TO: Honorable Mayor & Members of the North Port Commission
FROM: A. Jerome Fletcher II, ICMA-CM, MPA
TITLE: Discussion and Possible Action Regarding the Capacity Fee Changes, Line Extension Charges and Acceptance of the 2022 Utility Rate Analysis Report Prepared by GovRates, Inc.
Recommended Action
Discussion and possible action regarding the capacity fee changes, line extension charges and acceptance of the 2022 utility rate analysis report prepared by GovRates, Inc.
Background Information
In 2019, Commission adopted Resolution No. 2019-R-16, which established a rate adjustment schedule for FY19, FY20 and FY21 as well as establish that subsequent adjustments thereafter would be based on the Engineering News Record (ENR) Construction Cost Index, unless replaced by Resolution.
This year, Utilities budgeted for and secured the services of GovRates, Inc. to perform a Rate Analysis to verify the sufficiency of the rates charged for water and wastewater services. Utilities has seen substantial cost increases for items such as insurance, chemicals, fuel, electricity, supplies, and the payment to the Peace River/Manasota Regional Water Supply Authority over the last two years, resulting in the recommended 8% increase in FY22 followed by a 4% increase in FY23 and FY24. The ENR index reflected an 8% increase this year, so the analysis supports this recommendation under the existing Resolution.
This adjustment will automatically apply to user rates effective October 1, 2022. For the average residential water and wastewater customer using 3,000 gallons per month, beginning October 1, 2022, the bill will increase from the current $85.34 by $6.82 to $92.16 a month. These changes will help the City maintain a healthy financial forecast by maintaining 150% overall debt service coverage with at least 120 days rate revenue, while fully utilizing internal funding sources. Utilities will continue to closely monitor changes in economic conditions, customer usage trends a...
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