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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: October 21, 2008 <br />Action Agenda <br />Item No. ' e. <br />SUBJECT: Efland Sewer Rate Study <br />DEPARTMENT: County Manager PUBLIC HEARING: (Y/N) NO <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 />3. Resolution Establishing the Rules and <br />Regulations for Operation of the <br />Efland Sewer System (11/19/85) <br />INFORMATION CONTACT: <br />Kevin Lindley, Engineering Specialist, <br />245-2313 <br />This item was delayed from the <br />Board's October 7, 2008 regular <br />meeting due to time constraints. <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 established by Resolution of the BOCC in <br />November 1985 as a remedy for failing septic systems in the Efland Community. The rates set <br />at the time were sufficient for the operation of the system. However, over the last twenty years <br />of operation the costs for operating and maintaining the system have increased steadily while <br />the rates have remained unchanged. At the present time, the revenue generated by the current <br />rate structure accounts for only 20-25% of the full cost of operating and maintaining the system. <br />The remainder of the system costs is paid from the Orange County General Fund. <br />With this in mind, the BOCC authorized Raftelis Financial to study the system and create a cost <br />model to based on system costs versus revenue, the impact of different rates on customer bills, <br />and County General Fund subsidy. This cost model, which is in the form of a multiple-page <br />spreadsheet, has been completed and is the basis for the scenarios outlined below. <br />In order to capture all system costs, including funding for future capital projects and maintaining <br />a fund balance, the rates would need to be increased by an average of 300%. The current rate <br />structure bills all customers for a minimum of 3,000 gallons of use per month. Raftelis has <br />suggested changing the rate structure to a base charge that would be the same regardless of <br />use plus a charge per 1000 gallons used. This accomplishes two objectives: the impact of the <br />