Port St. Lucie, City of
The City of Port St. Lucie (City) retained RFC to conduct a comprehensive water and wastewater rate study. The study involved an analysis of billing data to identify the characteristics of the various customer classes. A dashboard-driven dynamic computer model was developed for the City to provide a platform for: 1) a revenue sufficiency analysis; 2) apportionments of the fiscal requirements and projections of operating costs; 3) reviews and effects of alternative rate structure modifications; 4) projections of revenue and rate requirements; 5) management of various unrestricted and restricted fund balances; and 6) multiple other items that provide the City with a rate and financial management tool.
Aided by the computer model, alternative rate structures were reviewed and discussed with City staff members during a series of meetings to ensure the recommended alternative would provide the desired results. The methodology, approach, findings, conclusions and recommendation were documented in a study report, which provided the basis for adoption by the City during public meeting.
Additionally, prior to the comprehensive rate study analysis, RFC’s Director of Florida Operations, Mike Rocca, reviewed and revised the utility’s water and wastewater impact fees, which were not in compliance with Section 163.31801 F.S. A “Consumption”-based methodology was utilized for the study, which assumes that new service connections will utilize portions of both existing and new improvements; as compared to an “Improvements”-based methodology that assumes a new set of service improvements is provided for each new service connection.
The approach to determining the capital charge for each functional service consists of dividing the adjusted improvement costs by the average day capacity of such improvements, resulting in an adjusted cost per gallon per day (gpd) of capacity. The capital charge methodology provides that the amount to be recovered adequately and reasonably represents the current costs of expansion improvements consistent with the level of service (LOS) provided by the utility. The approach to address the methodology was predicated on establishing a uniform cost per unit of capacity for each area of functional service. The total current facility cost on a benefit and consistent capacity basis, was allocated and apportioned utilizing the utility functional services and LOS criteria. The total current facility cost was also adjusted to include financing costs, and account for credits associated with county refund amounts, contributions, grants, and amounts included in user fee revenue used for the amortization of expansion debt. The functional system capacities were adjusted to consider water peak factors, unaccounted for water, and infiltration and inflow for wastewater. The results including discussion on the methodology, assumptions, findings and conclusions were documented in a draft report that was reviewed with utility staff. Upon agreement, the report was finalized and utilized to support the changes addressed at the appropriate public hearings.