TO: Honorable Mayor & Members of the North Port Commission
FROM: Peter D. Lear, CPA, CGMA, City Manager
TITLE: Resolution 2019-R-16, A Resolution of the City of North Port, Florida, Adopting Utility Rate and Water System Rate Schedules, Including Fire Protection Service Rates, Guaranteed Revenue Charges, Reclaimed Water Rates, Water System Rates and Fees, Wastewater Rates and Fees, and Adoption of Automatic Increases; Providing for Conflicts, Providing for Severability, and Providing an Effective Date.
Recommended Action
Approve Resolution 2019-R-16 for adoption.
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. GovRates Inc. was obtained to conduct this Rate Analysis. The analysis resulted in several recommendations for changes to user rates, capacity fees, developer fees, level of service and miscellaneous fees. Some of these changes are within the Water and Wastewater Utility Ordinance, some are within the City-Wide Fee schedule and some are set by Resolution.
On June 11, 2019, GovRates, Inc. presented the completed report from the Utility Rate analysis. The City Commission gave direction for staff to move forward with the changes to the rates set by Resolution. The revisions include Water System Rates, Wastewater System Rates, Reclaimed Water Rates, Private Fire Protection Services and Guaranteed Revenues, as well as changing the existing Cost Price Index (CPI) provision from the Miami-Fort Lauderdale Consumer Price Index to the Engineering News Record Construction Cost Index. This practice of using the CPI 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 CPI clause also helps avoid sudden extreme rate hikes by incrementally adjusting rates during years when rate adj...
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