TO: Honorable Mayor & Members of the North Port Commission
FROM: Peter D. Lear, CPA, CGMA, City Manager
TITLE: 2019 Utility Rate Analysis prepared by GovRates, Inc.
Recommended Action
Discussion and direction for staff to prepare and submit proposed user rate, Level of Service and Miscellaneous Fee adjustment recommendations for FY19/20, FY 20/21 and FY 21/22.
Background Information
In fiscal year 18/19 Commission approved funding for Utilities to move forward with a rate analysis to verify the sufficiency of the rates charged for water and wastewater services. The last formal rate analysis was conducted in 2015, which recommended rate adjustments for FY15/16 and FY16/17 and subsequent CPI adjustments during any other year a rate analysis is not being performed. Therefore, increases in costs for items such as chemicals, fuel, electricity and the payment to the Peace River/Manasota Regional Water Supply Authority over the last three years have been mitigated through these adjustments. To continue maintaining a positive financial outlook, the current rate analysis is recommending a 2% annual increase for wastewater rates and a 4% annual increase for water rates over the next three years, which produces a combined, average, annual utility rate increase of 3% and to re-evaluate the sufficiency of user rates thereafter to closely monitor changes in economic conditions, customer usage trends and regulatory requirements. For the average residential water and wastewater customer using 3,000 gallons per month, the FY19/20 increase would equal an adjustment of $2.20 a month. These changes will help the City maintain a healthy financial forecast by maintaining 150% overall debt service coverage with at least 90 days rate revenue, while fully utilizing internal funding sources.
Utilities would also recommend changing the current CPI indexing from Miami-Fort Lauderdale Consumer Price Index to the Engineering News Record (ENR) Construction Cost Index. The propos...
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