Agenda - 08-28-2006-4 - Laserfiche WebLink

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service replaced a previous septic system. Sewer rates have not changed since the inception of the system. Approximately 60% of the Efland Sewer System customers pay the minimum monthly bill (based on 3,000 gallons) of $15.20. As operating expenses have increased over the years, and rates have not been increased to keep revenues apace, the Efland Sewer System has experienced operating deficits that generally increase from year to year,. The County's General Fund has provided operational subsidies to keep the Efland Sewer Enterprise Fund balanced. By way of example, the General Fund transfers for FY 2004-05 and 2005-06 were approximately $77,000 and $85,000, respectively, Over the years, in addition to occasional tap-ons to properties identified as eligible during the original Efland Sewer System development, the County has allowed connections to the sewer system for several residential subdivisions and several commercial enterprises, A result has been that the General Fund has effectively begun to subsidize sewer rates for certain properties where the ability of the property owner to pay market rates for the true cost of sewer service is not an issue. Staff recommend that the County retain the services of a technical consultant to:1) examine the true costs of providing sewer service throughout the entire Efland Sewer System; and 2) provide recommendations regarding a sewer rate structure that would produce sufficient revenue to make the Efland Sewer Fund operationally self-sustaining, Specifically, the Manager recommends that the Board authorize staff to solicit proposals from qualified firmslindividuals to carry out an Efland Sewer System rate structure study, to retain the services of the best consultant for the job, and to report back to the Board later this fall with recommendations regarding changes to the system rate structure. The contemplated scope of the study would include staff and/or the consultant conducting a market survey of the existing customer base -original and continuing system users -and modeling alternative rate structures, and their administration, that would lessen the anticipated economic hardship of likely higher sewer rates for customers who present limited financial means, FINANCIAL IMPACT: There is no immediate financial impact associated with the discussion of these policy matters at this work session, However, decisions the BOCC may make regarding utility assessments and possible future adjustments in sewer rates have the potential to lead to recouping of significant capital expenditures on utility expansions and to solidify the financial position of the Efland Sewer System Enterprise Fund, Funding for consulting services associated with the recommended sewer system rate study would come from the General Fund transfer to the Efland Sewer System included in the BOCC's approved 2006-07 Orange County Budget. RECOMMENDATION(S): The Manager recommends that the Board: 1) discuss the issues related to a possible assessment program and provide appropriate direction to staff; 2) direct staff to retain the services of a qualified consultant to provide technical assistance in the conduct of an Efland Sewer System rate study; 3) authorize the Purchasing Director to carry out all actions and execute all paperwork associated with soliciting and retaining the services of a qualified consultant; and 4) direct staff to bring back recommendations in Fall 2006 for the Board's consideration regarding a revised Efland Sewer System rate structure and an assistance program to help Efland Sewer System customers of limited financial means.