LTC 222-2008 FY 2008/09 Water and Sewer Rates and Stormwater Ratesm ,11AMIBEA
OFFICE OF THE CITY MANAGER
NO. LTC # 222-2008 LETTER TO COMMISSION
TO: Mayor Matti H. Bower and Members of the City Commission
FROM: Jorge M. Gonzalez, City Manag r~~C- i ~-
DATE: September 4, 2008
SUBJECT: FY 2008/09 Water and Sewer Rates and Stormwater Rates
This Letter to Commission (LTC) is to provide you copies of the September 8, 2008 budget hearing
memoranda on the proposed water and sewer and stormwater rate increases. My office will contact
your offices to offer individual briefings before the scheduled budget hearing.
JM M/FHB/
F: ALL1(1) EMPLOYEE FOLDERSIKEITH WILDER1Commission ItemslWater and Sewer Rates LTC.doc
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COMMISSION ITEM SUMMARY
:ondensed Title:
An Ordinance of the Mayor and City Commission of the City of Miami Beach, Florida, Amending Chapter 110 of the
Miami Beach City Code entitled "Utilities," amending Article IV, entitled "Fees, Charges, Rates and Billing Procedure
Thereof," Amending Division 2 Thereof Entitled "Rates, Fees and Charges;" De{eting Section 110-168 (b} entitled
"Sanitary Sewer Charge," 7o Provide Additional Water Meter Fees; and also amending Appendix A, (Entitled "Fee
Schedule,") to increase the Sanitary Sewer Charge imposed by the City Pursuant to Sections 110-166 (a) and (b),
... __.___~:ra.. .....t .,., Cfforfiva Harp
Supporting Data (Surveys, Environmental Scan, etc.): In the 2007 Community Satisfaction Survey, 84% of
___.~....,...,..~„+~a ,.~.,~+ai nr~~PrtG as excellent or oood.
aauc.
Shall the Mayor and City Commission approve the amendment to the Ordinance on first rea mg an sc e u e
;em ~ummar IRCVVII l111GUM~/~w...
The City's utility rates are structured to collect the necessary revenues to meet operating and maintenance costs o
the water and 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.
In regards to water consumption, our projections are that water consumption levels would continue t0 be somewhat
below budgeted amounts and prior year levels, yet these decreases will be offset by decreased system water losses
and operational savings. The first component of the water and sewer rates is the Miami-Dade Water and Sewer
Department (WASD) pass through rate. WASD proposed water rate for FY2008/09 is $1.4649, an increase of $0.3649
or 33.17% above the current rate of $1.10. WASD proposed sewer rate is $1.6869, a decrease of $0.0481, or 2.77%
below the current rate of $1.7350. The second component of the proposed water and sewer rates is the need forfuture
City revenue bond requirements to finance improvements to the City's aged water and sewer infrastructure, the majority
of which has been in place for over 50 years. At the August 21, 2008 Finance and Citywide Projects Commiftee
(FCWPC} meeting the Administration recommended a combined increase of water and sewer rates of $2.95. At the
direction of the FCWPC, the Administration evaluated phasing of the financing of the bonds, and as a result, the
Administration proposes a revised 2008!09 water rate of $4.13 and a sewer rate of $6.16 for a combined rate of $10.29
for the fist phase of rate increases. This represents a reduction of $0.82 of the combined water and sewer rate, which
represents a reduction of $9.02 for the average 11,000 gallons per month customer.
After reviewing our existing fees, it was determined that the tapping fee should be revised to reflect the actual
operational expense for tapping work. The other ordinance change proposes the elimination of the sanitary sewer
rebate. The rebate program entitles customers who use their domestic water service for irrigation to sign an affidavit,
upon which they would be entitled to a `credit' of six {6) per cent of the total amount of sanitary sewer service charges
paid by the customer during the preceding year. Most water and sewer municipal service providers allow installation of
a separate irrigation meter to account for the water consumed for irrigation purposes. The City has already in place an
irrigation meter program. A more sound business practice is to use actual meter readings rather than an affidavit, which
is difficult to verify and poses an administrative burden.
The Administration recommends approving the amendment to the Ordinance on first reading and
t•Inanc~ai mrorrn auv„'
Amount
Account A roved
pp
Source of
Funds: 1 $2,474,964 425-8000-343310 Water
~`~
~ 2 $4,797,575 425-8000-343510 Sewer
I OBPI - Total $7,272,539
` }~ RGENDA 1TEN1 ~s~
,mss l ~ ~M 1 ~ ~~~/ ~ DATE q-~~OR~
Im MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commissio
FROM: Jorge M. Gonzalez, City Manag~~~--.
DATE: September 8, 2008 FIRST READING
SUBJECT: AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY OF
MIAMI BEACH, FLORIDA, AMENDING CHAPTER 110 OF THE MIAMI BEACH
CITY CODE ENTITLED "UTILITIES," AMENDING ARTICLE IV, ENTITLED
"FEES, CHARGES, RATES AND BILLING PROCEDURE THEREOF;"
AMENDING DIVISION 2, ENTITLED "RATES, FEES AND CHARGES," BY
DELETING SECTION 110-168 (b) THEREOF, ENTITLED "SANITARY SEWER
SERVICE CHARGE," TO PROVIDE ADDITIONAL WATER METER FEES; AND
ALSO AMENDING APPENDIX A TO SECTION 110-166, (ENTITLED "FEE
SCHEDULE,") TO INCREASE THE SANITARY SEWER SERVICE CHARGE
IMPOSED BY THE CITY PURSUANT TO SECTIONS 110-166 (a) AND (b), AND
110-168 (a); PROVIDING FOR CODIFICATION, REPEALER, SEVERABILITY,
AND AN EFFECTIVE DATE.
ADMINISTRATION RECOMMENDATION
The Administration recommends approving the Ordinance amendment on first reading and
scheduling a second reading public hearing.
ANALYSIS
The City's utility rates for water and sanitary sewer services are structured to collect the necessary
revenues amounts 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 wa#er p~,~rchased, the treatment of the City's
sewage and other fees. Increasing the water and sanitary sewer rates in the amounts levied by the
County and to pay all other costs listed above will keep the City water and sewer funds balanced.
In general, the rates for water supply and sanitary sewer services consist of apass-through of the
wholesale rate the. City pays to Miami-Dade County for the purchase of potable water and treatment
of sewage; debt service for the Series 2000 Water and Sewer Revenue Bonds and the 2006 Gulf
Breeze Loan (which financed some water and sewer projects); operating and maintenance costs for
the water and sewer utility; and a 7.5°/a fee of previous year total revenue paid to the Miami-Dade
County Environmental Resource Management Department (DERM).
On August 21, 2008, at the Finance and Citywide Projects Committee (FCWP) meeting, the
Administration provided an update of Fiscal Year (FY) 2007/08 water consumption trends and
discussed proposed FY2008/09 water and sewer rates.
Commission Memo
September 8, 2008
Water and Sewer Rate Ordinance Memo
Page 2 of 5
In regard to water consumption, our projections are that water consumption levels would continue to
be somewhat below budgeted amounts and prior year levels, yet these decreases will be offset by
decreased system water losses and operational savings. It is expected that SFWMD wilt continue
the same level of irrigation restrictions long-term; therefore, we are using current fisca! year's water
consumption levels to forecast future fiscal year revenues which reflects the current decreased
consumption of water.
In regard to FY 2008/09 water and sewer rates, the Administration presented a rate increase
proposal to cover the County rate increase and the need for additional water and sewer bonds which
would have resulted in a water and sewer bill increase to an average residential customer of $32.45
per month based on 11,000 gallons consumption per month. The FCWP expressed concern
regarding the amount of the proposed increase and directed staff to evaluate a phased rate
increase for the future based on a more detailed analysis of the timing of the capital projects.
A discussion of the County and the City components of the proposed rate increases is provided
below.
FY2008l09 Miami Dade Count Wholesale Water and Sewer Rates
The Miami-Dade Water and Sewer Department (WASD) had informed all wholesale customers of
rate changes proposed for FY2008/09. The proposed water rate would be $1.4649, an increase of
$0.3649 or 33.17% above the current rate of $1.10. The total cost of the proposed FY2008109 water
rate increase to Miami Beach, even with the decreased consumption, is approximately $1.8 million.
While the City has concerns with the County's cost allocation methodology, to date the County's
position is that their methodology is sound. The Manager's proposed budget of August 6, 2008
includes the increase in the City water fees in order to pass through the wholesale rate increase
proposed by the County. All other operational expenditures increases related to Cost of Living
Adjustment to salaries, increased costs of health insurance and pension, and increases in other
operating costs have been absorbed without fee increases, including a $474,088 true-up for
FY2006l07 water cost for the County
WASD has also notified wholesale customers that the proposed sewer rate will be $1.6869, a
decrease of $0.0481, or 2.77% below the current rate of $1.7350. WASD has determined that the
City is entitled to a credit of $1,660,338 for FY2006/07 sewage treatment charges. The Manager's
proposed budget as distributed August 21, 2008 did not recommend a decrease in City's fees
despite the $.048 decrease in the wholesale rate from the County as this somewhat mitigates
additional rate increases needed in both water and sewer funds for coverage requirements related
to the sale of additional bonds. The proposed wholesale water and sewer rates are subject to
approval by the Board of County Commissioners at their second Public Budget Hearing, scheduled
for Thursday, September 18, 2008.
Rate Requirements for Additional Bonds
The second component of the proposed water and sewer rates is the need for future water and
sewer revenue to finance the replacement of the City's aged water and sewer infrastructure, the
majority of which has been in place for over 50 years.
At the Special Finance and Citywide Projects Committee meeting of June 30, 2008, a summary of
future water and sewer bond funding needs for the Neighborhoods Right-of-Way projects was
presented. At this meeting, the additional water and sewer funding need of $50 million and $21
million respectively for CIP managed projects was presented. An additional $8.9 million was
identified for Public Works managed projects.
Commission Memo
September 8, 2008
Water and Sewer Rate Ordinance Memo
Page 3 of 5
Subsequent to the meeting Public Works and CIP staff worked together to better define the scope of
work requirements for water line replacements in future neighborhood projects and sewer
improvements. In the case of the water main replacements, part of the objective is to identify water
main sections in good condition, whose replacement could be deferred to at least 15 years in to the
future. As part of this review, the City hired an engineering consultant to perform an updated
hydraulic modeling of the City's water system; in addition, the consultant conducted soil resistivity
tests to determine areas where the soil conditions would be a cause of pipe corrosion concern.
Based upon the consultant's study, water main sections located in areas where soil conditions were
considered corrosive were further investigated. To this end, Public Works staff took "coupons,"
cutting actual sections of pipe to visually examine levels of possible tuberculation, a condition that:
(a) reduces the pipe's carrying capacity; (b) also causes loss of pressure; and, (c) can impact water
quality.
Using the engineering consultant's report and the results of the pipe coupons, City staff developed
several tiers of potential funding level requirements based on water main construction opportunities
and more recent costs estimates for future neighborhood projects. Using the information provided by
the City and its Financial Advisor, the City's rate consultant completed a series of pro forma
analyses that provide rate increase ranges for the different tiers that differentiate capital needs from
a more to less conservative perspective
In calculating the future rates, the City's consultant had to consider debt service coverage
requirements which must be met for two conditions. The first condition, termed the additional
bonds test, and requires that net revenues available for debt service must be not less than 110
percent of the maximum annual debt service of the outstanding plus prospective debt to be issued,
for at least 12 months prior to the issuance of additional bonds. The second condition, which must
be fulfilled annually, irrespective as to whether issuance of any prospective debt is contemplated, is
termed the rate covenant. Net revenues available for debt service in each fiscal year must be not
less than 110 percent of the principal and interest requirements for such fiscal year to meet the rate
covenant. in addition to meeting the two debt service coverage conditions, annual revenues must be
sufficient to meet other revenue requirements without resulting in a cash flow deficit.
At the FCWP meeting of August 21, 2008, the Administration recommended the rate increase
proposal of $1.47 per 1,000 gallons of water and $1.58 per 1,000 gallons of sewer; for a combined
total of $2.95 per 1,000 gallons based on the unfunded future water bond requirement of $45.4
million and the future sewer bond of $4.9 million (including separate financing for the construction of
the South Pointe Booster pump station). These increases were necessary to cover the pass-through
County increase of $0.3649 per 1,000 gallons of water (partially offset by a decrease of $0.0481 per
1,000 gallons of sewer) in addition to the future water and sewer bond debt. The FCW P requested
that the water and sewer rates not be increased all at once, but a phased rate increase approach be
developed and brought back to the Commission at the Budget Hearing on September 8, 2008.
To create a phased rate increase, the Administration has reviewed ways to spread out the tax-
exempt bond issuance for the remaining water and sewer funded projects. As explained at the
August 21.2008 FCWPC meeting, the proposed approach will be to seek a line of credit for water
and sewerfunded projects, which will allow the City to have the necessary funding capacity to enter
into new projects while allowing the City more time to both build the necessary capacity to issue
additional tax-exempt bonds through rate increases and also spend down the current fully
committed but unspent bond proceeds. While the General Fund will obtain the line of credit, the
Water and Sewer Enterprise fund will pay for the origination and carrying costs as well as for any
payments required by draws against the lines. Following a thorough review of the expected timing
Commission Memo
September 8, 2008
Water and Sewer Rate Ordinance Memo
Page 4 of 5
of funding needs for remaining water and sewer projects, we could issue bonds in two series. The
Water and Sewer Enterprise fund is expected to have the capacity to issue tax-exempt debt by
October 2009, therefore, it could sell the first series of bonds to cover projects in the amount of
$22.3 million plus any costs required to refund the line of credit. The second issue of $28 million
could be issued in either October 2010 or 2011, as the funding is needed.
Both alternatives are based on projects totaling estimated costs of $50.3 million as presented at the
FCWP meeting of August 21, 2008. Alternative 1 projects issuance of tax exempt bonds in 2009
and 2010 while Alternative 2 projects issuance of tax exempt bonds in 2009 and 2011.
The decision on which alternative to utilize will depend on the rate of cash disbursement of existing
bond proceeds and the timing of the project startups.
In both Alternatives 1 and 2, the recommended rate for FY2008! 09 is the same and therefore, until
a decision is made on which alternative wild be used, the Administration at this time only
recommends the adoption of the FY2008/09 rate. The FY2008/09 rate for water is $4.13/ 1,000
gallons and thre tact of the combed w/ater0andasewer~ateCncreases would be $23.43$month for0a
gallons. The p
typical user of 11,000 gallons per month.
Alternative 1 .
Cumulative
Per 1,000
Gallons
Current Rate
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014
Increase
$1
53
Water $3.23 $4.13 $4.46 $4.50 $4.57
50%
1 $4.62
00%
1 $4.76
00%
3 .
47.37%
Increase 28.00%
16
$6 8.00%
28
~ $6 1.00%
$6.41 .
$6.47 .
$6.53 .
$6.53 $1.60
Sewer $4.93 .
25
00% .
2.00% 2.00% 1.00% 1.00% 0.00% 31.24%
Increase .
Per 1,000
gallons
$2.13
$0.45
$0.17
$0.13
$0.11
$0.14
$3.13
or verage
Water and Residential
Sewer combined Use of
Increase 11,000
Gallons Per
Month
$23.43
$4.95
$1.87
$1.43
$1.21
$1.54
$34.43
Alternative 2
Cumulative
Per 1,000
Gallons
Current Rate
FY2009
FY2010
FY2011
FY2012
FY2013
FY2014
Increase
53
$1
Water $3.23 $4.13 $4.28
% $4.44
65%
3 $4.53
00%
2 $4.62
2.00% $4.76
3.00% .
47.37%
increase $4
93 28.00%
$6.16 3.65
$6.28 .
$6.41 .
$6.47 $6.53 $6.53 $1.60
Sewer . 00%
25 2.00% 2.00% 1.00% 1.00% 0.00% 31.24%
Increase .
Per 1,000
allons
$2.13
$0.27
$0.29
$0.15
$0.15
$0.14
$3.13
Water and For Average
Sewer Residential
combined Use of
Increase 11,000
Gallons: Per
Month
$23.43
$2.97
$3.19
$1.65
$1.65
$1.54
$34.43
Commission Memo
September 8, 2008
Water and Sewer Rate Ordinance Memo
Page 5 of 5
The recommended rate is conservative .in the area of needed bond coverage based on the
information developed to date. The Administration will continue to work on the bond debt needs and
anticipates having more information before it is necessary to actually issue the bonds. It may be
possible to reduce the rates at that point.
As shown in the table below by phasing the financing of the future water and sewer bond as
recommended by the FCW PC members, the combined water and sewer for FY2008/09 rates were
reduced by $0.82 from the rates presented on August 21, 2008, which represents a reduction of
$9.02 for the average 11,000 gallons per month customer.
Fee FY 8/21/08 Difference 9/08/08 Difference
(per thousand 2007108 Proposed From FY Proposed From FY Difference
_ _ nnn7~ns2 Rafia x(107/08 from 8/21/0
Combined
Monthly
Impact to
11,000 gallon
Fee Chances
After reviewing our existing fees, it was determined that the tapping fee should be revised to reflect
the actual operational expense for tapping fees. Tapping is a significant operational expense, and a
periodic review of the cost of making taps to our water and sewer system is appropriate and ensures
that we are recovering the city's costs. The other ordinance change is the elimination of the sanitary
sewer rebate. The rebate program entitles customers who use their domestic water service for
irrigation to sign an affidavit, upon which they would be entitled to a `credit' of six (6) per cent of the
total amount of sanitary sewer service charges paid by the customer during the preceding year.
This type of rebate is not provided by other municipal water and sewer service providers and poses
an administrative burden. Further, a more sound business practice is to use actual meter readings
rather than an affidavit which is difficult to verify. Mast water and sewer providers allow the
installation of a separate irrigation meter to account for the water consumed for irrigation purposes.
The customer will not pay sewer fees water for the water accounted for by the irrigation meter. The
City has already in place an irrigation meter program.
CONCLUSION:
The Administration recommends approving the Ordinance amendment on first reading and
scheduling a second reading public hearing.
JMG/RCM/FHB
T:IAGENDA12008\Sepember 81FY09 Water and Sewer Rate Ordinance MEMO.doc
ORDINANCE NO.
AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AMENDING CHAPTER 110 OF
THE MIAMI BEACH CITY CODE ENTITLED "UTIL{TIES," AMENDING
ARTICLE IV, ENTITLED "FEES, CHARGES, RATES AND BILLING
PROCEDURE THEREOF;" AMENDING DIVISION 2 THEREOF,
ENTITLED "RATES, FEES AND CHARGES;" AMENDING SECTION
110-168 (b) THEREOF, ENTITLED "SANITARY SEWER SERVICE
CHARGE," TO PROVIDE ADDITIONAL WATER METER FEES; AND
ALSO AMENDING APPENDIX A, (ENTITLED "FEE SCHEDULE"} TO
INCREASE THE SANITARY SEWER SERVICE CHARGE IMPOSED BY
THE CITY, PURSUANT TO SECTIONS 110-168 (a) AND (b), AND 110-
168 (b); PROVIDING FOR CODIFICATION, REPEALER,
SEVERABILITY, AND AN EFFECTIVE DATE.
WHEREAS, the City implemented a Water and Sewer System Improvement Program
(Program), which is funded by Water and Sewer Revenue Bonds: and
WHEREAS, in 1995, the first series of Water and Sewer Revenue Bonds were issued
to construct Phase I improvements for the Program; and
WHEREAS, in 2000, the Series 2000 Water and Sewer Revenue Bonds were issued
to continue the Program; and
WHEREAS, the rate increases pr to the wateeandrsewerhnfrast uct tref and phased in
debt instruments to continue improvements
WHEREAS, the rate increases provided herein include the increases for water supply
imposed by Miami-Dade County; and
WHEREAS, with ongoing drought restrictions, the City anticipates a continuation of its
decrease in water consumption and its corresponding decrease in water and sewer revenues;
and
WHEREAS, existing fees are being revised to reflect operational expenses for water
main tapping services; and
WHEREAS, the existing fee for sewer service disconnect is being increased to reflect
actual costs being incurred by the City.
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, as follows:
SECTION 1.
That Chapter 110, Article IV, Division 2, Section 110-168 (b) of the Miami Beach City
Code is hereby amended as follows:
Chapter 110.
Utilities
Article IV, Fees, Charges, Rates and Billing Procedure
Division 2. Rates, Fees and Charges
Sec. 110-168. Sanitary Sewer Charge.
--. .. --:r:_~~:..., h., ~ r v + •~„ of--the si~~-~.e
SECTION 2.
That Appendix A to Section 110, entitled "Fee Schedule," of the Miami Beach City
Code is hereby amended as follows:
Appendix A
Fee Schedule
110-166{a)
Size of
Meter
3/ "
4
1"
1.5"
2"
3"
4"
6"
8"
Size of
Meter
3/ "
4
1"
1.5"
2"
3"
4"
6"
8"
Size of
Meter
3/ "
4
1"
1.5"
2"
3"
4"
6"
8"
Minimum service charge:
Gallons of Minimum Monthly Service Charge
Water (effective for billings on or after October 1, 2000)
per Month
5,000 $11.05
7,000 15.47
11,000 24.31
17,000 37.57
40,000 88.40
80,000 176.80
120,000 265.20
200,000 442.00
Gallons of Minimum Monthly Service Charge
Water (effective for billings on or after October 1, 2001)
per Month
5, 000 $11.30
7,000 15.82
11,000 24.86
i 7-,000 38.42
40,000 90.40
50,000 180.80
120,000 271.20
200,000 452.00
Gallons of Minimum Monthly Service Charge
Water (effective for billings on or after October 1, 2002)
per Month
5,000 $11.55
7,000 16.17
11, 000 25.41
17,000 39.27
40,000 92.40
80,000 184.80
120,000 277.20
200,000 462.00
Gallons of Minimum Monthly Service Charge
Size of Water
(effective for billings on or after October 1, 2003)
Meter per Month
3/4" 5,000 $11.88
1 ~~ 7,000 16.60
1.5" 11,000 26.04
2" 17,000 40.20
3~~ 40,000 94.48
4~~ 80,000 188.88
6,~ 120,000 283.28
g°~. 200,000 472.08
Size of Gallons of Minimum Monthly Service Charge
4
Mater
)
(effective for billings on or after October 1, 200
Meter per Month
3/4°~ 5,000 $12.13
1 °~ 7,000 16.95
1.5~° 11, 000 26.59
2°° 17,000 41.05
3°~ 40,000 96.48
4" 80,000 192.88
g~~ 120,000 289.28
g" 200,000 482.08
e of
Si Gallons of Minimum Monthly Service Charge
z Water
(effective for billings on or after October 1, 2005)
Meter per Month
3/4" 5,000 $12.38
1 °~ 7,000 17.30
1.5" 11,000 27.14
2„ 17,000 41.90
3" 40,000 98.48
4" 80,000 196.88
6" 120,000 ~ 295.28
g" 200,000 492.08
Size of Gallons of Minimum Monthly Service Charge
Water
(effective for billings on or after October 1, 2006}
Meter. per Month
3/,°~ 5, 000 $13.95
1 ~~ 7,000 19.53
1.5" 11,000 30.69
2„ 17, 000 47.43
3" 40,000 111.60
4" 80,000 223.20
6" 120,000 334.80
g°~ 200,000 558.00
Size of Gallons of Minimum Monthly Service Charge
Water (effective for billings on or after October 1, 2007}
Meter per Month
/4" 5, 000 $16.15
1 ~° 7,000 22.61
1.5" 11,000 35.53
2" 17,000 54.91
3" 40,000 129.20
4" 80, 000 258.40
6°' 120,000 387.60
g" 200,000 646.00
Size of Gallons of Minimum Monthly Service Charge
Meter Water (effective for billings on or after October 1, 2008_}
per Month
3/4„ 5,000 46-a-5 20.65
1 ~° 7,000 x-6-1- 28.91
1.5" 11,000 3~ 45.43
2°~ 17,000 54.-a1- 70.21
3" 40,000 42.8 165.20
4°~ 80,000 ~:~8 330.40
6" 120,000 ~:~69 495.60
g" 200,000 646:-89 826.00
Description
Section
this Code
Water in excess of subsection 110-166(a}, shall be as follows: $2.21
per 1,000 gallons, effective with e ilW th b~l nos oneorOafteb OctobeoO,
$2.26 per 1,000 gallons, effectiv 9
2001; $2.31 per 1,000 gallons, effective with billings on or after
October 1, 2002; $2.44 per 1,000 gallons, effective with billings on or
110-166(b) after October 1, 2003; $2.49 per 1,000 gallons, effective effecti e s
on or after October 1, 2004; and $2.54 per 1,000 gallons,
with billings on or after October 1, 2005; and $2.79 per 1,000 gaNons,
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 4.13
er 1 000 allons effective with billin son or after October 1 2008.
110-168(x) Sanitary sewer service charge, shall be as follows: $3.73 per 1,000
2000' $3.81 per
gallons, effective with billings on or after October 1, ,
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 $ 616 per 1,000
Amount
110-166(d) Tapping fee, per size of tap in inches q,gg 4,726
3/Qn
688 4,665
1" g4.8 5.106
1.5" ~g 5,116
2" _~ 5.627
3" 4;87-8 6,189
4" X68 6.808
6"
- o
SECTION 3. CODIFICATION
and it
It is the intention of the Mayor and City Commission of the City of Miami Beach,
is hereby ordained that the provisions of this ordinance shall became 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. SEVERABILITY
If 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.
SECTION 6. EFFECTIVE DATE
This Ordinance shall take effect on the 15` day of October, 2008.
PASSED and ADOPTED this day of , 2008
ATTEST:
MAYOR
CITY CLERK
T:IAGENDA120081Sepember 81FY09 Water and Sewer Rate Ordinance1stRdg.d
AppROVED AS TO
GnRM & LANGUAGE
COMMISSION ITEM SUMMARY
Ke Intended Outcome Su ortea:
Ensure well maintained infrastructure.
Supporting Data (Surveys, Environmental Scan, etc.): In the 2007Community Satisfaction Survey, 84% of
residents and 86% of businesses rated the recent) com leted ca ital ro'ects as excellent or ood.
approve the amendment to the Ordinance on first reading
Item Summa /Fiecommenaa~wn:
At the Special Finance and Citywide Projects Committee meeting of June 30, 2008, a summary of future stormwater
bond funding needs for the Neighborhoods Right-of-Way projects were presented. At this meeting, the additional
stormwater funding need of $94.6 million was identified, based on anticipated scope of work requirements for future
stormwater construction across the not-yet-started neighborhood projects.
After the June 30, 2008 meeting, Public Works Department (PW) staff and Capital Improvement Projects (CIP) office
staff met several times to review the unfunded capital needs for stormwater improvements in the future. Subsequently,
CIP worked with PWD to hire a consultant to conduct an evaluation of the need to replace the existing stormwater
culvert system; the consultant determined that the culvert system didn't need to be replaced. Staff believes a
stormwater solution that reduces the amount of stormwater infrastructure improvements can be engineered with further
hydraulic analysis of this neighborhood. Once a consultant is retained and a hydraulic model run, the design scope
would be further refined and a cost reduction opportunity quantified.
On August 21, 2008, at the Finance and Citywide Projects Committee (FCWPC) meeting, the Administration provided
an overview of the proposed FY2008/09 stormwater Rates. The Administration recommended a rate increase of $7.25
to support a future bond debt requirement of $94.6 million. The Committee supported the rate increase but directed
staff to evaluate the phasing of the financing to better spread the rate increases over several years. The Administration
recommends that the future stormwater debt be kept at the $94.6 million required to fund components of the City's
Capital Improvement Program, including recent, newly identified areas where flooding is a concern, for example the
recently discussed hot spots. The City's Stormwater Improvement Program is meant to be for those areas in which
private property is negatively affected by stormwater levels or a roadway becomes impassable by stormwater
elevations exceeding the 5 year storm event. Those areas that are subject to nuisance flooding, where temporary
accumulations of stormwater on a right-of-way are experienced and vehicular movement is not hindered would
generally not be considered as part of this program. Nuisance flooding is permitted under the County's stormwater
storage criteria up to a 5 year storm event, allowing rainfall water runoff to accumulate up to the crown of the road and
up to 15 feet from private properties. As directed by the FCWPC, the Administration has evaluated phasing the
financing of this future $94.6 million debt, which reduced the proposed rate increase for FY 2D08/09 from $7.25 per
month for the average residential customer to $3.65 per month, a $3.60 reduction.
THE ADMINISTRATION RECOMMENDS APPROVING THE AMENDMENT TO THE ORDINANCE ON FIRST
o~nniwr_ et~n Sr:NEDULING A SECOND READING PUBLIC HEARING.
Financial Inform
urce of
S ation:
Amount
Account .roved
APP
o
Funds: 1 $4,035,314 427-8000-343710 stormwater
2
OBPI Total $4,035,314
Cit Clerk's Office Le islative TracKm
Keith Wilder, ext 6192
Si n-Offs:
De artment Director
Assists t Mana er ana er
FHB
„ ci ~nene .i.,~
T:IAGENDA120D8\Sepember 8~r-YOy stormwa~er rca~c v~un~a~~~ ~~~•~.•~•~-
. ` AGENDA ITEM
.,~ l V l ~ ~ ~ ~~~~ DATE Q-~-O$
I[A- MIAMIBEACH
City of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, www.miamibeachfl.gov
COMMISSION MEMORANDUM
TO: Mayor Matti Herrera Bower and Members of the City Commission
q ,~~~
FROM: Jorge M. Gonzalez, City Manage ~--
FIRST READING
DATE: September 8, 2008
SUBJECT: AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE CITY
OF MIAMI BEACH, FLORIDA, AMENDING CHAPTER 110 OF THE MIAMI
BEACH CITY CODE, ENTITLED "UTILITIES;" BY AMENDING ARTICLE IIt
THEREOF ENTITLED "STORMWATER UTILITY;" AMENDING SECTI BY
110-109 (c) THEREOF ENTITLED "STORMWATER UTILITY FEES,"
AMENDING APPENDIX "A" THEREOF TO INCREASE THE STORMWATER
UTILITY SERONCREPEALER, SEVERABIBLITY, ANDIAN~EFFEC TV DATOE.
CODFFICAT ,
ADMINISTRATION RECOMMENDATION
The Administration recommends approving the Ordinance amendment on first reading and
scheduling a second reading public hearing.
BACKGROUND
At the Special Finance and Citywide Projects Committee meeting of June 30, 2008, a summary of
future stormwater bond funding needs for the Neighborhoods Right-of-Way projects were
presented. At this meeting, the additional stormwaterfunding need of $94.6 million was identified,
based on anticipated scope of work requirements for future stormwater construction across the
not-yet-started neighborhood projects.
After the June 30, 2008 meeting, Public Works Department (PW) staff and Capital Improvement
Projects (CIP) office staff met several times to review the unfunded capital needs for stormwater
improvements in the future. The Flamingo neighborhood was identified as a potentia(opportunityfor
cost reduction based on the fact that original planning considerations entailed a full replacement of
all below grade infrastructure. Subsequently, CIP worked with PWD to hire a consul{het consultant
an evaluation of the need to replace the existing stormwater culvert system;
determined that the culvert system didn't need to be replaced. Staff believes a stormwater solution
that reduces the amount of stormwater infrastructure improvements can be engineered with further
hydraulic analysis of this neighborhood. Once a consultant is retained and a hydraulic model run,
the design scope would b edun the future because the City has fou Pd more effic ent Iwlays to des gn
project costs maybe reduc
and build the projects.
On August 21; 2008, at the Finance and Citywide Projects Committee (FCWPC) meeting, the
Administration provided an overview of the proposed FY2008/09 stormwater Rates. The
Administration recommended a rate increase of $7.25 to support a future bond debt requirement of
$94.6 million. The Committereadphertatet ncreases ove seveaal yeatls.taff to evaluate the phasing
of the financing to better sp
ANALYSIS
The City hired a rate consultant to calculate the potential future rates. The rate calculation had to
consider debt service coverage requirements under two conditions. The first condition, termed the
additional bonds test, required that net revenues available for debt service be no less than 110
percent of the maximum annual debt service of the outstanding plus prospective debt to be issued,
for at least 12 months prior to the issuance of additional bonds ros ecti~e debt tl~clont mplat d,Ss
be fulfilled annually, irrespective as to whether issuance of any p p
termed the rate covenant. Net revenues available for debt service in each fiscal year must be not
less than 110 percent of the principal and interest requirements for such fiscal year to meet the rate
covenant. In addition to meeting the two debt service coverage conditions, annual revenues must be
sufficient to meet other revenue requirements without resulting in a cash flow deficit. Using
information provided by the City anases reauiredto c'o~er debttrepayment of aI future stormwater
pro formas that provide rate ~ncre q
bond.
City staff will perform hydraulic modeling to further evaluate potential reductions in current capital
project requirements for neighborhood projects. Until this engineering evaluation is completed The
Administration recommends that the future stormwater debt be kept at the $94.6 million required to
fund components of the City's Capital Improvement Program, including recently newly identified
areas where flooding is a concern, for example the recently discussed hot spots. Flooding for
purposes of the stormwater improvement Program is meant to be for those areas in which private
property is negatively affected by stormwater levels or when a roadway is not safely passable by
virtue of stormwater elevations exceeding the 5 year event on the road surface for longer than
acceptable durations. Those areas that are subject to nuisance flooding, where temporary
accumulations of stormwater on a right-of-way are experienced and vehicular movement is not
hindered would generaNy not be considered as part of this program. Nuisance flooding is permitted
under the County's stormwater storage criteria up to a 5 year storm event, allowing rainfall water
runoff to accumulate up to the crown of the road and up to 15 feet from private properties. These
stormwater infrastructure improvements like the water and sewer upgrades, are an integral part of
the G.O. Bond neighborhood projects. The Administration has evaluated phasing the financing of
this future $94.6 million debt which reduced the proposed rate increase for FY 2008/09 from $7.25
per month for the average residential customer to $3.65 per month as shown in the table below
along with proposed rate increases through FY2014. The current monthly charge for stormwater is
$5.80 per equivalent residential unit (ERU). The number of ERUs for each account is one ERU for a
single family home, multi-family and condominium residence and the total square footage of
impervious area divided by 791 square feet for commercial property.
Although the FCWPC accepted the higher rate for the stormwater charge pending the results of
hydraulic modeling, the Administration has reviewed ways to spread out the tax-exempt bond
issuance for the remaining stormwater funded projects. As explained at the August 21. 2008
FCWPC meeting, the proposed approach will be to seek a line of credit for stormwater funded
projects, which will allow the City to have the necessary funding capacity to enter into new projects
while allowing the City more time to both build the necessary capacity to issue additional tax-exempt
bonds through rate increases and also spend down the currentfully committed but unspentexisting
bond proceeds. While the General Fund will obtain the line of credit, the stormwater Enterprise
fund will pay for the origination and carrying costs as well as for any payments required by draws
against the lines.
Following a thorough review of the expected timing of funding needs for remaining stormwater
projects, it was determined that bonds could be issued in two series. The stormwater Enterprise
fund is expected to have the capacity to issue tax-exempt debt by October 2009, therefore, it could
sell the first series of bonds to cover projects in the amount of $39.1 million plus any costs required
to refund the line of credit. The second issue of $55.5 million could be issued in either October 2010
or 2011, as the funding is needed. The size of the second issue will be better determined following
the hydraulic modeling proed foa my o be'ments m other areas that havetcurrentply been disc ssed
and an evaluation of the ne P
Both Alternatives 1 and 2 are based on projects totaling estimated costs of $94.6 million as
presented at the FCW PC of August 21, 2008. Alternative 1 projects issuance of tax exempt bonds in
2009 and 2010 while Alternative 2 projects issuance of tax exempt bonds in 2009 and 2011.
The decision on which alternative to utilize will depend on the rate of cash disbursement to existing
bond proceeds and the timing of the project startups.
In both Altematives 1 and 2, the recommended rate for 2008! 09 is the same and therefore, until a
decision is made on 008/09 rate The 2008109 rattle foesto mwater is $9.45 per ERUI month wh ch is
the adoption of the 2
an increase of $3.651 month.
Stormwater
Cumulative
Current
Rate FY2009 FY2010 FY2011 FY2012 FY2013 $Y2014 Increase 7 90
~ 5.80 $ 9.45 $ 13.70 $ - $ - $ - - - . ,. ,,,., A ~~o~
As shown in the table bethe st pmwatertrate1 wasl edufced by $3 60 from the ~ to presented on
the FCWPC members,
August 21, 2008.
FY ~ 8/21108
2007108 ~ Proposed
13.05
Difference 9/08/08 Difference
From FY Proposed From FY Difference
The recommended rate is conservative in the area of needed bond coverage based on the
information developed to date. The Administration will continue to work on the bond debt needs and
anticipates having more information before it is necessary to actually issue the bonds. It may be
possible to reduce the rates at that point.
CONCLUSION:
The Administration recommends approving the Ordinance amendment on first reading and
scheduling a second reading public hearing.
JMG/RCM/FHB
T:IAGENDA\2008\Sepember 81FY09 Stormwater Rate Ordinance MEMO.doc
ORDINANCE NO.
AN ORDINANCE OF THE MAYOR AND CITY COMMISSION OF THE
CITY OF MIAMI BEACH, FLORIDA, AMENDING CHAPTER 110 OF THE
MIAMI BEACH CITY CODE, ENTITLED "UTILITIES;" AMENDING
ARTICLE I11, THEREOF ENTITLED "STORMyVATER UTILITY;"
AMENDING SECTION 110-109(c) THEREOF ENTITLED
"STORMWATER FEES UTILITY FEES," BY AMENDING APPENDIX "A"
THEREOF TO INCREASE THE STORMWATER UTILITY SERVICE
CHARGE IMPOSED BY THE CITY; PROVIDING FOR CODIFICATION,
REPEALER, SEVERABILITY, AND AN EFFECTIVE DATE.
WHEREAS, the City owns and operates a Stormwater Utility System (System), which
is currently funded by a stormwater utility service charge; and
WHEREAS, a Capital improvement Program (the Program} has been developed to
implement stormwater improvements for the System; and
WHEREAS, it is necessary to finance the Program through the issuance of Stormwater
Revenue Bonds; and
WHEREAS, in 2000, the Series 2000 Stormwater Revenue Bonds were issued to
continue the improvement of the System; and
WHEREAS, the schedule of rate increases proposed herein will provide sufficient
revenues for the payment of principal and interest on the proposed Stormwater Revenue Bonds;
and
WHEREAS, the rate increases proposed herein include funding for additional costs or
operation and maintenance of the System; and
NOW, THEREFORE, BE IT ORDAINED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA, as follows:
SECTION 1: That Article III of Chapter 110, Section 110-109 (c), Appendix A thereof, of the
Miami Beach City Code is hereby amended as follows:
Chapter 110
Utilities
Article III, Stormwater Utittty
Section 110-109 (c) Stormwater Utility Fees
Fee Schedule
Appendix A
Stormwater utility service charge effective with billings on or after the following
110-109(c) dates shall be as follows;
October 1, 2000 $3.25
October 1, 2001 $4.00
October 1, 2002 $5.50
October 1, 2003 $5.80
October 1, 2004 $5. SO
October 1, 2005 _ $5.80
October 1, 2008 $9.45
SECTION 3. CODIFICATION
and it
It is the intention of the Mayor and City Commission of the City of Miami Beach,
is hereby ordained that the provisions of this ordinance shall become and be made part of the
Code of the City of Miami Beach, Florida. The sections of this ordinance may be renumbered or
re-lettered to accomplish such intention, and the word "ordinance" may be changed to "section",
"article" or other appropriate word.
SECTION 4. REPEALER
All ordinances or parts of ordinances in conflict herewith are and the same are hereby
repealed.
SECTION 5. SEVERAf31LITY
If any section, subsection, sentence, clause, phrase or portion of this Ordinanced;s{'toy
any reason, held invalid or unconstitutional, such portion shall be deemed a separate,
and independent provision and such holding shall not affect the validity or constitutional, such
portion shall be deemed a separate, distinct and independent provision and such holding shall
not affect the validity or constitutionality of the remaining portions of this Ordinance.
SECTION 6. EFFECTIVE DATE
This Ordinance shall take effect on the 1St day of October, 2008.
PASSED and ADOPTED this ________ day of _ , 2008
ATTEST:
MAYOR
CITY CLERK
F:lworkl$ALL1(1) EMPLOYEE FOLDERSIKEITH WILDER1Commission Items1FY09 Stormwater Rate Ordinance1stRdg.doc
ApppipVED AS TO
....fl.e >z t~,NGUAGE