TO: Honorable Mayor & Members of the North Port Commission
FROM: A. Jerome Fletcher II, ICMA-CM, MPA
TITLE: A Resolution of the City Commission of the City of North Port, Florida, Adopting the Annual Utility Rate Schedule for Private Fire Protection Services, the Annual Utility Rate Schedule for Water and Wastewater Guaranteed Revenue Charges, the Utility Rate Schedule for Reclaimed Water, the Water and Wastewater System Base Facility Charge, the Water System Rate Schedule for Water Usage Volume, the Water System Rate Schedule for Bulk Water, the Wastewater System Rate Schedule for Usage, the Wastewater System Flat Rate Schedule, the Water and Wastewater System Deposit Fee Schedule; Adopting Automatic Rate Increases; Providing for Incorporation of Recitals; Providing for Conflicts; Providing for Severability; and Providing an Effective Date
Recommended Action
Approve Resolution No. 2024-R-58.
Background Information
Utilities budgeted for and secured the services of GovRates, Inc. to perform a high-level revenue sufficiency analysis to verify the sufficiency of the rates charged for water and wastewater services for fiscal year 2025. Utilities has seen substantial cost increases over the last two years for items necessary to operate, where much of the pricing is out of the department’s control. Some examples of these items include insurance, chemicals, fuel, electricity, and supplies. These operational increases have resulted in the recommended overall increase of 9.5%, which is 6.92% above the already adopted automatic increase of the Consumer Price Index, previously adopted. The following rates and charges are the ones proposed to be adjusted as of October 1, 2024:
Ø Reuse Rate increase from $.68 per 1,000 gallons to $.74 per 1,000 gallons.
Ø West Villages Bulk Reuse Water Rate of $0.31 per 1,000 gallons increase to $0.34 per 1,000 gallons.
Ø Water Base Facility Charges and Usage Volume Rates as outlined in the Resolution.
Ø Bulk Water Rate as outlined in the Resolution.
Ø Wastewater Base Facility Charges and Usage Volume Rates as outlined in the Resolution.
Ø Wastewater Usage Flat Rate as outlined in the Resolution.
All other rates in Resolution No. 2024-R-58 remain the same with their respective effective dates outlined within the Resolution and was combined into one document for the ease of public transparency.
The other change to the Resolution includes the addition of the Miami-Fort Lauderdale-West Palm Beach Consumer Price Index, in addition to the already adopted Engineering News-Record Construction Cost Index. This practice of using a consumer price index helps assure credit rating agencies that the city’s rates will keep up with inflation and hence, have less implied risk that the city will default on any debt service payments. The consumer price index clause also helps avoid sudden extreme rate hikes by incrementally adjusting rates during years when rate adjustments are not recommended based on a rate analysis.
The Resolution has been reviewed by legal for form and correctness.
Strategic Plan
Good Governance
Financial Impact
There will be a negative financial impact if recommended changes are not instituted, which would require a change in the fiscal year 2025 budget due to the decrease in revenues.
Procurement
N/A
Attachments:
1. Resolution No. 2024-R-58
Prepared by: Michelle Tipp, Utilities Business Manager
Department Director: Nancy Gallinaro, Utilities Director