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Mr. Kevin Lindley
<br />Orange County
<br />September 24, 2008
<br />Pie 3 O
<br />Additionally, annual capital costs were estimated based on planned capital project information provided
<br />by Orange County which includes rehabilitations to three pump stations, a manhole seepage collar
<br />program, and the $1.7 million expansion to the system to allow additional 75 to 100 customer
<br />connections. For the purposes of this rate study, it is assumed the $1.7 million will be funded by a ten-
<br />year loan with a 3.0% annual rate of interest. However, the actual method of funding the system
<br />expansion and other capital costs may differ based on financing decisions of the County.
<br />The table below presents the forecast of annual revenue requirements of the Efland System during the
<br />first five years (FY 2008 through FY 2012) of the fi$een year forecast period. In addition, the table
<br />demonstrates the annual revenue deficit or required subsidy from the County under the current
<br />wastewater rates for the Efland System.
<br />Revenue Requirements and Revenue Suffidency
<br /> Fiscal Year Endin June, 30
<br />Revenue Sut~ciencv 2008 2009 2010 2011 2012
<br />Revenue Requirements
<br />O&M Expensed $60,831 $62,656 $77,905 $80,243 $82,650
<br />Hillsborough Treatment Costs 144,031 144,031 154,608 189,867 196,918
<br />Annual Capital ProjectsZ 1,200 0 35,000 220,000 0
<br />Annual Debt Service; 0 0 0 51,000 213,889
<br />Total $206,061 $206,686 $267,513 $541,109 • $493,457
<br />Revenues
<br />User Charges 63,500 63,468 68,129 83,666 86,773
<br />Other Revenues° 1,500 1,545 1,591 1,639 1,688
<br />Total $65,000 $65,013 $69,721 $85,305 $88,462
<br />Surplus/Deficit (141,061) (141,673) (197,793) (455,804) (404,995)
<br />' O&M includes all equipment, utilities, and other costs associated with the County's operating expenses.
<br />z Annual capital projects include those capital projects not funded through debt financing.
<br />s Represents debt service on the ten-year loan to finance the $1.7 million for expanding the Efland System
<br />a Other revenues include all non user charge revenues, such as interest income etc.
<br />Based on the forecast of revenue requirements and the anticipated annual revenue defidt, the County
<br />would need to increase the current wastewater rates by approximately 300% to generate an additional
<br />$142,000 in wastewater charge revenues and achieve financial sufficienry in FY 2009. This level of rate
<br />increase represents a substantial impact on the customers of the Efland System and the anticipated
<br />future capital improvements would require subsequent, although less substantial rate increases.t
<br />~ Since the rate increases would on effect the final six months of the fiscal year, the rate increase is more significant than
<br />would be required if the rate increases would have occurred on July 1, 2008.
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