St. Johns County

Florida

St. Johns County (County) engaged RFC to conduct a study that included an evaluation of the existing rate structure, a revenue sufficiency analysis, and an update to the five-year capital funding program. To accomplish the evaluation of the rate structure and revenue sufficiency, RFC conducted a review of the customer classifications and characteristics, together with allocations of fiscal requirements to appropriated categories pursuant to cost of service principles. These activities were managed within a dynamic operating computer rate model, allowing for analysis of alternatives and projection of the impacts on customers and the utility. The capital funding program portion of the study was accomplished through reviews of historic and current financial data, along with meetings with County staff members responsible for the management, operations and scheduling of capital projects. We used the information acquired from the reviews and meetings to develop a master funding forecasting schedule identifying the sources and uses of funds for capital improvements. This forecasting schedule was incorporated into the utility system’s dynamic operating computer rate model, which identified the impact on rates and fund balances as changes were made to the master funding forecasting schedule.

Multi-year rate adjustments were identified, together with strategic funding amounts and timing, to allow for the utility to provide for ongoing quality services, maintain its investment grade ratings, address the necessary capital improvements, and build cash reserves for financial stability and future needs.  RFC fully documented all activities, findings, and conclusions in a rate study report, which was presented to the County for their use and adoption.

Letter of Recommendation