Agenda - 10-21-2008 - 6e - Laserfiche WebLink

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MEMORANDUM TO: Laura Blackmon, County Manager COPIES: Willie Best, Asst. County Manager Pam Jones, Purchasing & Central Services Director Donna Coffey, Budget Director Kevin Lindley, PE, Engineering Associate FROM: Paul Thames, PE, County Engineer DATE: September 5, 2008 SUBJECT: Efland Sewer Rate Study As per Asst. Manager Willie Best's request, the following information related to the Raftelis study for setting Efland sewer rates is provided for your information and to assist you and the BOCC in making both budget decisions and decisions as to how to set Efland sewer rates so that the County`s contribution to the Efland sewer fund can range from none at all to as much or more than the current contribution. The Raftelis study was ultimately designed to consist of three parts: 1) a model in the form of a set of interrelated spreadsheets that allow one to input a number of factors, assumptions and projections related to number of customers, operating costs, maintenance costs, NPDES permit compliance costs, capital improvement costs, treatment costs, etc. and a sewer rate (per thousand gallons) to derive a shortfall in operating and CIP costs that would be covered by a County contribution to the fund: 2) a written report outlining the basis of the model, its operation or manipulation, and its built-in assumptions (base rate, etc.); and 3) a verbal report and demonstration of the model's functionality. The study will not make a recommendation as to an actual sewer use rate. The ultimate product of the model is, however, a sewer use rate based on the inputs outlined above and the amount of funds, if any, that the BOCC determines to provide to continue directly subsidizing the costs of operating and maintaining the system. The BOCC has indicated that it wants to develop a strategy that minimizes the impact of increasing sewer rates on low income households. Unfortunately, it is not legally possible to adopt a sewer rate structure that addresses this goal directly. While it may be possible to set rates that group users by category, those categories must be based on characteristics such as quantity of sewer use, residential or non-residential commercial/ institutional/industrial, etc. The sewer use rate must be the same for each customer in each category that is created. However, as most low income and single occupant households tend to be among the lower water/sewer consumers, eliminating the base rate used in the current rate structure (minimum charge for 3000 gallons per month of sewer use) should provide some relief from an elevated sewer use rate/cost per thousand gallons to low use households (those that use significantly less that 3000 gallons per month). Another option to provide relief for low wealth households is for the BOCC to set aside