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HomeMy WebLinkAboutMinutes 02-27-2007 WorkshopCITY COUNCIL WORKSHOP CITY HALL ANNEX 111 Polk Avenue, Cape Canaveral, Florida TUESDAY February 27, 2007 5:30 P.M. MINUTES CALL TO ORDER: Mayor Randels called the meeting to order at 5:30 P.M. ROLE CALL: Council Members Present: Mayor Pro Tem Council Member Council Member Mayor Council Member Others Present: Bob Hoog Leo Nicholas Buzz Petsos Rocky Randels Shannon Roberts City Manager Bennett Boucher Public Works Director Ed Gardulski Finance Director Andrea Bowers Troy Railsback Brown and Caldwell Engineering Ed Lawson Recording Secretary DISCUSSION: 1. Sewer System Rate Study. Mayor Randels began the meeting by providing informational rate increase trends from 2003 -2006 and revenue income for the same time period. This information was from the current budget book. He indicated that revenues have been pretty consistent from the last rate increase in January 2003. Mayor Randels indicated that although we have had considerable growth, our revenues have stayed pretty consistent due to reclaimed water usage. He indicated that our gross revenue from the residents has stayed pretty much the same for the last 6 years. Mr. Petsos indicated that revenues have not gone up as anticipated because of growth and operating expenses have increased and our reserves have gone down. Mr. Troy Railsback from Brown and Caldwell began by stating that the Sewer Rate Study from Brown and Caldwell establishes for the renewal and replacement of the City Council Workshop Meeting Sewer Rate Study February 27, 2007 Page 2 of 3 City's savings account in order to allow for the expense of Capital items without taking out debt. He presented a graph that showed net requirements and stated that the study is not projecting revenues and setting rates to generate revenues that are way above future requirements. Mr. Railsback indicated that there is a need to set aside $464,000.00 per year in order to pay for future renewal and replacement items. He presented ways to achieve through a series of what -if scenarios. Mr. Railsback identified with the City Treasurer and Utilities Staff a beginning balance of $1.29M as of October 1, 2006 that was unencumbered. The Brown and Caldwell study establishes an account for renewal, replacement or depletion funding. He continued to explain for the city to achieve this $464,000.00 per year savings ideally rate increases would begin April 1, 2007. It is understood that this is an unrealistic time period because of advertising issues. Ms. Roberts indicated that she thought that council had decided to wait until January of 2008. Mayor Randels indicated that there would not be enough money for the debt service. Mr. Railsback presented the scenario of waiting until January 2008 there would be nothing to hold in reserve. Mr. Nicholas asked if we implemented a 6% increase the first year beginning on January 1, 2008, then 5% for the next 4 years, where would that put us? Mr. Railsback calculated that this would not be sufficient enough to maintain the required reserve. Ms. Roberts asked to scenario a 7% increase beginning January 1, 2008, then 6% for the remaining 4 years. Mr. Railsback expressed that this scenario would begin to bring a minimal reserve beginning in 2008109. Mayor Randels indicated that the council has come to a consensus that there will be no increases until January 1, 2008. Ms. Roberts indicated that this seems like such a sizeable amount. Mr. Boucher indicated that Brown and Caldwell did a thorough analysis of the facility indicating what needed to be done over a 30 -year study model. Mr. Railsback stated that today we should be putting at least $464,000.00 per year away for the next 30 years in order to renew or replace the system without having to incur debt. Mr. Petsos asked when would we reach the $464,000.00 yearly figure using the 7 %, 6 %, 6 %, 6 %, 6% model. Mr. Railsback indicated that we would reach that figure at the 7 -year point. Mayor Randels asked Mr. Boucher if there were enough funds available to cover expenses. Mr. Boucher responded that there was enough. Mayor Randels recapped the scenario that we'll be operating at a deficit this year and the next year. Then, we begin to cross over and have a break -even point and surplus. He asked the Public Works Director if this were realistic. Mr. Gardulski responded as long as there were no unforeseen problems or unfounded mandates. Mr. Boucher remarked that the financial viability of the plan would be in good shape at the end of the 7 -year point. Ms. Roberts remarked that she thought there was going to be discussion as to what impact this would have on the different scenarios as to the impact on the different groups affected. Mr. Nicholas indicated that the condominium associations feel that City Council Workshop Meeting Sewer Rate Study February 27, 2007 Page 3 of 3 they are getting a larger increase than others. Mayor Randels indicated that usage determines the amount of increase. Mr. Railsback indicated that 80% of residents use 2,000 -4,000 gallons. Mr. Nicholas expressed annually, there would be a 7% increase. Mr. Boucher indicated that the more you use, the more you'd have to pay. Mayor Randels expressed that as of January 1, 2008, condo associations should anticipate an increase of approximately 7% for the first year and 6% annually for the next 4 years. Mr. Boucher asked Mr. Railsback what an average increase dollar amount would be? Mr. Railsback expressed the average increase would be $1.41 per unit for multi - family and $1.90 per unit for single family. Mr. Railsback will provide the figures for the next years at 6 %. Mayor Randels remarked that there would not be an increase until January 1, 2008. The increase will be 7% for the first year and then 6% for the following 4 years. Council members agreed that this is the option that they would like to pursue. Council asked Mr. Railsback to provide a final report utilizing the agreed upon recommendations of the council. ADJOURNMENT Mayor Randels adjourned the meeting at 7:14 pm. Pursuant to Section 286.105, Florida Statutes, the City hereby advises the public that: rw If a person decides to appeal any decision made by the City Council with respect to any matter considered at this meeting, that person will need a record of the proceedings, and for such purpose that person may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. This notice does not constitute consent by the City for the introduction or admission into evidence of otherwise inadmissible or irrelevant evidence, nor does it authorize challenges or appeals not otherwise allowed by law. Persons with disabilities needing assistance to participate in any of these proceedings should contact the City Clerk's Office (868 -1221) 48 hours in advance of the meeting.