. He questioned what that would do to their overall
projections. Mr. Burton informed him it would only affect the fiscal
year they are in now because it would be a January 1 implementation.
Councilman Cooper stated because the 6% was already there and already
in their budget, if they left that alone and looked at revising the
plan to start next year, if they would gain from holding off a year or
two. Mr. Burton stated the City did not make the 6% increase on
October 1 in anticipation of the Rate Study. Finance Director
McKinney stated at the workshop he requested permission to hold off
the increase until after this presentation. Mr. Burton stated at the
bare minimum, they would need to adopt the 6% across the board
increase effective January 1 Councilman Cooper identified his
concerns with having already done the budget and the perception they
would be giving to the public.
Councilman Kennedy questioned who has the bigger meters and who would
get these rate increases. Ms. Dewees identified there were 170
accounts that were over 3 41" that would be affected by the difference in
the commercial rates. City Manager Barlow pointed out that was out of
over 10,000 accounts.
There was further discussion regarding how much the commercial rates
would affect businesses. Ms. Dewees referred to the Coronado Paint
building that has been sitting vacant who has eight 3/4" meters and
two 1" meters. Their minimum bill for the vacant building would go up
approximately $65 per month with the ten meters.
There was further discussion regarding the businesses that would be
affected and giving incentives to install water conservation
appliances to get new businesses and existing businesses to convert
over to those conservation devices.
City Manager Barlow commented on having the tiers in the rates to
encourage water conservation.
Councilman Kennedy commented on possibly in the future entertaining a
city -wide promotion for those converting to water conservation
devices.
Councilman Cooper commented on the average being a little over 3,000
gallons on a regular family and questioned how many was a regular
family. Mr. Burton explained they took the single family accounts and
their usage and came up with the average. City Manager Barlow
identified that 55.6% of all of their bills are 3,000 gallons or less.
3
Council Utility Rate Study Workshop
October 17, 2011
He further commented on Edgewater being predominantly single family
residential.
Mr. Burton further commented on the large meter customers and having
to have capacity on hand to meet the potential demand of that
customer.
Councilwoman Bennington referred to Page 13 - Conclusions &
Recommendations. She questioned if the Revenue Produced by Current
Rates is Not Sufficient to Address Annual Operating, Capital, Debt and
Reserve Requirements was the situation they were in now. Mr. Burton
explained if they didn't implement the rate increases, they really
don't have enough revenue to meet all those requirements. He
confirmed that they have to at least do the 6 %.
Councilman Cooper commented on the project sitting west of I -95 that
can start whenever they want. He asked how that begins to blow the
study apart due to this doubling Edgewater's population. Mr. Burton
identified if that happened that it would be good. Councilman Cooper
was worried about the maximum capacity versus they don't have the
capacity and now they need a plan. Ms. Dewees spoke of the Wastewater
Facility Plan encompassing Restoration and outlining that they have
the capacity for Phase 1 and as they are building they will be paying
impact fees so when they need the capacity they will have those impact
fees to increase the capacity at both plants.
City Manager Barlow spoke of Council adopting going to 6% next year.
This study has confirmed that is an absolute need and has been
validated. They would continue to work with Mr. Burton to fine tune
the remainder of those going forward and also come back and talk about
those prorations based on the industrial side. He spoke of it being
up to staff to see what they can do to be a more efficient operation
to see if they can keep the rate increases at 6% in years four and
five.
Councilwoman Bennington asked City Manager Barlow if he wanted Council
to tell Mr. Burton to go ahead with the study the way he as presented
it with the tiered system. City Manager Barlow stated and tell staff
to continue to work with him while they try to micromanage the process
to try to shave some of the 7.5% in years four and five.
Councilman Cooper asked if they would change the tiers right away.
City Manager Barlow identified it would be the recommendation of staff
to change the tier from 2,000 to 3,000, which would be brought back to
Council in the Rate Study. They are going to massage some of those
because those would influence another area they still have work to do
with regard to the large meters.
Mr. Burton recommended when they come back to Council at the hearing
to have what they have here and they will have the customer impacts
4
Council Utility Rate Study Workshop
October 17, 2011
they have asked for with regard to the commercial customers and have
another alternative that wouldn't be as aggressive a move to the
larger meter size and then of course they always have the across the
board.
Mr. Burton continued his Powerpoint Presentation by describing Owner
vs. Tenant Billing.
Mr. Burton recommended along with staff that they adopt Option 3
(Hybrid) Split Bill Between Owner & Tenant.
Councilwoman Bennington questioned in Option 2 and Option 3 how the
City would know when a tenant leaves. City Manager Barlow commented
on having some recent discovery that they may not be able to split the
bill. The only minor change there would be the base and water bill
would go to the tenant due to only being able to bill on one meter.
The base fee and consumption would go to the tenant and the landlord
would be responsible for the stormwater and refuse.
Councilwoman Bennington commented on the problem they have now and the
complaints she has heard regarding the tenant leaving and the landlord
being stuck with the bill. City Manager Barlow further identified
ways to handle this issue.
Councilman Cooper suggested making a policy program with landlords due
to the landlord ultimately being responsible for the property.
Councilman Kennedy commented on State law not allowing landlords to
turn the water off on a tenant and being subject to fines.
Councilman Kennedy questioned tenants leaving $150 deposits, which
should cover two months worth of bills, and how this would cost them
any more than it already does. He also questioned how much staff time
is put into doing liens and how many of the liens are they not ever
going to recover. He further identified he felt tenants who put up a
deposit on the account are going to act more responsibly when they are
leaving that property.
Mayor Thomas suggested Councilman Kennedy come up with Option 4 and
they would look at it. Councilman Kennedy felt his Option 4 was
Option 2.
There was further discussion regarding the differences between Option
2 and Option 3.
City Manager Barlow spoke of placing the garbage on the annual tax
bill and questioned how many cities in Volusia County were doing that
now. Mr. McKinney identified 3 cities as well as the County were
doing that now. City Manager Barlow further identified the benefits
of placing the garbage on the annual tax bill.
5
Council Utility Rate Study Workshop
October 17, 2011
Councilman Kennedy didn't have a problem with Option 3. He felt by
collecting deposits they reduce the City's exposure.
City Manager Barlow needed a consensus on Option 1, 2 or 3.
Councilman Cooper, Councilman Ignasiak, Mayor Thomas and Councilwoman
Bennington were all for Option 1.
Councilman Kennedy was for Option 2 or 3.
ADJOURNMENT
There being no further business to discuss, the Workshop adjourned at
6:03 p.m.
Minutes submitted by:
Lisa Bloomer, CMC
6
Council Utility Rate Study Workshop
October 17, 2011
City of Edgewater
Water &Sewer Utility Rate
CITY COUNCILWORKSHOP
October 17,201 1
►Presented by:
BURTON &ASSOCIATES
►Michael Burton, President — Burton & Associates
Study
High -Level Summary of Findings
Scope of Study
Financial Management Plan
Key Issues
Rate Revenue Adjustments
FY 2012 Rate Structure Options
Schedule of Current &Proposed Rates
Residential Customer Impacts
FY 2012 Residential Water &Sewer Bill Comparison
Conclusions &Recommendations
Owner vs.Tenant Billing Options
Discussion
2 BURTON & ASSOCIATES
EDGE,WEITER Introduction of Burton & Associates
Burton &Associates Firm Background
Multi -year financial planning and rate services to local
governments since 1988
Emphasis in water resources financial planning & rates
Some of our clients in the area
Daytona Beach, Deltona, Bunnell, Seminole County, Orange County, St.
Johns River Water Management District
Some of our clients around the state
Pinellas County, Ft. Myers, Clearwater, Sarasota, Cocoa, St. Petersburg
Project Staff
Mike Burton — President & Project Director
Andy Burnham — Senior Vice President & Project Manager
Mike Francis — Consultant & Project Analyst
3 BURTON & ASSOCIATES
city -f ED GEWATER Hig �l -Level Summary of Findings
Recommended FY 12
rates will result in a
$0.10 increase to the
average residential bill
Versus a $2.44 increase
that would result from
the 6% increase included
in the rate resolution
Will continue to be
one of the lowest cost
providers in the area
Multi -year plan of
future rate increases
At levels comparable to
current resolution and
consistent with national
and local trends
M
Entity
Water Bill
Sewer Bill
Total Bill
Flagler County
$48.50
$28.58
$77.08
Bunnell
$31.85
$36.54
$68.39
Deland
$18.56
$35.91
$54.47
South Daytona
$23.00
$28.68
$51.68
Volusia County - East (S)
$21.57
$28.75
$50.32
Flagler Beach
$27.14
$23.01
$50.15
Titusville
$16.55
$31.34
$47.89
Palm Coast
$25.28
$21.42
$46.70
Volusia County - West (US)
$16.92
$28.75
$45.67
Holly Hill
$21.29
$24.04
$45.33
Seminole County
$14.37
$30.62
$44.99
Daytona Beach
$21.25
$23.71
$44.96
Oveido
$12.65
$31.73
$44.38
New Smyrna Beach
$14.44
$27.51
$41.95
Edgewater - Proposed
$15.22
$25.60
$40.82
Edgewater - Current
$17.10
$23.62
$40.72
Port Orange
$16.16
$21.28
$37.44
Orange City
$16.43
$20.15
$36.58
Sanford
$11.66
$23.38
$35.04
Ormond Beach
1 $14.89
1 $19.72
1 $34.61
BURTON & ASSOCIATES
file il
EDG,,WATER Scope of Study
. Develop a multi -year financial management plan that will:
Satisfy annual operating and capital cost requirements
Ensure compliance with the terms of existing and new debt
Establish and maintain adequate operating and capital reserves
2. Prepare comparative rate survey
FY 2012 residential monthly water and sewer bill comparisons
3. Rate Structure /Design Analysis
Recommend adjustments for implementation in FY 2012 to conform
to industry practice, maintain affordability, promote conservation, etc.
4. Assist City in evaluating owner and tenant billing options
5 BURTON & ASSOCIATES
Financial Management Plan:
EDGEWATER Key Issues
Increases in Existing Debt Service
SRF Loan principal payments resume in FY 14 (Avg of $1.5M per year)
Funding of Capital Improvement Program
$7 million of borrowing required (annual debt service of $0.5M)
Rates need to provide for adequate annual funding of future R &R
Maintaining Sufficient Operating Reserves
Target: 6 months of Operating & Maintenance Expenses ($2.75M in FY 12)
Indicative of "Strong" Utility Systems per Guidance Published by the Municipal
Utility Rating Agency, Standard & Poor's
Maintaining Sufficient Debt Service Coverage
Target: Net Revenues at least 1.5 times greater than annual debt service
Indicative of "Strong" Utility Systems per Guidance Published by the Municipal
Utility Rating Agency, Standard & Poor's
6 BURTON & ASSOCIATES
Financial Management Plan:
ED�EwATER Rate Revenue Adjustments
Plan of Annual Water &Sewer Rate Revenue Increases
Funds existing and new debt service requirements
Reflects allocation of costs between systems
Comparable to approved plan and consistent with national and local trends
Current rate resolution reflects 6% annual water & sewer rate increases in FY 12 — FY 15
Water
2.5%*
2.5%
5.5%
5.5%
5.5%
Sewer
9.5%*
9.5%
9.5%
9.5%
9.5%
Combined
6.0%*
6.0%
7.5%
7.5%
7.5%
Effective Date
1/1/12
10/1/12
10/1/13
10/1/14
10/1/15
*FY 2012 revenue increase achieved within recommended rate structure
adjustments which significantly reduces impact to low and average users
--------------------------------------------- ..__.----- __- ____ -__._
7 eiURTON & ASSOCIATES
ED GEWATER
FY 2012 Rate Structure Options
Two options for FY 12 rates:
"Across- the - board" application of increases vs. New Rate Structure
Changes within New Rate Structure:
Increase rates in highest tiers
Scale base charges and consumption in each tier for larger meter sizes
Reduce
base charge per
unit for master meter
residential accounts
(based on use per unit vs.
individually metered
residential)
Expand first tier to include 3,000 gallons (instead of 2,000)
Include FY 12 revenue increase from financial management plan
2.5% revenue increase for water & 9.5% revenue increase for sewer
Future rate revenue increases (FY 13 and beyond) would be
applied "across- the - board" to FY 12 rates
8 BURTON & ASSOCIATES
C n "i
EDGE WATER
Proposed Rates
Key Features of Proposed FY 12 Rates:
First tier /block expanded from 2,000 gallons to 3,000 gallons
Single - Family base charges are scaled by meter size
Commercial base charges and tiers /blocks are scaled by meter size
Multi- family base charges and tiers /blocks are per dwelling unit
9 BURTON & ASSOCIATES
I ED�EwATEa
Schedule of Current 8v Proposed Rates
Fixed Charge: Charge per Month
Single Family Multi - Family Comm
$9.91 $9.91 $9.91
Usage Charge:
Block
0-2,000
2,001 - 6,000
6,001 - 12,000
> 12,000
PW-O 44
Rate per 1,000 gallons
Single Family Multi-Family(l) Comm 2
$1.55 $1.55 $1.55
$4.09 $4.09 $4.09
$4.83 $4.83 $4.83
$6.20 $6.20 $6.20
(1) Blocks scaled by number of units
(2) Blocks not scaled by meter size
Fixed Charge: Charge per Month
Single Family Multi - Family Comm
$11.83 $11.83 $11.83
Usage Charge: Rate per 1,000 gallons
Block Single Family Multi - Family Comm
All Usage $3.93 $3.93 $3.93
Fixed Charge:
Charge per Month
Single Family
Multi - Family
Comm
$9.91
$8.92
$9.91
Usage Charge:
Rate per 1,000 gallons
Block
Single Family
Multi- Family(3)
Comm 4
0-3,000
$1.77
$1.77
$1.77
3,001 - 6,000
$4.67
$4.67
$4.67
6,001 - 12,000
$6.26
$6.26
$6.26
> 12,000
$9.08
$9.08
$9.08
(3) Blocks scaled by number of units
(4) Blocks scaled by meter size
Fixed Charge: Charge per Month
Single Family Multi - Family Comm
$11.83 $10.65 $11.83
Usage Charge: Rate per 1,000 gallons
Block Single Family Multi - Family Comm
All Usage $4.59 $4.59 $4.59
BURTON & ASSOCIATES
A,
EDGEWATER Single - Family Residential Impacts
Single Family 3/4"
Meter Monthly Water & Sewer Bill Calculations
Across the Board Increase
(Gallons)
%of Bills
Aee. °/a
Current (FY 111
Proposed
(FY 1,_
°%Chi
FY 2012
S C_ hh
%o h
-
12.8%
12.8%
$
21.74
$
21.74
$
_.
23.11
1.37
6.3%
11000
10.4%
23.2%
$
27.22
$
28.10
$
0.88
3.2%
29.00
$
1.78
6.6°
21000
15.8%
39.0%
$
32.70
$
34.46
$
1.76
5.4%
$
34.90
$
2.20
6.7/'U
31000
16.6%
55.6%
$
40.72
$
40.82
$
0.10
0.2%
$
43.39
$
2.67
6.6%
41000
14.4%
70.0%
$
48.74
$
50.08
$
1.34
2.7%
$
51.89
$
3.15
6.5%
51000
10.2%
80.1%
$
56.76
$
59.34
$
2.58
4.5%
$
60.38
$
3.62
6.4%
61000
6.8%
87.0%
$
64.78
$
68.60
$
3.82
5.9%
$
68.88
$
4.10
F ' I,
71000
4.2%
91.2%
$
73.54
$
79.45
$
5.91
8.0%
$
78.13
$
4.59
6.2ro
81000
2.8%
94.0%
$
82.30
$
90.30
$
8.00
9.7%
$
87.39
$
5.09
6.2"
91000
1.8%
95.8%
$
91.06
$
101.15
$
10.09
11.1%
$
96.64
$
5.58
6.1
101000
1.2%
97.0%
$
99.82
$
112.00
$
12.18
12.2%
$
105.89
$
6.07
6.1%
11,000
0.8%
97.8%
$
108.58
$
122.85
$
14.27
13.1%
$
115.15
$
6.57
6.0%
12,000
0.5%
98.4%
$
117.34
$
133.70
$
16.36
13.9%
$
124.40
$
7.06
6.0%
13,000
0.4%
98.8%
$
127.47
$
147.37
$
19.90
15.6%
$
135.06
$
7.59
6.0 °b
141000
0.3%
99.0%
$
137.60
$
161.04
$
23.44
17.0%
$
145.72
$
8.12
5.91/4
15,000
0.2%
99.2%
$
147.73
$
174.71
$
26.98
18.3%
$
156.38
$
8.65
5.9`,"
16,000
0.1%
99.3%
$
157.86
$
188.38
$
30.52
.19.3%
$
167.04
$
9.18
5.8%
17,000
0.1%
99.5%
$
167.99
$
202.05
$
34.06
20.3%
$
177.69
$
9.70
5.8%
18,000
0.1%
99.5%
$
178.12
$
215.72
$
- � cn
$
188.35
$
10.23
5 �nl
19,000
0.1%
99.6%
$
188.25
$
229.39
$
41.14
21.9lk
$
199.01
$
10.76
5. /vo
20,000
0.0%
99.6%
$
198.38
$
243.06
$
44.68
$
209.67
$
87% of all bills were issued for 3/4" Single Family Customers
BURTON & ASSOCIATES
Combined Water & Sewer Bill Survey at 3,000 Gallons per Month
Flagler County
Bunnell '
Deland
South Daytona
Volusia County - East (S)
Flagler Beach
Titusville
Palm Coast
Volusia County - West (US)
Holly Hill
Seminole County
Daytona Beach
Oveido
New Smyrna Beach
Edgewater - Proposed
Edgewater - Current
Port Orange
Orange City
Sanford
Ormond Beach
12
$51.68
$47.89
$41.95
►3,000 gallons or less per month
represents 55.6% of Residential bills
BURTON & ASSOCIATES
FY 12 Residential
Water
&, Sewer
EDGE,WATER
Bill Comparison:
3,000
Gallons
Combined Water & Sewer Bill Survey at 3,000 Gallons per Month
Flagler County
Bunnell '
Deland
South Daytona
Volusia County - East (S)
Flagler Beach
Titusville
Palm Coast
Volusia County - West (US)
Holly Hill
Seminole County
Daytona Beach
Oveido
New Smyrna Beach
Edgewater - Proposed
Edgewater - Current
Port Orange
Orange City
Sanford
Ormond Beach
12
$51.68
$47.89
$41.95
►3,000 gallons or less per month
represents 55.6% of Residential bills
BURTON & ASSOCIATES
Ii"M
EDGEWATER
Conclusions &, Recommendations
Revenue Produced by Current Rates is Not Sufficient to Address
Annual Operating, Capital, Debt, and Reserve Requirements
Multi -year Plan of Rate Revenue Adjustments is Required
Comparable to current approved plan as well as national and local trends
Consider Rate Structure Modifications for FY 2012
Conform to accepted industry practice
Provide a greater allocation of costs and price incentive for conservation to
large users
Maintain affordability for low and average users
Update Financial Management Plan Periodically
Recommend annually or bi- annually
Adjust plan as appropriate to account for changes in costs, demands, growth
rates, regulatory requirements, borrowing costs, etc.
3 BURTON & ASSOCIATES
City currently bills property owner for all water and
sewer charges for rental properties
Concern of certain stakeholders with current practice
In some cases, property owners are left with unpaid bills that they cannot
recover from tenants after they have gone
City staff requested our input based on industry experience
Identified 3 alternatives for billing of water and sewer services
Determined the pro's and con's of each alternative
Conclusions & Recommendations
14 BURTON & ASSOCIATES
Ii-, TER Option l: Bill Property Owner
Key Feature:
Status quo
Pro's:
Limits the City's exposure to uncollectibles
Ensures any uncollectibles associated with a property stay with
that property and do not impact other ratepayers
Least administratively burdensome
Con's:
Provides the potential for a tenant to avoid paying for services
received resulting in a financial burden to the property owner
Tenant has risk for service interruption due to owner non-
payment
15 BURTON & ASSOCIATES
(i"of •
EDGEWATER Option 2: Bill Tenant
Key Featu re:
City would maintain level of deposits and keep them for tenant accounts
Pro's:
Places burden for payment of utility services on person /entity receiving
service
Removes exposure of property owner to unpaid or under - funded utility
services
Con's:
Would increase the City's level of uncollectibles
Based on industry experience, it is estimated to increase uncollectibles by an
amount approximately equal to I% of rate revenue (about $75,000)
Meaning an additional I% rate increase would be required to offset impact
Uncollectibles for a property would impact other ratepayers
More administratively burdensome as the account responsibility would
revert to owner during periods of vacancy
16 BURTON & ASSOCIATES
Option 3: (Hybrid) Split Bill
EDGEWATER Between Owner 8, Tenant
Key Features:
Base charges for Water and Sewer and volume /usage charges to tenant
City would maintain level of deposits and keep them for tenant accounts
City would send an annual Stormwater Bill to the property owner
Refuse and Recycling would be added to the annual tax bill
Pro's:
Limits exposure of property owner to unpaid utility services of tenants by about 50%
Matches costs to beneficiary;
"Readiness -to- serve" charges for service availability to tenants
Volume /usage charges to the tenant receiving /using the service
Allows property owner to identify fixed costs for refuse, recycling and stormwater and ensure
pass through in rental charges
Con's:
Potential increase in uncollectibles (will be offset to a certain extent by deposits)
Uncollectibles for a tenant may impact other ratepayers if in excess of deposits
Most administratively burdensome option
Extra billing and postage costs and additional customer service expenses for more accounts
Not anticipated to rise to the level of requiring additional rate impact
Account responsibility would revert to owner during periods of vacancy
17 BURTON & ASSOCIATES
EDGEiWATER Conclusions 8, Recommendation
Option 1 (Owner) is simplest, has the lowest /least risk to
the City, but is least effective in terms of ensuring the
entity receiving service pays for it
Option 2 (Tenant) is simple, has the highest risk to the
City, and is most effective in terms of ensuring the entity
receiving service pays for it
Option 3 (Hybrid) is more administratively complex, has
moderate risk to the City, and does a reasonable job in
terms of ensuring the entity receiving service pays for it
If the City is to change from its current practice (Option
1), we would recommend that the City choose Option 3
18 BURTON & ASSOCIATES
EDGEWATER Discussion
19 BURTON & ASSOcIATES