R5C-Amend Ch 110 Increase Water And Sanitary Sewer Rates -Wolfson-COMMISSION ITEM SUMMARY
Condensed Title:
An Ordinance Of The Mayor And City Commission Of The City Of Miami Beach, Florida, Amending Appendix A,
Entitled "Fee Schedule," To Chapter 1 10 Of The Miami Beach City Code, Entitled "Utilities," Article lv, Entitled "Fees,
Charges, RatesAnd Billing Procedure," Division 2, Entitled "Rates, FeesAnd Charges," Section 110-166, Entitled
"Schedule Of Water Rates And Tapping Charges," And Section 1 10-168, Entitled "Sanitary Sewer Service Charge," To
lncrease The Rate For Water Service Charges ln Excess Of The Minimum Service Charge; And To lncrease The
Sanitary Sewer Service Charge By The Same Percentage Enacted By Miami-Dade Water And Sewer Department
(WASD) Pursuant To Section 1 10-168; Providing For Codification, Repealer, Severability, And An Effective Date.
Maintain the Citv's infrastructure.
Data Environmental Scan. etc.):
Item Summary/Recommendation :
The Miami-Dade Water and Sewer Department has informed allwholesale customers that the proposed water
rate for FY16 would decrease by $0.0475 to $1.7341 per 1,000 gallons. WASD has also notified wholesale
customers that their proposed sewer rate will be $2.7879, an increase of $0.2279 from the current rate of $2.56
per 1,000 gallons. The cost of the proposed FY16 sewer rate increase to Miami Beach is approximately 8.9%.
The current rate of $4.43 per thousand gallons is insufficient to cover the cost of providing water service. Based
on the proposed FY16 budget, the water rate would need to be increased by 5o/o to $4.65 per 1,000 gallons in FY
16 .The increase to the water rate is required to cover debt service on approximately $35 million in water capital
needs over the next few years. ln addition $9.6 million will go towards the completion of the neighborhood
projects included in the FY15 and FY16 capitalbudget.
The current rate of $7.55 per thousand gallons is insufficient to cover the cost of providing sewer service. Based
on the proposed FY16 budget, the sewer rate would have to be increased by 8.9% to $8.23 per thousand gallons
in FY16. Rate increases are needed to cover debt service requirements of a proposed $18 million sewer debt
issuance in FY16 and to cover further increases in costs (due to inflation, etc.) beyond FY15. Approximately $5
million of will go towards the completion of neighborhood projects included in the FY15 and FY16 capital budget.
Based on the above, the Administration recommends that the City Commission approve a rate increase forwater
customers of $0.22 and a rate increase for sewer customers of $0.68 effective October 1,2015. For the average
1 1 ,000 gallons per month customer, the combined water and sewer rates result in a monthly increase of $9.90 in
FY16. For the minimum usage customer (5,000 gallons or less per month), the combined monthly impact would
be a total of $4.50.
The Administration recommends moving forward with the recommended modifications to the water and sewer fee
ordinances including allocation of appropriate costs to the Satellite Cities.
THE ADMINISTRATION RECOMMENDS APPROVING THE AMENDMENT TO THE ORDINANCE ON
SECOND PUBLIC HEARING.
At the Finance and CihTwide Projects Committee (FCWPC) meeting of July 17,2015, Public Works staff
the MSA report and summarv of their findinos and recommendations.
Financial lnformation :
Source of
Funds:
OBPI
Amount Account Approved
1
Tota!
Clerk's Office
t:\agenda\201S\september\september 30 meeting\public works\fy15 water and sewer rate
Sign-Offs: Department Assistant City Manager
AGENDAJT1T &# M:AMIBTACH
114
g MIAMIBEACH
City of Miomi Beqch, I700 Convention Center Drive, Miomi Beoch, Florido 33'l39, www.miomibeochfl.gov
N MEMORANDUM
Mayor Phillip Levine and Members
Jimmy L. Morales, City Manager
September 30, 2015
SUBJECT:AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI
BEAGH, FLORIDA, AMENDING APPENDIX A, ENTITLED "FEE SCHEDULE," TO
CHAPTER 110 OF THE MIAMI BEACH CITY CODE, ENTITLED "UTILITIES," ARTICLE
lv, ENTITLED "FEES, CHARGES, RATES AND BILLtNG PROCEDURE," DIVISION 2,
ENTTTLED "FIATES, FEES AND CHARGES," SECTTON 110-166, ENTTTLED
..SCHEDULE OF WATER RATES AND TAPPING CHARGES," AND SECTION 110.168,
ENTITLED "SANITARY SEWER SERVICE CHARGE," TO INCREASE THE RATE FOR
WATER SERVICE GHARGES IN EXCESS OF THE MINIMUM SERVICE CHARGE; AND
TO INCREASE THE SANITARY SEWER SERVICE CHARGE BY THE SAME
PERCENTAGE ENACTED BY MIAMI.DADE WATER AND SEWER DEPARTMENT
(WASD) PURSUANT TO SECTION 110-168; PROVIDING FOR CODIFICATION,
REPEALER, SEVERABILITY, AND AN EFFECTIVE DATE.
ADMINISTRATION RECOMMENDATION
The Miami-Dade Water and Sewer Department has informed all wholesale customers that the
proposed water rate for FY16 would decrease by $0.0475 to $1.7341 per 1,000 gallons.
WASD has also notified wholesale customers that their proposed sewer rate will be $2.7879, an
increase of $0.2279 from the current rate of $2.56 per 1,000 gallons. The cost of the proposed
FY16 sewer rate increase to Miami Beach is approximately 8.9%.
The Administration recommends approving the Amendment to the Ordinance on Second Reading,
Public Hearing.
ANALYSIS
The City's utility rates for water and sanitary sewer services are structured to collect the necessary
revenues to meet annual operating and maintenance costs of the water and sanitary sewer
infrastructure, to cover debt service for water and sewer bonds, to maintain adequate operating fund
reserves, and, to pay Miami-Dade County for wholesale water purchased, the treatment of the City's
sewage and other fees.
ln general, the rates for water supply and sanitary sewer services consist of:o Pass-through of the wholesale rate the City pays to Miami-Dade County for
the purchase of potable water and treatment of sewage;o Debt service for the Water and Sewer Revenue Bonds;. Operating and maintenance costs for the water and sewer utility;
TO:
FROM:
DATE:
the City
SECONDREADING
PUBLIC HEARING
115
Commission Memo
September 30, 201 5
Water and Sewer Rafe Ordinance Memo
Page 2 of 3 . 7.5o/o fee of previous year total revenue paid to the Miami-Dade County
Environmental Resource Management Department (DERM).
FY2015/16 Miami Dade Countv Wholesale Water and Sewer Rates
The Miami-Dade Water and Sewer Department has informed all wholesale customers that the
proposed water rate for FY16 would decrease by $0.0475 to $1.7341 per 1,000 gallons. The
operational expenditure decreases for the County are due to projected operating expenses, debt
service increases in FY16, and other revenue, charges and adjustments such as reserve
requirements, decreased interest earnings and renewal and replacement.
WASD has also notified wholesale customers that their proposed sewer rate will be $2.7879, an
increase of $0.2279 above the current rate of $2.56 per 1,000 gallons. The cost of the proposed
FY16 sewer rate increase to Miami Beach is approximately 8.9%.
The wholesale water and sewer rates were approved by the Board of County Commissioners at their
Public Budget Hearings on the first and second readings on September 3, 2015 and September 17,
2015, respectively.
Water and Sewer Revenue Review Recommendations
Millian, Swain & Associates, lnc. (MSA) were retained to assist in evaluating the level of revenues
produced by current water and sewer rates and the potential need for rate adjustments. The
following are their findings:
Water Revenue Review and Recommendation
An increase in debt service payments for new bonds is the driver for the potential FY16 deficit.
1 . The current rate of $4.43 per thousand gallons is insufficient to cover the cost of providing water
service. Based upon the proposed FY16 budget, the water rate would need to be increased by
5olo to $4.65 per 1,000 gallons in FY16.
2. The increase is required to cover debt service on approximately $35 million in water capital
needs over the next few years. ln addition $9.6 million will go towards the completion of
neighborhood projects included in the FY 15 and FY 16 capital budget including the following
projects: West Avenue/Bay Road lmprovements, City Center (Convention Center), and La
Gorce Neighborhood lmprovements.
3. The City will receive a $3.3 million WASD true up credit for consumption from FY 14. This
results in an anticipated WASD payment of $1 0.6 million for FY 16. The true-up credit for future
years remains unknown and is not included when calculating the proposed rate adjustments.
4. All operational expenditure increases related to the proposed adjustments to salaries, increased
costs of health insurance and pension, and increases in other operating costs can be absorbed
without the requirement to increase the water rate.
5. lncorporating a2.1% inflation factor to expenses (including WASD) and other income (excluding
interest income) will result in future rate increase next year of 9.3o/o.
Sewer Revenue Review and Recommendation
An increase in WASD Sewer fees and scheduled increase in debt service payment for new bonds
are the largest contributors to a rise in the projected FY16 deficit.
1 . The current rate of $7.55 per thousand gallons is insufficient to cover the cost of providing sewer
116
Commission Memo
September 30, 201 5
Water and SewerRale Ordinance Memo
Page 3 of 3
service. Based on the proposed FY16 budget provided by the City, rates would have to be
increased by 8.9% to $8.23 per thousand gallons in FY16.
2. Rate increases are needed to cover debt service requirements of a proposed $18 million sewer
debt issuance in FY16 and to cover further increases in costs (due to inflation, etc.) beyond
FY15. Approximately $5 million of will go towards the completion of neighborhood projects
included in the FY15 and FY16 capital budget.
3. Fees charged to Satellite Cities to transport wastewater to WASD appear to be insufficient to
cover the cost of providing this service. As part of the comprehensive cost of study, MSA also
performed a detailed cost allocation study to address the proper charges to the Satellite Cities
and found that those charges needed to be increased from $2.727 to $3.1047 which is
approximately 13.9%
4. lncorporating a2.1% inflation factor to expenses (including WASD) and other income (excluding
interest income) will result in future rate increases over the next year of 7.5o/o.
Backqround
At the Finance and Citywide Projects Committee (FCWPC) meeting of July 17 ,2015, Public Works
staff presented the MSA report and summary of their findings and recommendations.
Fee (per thousand
gallons)
FY
20L7/L2
Fee
FY
20L2/L3
Fee
FY
2OL3/1,4
Fee
FY
2}t4lLs
Fee
Prop. FY
21tsl L6
Fee
Difference
From FY
2oL4h5
Water s4.36 S+.go S+.so S+.+E S+.ss 5o.zz
Sewer So.o+So.o+S6.34 Sz.ss Sg.zg So.sg
Combined Fee Sro.+o Sro.+o S1o.70 s11.e8 Srz.sg s0.e0
Monthly Cost to 11,000
Gallon Customer sLt4.4O s114.40 51L7.70 s131.78 s141.68 Sg.go
Monthly Cost to 5,000
Gallon Customer ss2.00 Ss2,oo ss3.s0 ss9.so s64.40 s4.s0
Conclusion
Based on the above, the Administration recommends that the City Commission approve a rate
increase for water customers of $0.22 and a rate increase for sewer customers of $0.68 effective
October 1, 2015. For the average 1 1,000 gallons per month customer, the combined water and
sewer rates result in a monthly increase of $9.90 in FY2015/16. For the minimum usage customer
(5,000 gallons or less per month), the combined monthly impact would be a total of $4.50.
The Administration recommends moving fonruard with the recommended modifications to the water
and sewer fee ordinances including allocation of appropriate costs to the Satellite Cities.
JLM/ETC/,6INN
t:\agenda\2O 1 4\september\fy1 5 water and sewer rate ordinance memo.doc
117
ORDINANCE NO.
AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE
CIry OF MIAMI BEACH, FLORIDA, AMENDING APPENDIX A,
ENTITLED "FEE SCHEDULE," TO CHAPTER 110 OF THE MIAM!
BEACH CITY CODE, ENTITLED "UTlLlTlES," ARTICLE lV, ENTITLED
''FEES, CHARGES, RATES AND BILLING PROCEDURE," DIVISION 2,
ENTITLED "RATES, FEES AND CHARGES," SECTION 110-166,
ENTITLED "SCHEDULE OF WATER RATES AND TAPPING
CHARGES," AND SECTION 110.168, ENTITLED "SANITARY SEWER
SERVICE CHARGE," TO INCREASE THE RATE FOR WATER
SERVICE CHARGES IN EXGESS OF THE MINIMUM SERVICE
CHARGE; AND TO INCREASE THE SANITARY SEWER SERVIGE
CHARGE BY THE SAME PERCENTAGE ENACTED BY MIAMI-DADE
WATER AND SEWER DEPARTMENT (WASD) PURSUANT TO
SECTION {10-168; PROVIDING FOR CODIFICATION, REPEALER,
SEVERABILIW, AND AN EFFEGTIVE DATE.
WHEREAS, the City implemented a Water and Sewer System lmprovement Program
("Program"), which is funded by Water and Sewer Revenue Bonds; and
WHEREAS, in 2006, the Water and Sewer Taxable Series B-2 Bonds were issued for
the purpose of paying the cost of certain improvements to water and sewer utility; and
WHEREAS, in 2009, Water and Sewer Taxable Series 2009J-1C Bonds were issued
for the purpose of paying the cost of certain improvements to the water and sewer utility; and
WHEREAS, the rate increases proposed herein are for the payment of the phased in
debt instruments to continue improvements to the water and sewer infrastructure; and
WHEREAS, the new rate provided herein reflects the increase for water in excess of
the minimum service charge; and
WHEREAS, the new rate provided herein reflects the increase for the sanitary sewer
service charge in the same percentage imposed by Miami-Dade County as provided in Section
1 10-168 of the City Code; and
WHEREAS, the City anticipates a continuation of its decrease in water consumption
and its corresponding decrease in water and sewer revenues; and
WHEREAS, the City Commission of the City of Miami Beach deem it to be in the best
interest of the citizens and residents of the City of Miami Beach to amend Chapter 110 entitled
"Utilities", Article lV entitled "Fees, Charges, Rates and Billing Procedure, to periodically adjust
water and sewer rates for maintenance and fiscal responsibility purposes. Therefore, the
increased rates set forth herein should be imposed.
118
NOW, THEREFORE, BE !T ORDAINED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAM! BEACH, FLORIDA, as follows:
SECTION 1.
That the Appendix to Sections 110-166 and 110-168 of Chapter 110, Article lV,
Division 2, of the Miami Beach City Code is hereby amended as follows:
APPENDIX A
FEE SCHEDULE
Chapter 110 Utilities
Article lV. Fees, Charges, Rates and Billing Procedure
Division 2. Rates, Fees and Charges
***
Secfion
this Code
1 10-166(a)
Size of
Meter
Yr"
1"
1.5"
2"
3',
4"
o
8"
Gallons of
Water
per Month
5,000
7,000
1 1,000
17,000
40,000
80,000
'120,000
200,000
Description
Minimum service charge:
Minimum Monthly
Service Charge
(effective for billings
on or after October 1,2014
22.15
31.01
48.73
75.31
177.20
354.40
531.60
886.00
Water in excess of subsection 110-166(a), shall be as follows. $2.21
per 1,000 gallons, effective with billings on or after October 1, 2000;
$2.26 per 1,000 gallons, effective with billings on or after October 1,
2001; $2.31 per 1,000 gallons, effective with billings on or after
1 10-166(b)
119
1 10-168(a)
October 1,20Q2; $2.44 per 1,000 gallons, effective with billings on or
after October 1, 2003; $2.49 per 1,000 gallons, effective with billings
on or after October 1,2004; and $2.54 per 1,000 gallons, effective
with billings on or after October 1, 2005; and $2.79 per 1,000 gallons,
effective with billings on or after October 1, 2006; and $3.23 per 1,000
gallons, effective with billings on or after October 1,2007; and $3.88
per 1,000 gallons, effective with billings on or after October 1, 2008;
and $4.36 per 1,000 gallons, effective with billings on or after October
1, 2009; and $4.43 per 1,000 gallons, effective with billings on or after
October 1, 2014 and $4.65 per 1,000 sallons. effective with billinqs on
or after October 1. 2015.
Sanitary sewer service charge, shall be as follows: $3.73 per 1,000
gallons, effective with billings on or after October 1, 2000; $3.81 per
1,000 gallons, effective with billings on or after October 1, 2001; $3.90
per 1,000 gallons, effective with billings on or after October 1,2002;
$4.03 per 1,000 gallons, effective with billings on or after October 1,
2003; $4.12 per 1,000 gallons, effective with billings on or after
October 1, 2004; and $4.21 per 1,000 gallons, effective with billings on
or after October 1,2005; and $4.25 per 1,000 gallons, effective with
billings on or after October 1, 2006; and $4.93 per 1,000 gallons,
effective with billings on or after October 1, 2007; and $5.62 per 1,000
gallons, effective with billings on or after October 1, 2008; and $6.04
per 1,000 gallons, effective with billings on or after October 1, 2009;
and $6.34 per 1,000 gallons, effective with billings on or after October
1,2013; and $7.55 per 1,000 gallons, effective with billings on or after
October 1, 2014 and $8.23 per 1.000 oallons, effective with billinos on
or after October 1. 2015.
SECTION 3. CODIFICATION
It is the intention of the Mayor and City Commission of the City of Miami Beach, and it
is hereby ordained that the provisions of this ordinance shall become and be made part of the
Code of the City of Miami Beach, Florida. The sections of this ordinance may be renumbered or
re-lettered to accomplish such intention, and the word "ordinance" may be changed to "section",
"article" or other appropriate word.
SECTION 4. REPEALER
All ordinances or parts of ordinances in conflict herewith are and the same are hereby
repealed.
SECTION 5. SEVERABILIW
lf any section, subsection, sentence, clause, phrase or portion of this Ordinance is, for
any reason, held invalid or unconstitutional, such portion shall be deemed a separate, distinct
and independent provision and such holding shall not affect the validity or constitutional, such
portion shall be deemed a separate, distinct and independent provision and such holding shall
not affect the validity or constitutionality of the remaining portions of this Ordinance.
120
SECTION 6. EFFECTIVE DATE
This Ordinance shall take effect on the day of ,2015.
PASSED and ADOPTED this day of ,2015
Philip Levine, Mayor
ATTEST:
Rafael E. Granado, City Clerk
Underline denotes additions
Strike+nreush den otes deletions
(Sponsored by Commissioner Jonah Wolfson)
F:\T_Dr|ve\AGENDA\20'1s\SeptembeAPublic Works setp '10\FY15 Water and Sewer Rate Ordinance lstRdg.doc w redline.doc
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