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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: October 7, 2008 <br />Action Agend~ <br />Item No. <br />SUBJECT• Efland Sewer Rate Study <br />DEPARTMENT: County Manager PUBLIC HEARING: (Y/N) ~~ <br />ATTACHMENT(S): <br />1. Rate Study Summary from Raftelis <br />Financial <br />2. 9/5/08 Memo from Paul Thames, <br />County Engineer to the County <br />Manager Describing Progress on the <br />Rate Study <br />INFORMATION CONTACT: <br />Kevin Lindley, Engineering Specialist, <br />245-2313 <br />PURPOSE: To provide for BOCC review of the recently completed rate study and request <br />BOCC recommendations on implementation of a new rate schedule. <br />BACKGROUND: The Efland Sewer System was conceived back in the mid-1980s .as a remedy <br />for failing septic systems in the Efland Community. Phase I of the system was completed in the <br />late-1980s, and the rates set at the time were sufficient to provide sufficient revenue for the <br />operation of the system. However, over the last twenty years of operation, the costs of both <br />operation and maintenance have increased steadily while the rates have remained unchanged. <br />At the present time, the revenue generated. by the current rate structure accounts for only 20- <br />25% of the full cost of operating and maintaining the system. The remainder of the system <br />costs are paid from the Orange County General Fund. <br />With this in mind, the BOCC authorized Raftelis Financial, a consultant who specializes in rate <br />studies, to study the system and create a cost model that shows the system's costs versus its <br />revenue and shows how different rates affect customer's bills and the amount of the County's <br />General Fund contribution. This cost model, which is in the form of a multiple-page <br />spreadsheet, has been completed and is the basis for the following scenarios. <br />In order to capture all the system costs, including funding for future capital projects and <br />maintaining a fund balance, the rates would need to be increased by an average of 300%. The <br />current rate structure bills all customers for a minimum of 3,000 gallons of use per month. <br />Raftelis has suggested changing the rate structure to a base charge that would be the same <br />regardless of use plus a charge per 1000 gallons used. This accomplishes two objectives: the <br />impact of the rate increases on low water users (who typically are also low income users) is <br />