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ORANGE COUNTY <br />BOARD OF COMMISSIONERS <br />ACTION AGENDA ITEM ABSTRACT <br />Meeting Date: November 24, 2008 <br />Action Agenda <br />Item No. C -1 <br />SUBJECT: Efland Sewer Rate Schedule Change <br />DEPARTMENT: County Manager PUBLIC HEARING: (Y/N) <br />ATTACHMENT(S): <br />1. Proposed Efland Sewer rate schedule <br />-Impact on typical customers <br />2. Timeline for establishing new rate <br />schedule <br />3. Draft letter to customers notifying <br />them czf this public hearing and <br />explaining the need for a rate <br />increase. <br />INFORMATION CONTACT: <br />Kevin Lindley, Engineering Specialist, <br />245-2313 <br />PURPOSE: To provide a forum for public comment and possible BOCC decision on the new <br />rate schedule for the Efland Sewer System. <br />BACKGROUND: The Efland Sewer System was conceived in the early to mid-1980s as a <br />remedy for failing septic systems in the Efland Community. The Efland Sewer System was <br />established by Resolution of the BOCC in November 1985. The rates set at the time were <br />sufficient for the operation of the system. However, over the last twenty years of operation, the <br />costs of both operation and maintenance have increased steadily while the rates have remained <br />unchanged. At the present time, the revenue generated by the current rate structure accounts <br />for only 20-25% of the full cost of operating and maintaining the system. The remainder of the <br />system cost is paid from the Orange County General Fund. as an example of the disparity <br />between revenues and costs, the current rates generate about $63,000 in revenue per year. <br />The System's wastewater treatment cost alone is approximately $140,000 per year. In addition, <br />the System's maintenance and utility costs are projected to be about $60,000 this fiscal year. <br />With this in mind, the BOCC authorized Raftelis Financial, a consultant who specializes in rate <br />studies, to study the system and create arevenue/cost model. The model shows the system's <br />costs versus its revenue and shows how different rates affect customer's bills and the amount <br />of the County's General Fund contribution. This cost model, which is in the form of a multiple- <br />page spreadsheet, has been completed. Frank Davis, the Raftelis representative who headed <br />the Rate Study, made a presentation at the October 21, 2008, BOCC meeting highlighting the <br />main findings of the Study.' <br />This year, in anticipation of BOCC implementation of a new rate schedule, the General Fund <br />contribution to the system's budget was reduced by $40,000. To make up for this budget <br />