[1. CALL TO ORDER] [00:00:09] >> GOOD EVENING AND WELCOME TO OUR APRIL 7TH SCHEDULED CITY COMMISSION WORKSHOP, PLEASE CALL ROLE. >> PLEASE STAND FOR THE PLEDGE OF ALLEGIANCE. >> I PLEDGE ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA. AND TO THE REPUBLIC FOR WHICH IT STANDS, ONE NATION, UNDER GOD, INDIVISIBLE, WITH LIBERTY AND [4.1 STORMWATER RATE STUDY] JUSTICE FOR ALL. >> YOU MAY BE SEATED, WE HAVE JUST ONE TOPIC FOR OUR WORKSHOP, THAT'S OUR STORMWATER RATE STUDIES, MR. DESILET IS GOING TO TAKE AWAY. >> ANDRE DESILET, UTILITY DIRECTOR FOR THE CITY. THIS IS PART 2 OF WHAT WE STARTED IN FEBRUARY OF WHAT WE DON'WE -- THE UPDATE. WITH THE DEPARTMENT NEEDS TO ACCOMPLISH OUR GOALS AND HOW WE DISCUSS HOW WE GET THERE. WHAT I WANTED TO DO WAS TAKE A MOMENT TO UPDATE YOU ON A COUPLE THINGS FROM THE MASTER PLAN THAT WE HAVE UPDATED SINCE OUR FEBRUARY MEETING. BUT PLAY INTO THIS RATE STUDY THAT WE ARE GOING TO LOOK AT IN JUST A MOMENT. THE STORMWATER PLAN IS ON THE AGENDA FOR A REGULAR MEETING TONIGHT, VICTORIA WILL GET INTO IT A LITTLE BIT MORE. WE'VE INCLUDED SOME VERBIAGE ON OVERALL STORMWATER INFORMATION, CHALLENGES AND OBJECTIVES. WE'VE TWEAKED THE CABINET IMPROVEMENT PROJECTS AND BUDGETS JUST AS NEW INFORMATION BECOMES AVAILABLE, WE'VE UPDATED THOSE AND INCLUDED THAT IN THE RATE STUDY AND THE FINANCIAL PROTECTIONS. WE'VE REVISED THE STAFFING RECOMMENDATIONS AND THAT'S KIND OF WHAT I WANTED TO DIG INTO A LITTLE BIT TODAY. INITIALLY IN THE MASTER PLAN WE IDENTIFIED FOUR NEW FIELD PERSONNEL. TO GO IN ONE YEAR AND TO GO IN THE FOLLOWING YEAR AND WE WERE LOOKING AT STRICTLY ON AN HOUR NEEDED IN ORDER TO PROVIDE NECESSARY MAINTENANCE FOR THE STORMWATER SYSTEM. SINCE THEN WE HAVE REALLY STARTED TO LOOK MORE OPERATIONALLY INTO HOW WE ARE GOING TO FUNCTION. AND WHAT EQUIPMENT IS NECESSARY TO DO THAT MAINTEANCE. WHAT WE'VE ARRIVED AT IS, WE ARE REQUESTING AN ADDITION OF THREE FIELD PERSONNEL AND THAT WOULD ACCOMPLISH -- THAT WOULD HAVE A DEDICATED CLEANING CREW, THEY WILL OPERATE OUR VACUUM TRUCK NONSTOP, THAT MACHINE WILL BE IN USE THROUGHOUT THE YEAR AND THAT WILL FREE UP THE EXISTING THREE CREW TO DO ALL THE NONVACUUM TRUCK MAINTENANCE AND ALSO THE SMALL IMPROVEMENT REPAIR PROJECTS. WE'VE LOOKED AT WHAT THOSE BUDGETS ARE AND THOSE TO GO CRUISE WE CAN KEEP VERY BUSY. >> INSTEAD OF TWO AND TWO YOU WANT THREE IN THE FIRST BUDGET YEAR AND THAT'S IT? >> CORRECT. >> THANK YOU. >> HOW WE ARE GOING TO STRUCTURE THOSE, THE OTHER PIECE IS A CHIEF RESILIENCE OFFICER. THIS WAS A TOP DISCUSSION AT THE VISION SESSION AND WE'VE LOOKED AT HOW THAT POSITION WILL FUNCTION AND IT LIVES SOMEWHERE BETWEEN ENGINEERING AND PLA PLANNING. FOR THE ENGINEERING PORTION OF THAT WHAT WE HAVE ACCOUNTED FOR IS A NEW POSITION THAT WOULD BASICALLY BE FUNDED EQUALLY BETWEEN ALL THREE UTILITY DEPARTMENTS. WE'VE ACCOUNTED FOR OUR BUDGET AND THE RATE STUDY ONE-THIRD OF THE COST THAT ADDITIONAL CHIEF RESILIENCE OFFICER POSITION. THAT'S ACCOUNTED FOR AND WHAT WE ARE GOING TO END JUST A MOMENT. THE OTHER PIECE I WANTED TO BRING TO YOUR ATTENTION IS, THESE STORMWATER FEES ARE ALL -- ONCE WE GET THROUGH THIS AND GET DIRECTION FROM YOU WE'LL COME BACK WITH AN UPDATED ORDINANCE THAT UPDATES THIS RATE STRUCTURE WE ARE DISCUSSING TODAY. PART OF THAT IS WHO DOESN'T PAY STORMWATER FEES? THIS IS A LITTLE BIT WORDY BUT I WILL GIVE YOU THE BASICS. THE FACILITIES THAT ARE EXEMPT FROM STORMWATER FEES ARE ROADWAYS, AIRPORT RUNWAYS, TAXIWAYS WHICH ARE AVAILABLE FOR PUBLIC USE, ALSO INCLUDES [00:05:09] PROPERTY OWNED BY THE CITY, COUNTY, STATE, OR FEDERAL GOVERNMENT AND INCLUDES PUBLIC LANDS USED FOR OFFICES, MAINTENANCE YARDS, WASTEWATER TREATMENT PLANTS, WATER RESERVOIR STORAGE FACILITIES, DRIVEWAYS, INTERNAL ROADS, PARKING LOTS, RECREATION FACILITIES, LIBRARIES, SCHOOLS, UNIVERSITIES, SOCIAL SERVICE CENTERS, PUBLIC HOUSING, PUBLIC HOSPITALS, SIMILAR PUBLIC PROPERTIES. IT DOESN'T APPLY TO PRIVATE ROADS AND PRIVATE DRIVES AND OTHER SITUATIONS. THAT IS WHAT IS CURRENTLY IN THE ORDINANCE. AS WE ARE GOING THROUGH THIS, THOSE EXEMPTIONS -- NOW WOULD BE TIME TO UPDATE THAT LANGUAGE. >> ARE THOSE EXEMPTIONS LOCALLY DRIVEN BY LOCAL PREFERENCES OR IS THERE STATE STATUTE STUFF IN THERE. >> I DON'T KNOW HOW CONSISTENT THESE ARE, I DON'T KNOW WHERE IT WAS ADOPTED FROM. WHEN THE ORDINANCE WAS ORIGINALLY PASSED IT WAS TAKEN AS A MODEL ORDINANCE FOR ANOTHER COMMUNITY. I THINK LIKELY THIS IS LANGUAGE THEY'VE ADOPTED ABOUT ORDINANCE. I DON'T KNOW HOW CONSISTENT IT IS. >> THIS WAS ALL DONE IN 2012, RIGHT? >> THIS HAS NOT BEEN CHANGED SINCE THE ORIGINAL. JUST TO GO THROUGH OUR GOALS FOR TODAY, WE WANT TO DEVELOP AND UNDERSTAND THE FINANCIAL NEEDS OF THE STORMWATER DEPARTMENT IN ORDER TO COMPLETE THE PLAN WE HAVE ESTABLISHED. WE WANT TO GET SOME DIRECTION REGARDING THE IMPLEMENTATION OF THE RATE STRUCTURE. WHAT OUR NEXT STEP WOULD BE TO BRING BACK TO YOU AN ORDINANCE FOR FIRST AND SECOND READING AND IDEALLY HAVE THESE CHANGES TO THE RATE STRUCTURE IN PLACE BY OCTOBER 1ST BEFORE THE NEW BUDGET YEAR. WE ARE IN THE PROCESS OF BUILDING OUR BUDGET FOR THE 26-27 BUDGET YEAR, WE ARE HAVING TO MAKE ASSUMPTIONS ABOUT WHERE WE ARE GOING TO BE AT THE BEGINNING OF THE BUDGET YEAR. WITH THAT, I WILL INTRODUCE MR. RYAN SMITH -- RYAN IS WITH RYPER WATER ANALYTICS AND HE'S BEEN OUR PARTNER ON THIS RATE STUDY. HIS EXPERTISE AND EXPERIENCE IN THIS HAS HELPED US PUT TOGETHER A LOT OF INFORMATION. WE ARE GOING TO TRY TO GET THROUGH IT AS MUCH AS BEGAN THE TIME WE HAVE. AND CERTAINLY LEAVE SOME TIME FOR QUESTIONS BUT FEEL FREE TO JUMP IN IF YOU HAVE SPECIFIC QUESTIONS. >> MAYOR, COMMISSIONERS, THANK YOU VERY MUCH FOR HAVING ME. I DO WANT TO RECOGNIZE YOUR STAFF, YOUR STAFF HAS DONE AN EXCELLENT JOB PROVIDING INFORMATION, BEING AVAILABLE TO ANSWER QUESTIONS, BEING INVOLVED IN THE PROCESS, AND HAVE A REALLY GOOD STAFF HERE AT THE CITY. A LITTLE BIT ABOUT MY BACKGROUND, I AM EFFECTIVELY -- WHAT I AM AS A FINANCIAL ANALYST THAT SPECIALIZES IN WATER AND WASTEWATER AND MUNICIPAL ENTERPRISE FUNDS. I'VE BEEN DOING THIS TYPE OF WORK FOR 15 YEARS. II ALSO SERVE AS THE CHAIR OF THE FLORIDA AW W A FINANCE AND RATES COMMITTEE AS WELL IT PROBABLY SERVED OVER 100 LOCAL MUNICIPALITIES THROUGHOUT THE NATION. TODAY WE ARE GOING TO TALK ABOUT A COUPLE OF DIFFERENT THINGS. FIRST WE ARE GOING TO TALK ABOUT SOME INITIAL OBSERVATIONS, WHERE ARE YOU TODAY, AND HOW DO YOU COMPARE TO YOUR PEERS. THEN WE'LL TALKED ABOUT THE FINANCIAL FORECAST, HOW IS DEVELOPED, COMPARED TO PRIVATE BUSINESSES, THEN WE'LL TALK ABOUT DEVELOPING THE ALTERNATIVE RATE STRUCTURE WE ARE GOING TO PRESENT, THEN WE ARE GOING TO LOOK FOR SOME DIRECTION FROM YOU ALL FOR NEXT STEPS, HOW DO WE MOVE FORWARD FROM HERE? TO TALK ABOUT OUR INITIAL OBSERVATIONS AS ANDRE JUST MENTIONED, THE STORMWATER SYSTEM IS AN ENTERPRISE FUND WHICH EFFECTIVELY MEANS IT SHOULD BE OPERATED LIKE A BUSINESS BUT IT DOESN'T PRODUCE A PROFIT, RIGHT? IT'S REALLY THERE JUST TO RECOVER THE COST OF PROVIDING THE SERVICES. WHEN YOU THINK ABOUT UTILITIES STORMWATER INCLUDED, IT'S VERY, VERY CAPITAL INTENSIVE. BECAUSE OF THAT YOU CAN HAVE TIME FRAMES FOR YOU DON'T HAVE A LOT OF CAPITAL REINVESTMENT NEEDS AND OUR OVERALL COSTS ARE [00:10:02] JUST OPERATION AND ANNUAL EXPENSES. WHEN YOU COME TO A POINT WHERE YOU ARE ALL BEACHING TODAY, YOU HAVE TO LOOK AT THE CAPITAL INFRASTRUCTURE NEEDS, THERE CAN BE DRASTIC CHANGES IN OUR OPERATIONS FROM ONE YEAR TO THE NEXT. YOUR SYSTEM WAS ESTABLISHED IN 2012 IT DOES PROVIDE A CITYWIDE DRAINAGE AND THE PRIMARY FUNCTION OF THE SYSTEM IS TO PROTECT ROADWAYS AND PUBLIC ROADWAYS AND MAINTAIN FREE AND CLEAR ROADS. THROUGHOUT THE CITY SERVICE TERRITORY. THE REVENUES ARE DERIVED FROM MONTHLY RATES. YOU'RE NOT ASSESSING PROPERTY TAX, THE PROPERTY TAXES, YOU ALL BILL ON YOUR MONTHLY BILLS WITH YOUR WASTEWATER AND SOLID WASTE SERVICES. HOW DO YOU COMPARE TO INDUSTRY WIDE METRICS? WHAT YOU ARE SEEING ON YOUR SCREEN IS A COMPARISON OF SEVERAL METRICS I THOUGHT WERE IMPORTANT FOR YOU TO CONSIDER AND THESE ARE BASED ON FISCAL YEAR 25 AND 26 COMPARED TO CREDIT UTILITIES -- YOU DON'T HAVE A RATING ON THE SYSTEM BUT IN MY EXPERIENCE LOOKING AT IT AND SAYING THIS IS A SMALL SYSTEM, A SMALL SERVICE TERRITORY YOU ONLY HAVE ABOUT 10,000 CUSTOMERS I WOULD PROBABLY PUT YOU AT ABOUT A LEAWHICH IS WHERE I THINK YOU WD LAND. WHAT DAYS OF CASH ON HAND IS HOW WE COMPARE OUR SAVINGS AND HOW MUCH CASH WE HAVE IN THE BANK TO OTHER UTILITIES THAT COULD BE DIFFERENT SIZES. FOR A SINGLE CREDIT UTILITY, THE AVERAGE CASH AVAILABLE ABOUT 315 DAYS, ALMOST A YEAR'S WORTH WORTH OF REVENUE. RIGHT NOW YOU ALL ARE AT ZERO WE DON'T HAVE A WHOLE LOT OF CASH IN THE BANK. THE NEXT PRIMARY METRIC I THOUGHT WAS WORTH CONSIDERING WITH THE OPERATING MARGIN, WITH THE OPERATING MARGIN TELLS US IS AFTER WE HAVE PAID FOR OUR OPERATING EXPENSES, HOW MUCH IS LEFT OVER FOR OTHER SYSTEM PURPOSES? CAPITAL, REINVESTMENT, HOW MUCH MORE CAN WE REINVEST INTO OUR INFRASTRUCTURE? THE MEDIAN FOR CREDIT UTILITIES IS 43%, EFFECTIVELY EVERY DOLLAR, $0.43 LEFT OVER TO REINVEST INTO THE SYSTEM. RIGHT NOW YOU'RE AT 18%, A LITTLE BIT LOWER. DO I THINK THAT IS OUT OF THE NORM? IT'S A LITTLE LIGHT. CONSIDERING YOUR STORMWATER -- DO I THINK THAT'S A REASONABLE PLACE TO BE OF WHERE YOU ARE TODAY. THE NEXT ONE YOU LOOK AT HIS AGE OF INFRASTRUCTURE FOR EVERY DOLLAR YOU SPENT ON CAPITAL HOW LONG IS IT BEEN ON THE GROUND? THE MEDIAN IS ABOUT 15 YEARS, YOU ARE A LITTLE HIGHER THAN THAT, YOUR EX 22 YEARS RIGHT N NOW. SOMETHING WE WANT TO FOCUS ON THAT ALSO SAYS WE'VE GOT TO START LOOKING FOR INFRASTRUCTURE MORE. THE NEXT ONE IS FREE CASH FLOW AS PERCENT OF DEPRECIATION, AFTER WE'VE PAID OUR OPERATING EXPENSES AND DEBT SERVICE THAT YOU HAVE HOW MUCH IS LEFT OVER AT HOW MUCH DOES THAT COMPARE TO OUR ANNUAL DEPRECIATION EXPENSE? THE AVERAGE IS ABOUT 127%, EFFECTIVELY IF YOU HAD A MILLION DOLLARS IN DEPRECIATION, YOU WOULD WANT TO BE GENERATING ABOUT $1,270,000 TO OFFSET THAT DEPRECIATION COST. WHEN WE THINK ABOUT DEPRECIATION THAT'S A COST THAT IS DERIVED FROM THE HISTORICAL EXPENSES ON CAPITAL, NOT THE REPLACEMENT COSTS OF THOSE ASSETS. OUR LONG-TERM GOAL IS TO INCREASE THAT, RIGHT? THE LAST ONE ALSO A BIG BENEFIT THAT YOU ALL HAVE IS TOTAL DEBT OUTSTANDING TO NET PLANNED ASSETS, PLANNED INFRASTRUCTURE. HOW MUCH OF OUR HOUSE IS MORTGAGED? AS YOU CAN SEE EIGHT CREDIT UTILITIES ON AVERAGE, FOR EVERY THOUSAND DOLLARS, NET ASSETS THAT THEY HAVE, $700 OF IT HAS DEBT OUTSTANDING. WE DON'T WANT TO BE THERE WE WANT TO KEEP OUR DEBT AT A MANAGEABLE LEVEL. WHEN WE COMPARE, YOU GUYS LOOK REALLY GOOD, YOU HAVE A VERY, VERY LOW DEBT OUTSTANDING ON THE SYSTEM. RECOGNIZING THOSE, WE SAID THE NEXT THING WE SAID WAS LET'S LOOK AT THE INFRASTRUCTURE. THE MAJORITY OF YOUR INFRASTRUCTURE WAS INSTALLED IN 1977. A TOTAL OR GROSS BASIS YOU HAVE ABOUT $16 MILLION OF GROSS ASSETS ON THE SYSTEM. BUT WHEN WE LOOK AT WHEN THOSE ASSETS WERE INSTALLED AND WE [00:15:04] INFLATE THEM TO TODAY'S DOLLARS AND HONESTLY I'VE USED WHAT I FEEL IS A REASONABLE OR CONSERVATIVE ASSUMPTION, 3.5% -- YOU CAN SEE THAT THE ACTUAL REPLACEMENT COST OF THOSE ASSETS IS MUCH, MUCH HIGHER THAN OUR GROSS VALUE OF THEM. WE CALCULATE THE REPLACEMENT COST AT ABOUT $52 MILLION IN TOTAL AND WHEN WE THINK ABOUT OUR INFRASTRUCTURE, THE MAJORITY OF IT IS CONCRETE PIPE OR CORRUGATED PIPE. THAT INFRASTRUCTURE CAN LAST A SIGNIFICANT AMOUNT OF TIME -- CONCRETE PIPE CAN LAST UP TO 100 YEARS IF WELL AND PROPERLY MAINTAINED. ONE OF OUR GOALS WE SAID IS WE WANT TO TRY TO INCREASE THE MAINTENANCE THAT WE ARE DOING ON THE SYSTEM AND REALLY TRY TO REACH THAT MAXIMUM USEFUL LIFE OF OUR EXISTING INFRASTRUCTURE, REDUCING THE OVERALL COSTS. ONCE WE HAVE TO START MAKING MAJOR REPAIRS, MAJOR REPLACEMENTS OF THIS, IT'S GOING TO BE EXTREMELY EXPENSIVE. WE WANT TO KEEP IN MIND SOME PRIMARY GOALS, WE WANT TO TRY TO REACH AND MAINTAIN DURING THE FORECAST. MAC WHICH IS THE NEXT FIVE FISCAL YEARS. WE WANT TO EXPAND MAINTENANCE STAFFING, GET THE MAXIMUM BENEFIT OUT OF OUR EXISTING INFRASTRUCTURE THAT WE CAN. WE WANT TO BUILD UP SOME OPERATIONAL OR CAPITAL RESERVES FOR AN EMERGENCY EVENT. ARE YOU COASTAL OR HURRICANE? WE WANT TO IMPLEMENT ARE IDENTIFIED CAPITAL IMPROVEMENT PLAN, IT'S ABOUT $10 MILLION IN TOTAL COSTS THAT WE ARE LOOKING TO MOVE FORWARD WITH OVER THE NEXT FIVE YEARS. TO DO THAT WE ARE GOING TO NEED SOME DEBT FINANCING. WE WANT TO TALK ABOUT SECURING THE DEBT THAT'S ONE OF OUR MAIN PRIORITIES. ONE OF THE MAIN THINGS WITH SECURING DEBT IS HAVING SUFFICIENT COVERAGE RATIOS, DEBT SERVICE COVERAGE RATIOS. WHAT WE HAVE TARGETED THIS TO TRY TO MAINTAIN DEBT SERVICE COVERAGE EQUAL TO OR GREATER THAN 130% PER YEAR. WHEN WE TALK ABOUT WHAT IS THE FINANCIAL FORECAST, IT'S A BALANCING ACT. IT'S IDENTIFYING WHAT ARE OUR GOALS AND OBJECTIVES AND TRYING TO BALANCE THE USE OF OUR EXISTING RESERVES, RATE REVENUES, OTHER REVENUES, INTEREST INCOME AND DEBTS TO COME UP WITH A BALANCED PLAN THAT MEETS OUR NEEDS OVER THE NEXT FIVE YEARS. NOT OVER RECOVERING BUT MEETING OUR NEEDS AND TRYING TO REDUCE THE IMPACT ON OUR CUSTOMERS. TO MEET OUR MAINTENANCE GOALS, WE DID IDENTIFY ADDITIONAL STAFF IS NEEDED TO. AS ANDRE JUST MENTIONED, WE HAVE ASSUMED THREE ADDITIONAL FULL-TIME EMPLOYEES AND AS WE LOOK AT THE CHART WE SEE ON THE SCREEN IN FRONT OF YOU, WHAT YOU ARE SEEING IS BASELINE EXPENSES, THE BOTTOM BLUE BAR. THE INFLATION ASSOCIATED ON THOSE BASELINE OPERATING COSTS WHERE YOU ARE TODAY IS THE BLACK BAR, THEN YOU CAN SEE THE ADDITIONAL PERSONNEL RELATED COSTS IS THAT GRAY BAR ABOVE. A PRETTY SUBSTANTIAL INCREASE ABOVE WHERE YOU ARE NOW. WE SEE THE OVERALL COSTS RISING TO ABOUT ONE AND A HALF MILLION DOLLARS BY 2031, WITH THE MAJORITY OF THE INCREASE OCCURRING IN FISCAL YEAR 27. WHAT IS STAFF OING TO DO AND WHAT YOU ARE SITTING ON THE SCREEN HERE? THIS IS SOME OF THE PROJECTS AND WORK THAT HAS BEEN DONE RECENTLY, SOME FLOODING, SOME STORMWATER INFRASTRUCTURE, CORRUGATED PIPE, AND THESE ARE THE KIND OF ISSUES THAT STAFF THAT THIS ADDITIONAL FIELD SERVICE CREW WILL BE ADDRESSING. THE NEXT THING WE ALWAYS LIKE TO TAKE INTO ACCOUNT IS THE CAPITAL IMPROVEMENT PLAN AND HONESTLY, 90% OF THE PLACES I GO TO, THE CIP -- CAPITAL IMPROVEMENT PLAN -- IS TYPICALLY THE BIGGEST DRIVER OF THE NEED RATE ADJUSTMENTS. WHAT YOU ARE SITTING ON YOUR SCREEN ABOUT $10 MILLION IN TOTAL. YOU WILL NOTICE A NUMBER OF DIFFERENT COLORS -- THE PINK AND BEING THE AREA 6 PROJECTS HAPPENING OUT HERE, WE ARE WALKING IN THAT'S FUNDED FROM ARPA, ALREADY BEING SECURED AND BEING USED, THEN YOU WILL NOTICE SEVERAL OTHER COLORS. THE BLUE REPRESENTS OUR HIGHEST PRIORITY PROJECTS, THE PROJECTS THAT STAFF HAVE IDENTIFIED AS A [00:20:02] HIGH NEED OR AREA OF FOCUS OVER THE NEXT FIVE YEARS. LIGHT BLUE BEING THE MEDIUM PRIORITY, THE NEXT TRANCHE OF PROJECTS WE WANT TO TACKLE. THE BLACK BAR AT THE TOP BEING VERY SMALL PROJECTS THAT HAVE BEEN IDENTIFIED TO BE COMPLETED BY STAFF ON AN ANNUAL BASIS. WHAT ARE SOME OF THOSE HIGH PRIORITY PROJECTS? THAT'S WHAT YOU ARE SEEING ON YOUR SCREEN NOW. THIRD AND FIRST STREET, SAFE HARBOR, ASH AND FOURTH STREET, ALSO THE NORTHWEST CORE DOOR AND A STORMWATER STATION. LOS ROBLES AND PIPELINING WHICH ALSO PROVIDES TO EXTEND THE USEFUL LIFE OF SOME THAT INFRASTRUCTURE. WE DEVELOPED A FUNDING PLAN TO MEET OUR NEEDS. I DO WANT TO MENTION ONE OF OUR GOALS AS PART OF THIS PLAN IS TO BUILD UP OPERATIONAL RESERVES. RECOGNIZING THIS PLAN AND THAT WE WANT TO BUILD UP SOME OPERATIONAL AND CAPITAL RESERVES, THE MAJORITY OF THE PLAN IS DEBT FINANCED. WHAT WE HAVE ASSUMED IS A SECURE PRIVATE PLACEMENT LOAN FOR $3.4 MILLION IN 2027, FOLLOWED BY -- THAT WOULD PROVIDE FUNDING FOR THOSE HIGH PRIORITY PRO PROJECTS. IN 2029 SECURING A SECOND LOAN FOR $2.5 MILLION TO FUND THOSE MEDIUM-TERM PROJECTS. BEYOND THAT YOU CAN SEE WE ARE USING $2.2 MILLION OF EXISTING PROCEEDS AND FINALLY $1.5 MILLION OF CASH GENERATED FROM OPERATIONS TO FUND SOME OF THOSE SMALL DOLLAR PROJECTS. TO DO THAT, WE KNOW WHEN WE ADD UP THE ADDITIONAL STAFFING, THE DEBT SERVICE ON THESE PROPOSED LOANS, WE ARE GOING TO HAVE A LARGE INCREASE IN WHAT WE CONSIDER OUR REVENUE REQUIREMENTS AND WHAT REVENUE REQUIREMENTS ARE. THESE ARE GOALS OR OBJECTIVES ON A FINANCIAL BASIS. AS YOU CAN SEE COMPARED TO 2026, REVENUES WHICH IS THE BLACK LINE ARE KIND OF MEETING OUR NEEDS BUT NOT REALLY PRODUCING ANY ADDITIONAL REVENUE TO SAFER RESERVES TO FUND CAPITAL IMPROVEMENTS AND WHATNOT. WHAT YOU ARE SEEING ON YOUR SCREEN WITH THE RED DOTTED LINE THAT IS OUR PROJECTED REVENUES WITH OUR RATE ADJUSTMENTS. YOU WILL SEE A LARGE INCREASE BETWEEN 2026 AND 2027, THAT'S BEEN PUT IN PLACE TO TRY TO SECURE FINANCING FOR A HIGH PRIORITY PROJECTS AND TO PROVIDE FUNDING FOR OUR ADDITIONAL MAINTENANCE. BEYOND THAT YOU WILL NOTICE THE RED LINE CONTINUES TO GO UP AND THAT'S ASSOCIATED WITH THE CONTINUED APPLICATION OF THE ANNUAL INFLATIONARY RATE ADJUSTMENTS THAT YOU ALL HAVE DONE HISTORICALLY. IT'S HONESTLY A GREAT THING YOU HAVE DONE THAT AND A GOOD PLAN TO MOVE FORWARD WITH GOING FORWARD. THE NEXT THING WE'RE GOING TO TALK ABOUT IS THE ALTERNATIVE RATE STRUCTURE AND HOW IT WAS DEVELOPED. WHEN WE DEVELOP AN ALTERNATIVE STRUCTURE, THE FIRST THING WE HAVE TO DO IS IDENTIFY WHAT ARE OUR BILLING UNITS. TO DO THAT WE HAVE LOOKED AT BILLING DATA FOR FISCAL YEAR 25, ALONG WITH PARCEL INFORMATION PULLED FROM THE PROPERTY TAX COLLECTOR. WE LOOK AT AVERAGE REVENUE COLLECTION AMONG BENEFIT CLASSES OR DIFFERENT CUSTOMER CLASSES, AND COMPARED THAT TO WHAT OUR ALTERNATIVE RATES WOULD PRODUCE. A LITTLE BACKGROUND ON YOUR EXISTING RATE STRUCTURE: RIGHT NOW YOU CHARGE SINGLE FAMILY, MULTIFAMILY AND COMMERCIAL, THOSE ARE YOUR THREE DIFFERENT RATE CLASSIFICATIONS, CUSTOMER CLASSIFICATIONS THAT YOU HAVE IN PLACE. SINGLE-FAMILY GENERALLY IS REFERRED TO AS ONE, ESU EQUIVALENT RESIDENTIAL UNIT, MULTIFAMILY IS TREATED AT A LOWER PERCENTAGE THAN THAT OR REDUCED FACTOR, EQUIVALENCY FACTOR OF .5% AND COMMERCIAL IS CONSIDERED EQUIVALENT AS ONE SINGLE-FAMILY DWELLING. I DO WANT TO MENTION RIGHT NOW YOU ALSO PROVIDE A 50% PRIVATE RETENTION FACILITY DISCOUNT. EFFECTIVELY, IF THE HOA HAD A [00:25:06] RETENTION POND, THOSE CUSTOMERS WOULD RECEIVE A 50% DISCOUNT ON THEIR STORMWATER FEES. WHEN WE TALK ABOUT HOW ARE THESE CUSTOMERS GOING TO BE IMPACTED AND WHO IS PAYING FOR WHAT'S? ONE THING WE LIKE TO DO IS TRY TO PUT EVERYONE ON AN EQUIVALENT BASIS. WHAT YOU ARE SEEING ON YOUR SCREEN IS THE AVERAGE REVENUE THAT'S COLLECTED PER THOUSAND SQUARE FEET OF IMPERVIOUS AREA. YOU WILL NOTE SINGLE-FAMILY AND MULTIFAMILY WITHOUT ANY DISCOUNTS FOR PRIVATE RETENTION FACILITIES, THEY ARE PAYING ABOUT 4.80 TO $3.42 PER MONTH, PER THOUSAND SQUARE FEET. WHEN WE COMPARE THAT TO THE OTHER COMMERCIAL CLASSES -- OTHER CUSTOMER CLASSES AND OUR THREE DISCOUNTED CLASSES, THERE'S A PRETTY STARK DIFFERENCE BETWEEN THE REVENUE THAT'S COLLECTED COMPARED TO THE BENEFIT THAT IS RECEIVED. RIGHT NOW YOUR AVERAGE REVENUE THAT YOU ARE COLLECTING PER THOUSAND SQUARE FEET OF IMPERVIOUS AREA IS ABOUT $3.07, THAT'S AVERAGE FOR THE WHOLE SYSTEM. WHAT WE CALCULATED WHEN WE LOOKED AT WHAT WAS THE ACTUAL COST OF PROVIDING SERVICE FISCAL YEAR 27, THE AMOUNT THAT WAS IDENTIFIED WAS $5.40, THAT'S REALLY WHERE WE WANT TO GO, TRY TO SAY WE NOTICED THERE ARE SOME DIFFERENTIALS BETWEEN THE DIFFERENT CUSTOMER CLASSES AND OUR GOAL IS TO ADJUST AND TRY TO MITIGATE THOSE AS MUCH AS WE C CAN. TO DO THAT TO THE FIRST THING WE HAVE TO DO IS TO ESTABLISH WHAT IS A SINGLE-FAMILY HOME WORTH? HOW MUCH IMPERVIOUS AREA IS ON AVERAGE FOR A SINGLE-FAMILY HOME? WHAT WE DO IS WE TYPICALLY LOOK AT THE 75TH PERCENTILE FOR EACH ONE OF THE CUSTOMER CLASSES TO ESTABLISH A SINGLE E.R. YOU. FOR A SINGLE-FAMILY HOME, 75% IS AT OR BELOW 3,000 SQUARE FEET OF IMPERVIOUS AREA, THAT DOES INCLUDE AN ALLOTMENT FOR THE DRIVEWAYS AND ANY OTHER KIND OF ACCESSORY UNITS, BACK PORCH, POOL DECK WHATNOT. WHEN WE LOOKED AT MULTIFAMILY WHICH RIGHT NOW IS BILLED AT EFFECTIVELY A 0.5 FACTOR OF THE AVERAGE WE CAME UP WITH PER DWELLING UNIT IS ABOUT 2100 SQUARE FEET. WHAT WE ARE SEEING TO START WITH IS A SLIGHT INCREASE IN THE ASSUMPTION FOR MULTIFAMILY. ON COMMERCIAL, THERE WAS A MUCH LARGER DIFFERENCE. THE COMMERCIAL CLIENT IS PRETTY WIDE. WE DID NOTE AT THE 75TH PERCENTILE EFFECTIVELY EVERYONE IS EQUAL TO 6,000 SQUARE FEET OF IMPERVIOUS AREA IN TOTAL. WE ARE RECOMMENDING GOING FORWARD THESE CUSTOMERS, THE COMMERCIAL CLASS B BUILD A MINIMUM OF TWO GO E.R. YOUS CALCULATED FOR THE LARGER CUSTOMERS TO TRY TO GO BACK AND DEAL WITH SOME OF THIS, RIGHT? TRY TO TAKE AWAY FROM THESE LARGE DIFFERENTIALS ON THE COMMERCIAL CLASS. THE NEXT THING WE DID IS WE TOOK OUR 2027 REVENUE REQUIREMENTS AND WE FUNCTIONALIZED THEM TO SAY HOW MUCH COST WE THINK IS ASSOCIATED WITH PROVIDING THE SERVICES THE STORMWATER SYSTEM PROVIDES? WHAT WE IDENTIFIED, OF ALL OF OUR COSTS APPROXIMATELY 92% IS ASSOCIATED WITH RIGHT OF WAY, FLOOD PROTECTION. THAT IS A COST THAT BENEFITS EVERYONE, WHETHER YOU ARE A COMMERCIAL BUSINESS, SINGLE-FAMILY HOME OR MULTIFAMILY. PRIVATE FLOOD PROTECTION WAS LESS THAN 7%, REALLY WHAT THAT IS, THAT'S THE RUNOFF FROM THE HOME AND IT REALLY ONLY OCCURS DURING STRONG STORM EVENTS WHICH WAS VERY RARE, LESS THAN FIVE YEAR. PUBLIC RETENTION FACILITY MAINTENANCE WAS LESS THAN 1% TO. WHEN YOU THINK ABOUT THOSE PRIVATE RETENTION DISCOUNTS, THIS IS THE COST THAT'S BEING OFFSET BY AN HOA HAVING THEIR OWN RETENTION FACILITY. THE MAINTENANCE ON THAT INFRASTRUCTURE IS VERY LOW. AS WE KIND OF SAW WITH THE CIP, THE CAPITAL PLAN, A MAJORITY OF OUR COSTS REALLY ASSOCIATED WITH [00:30:02] INFRASTRUCTURE REINVESTMENT WHICH BENEFITS EVERYONE. BASED ON THAT, WE ARE RECOMMENDING TO ESTABLISH OUR E.R. YOU LEVELS FOR EACH CUSTOMER CLASS, SINGLE-FAMILY RESIDENTIAL BEING ONE E.R. YOU MULTIFAMILY BEING ABLE TO .7, THAT IS AN INCREASE TO WHERE THEY ARE RIGHT NOW AND COMMERCIAL WE ARE RECOMMENDING THEY BE CALCULATED BASED ON THE ACTUAL IMPERVIOUS AREA OF THOSE FACILITIES, NEVER LESS THAN TWO. WHAT THAT DOES IS IT PUTS EVERYONE ON AN EQUAL FOOTING AS FAR AS THEIR CONTRIBUTIONS, REVENUE GENERATION TO THE SY SYSTEM. WE ARE RECOMMENDING ELIMINATION OF THE PRIVATE RETENTION FACILITY DISCOUNTS -- RIGHT NOW WOULD WE IDENTIFIED AS THE COSTS BEING DEFERRED ASSOCIATED WITH THOSE FACILITIES, LESS THAN 1% A YEAR. BASED ON OUR NEEDS FOR STAFFING, SECURING THE LOANS TO FUND THE HIGH PRIORITY AND MEDIUM PRIORITY CAPITAL PROJECTS, WE ARE RECOMMENDING EACH E.R. YOU WILL BE BILLED AT $16.75. A TABLE AT THE BOTTOM OF THIS SLIDE PRESENTS THE RECOMMENDED RATES OF $16.75 FOR A SINGLE FAMILY, MULTIFAMILY BEING ABOUT $11.73 PER E.R. YOU AND COMMERCIAL PAYING MINIMUM OF $33.50. INCREASING BASED ON THE OVERALL IMPERVIOUS AREA FOR LARGER PARCELS. HOW DO THOSE RATES COMPARE TO YOUR PEERS? YOUR EXISTING RATE RIGHT NOW PER MONTH IS $14.36 AS YOU CAN SEE THE PROPOSED RATE DOES MOVE YOU TOWARD THE MIDDLE, ABOVE THE MIDDLE OF THE PACK RIGHT NOW COMPARED TO SOME OTHER COASTAL COMMUNITIES THAT WE SURVEYED TO. I DO WANT TO MENTION WHEN WE LOOK AT THIS COMPARISON, WHAT IS BEING PRESENTED ON THE SCREEN IS FISCAL YEAR 27 RECOMMENDED RATES VERSUS FISCAL YEAR '26 RATES. THE SLIDE SAYS 2025, IT SHOULD BE 26. GOING FORWARD TO NEXT YEAR MANY OF THESE UTILITIES WILL ALSO BE ADJUSTING RATES, YOU'LL PROBABLY STILL BE IN THE MIDDLE OF THE PACK. RIGHT NOW YOU ARE RIGHT IN THE MIDDLE WHICH LOOKS GOOD. I DID WANT TO MAKE A CONSIDERATION TO THE COMMISSION, AN ALTERNATIVE TO CONSIDER THAT IS DONE THROUGHOUT THE STATE IS TO SET SINGLE-FAMILY AT DIFFERENT LEVELS, CHARGE A DIFFERENT E.R. YOU FOR SMALL PROPERTIES, VERY SMALL HOMES, AND AVERAGE BASED ON CAPTURING THE MAJORITY OF YOUR CUSTOMER CLASS AND LARGE HOMES PAYING A LARGER E.R. YOU ASSESSMENT OF TWO E.R. YOUS. WE DID LOOK AT CALCULATING THAT AND THAT'S WHAT YOU'RE SEEING ON YOUR SCREEN HERE. THE POTENTIAL ALTERNATIVE FOR THE APPLICATION TO SINGLE SINGLE-FAMILY, IN TOTAL YOU HAVE ABOUT -- IF THERE'S CUSTOMERS WITH REALLY SMALL HOMES, IS ONLY ABOUT 480 OF THOSE CUSTOMERS THAT MIGHT RECEIVE A DISCOUNTED RATE. ON THE LARGE HOME SIDE, ABOUT 272 IN TOTAL THAT WOULD POTENTIALLY RECEIVE AN OVERALL HIGHER FEE BEING ASSESSED. THE OVERALL IMPACT ON THE SYSTEM WOULD BE NEGLIGIBLE, AND PRODUCE ABOUT $6500 OF ADDITIONAL REVENUE. SOMETHING FOR YOU TO CONSIDER. >> SORRY FOR THE INTERRUPTION -- WHEN YOU LOOK AT SMALL, AVERAGE, LARGE AS THAT SQUARE FOOTAGE OR RATIO OF IMPERVIOUS TO LAND. >> IT'S BASED ON HOME SQUARE FOOTAGE. >> NOT ACCOUNTING FOR HOW MUCH LAND THAT MIGHT SIT ON. >> RIGHT. WHERE YOU ARE GOING AS FOR OTHER AREAS, HOW MUCH RUNOFF CAN THAT -- HOW MUCH CAN THAT PROPERTY DEAL WITH? WE DON'T HAVE THAT LEVEL OF DETAIL IN THIS ANALYSIS. THAT IS AN OPTION. WHEN WE LOOKED AT YOUR OVERALL DEMOGRAPHICS OF YOUR HOMES, I DID ONE OF THESE STUDIES FOR THE TOWN OF PALM BEACH WHICH IS IN WEST PALM. THEY HAVE SOME DRASTIC, DIFFERENCES IN HOW BIG SOME OF THE HOMES CAN BE COMPARED TO SOME OF THE SMALLER HOMES. THE MAJORITY OF YOUR CUSTOMERS [00:35:06] REALLY FALL WITHIN THAT FRAMEWORK AND THAT'S WHAT WE ARE SEEING HERE. WHEN WE LOOK AT -- DOES AN ALTERNATIVE STRUCTURE MAKES SENSE HERE? WE'VE ONLY GOT ABOUT 700 OR SO HOMES THAT MIGHT FALL OUT SIDE. IT'S AN OPTION THAT IS AVAILABLE TO YOU WHAT I THINK ABOUT THE HOMES AND I THINK ABOUT HOW ARE THESE CUSTOMERS REALLY BENEFITING FROM THE SYSTEM AND RECOGNIZING THE MAJORITY OF OUR COSTS ASSOCIATED WITH MAINTENANCE AND RUNAWAY FLOOD PROTECTION, IT'S REALLY ASSOCIATED -- HOW MUCH ARE YOU BENEFITING FROM USING THE RIGHT OF WAYS, USING THE ROADS? I DON'T KNOW IF HOME SQUARE FOOTAGE TIES AS WELL TO THAT. IT IS AN OPTION FOR YOU TO CONSIDER. >> WHAT WAS THE AMOUNT OF SQUARE FOOTAGE THE THRESHOLD IS SET FROM SMALL TO MAKE AVERAGE AND AVERAGE TO LARGER? >> IT'S SET AT 1500 SQUARE FEET, IMPERVIOUS AREA AND LARGE WOULD BE EVERYONE DRIFTS ALL THE WAY OVER, 6,000 SQUARE FEET. YOU COULD PLAY WITH THOSE LEVELS WHERE YOU WANT TO BE. I THINK MY GOAL TOO IS LOOKING AT THE CUSTOMER CLASS, CONSIDERING YOUR STAFF IS SET UP AT A LEVEL THAT IS ADMINISTRATIVELY FEASIBLE. GO OUT COME UP WE CALCULATE THIS, ISSUE THE NOTICES AND CHANGE THE BILLING SYSTEM. >> SINCE WE ARE ASKING A COUPLE QUESTIONS CAN I GET A CLARIFICATION ON THE MULTIFAMILY? MULTIFAMILY IS WHETHER IT'S A DUPLEX OR VINTAGE APARTMENTS -- ANY SIZE WITH MULTIFAMILY, EACH ONE OF THESE MULTIFAMILY UNITS WOULD PAY THAT HIS MULTIFAMILY RATE. IT'S A BUNCH OF CONDOS -- GO. >> PRIMARILY COMBOS AND DEPARTMENTS. THE DUPLEX IS I BELIEVE THE MAJORITY -- REALLY MORE TOWNHOMES AND TREATED IN THAT SINGLE-FAMILY CUSTOMER CLASSIFICATION. >> TOWNHOMES ARE ON THEIR OWN. >> WE HAVE DUPLEXES THAT AREN'T NECESSARILY TOWNHOMES, ARE YOU SAYING IF SHE'S A DUPLEX ON ONE PARCEL, THEN EACH SIDE IS GOING TO GET THE FULL RATE? THIS IS SOMETHING WE TALKED ABOUT YESTERDAY. >> THE PARCEL IS THE DEFINING FACTOR, TWO UNITS ON ONE TRACK OF LAND, THAT'S MULTIFAMILY. A TRADITIONAL TOWNHOME IS TWO LOTS WITH ONE ADJOINING STRUCTURE. BOTH TREATED AS A SINGLE-FAMILY RESIDENCE -- >> ONE UNIT ON ONE LOT, IT'S SINGLE-FAMILY. MULTIPLE UNITS ON ONE PARCEL IT WILL FALL INTO THE MULTIFAMILY CATEGORY. >> AS AN EXAMPLE, THE TOWN HOUSES RIGHT BEHIND US WOULD EACH BE ONE UNIT. I THINK THE FEE IS SIMPLE. IT WOULD BE ONE. >> THAT IS HELPFUL, THANK YOU -- SORRY FOR THE INTERRUPTION. >> NOT A PROBLEM. IN SUMMARY WHAT WE'RE LOOKING FOR YOUR SUPPORT AND DIRECTION ON IS EXPENDING MAINTENANCE STAFF. HE GETS THE MOST LIFE OUT OF EXISTING INFRASTRUCTURE ESTABLISHING A DEDICATED CAPITAL FUNDING PROGRAM. YOU'RE WORKING YOUR WAY THROUGH IT NOW WITH AREA SIX AND WORKING ON FUNDING THOSE IMPROVEMENTS AND ALSO LONG TERM GENERATING RESERVES, WE CAN KIND OF GET AWAY FROM USING DEBT TO FUND CIP IN THE FUTURE. WE WANT TO LOOK FOR YOUR SUPPORT TO SECURE TWO LOANS OVER THE NEXT SEVERAL YEARS, 2027 SECURING $3.4 MILLION, FUNDING THOSE MEDIUM PRIORITY PROJECTS $2.4 MILLION. FINALLY ADOPTING AN ALTERNATIVE RATE STRUCTURE, BASED ON EQUIVALENCY FACTOR, BASED ON E.R. YOU. ELIMINATING THE PRIVATE RETENTION FACILITY DISCOUNT, [00:40:02] COST SAVINGS WAS LESS THAN 1% OF OVERALL IDENTIFIED REVENUE REQUIREMENTS. SETTING OUR NATIONAL E.R. YOU MONTHLY RATE AT $16.75. THANK YOU VERY MUCH. >> QUESTION IF YOU DON'T MIND. WHEN YOU HAD THE RATES OF THE VARIOUS CITIES -- I CAN SEE THAT LINE. HOW TO THOSE CITIES COMPARED TO WHERE WE ARE WITHOUT ANY CASH IN THE BANK? WE ARE TALKING ABOUT RAISING OUR FEES TO GET BETTER IN LINE -- HOW DO THESE COMPARE? HOW DO SOME OF THESE CITIES BECAUSE I THINK THAT IS A MORE FAIR QUESTION TO ASK. WE HAVE NO MONEY, MAYBE SOME OF THESE -- DAYTONA BEACH HAS A LOT MORE MONEY IN CASH ON HAND, WE MIGHT BE GOING IN THE SAME WAY. WE ARE WAY BELOW WHERE WE SHOULD BE. >> THE HARD PART IS THAT'S A REALLY GOOD QUESTION. WE DID THAT SAME FINANCIAL METRICS AND CALCULATED FOR ALL OF THESE, HOW DOES OUR REPORT CARD COMPARED TO THEIR REPORT CARD? I CAN TELL YOU WHEN I LOOK AT SOME OF THESE UTILITIES AND I CONSIDER WHAT'S GOING ON, DAYTONA BEACH HAVE A LOT OF GROWTH. THEY ARE BUILDING THEIR WHOLE AREA AROUND MARGARITAVILLE WEST OF 95 IT'S ALL DAYTONA BEACH SERVICE TERRITORY. THEY ALSO HAVE GROWTH TO OFFSET SOME OF THEIR POTENTIAL NEEDS FOR RATE ADJUSTMENTS, YOU DON'T HAVE THAT. THERE'S NOT A LOT OF GROWTH OR AREAS TO EXPAND UNLESS YOU START EXPANDING UP. LOOKING AT WHERE YOU ARE TODAY AND WHERE YOU ARE TRYING TO GO WE ARE TRYING TO COME UP WITH A BALANCED PLAN THAT GETS US TH THERE, IT ISN'T TOO GREAT OF AN IMPACT. BUT IT'S STILL FUNDING OUR NE NEEDS. THAT'S A VERY GOOD QUESTION. I WOULD ASSUME THE MAJORITY OF THESE HAVE SOME AMOUNT OF RESERVES. >> WOULD YOU ALSO ASSUME THEY CARRY MORE DEBT THAN WE ARE? >> IT'S POSSIBLE. WE DON'T KNOW FOR SURE. >> PALM COAST IS THE POSTER CHILD FOR NOT DOING ANYTHING. THEIR WASTEWATER AND WATER IS JUST AS BAD, THEY ARE TAKING A 35% INCREASE IN THEIR WATER SYSTEMS BECAUSE OF -- JUST BECAUSE OF DOING NOTHING OVER MANY, MANY YEARS. THAT IS A COMMUNITY THAT GOT AS A PLANNED UNIT DEVELOPMENT 50 YEARS AGO. IT'S THE POSTER CHILD FOR DOING NOTHING. THE OTHER QUESTION I HAVE IS WE ARE TALKING ABOUT HOW WE NEED TO GET TO THE NEXT FIVE YEARS. WE KNOW WHAT THE END OF FIVE YEARS WE AREN'T GOING WE ARE DONE. ANOTHER FULL SET OF PROJECTS THAT SHOW UP ON THIS LIST. YOU THINK THIS RATE CARRIES US FOR FIVE YEARS ARE WE REALLY SAYING IN FIVE MORE YEARS WE NEED TO DO ANOTHER RATE STUDY BECAUSE WE HAVE ANOTHER NEW SET OF PROJECTS? WE MAKE AN ADJUSTMENT AGAIN? MAYBE THAT'S MORE OF AN ANDRE QUESTION, I'M TRYING TO UNDERSTAND -- FIVE YEARS AS A SHORT PLANNING PERIOD FOR WHAT WE ARE TALKING ABOUT. >> YOU ARE RIGHT, IT IS. THIS WILL PUT US IN A VERY GOOD POSITION, NEW PROJECTS ARE GOING TO DEVELOP. MORE NEEDS ARE GOING TO ARISE -- I DON'T THINK THEY ARE GOING TO BE ON THE SAME SCALE AS THE MAJORITY OF THE PROJECTS WE HAVE ALREADY IDENTIFIED IN THE CIP. WE ARE DEVELOPING AN ANNUAL REPORT SO WE CAN THAT YEAR-TO-YEAR LOOK AT THE FINANCIAL HEALTH OF THE ENTERPRISE. >> AS YOU ARE PLANNING ASSUMPTION WITH THIS FOR THE NEXT FIVE YEARS, WE WOULD NOT ANTICIPATE A SIGNIFICANT RATE INCREASE IN STORMWATER FEES? >> THAT'S CORRECT. AN INITIAL INCREASE TO 675, WHAT [00:45:05] WE ARE PLANNING ON IS AN INCREASE MOVING FORWARD. THIS IS THE ONLY SUBSTANTIAL INCREASE. >> I THOUGHT I HEARD YOU SAY YOU ARE ILLUMINATING THE CREDITS FOR COMMERCIAL STORMWATER -- >> JUST FOR THE PRIVATE SYSTEM DISCOUNT THAT'S CURRENTLY AT A 50% DISCOUNT. >> I'M BRINGING IT UP BECAUSE MY MOST RECENT PROJECT WITH THE PAVILION, I HAD TO KEEP STORMWATER ON MY PROPERTY WHICH COST A LOT OF DOLLARS IN ORDER TO DO THAT AND YOU'RE SAYING YOU ARE TAKING THAT ELEMENT AWAY? >> FROM THE MONTHLY FEE, YES. >> BUT YOU ARE STILL GOING TO MAKE THEM DO THAT. >> IT'S NOT JUST THE CITY THAT REQUIRES THAT, THAT'S WATER MANAGEMENT DISTRICT, THAT'S STATE GUIDELINES. UNDER THIS MODEL, YOU ARE CORRECT. >> IS THERE CONCERN -- ST. JOHN'S WATER MANAGEMENT DISTRICT WOULD CONTINUE TO REQUIRE THAT. I'M WONDERING IF THAT DISCOUNT WAS REMOVED WOULD AN HOA NO LONGER BE INCENTIVIZED TO MAINTAIN THEIR SYSTEM BUT THEY WOULD HAVE TO UNDER ST. JOHN'S. >> IT'S A PERFECT REQUIREMENT UNDER IT. >> THE ANTICIPATED LOANS -- I DON'T REMEMBER IF I SAW IN THIS STUDY, WHAT DO WE ANTICIPATE WOULD BE A LENGTH OF TERM FOR A LOAN? >> I BELIEVE IT WAS 15 YEARS. >> WE TALKED ABOUT OUR FINANCIAL CONSULTANT. >> BECAUSE THE LOANS WERE SO SMALL, I WANTED TO BE THE FINANCIAL ADVISORS ASSESSMENTS, TO LOOK FOR WHAT WOULD BE THE POTENTIAL LINK. GENERALLY WHEN WE DO UTILITY BONDS THEY ARE 20 TO 30 YEARS BUT THESE LOANS BEING SO SMALL AND IT'S A WIDE GROUPING OF PROJECTS WE COULDN'T GO SRF, NOT BIG ENOUGH FOR A BOND. WE WANT TO REACH OUT FOR THEM AND THEY RECOMMENDED 15 YEARS, A LITTLE BIT HIGHER INTEREST AND THEY ALSO RECOMMENDED THE COVENANTS THAT WE SHOULD ALSO TRY TO MAINTAIN DURING THE ST STUDY. >> ABOUT THE PRIVATE DISCOUNTS FOR MAINTAINING RETENTION, THE STORMWATER FEES ARE TIED TO THE RIGHTS OF WAY. IF YOU LOOK AT THE SUBDIVISION ABOUT A RETENTION POND WE ARE STILL MAINTAINING THEIR STREETS, THEY ARE NOT PRIVATE STREETS. SPEAK ABOUT THE WATER IS NOT GOING ON THEM. >> NOT ALL THE WATER IS GOING ON THEM BUT SOME WATER CLEARLY IS. THAT MAKES SENSE -- THE OTHER THING I WOULD SAY, ANDRE AND I HAD A CONVERSATION ABOUT THIS YESTERDAY. I AM SOMEWHAT CONCERNED ABOUT THE INCREASE FOR WHAT I THINK OF AS THESE SMALL PROPERTIES. THE OPTION YOU PRESENTED WHERE YOU COULD HAVE THE THREE TIERS OF PROPERTY FOR ME MAKES SENSE. IT RECOGNIZES MANY OF OUR MUCH OLDER COMMUNITIES IN THE CENTRAL PART ARE VERY SMALL MOVES. THEY MAKE IT REPLACED AT SOME POINT WITH A 2,000 SQUARE-FOOT HOUSE AS THINGS CONTINUE TO CHANGE HANDS. AND THEN THAT WILL CHANGE. FOR THOSE THAT ARE IN PLACE TODAY EVEN IF IT'S ONLY A COUPLE HUNDRED, I THINK WE SHOULD TRY TO ACCOMMODATE THAT AND RECOGNIZE THAT MANY OF THOSE HOMES ARE OWNED BY RETIREES ON VERY LIMITED INCOMES. AND WE NEED TO BE SENSITIVE TO THAT. >> I AGREE WITH THAT. >> I'M NOT SURE I AGREE WITH THAT. THAT WAS THE NEXT THING I WANTED TO TALK ABOUT. IF IT'S BASED JUST ON THE SQUARE FOOTAGE OF THE HOME, IT'S NOT TRULY CAPTURING THE IMPERVIOUS SURFACE. IT'S AN ATTEMPT TO CAPTURE IT BUT WE CAN IMAGINE A VERY SMALL HOME HAS A LOT OF PERVIOUS SURFACE AROUND IT BUT WE DON'T ACTUALLY KNOW. WE DON'T KNOW WHAT THE PARCEL SIZE IS YOUR COWE'VE MADE THIS 500 SQUARE FOOT ADJUSTMENT FOR DRIVEWAY AND A PATIO -- BUT WE DON'T ACTUALLY KNOW, THE LONGER YOU OWN A HOME, THE MORE STUFF [00:50:02] YOU ARE IN GENERAL ADDING, SHEDS AND WHATNOT. THE OTHER THING I'M CONCERNED ABOUT IS OUR VERY LARGEST HOMES, ARE THEY THREE STORIES? AND ACTUALLY THEIR FOOTPRINT IS RELATIVELY SMALL WITH A BIG IMPERVIOUS SURFACE OR ARE THEY ONE STORY SPREAD ACROSS THE LOT. SQUARE FOOTAGE I THINK DOESN'T ACTUALLY TELL US A VERY ACCURATE STORY. I DON'T THINK IT'S ADMINISTRATIVELY FEASIBLE TO TO TRULY -- TRULY WE SHOULD BE CAPTURING -- WE SHOULD HAVE SOME LIDAR AND SOME GREAT GIS -- >> WE DON'T HAVE IT. >> BECAUSE WE DON'T HAVE A COUPLE HUNDRED THOUSAND DOLLARS. >> AT THE WORLD WAS PERFECT -- >> THE DATA SETS THAT WE HAVE IS GIS-BASED. THE SQUARE FOOTAGE THAT WE ARE USING ARE NOT LIVABLE SQUARE FOOTAGE THAT YOU WOULD ADVERTISE. >> IT'S FOOTPRINT? OKAY. >> WHAT WE HAVE IS BASICALLY YOUR ROOFTOP, COULD BE A THREE-STORY BUILDING, COULD BE ONE STORY. WHAT WE DON'T HAVE IS THOSE ACCESSORY SHEDS, PATIOS, DRIVEWAYS. THAT TAKES MUCH MORE TIME TO DEVELOP. ESSENTIALLY YOU ARE TRACING AN AREA. YOU CAN'T SEE THOSE. >> BUT WE WOULD JUST BE GOING BY SQUARE FOOTAGE. >> OUR WHOLE DATA SET IS BASED ON FOOTPRINT. THINK OF IT THAT WAY. >> IN THAT CASE, I DEFER. I COULD BE AMENABLE TO THAT. IF OUR WHOLE GOAL IS COST OF SERVICE AND TO RECLASSIFY THIS AND HAVE PEOPLE PAY WHAT THEY ARE ACTUALLY CAUSING, THEN YEAH. 272 LARGE HOMES -- DO HAVE MORE IMPERVIOUS SURFACE AND ARE CAUSING MORE RUNOFF AND THE SMALLER HOMES ARE NOT. >> ONE MORE IMPORTANTLY COMMERCIAL DISCOUNTS CURRENTLY BEING EXPERIENCED ARE ESSENTIALLY URGING RESIDENTS TO CARRY MOST OF THIS. >> UNDER CHART COMMERCIAL HAS BEEN -- >> NOBODY IS ASKING THE $64,000 QUESTION WHICH IS HOW MUCH DO RESTAURANTS PAY? >> $14? THAT'S A DEAL. >> THAT IS THE PEACE, GRANTED THERE MAY ONLY BE A HANDFUL OF COMMERCIAL PROPERTIES THAT FALL IN THAT CATEGORY, BUT THOSE CALCULATIONS WILL HAVE TO CHANGE DRASTICALLY AND WILL GENERATE MORE MONEY THAN MAKING PEOPLE WITH A THOUSAND SQUARE-FOOT HOUSE. >> WE DID HAVE A SLIDE TO THAT EFFECT, THERE'S A TABLE IN THE REPORT THAT LOOKS AT THE IMPACT TO COMMERCIAL PROPERTIES. HOW MANY PROPERTIES SEE THEIR RATES DRASTICALLY INCREASE. >> IT'S ON PAGE 23, THAT -- THERE'S EIGHT. THE NUMBER OF COMMERCIAL USERS IN THE HIGHEST TIER IS VERY SMALL. >> THE BEST MAJORITY ARE IN THE MUCH SMALLER -- >> THE OTHER THING I WOULD WANT TO GET YOUR RECOMMENDATION ON IS THIS ISSUE OF WHO IS EXEMPT TODAY? AND WHAT IS EXEMPT? WHO AND WHAT NEEDS TO BE EXEMPT TOMORROW. I'M NOT SURE I CAN SIT HERE AND TELL YOU I KNOW FOR SURE THIS OR THAT BUT I WHAT I WOULD LIKE TO SEE FROM STAFF'S RECOMMENDATIONS THAT SET -- IF PARKING LOTS FOR EXAMPLE -- >> ONLY PUBLIC PARKING LOTS. >> ANYWAY, I THINK WE JUST CAN'T LET THAT LIST GO AND SAY WE DID FIND WE WILL JUST CONTINUE HAVE EVERYTHING EXEMPT. BUT I DO THINK WE NEED TO GET SOME RECOMMENDATIONS FROM THE STAFF ABOUT IF THERE ARE ANY CHANGES TO THAT? I KNOW YESTERDAY YOU MENTIONED THAT THERE ARE SOME SURVEYS PARTICULARLY ABOUT SCHOOLS AND THEY ARE EXEMPT TODAY, SHOULD THEY BE EXEMPT? WHO IS EXEMPT ON THAT LIST EXACTLY FOR US? IS AT THE RIGHT LIST FOR US? >> I WOULD WANT SOME RECOMMENDATION FROM YOU IN THE CITY MANAGER STAFF ABOUT WHAT THAT OUGHT TO LOOK LIKE. >> WE CAN DEFINITELY LOOK AT HOW OTHER COMMITTEES HANDLE IT, WHAT THOSE CURRENT TRENDS ARE, MOVE THE EXEMPT COMMUNITIES IN OUR [00:55:05] JURISDICTION. THIS PROCESS HAS ALLOWED US TO LOOK CRITICALLY AT OUR ACCOUNTS AND SOME WEREN'T BEING BILLED THAT SHOULD HAVE BEEN. WE HAVE BEEN ABLE TO SHORE UP IN SOME AREAS AND CORRECT SOME SITUATIONS JUST UNDER OUR CURRENT STRUCTURE. WE'LL CONTINUE TO DO THAT BUT CERTAINLY WE CAN DO MORE RESEARCH AND BRING BACK SOME RECOMMENDATIONS. >> I'M SO HAPPY Y'ALL HAVE DONE THIS, IT'S AN EXCELLENT JOB, THE REPORT WAS EXCELLENT. IT REALLY HELPS US UNDERSTAND WHY WE ARE WHERE WE ARE TODAY AND WHAT WE NEED TO DO TO GET A LONG TERM DOWN THE ROAD. THANK YOU BOTH VERY MUCH. >> I WILL COMPLETELY AGREE, I REALLY APPRECIATE -- NOBODY WANTS A RATE INCREASE BUT ALSO NOBODY WANTS SYSTEMS FAILING DOWN THE ROAD. WHOEVER THE FUTURE COMMISSIONERS ARE SITTING UP HERE TEN YEARS FROM NOW, THEY DON'T WANT US T FAIL THEM. WE ALL KNOW THAT YOU NEED TO MAINTAIN YOUR EQUIPMENT AND WHAT YOU HAVE AND DO YOU NEED TO BUILD YOUR RESERVES. THEN WE NEED TO DO THAT. WHETHER IT'S PAINFUL OR NOT. I REALLY APPRECIATE THIS. I APPRECIATE THE NOTION OF THE THREE STAFF MEMBERS FULL-TIME ON THAT VACUUM TRUCK. THAT IS AN INCREDIBLY EXPENSIVE ASSETS, IT SHOULD BE USED AS IT SAYS IN THE REPORT, IT SHOULD BE USED AS MUCH AS POSSIBLE, EVERY HOUR IT'S SITTING IN THE YARD IS A DEPRECIATION COST WE ARE NOT UTILIZING. I THINK THAT'S GREAT FOR MAINTENANCE. I APPRECIATE IT. >> I DO WANT TO BE ABLE TO GIVE CONSENSUS BEFORE THE END AT THE MEETING. SPEAK I WAS GOING TO ASK ABOUT CONSENSUS ON THE THREE RATES FOR THE ONE RATE, YOU WANT THAT INFORMATION RIGHT? >> THAT WILL HELP US BRING BACK SOMETHING THAT YOU GUYS CAN SUPPORT. >> GIVEN THE CLARIFICATION I CAN SUPPORT THE TIERED RATE, ANYONE THAT DOES NOT, SPEAK UP. >> I CAN SUPPORT IT, I ASSUME IT'S ADMINISTRATIVELY FEASIBLE, IT'S WITHIN THE GIS DATA. >> A LITTLE BIT MORE CUMBERSOME ON THE BILLING SIDE BUT IT'S MANAGEABLE. >> I BELIEVE WE ALSO HAVE A REQUEST FOR FURTHER CLARIFICATION ON SOME OF THOSE QUALIFYING FACTORS. >> WHAT WE WILL PLAN ON DOING IS WHEN WE COME BACK WITH AN UPDATE ORDINANCE, WE'LL GIVE YOU SOME OPTIONS. AND SOME CONSIDERATIONS BECAUSE THAT WOULD BE TO GO READINGS. FOR THE FIRST READING WE CAN DIVE INTO THAT MORE. >> UNLESS THERE IS FURTHER QUESTIONS OR IF YOU NEED ADDITIONAL DIRECTION I THINK WE CAN WRAP IT UP. >> THANK YOU VERY MUCH. WITH THAT, * This transcript was compiled from uncorrected Closed Captioning.