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HomeMy WebLinkAboutMinutes 06-27-2000 Workshop Meeting1 1 1 CITY OF CAPE CANAVERAL CITY COUNCIL WORKSHOP MEETING City Hall Annex, 111 Polk Avenue Tuesday, June 27, 2000 5:00 P.M. MINUTES Council Members Present Burt Bruns Richard Treverton Larry Weber Buzz Petsos Rocky Randels Others Present: Bennett Boucher, City Manager Susan Stills, Assistant City Clerk Ed Gardulski, Public Works Director Andrea Bowers, City Treasurer DISCUSSION: 1. Sewer Rate Study with Burton & Associates Mr. Boucher introduced Mr. Robert Lockridge of Burton & Associates who would present the City's data in order to project a sewer rate fee. Mr. Lockridge explained that his firm uses a decision support approach with a base -line projection. He began his presentation with an overview of financial definitions and rates in general. Mr. Lockridge opened his presentation on what he called the City's Sufficiency Analysis & Financial Management Plan for Fiscal Years 2000 — 2005. (Plan attached to Minutes) Mr. Lockridge stated that a cost - recovery approach is used for govemment entities in opposition to depreciation accounting. Mr. Bruns queried about the City's new depreciation accounting system and the difference in use to Mr. Lockridge's approach. Mr. Lockridge explained that the Statement of Cash Flows would Ms. Bowers clarified that he depreciation accounting is in essence an offset and the Enterprise Fund would not change. Mr. Lockridge stated that revenue sufficiency over economic efficiency provide a balance for the total cost system. He reviewed components in order to construct a rate structure and to determinate revenue sufficiency. Mr. Lockridge explained how the model would determine if cash flow is adequate He summarized that a lack of funds would cause a rate increase. Mr. Lockridge reviewed the nine components for baseline assumptions. He noted that impact fees funds are restricted and should be used. Mr. Treverton questioned funding in the years subsequent to 2005 and how to avoid operating so close to***. 1 City of Cape Canaveral, Florida City Council Workshop Meeting June 27, 2000 Page 2 Mr. Lockridge inserted a three and then a two percent rate increases to demonstrate the effect on the City's overall financial position. Both percentages were comparatively favorable for the City's position of revenue over debt. Mr. Bruns queried the basis for Debt Service on purchases. Mr. Lockridge explained that the model provides for payment of debt even if purchases are not made. Ms. Bowers stated that the current Debt Services are the two state revolving loans. Ms. Bowers responded to Mr. Treverton's question that the $8 million dollar loan would be paid in the year 2016. Mr. Lockridge related that one legitimate use of funds on hand is to fund Capital Improvements. Ms. Bowers responded to Council that the average household pays $24.00 per month in sewer charges and that there has been no rate increase for the past three years. Mayor Randels asked for a consensus on a percentage amount of increase. Mr. Lockridge explained to Mr. Weber that adopting an index, such as the Public Service Commission, would leave the City at the control of the index He pointed out that a definitive number provides for more flexibility. Mr. Lockridge explained that a stable number would also help businesses set their budgets. Mr. Treverton expressed the possibility of a conservation program. Mr. Nicholas noted that increased growth would necessitate a sewer plant expansion. Mr. Lockridge concluded that a 3% increase would provide a substantial protection against increased growth. Mayor Pro Tem Petsos expressed concem with the possibility of reviewing the rates again in five- years. Council agreed by majority to increase the sewer rates by 3% each year over the next five years. Staff will draft a resolution to adopt the increase with an effective date of January 1, 2001. Sewer Impact Fee Calculations Mr. Lockridge provided a detailed review of impact fee calculation. He stated that impact fees are legally defined. Prices for Reclaimed Water Mr. Lockridge explained that prices for Reclaimed Water are market driven rather than cost- based. He identified the three points for a price decision as: 1) the cost of reuse for whole sale customer to include amortization of a resident's capital investment plus usage charges paid to Cape Canaveral, 2) the cost of alternative sources that would set the breakeven point for the pricing decision and 3) the City's rate should provide enough of an advantage to make it worthwhile for the customer. He advised Council not to provide for less than the value to retain. Mr. Boucher stated that the Interlocal Agreement with the Port outlines the distribution terms. Mayor Pro Tem Petsos expressed concem with being definitive in that the water provided is in excess of what is provided to Canaveral residents. Mr. Bruns recommended computerized distribution valves in order to regulate the flow at both the Port and the City of Cocoa Beach. Mayor Randels 1 City of Cape Canaveral, Florida City Council Workshop Meeting June 27, 2000 Page 3 queried an amount to charge for up to 100,000 gallons per day. Mr. Boucher responded that the existing contract is temporary based on the Port's need. Mr. Treverton expressed that the Port might want to re- evaluate the Agreement in light of the current level of distribution. Mayor Pro Tem Petsos asked Mr. Gardulski about the Port's probable expenses. Mr. Gardulski stated that the distribution system and re- pumping are two of their cost. He related that little electric is needed to pump water at the City's cost. Staff will provide the data to assess a charge at the next City Council meeting. The meeting recessed at 6:35 P.M. The meeting resumed at 6:40 P.M. 2. City Hall and Annex Building Study Mr. Boucher explained that he submitted data to Mr. Mike Kelly of Stott ler, Stagg and Associates in order to provide a preliminary look at our current facility needs. He expressed that ample space is needed for the general public as well as staff. Mr. Kelly considered the existing square footage and found that an additional 7,280 square feet is needed. The annex would need 4,000 additional square feet and City Hall the remainder. Mr. Kelly reported that the Building Department currently has 600 square feet, however twice that size would be optimal. He referenced the letter of June 8th from Mr. Treverton that proposed a separate Police station and utilizing the annex for some of City Hall staff. Mr. Kelly stated that a two -story building was not cost effective. He reviewed the costs relative to purchasing the Johnson Controls building and that the overall the purchase to include renovation would amount to approximately $1.5 million. Mr. Weber questioned the feasibility of using both City Hall and the Annex. Mr. Boucher related that the intent is to provide cohesive services to City Hall customers without sending customers to separate facilities. Mayor Pro Tem Petsos expressed concern with remodeling buildings that have outlived their usefulness. Mayor Randels reported that $70,000 was spent in 1998 to renovate the Annex. Mayor Pro Tem Petsos stated that he preferred a new building for the City Hall. Mr. Bruns proposed using the Xeriscape Park since the City owns the property. Mr. Nicholas added that there is also room available on the West Side of the City Hall building. By a majority, Council was not interested in purchasing the Johnson Controls building. On a final note, Mayor Pro Tem Petsos expressed that he would like to see a campus -style atmosphere. (Mayor Pro Tem Petsos left the meeting at 7:00 P.M.) Mr. Bruns expressed that the City owns enough property to create what is needed. Mr. Boucher concluded that Mr. Kelly could provide a preliminary layout proposal. Council agreed by a majority to consider using the Xeriscape Park City of Cape Canaveral, Florida City Council Workshop Meeting June 27, 2000 Page 4 in planning options of a campus style setting for City Hall and the Sheriff's Office. There being no furthef business the meeting adjoumed at 7:20 P.M. Susan Stills, ASSISTANT CITY CLERK 1