Agenda 07/13/2021 Item #11E (Water, Wastewater, IQ Water and Wholesale Potable Water User Rate Study)07/13/2021
EXECUTIVE SUMMARY
Recommendation to accept the Water, Wastewater, Irrigation Quality Water, and Wholesale
Potable Water User Rate and Fee Study and direct the County Manager or his designee to
advertise a resolution amending Schedules One, Two, Three, Four, and Five of Appendix A to
Section Four of Collier County Ordinance No. 2001-73, as amended, titled the Collier County
Water-Sewer District Uniform Billing, Operating, and Regulatory Standards Ordinance No. 2001-
73, as amended, with an effective date of October 1, 2021.
OBJECTIVE: To update existing Water, Wastewater, Irrigation Quality Water (IQ) and Wholesale
Potable Water user rates and fees for the Collier County Water -Sewer District (District) to ensure the
revenues are sufficient to recover system-wide operation, maintenance, and repair costs; fund capital
improvement and rehabilitation projects (CIPs); make user fee debt service payments and meet rate
covenants in accordance with the Special Act of the Florida Legislature, Chapter 2003-353.
CONSIDERATIONS: Staff engaged Raftelis Financial Consultants, Inc. (Raftelis) to perform an
updated rate study for all user rates and fees that the District collects to ensure full cost recovery.
Raftelis’ Executive Summary report is attached for your review and includes their recommendations for
Water, Wastewater and IQ user rates. This report was prepared prior to the availability of any information
related to funding utility infrastructure from the American Rescue Act/Cares Act. Since that time, up to
$10 million of funding is being recommended for allocated to the District’s capital program.
Leading indicators support the findings and recommendations including critical utility cost drivers such as
price increases for utility parts and building construction indices approaching four percent increases
annually. However, with Federal Cares Act and American Rescue Act funding available in fiscal year
2022, staff is recommending a rate increase of 2.9 percent in the first year effective October 1, 2021, with
subsequent rate adjustments in fiscal years 2023 and 2024 equivalent to the rate study recommendations,
assuming no other funding availability.
The table below compares national utility cost indicators with current and proposed rate adjustments.
District utility infrastructure is continuously growing and aging. The proposed rate increases are driven
by capital improvement project (CIP) rehabilitation, replacement, and upgrades. Significant current and
upcoming repair, rehabilitation, and replacement needs include the Naples Park Basin Optimization,
Water Reclamation Facilities Repairs and Modifications, North County Water Reuse Facility Headworks,
and Palm River Public Utilities Renewal. Any federal dollars allocated to the utility for infrastructure
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07/13/2021
repair and rehabilitation will serve to accelerate the capital program and so mitigate risk by shortening the
timeframe to address critical needs.
Potable Water, Wastewater, and IQ user rates are included in Schedules One and Two of Appendix A to
Section Four of Collier County Ordinance No. 2001-73, as amended, titled the Collier County Water-
Sewer District Uniform Billing, Operating, and Regulatory Standards Ordinance No. 2001 -73, as
amended (represented by Tables ES-1, ES-2, and ES-3 in Raftelis’ Executive Summary). Proposed rate
increases are summarized in the following table. However, an across the board 2.9% rate increase in the
first year would replace the original study recommendation given Cares Act capital funding.
At the proposed rates, in FY22 the potable water and sewer utility bill for a typical residential customer
(¾” meter that uses 5,000 gallons per billing cycle) will increase by $4.72 per month, less than 16 cents
per day, from $102.09 to $106.81. Factors affecting rates charged by utilities include treatment required,
effluent disposal, utility size, bond covenants, capital reinvestment in utility infrastructure, and fiscal
policies. Rates vary significantly on a national level. The District’s rates remain competitive with other
Florida utilities surveyed in the rate study, higher than fourteen (14) but lower than six (6) by comparison.
Of the surveyed utilities, eleven (11) plan to conduct or implement a rate revision within the next 12
months.
On June 25, 2021, Fitch reaffirmed the District’s AAA credit rating citing robust liquidity, disciplined
rate setting and growth which are expected to support a sustained low leverage through Fitch’s scenario
analysis. The AAA rating enables the utility to borrow at very favorable rates. Even though no new user
fee debt is anticipated in this user rate study, maintaining this rating is key to future low -cost borrowing.
Moody’s also reaffirmed it Aaa rating on June 24, 2021 citing an expanding customer base, manageable
debt burden and capital needs that are largely supported by recurring revenues.
IQ water rates have historically been partially subsidized by water and wastewater rates to promote
beneficial use of reclaimed water and reduce future needs to construct and maintain additional water
capacity. IQ water rates are proposed to increase at 9 percent per year to approach full cost recovery for
this scarce commodity by fiscal year 2024 at which time pressurized and distributed IQ water rates will
still be 53 percent lower than the Block 1 potable water rate.
While the District does not have any current wholesale water agreements, rates are established for use on
an emergency or otherwise as-needed basis. The rate was last adjusted to $4.39 per thousand gallons on
October 1, 2020 in accordance with the User Rate Study approved by the Board on June 26, 2018,
Agenda Item 11 I. Raftelis has calculated the cost of service to be $4.60 for fiscal year 2022, $4.82 for
fiscal year 2023, and $5.06 for fiscal year 2024.
Miscellaneous service charges included in Schedules Three through Five of the Ordinance (represented
by Table ES-4 in Raftelis’ Executive Summary) are billed to customers to recover the actual costs for
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parts, staff labor, and County equipment incurred for specific services provided by the District at the
request of a customer. These charges are customary in the industry and provide a mechanism for the
District to recover direct costs associated with services that benefit one individual customer rather than
the overall customer base. Revenues resulting from these fees serve to reduce the amount that must be
recovered from all customers via user rates. The District’s miscellaneous service charge schedules were
last modified effective October 1, 2018 in accordance with the User Rate Study approved by the Board on
June 26, 2018, Agenda Item 11 I. While adjustments are recommended so that hourly labor rates are
consistent with the County’s fiscal year 2020 pay and classification plan and fees for equipment remain
consistent with the Federal Emergency Management Agency’s (FEMA’s) current Schedule of Equipment
Rates, increased cost of parts is the primary driver for the proposed changes in fees.
FISCAL IMPACT: The fiscal year 2022 revenue budget was prepared using a 2.9 percent rate increase.
Those rates provide estimated fiscal year 2022 incremental Water revenue of $2.7 million, Wastewater
revenue of $3.3 million, and IQ revenue of $ 0.1 million in the Collier County Water-Sewer District
Operating Fund (408). At those rates, the CIP program is approximately $3.0 million lower than
historical capital budgets.
It is staff's intention to direct up to $10 million of available CARES Act relief funding and/or American
Rescue Plan funding to water and wastewater user fee capital funds supporting cash and carry
maintenance projects like the infrastructure replacement efforts ongoing in Naples Park. This infusion of
dollars not only allows for the smaller year one user rate increase of 2.9 percent which is consistent with a
forward looking CPI versus the 4.0 percent recommended in the study but also allows the utility to keep
on schedule with strategic and planned capital maintenance work. The proposed rate study estimated
fiscal year 2022 incremental Water revenue of $3.5 million, Wastewater revenue of $5.1 million, and IQ
revenue of $0.4 million in the Collier County Water-Sewer District Operating Fund (408), approximating
the suggested federal funding allocation.
The rates proposed by the study for fiscal years 2023 and 2024 will enable the utility to restore critical
funding to the capital program. Revenue from miscellaneous service charges represents approximately
$2.5 million annually, or less than two percent of the total annual District revenue.
GROWTH MANAGEMENT IMPACT: There is no growth impact for this action.
LEGAL CONSIDERATIONS: This item has been reviewed by the County Attorney, raises no legal
issues at this time, and requires majority vote for approval. -JAK
RECOMMENDATION: That the Board of County Commissioners, Ex-officio the Governing Board of
the Collier County Water-Sewer District, accept the Water, Wastewater, Irrigation Quality Water and
Wholesale Potable Water User Rate and Fee Study and direct the County Manager or his designee to
advertise a Resolution amending Schedules One, Two, Three, Four, and Five of Appendix A to Section
Four of Collier County Ordinance No. 2001-73, as amended, titled the Collier County Water-Sewer
District Uniform Billing, Operating, and Regulatory Standards Ordinance No. 2001-73, as amended, with
an effective date of October 1, 2021.
Prepared by: Amia Curry, Manager, Public Utilities Financial and Operational Support
ATTACHMENT(S)
1. Rate Study Letter and Executive Summary (PDF)
2. User Rate Study 2021 BCC Presentation Final w-Extra Slides (PDF)
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07/13/2021
COLLIER COUNTY
Board of County Commissioners
Item Number: 11.E
Doc ID: 15214
Item Summary: Recommendation to accept the Water, Wastewater, Irrigation Quality Water, and
Wholesale Potable Water User Rate and Fee Study and direct the County Manager or his designee to
advertise a resolution amending Schedules One, Two, Three, Four, and Five of Appendix A to Section
Four of Collier County Ordinance No. 2001-73, as amended, titled the Collier County Water-Sewer
District Uniform Billing, Operating, and Regulatory Standards Ordinance No. 2001-73, as amended, with
an effective date of October 1, 2021. (Amia Curry, Manager, Public Utilities Financial and Operational
Support)
Meeting Date: 07/13/2021
Prepared by:
Title: Manager - Operations Support - PUD – Public Utilities Operations Support
Name: AmiaMarie Curry
03/05/2021 3:51 PM
Submitted by:
Title: Division Director - Operations Support – Public Utilities Operations Support
Name: Joseph Bellone
03/05/2021 3:51 PM
Approved By:
Review:
Public Utilities Operations Support Joseph Bellone Additional Reviewer Completed 03/05/2021 4:07 PM
Public Utilities Department Drew Cody Level 1 Division Reviewer Completed 03/05/2021 4:30 PM
Public Utilities Department Joseph Bellone Level 2 Division Administrator Review Completed 04/05/2021 8:24 AM
Office of Management and Budget Debra Windsor Level 3 OMB Gatekeeper Review Completed 04/05/2021 8:30 AM
County Attorney's Office Jeffrey A. Klatzkow Level 3 County Attorney's Office Review Completed 04/05/2021 9:12 AM
Budget and Management Office Ed Finn Additional Reviewer Completed 04/06/2021 11:55 AM
Office of Management and Budget Susan Usher Additional Reviewer Completed 07/03/2021 1:47 PM
County Manager's Office Amy Patterson Additional Reviewer Completed 07/06/2021 4:10 PM
County Manager's Office Mark Isackson Level 4 County Manager Review Completed 07/07/2021 10:47 AM
Board of County Commissioners Geoffrey Willig Meeting Pending 07/13/2021 9:00 AM
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341 N. Maitland Avenue, Suite 300
Maitland, FL 32751
www.raftelis.com
February 5, 2021
Honorable Chair and Members of the
Board of County Commissioners
Collier County
3299 Tamiami Trail East, Suite 303
Naples, FL 34112
Subject: Water, Wastewater, Irrigation Quality Water, and Wholesale Potable Water User Rate and
Fee Study for Collier County Water-Sewer District
Ladies and Gentlemen:
Raftelis Financial Consultants, Inc. ("Raftelis") has completed our review of the water, wastewater,
irrigation quality ("IQ") water and wholesale potable water user rates and fees for the Collier County (the
"County") Water-Sewer District (the "District") utility system (the "System"), and has summarized the
results of our analyses, assumptions, and conclusions in this report, which is submitted for your
consideration. This report summarizes the basis for the proposed rates, fees, and charges for water,
wastewater, and IQ water service that are necessary, along with other appropriate sources of funds, to meet
the near-term expenditure requirements of the utility. The Study involved preparing financial projections
of the water, wastewater, and IQ water operations for the six-fiscal year period of October 1, 2020 through
September 30, 2026 (the "Forecast Period").
The user rate adjustments outlined in this report are primarily needed to enable the District to: i) fund the
continued impact of inflation on the cost of operation and maintenance and to maintain operating margins
for capital financing and fiscal sustainability; ii) address critical and ongoing infrastructure replacement,
upgrades, and rehabilitation needs; iii) support the financing of long-term capital facilities to provide
sustainability and reliable service for the benefit of the District customers; and iv) maintain a strong
financial position to allow cost effective access to credit markets and provide for long-term rates at the
lowest cost for the utility given recent and anticipated increases in the costs to provide service. The need
for capital re-investment and having an ongoing sustainable funding program for such reinvestment is a
critical issue facing most utilities today, including the District. The multi-year capital program developed
by the District has been structured to mitigate and manage the utility service and environmental risks; such
plan has been recognized in the development of the financial and rate implementation plan reflected in this
report.
The District is currently rated "AAA" (the highest credit rating) with a stable outlook by Fitch Ratings
(Fitch). The rating and outlook were reflected in the Fitch credit report dated March 13, 2019 after the
issuance of the Water and Sewer revenue Bonds, Series 2019. In the most recent Fitch credit report, Fitch
indicated the following key drivers behind the utility's AAA rating:
● Strong Financial Metrics. Financial results continued to yield strong debt service coverage levels,
robust liquidity, and sound operating margins.
● Manageable Debt Burden and Capital Needs. The District's leverage metrics (i.e., debt to net plant,
debt per customer, etc.) were favorable and comparable to peer credits despite capital needs.
11.E.1
Packet Pg. 218 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Honorable Chair and Members of the
Board of County Commissioners
Collier County
February 5, 2021
Page 2
● Excellent Financial Performance. The system's strong financial profile is evidenced by robust debt
service coverage and liquidity. Although cash balances are predicted to decline gradually over the
next five years with additional cash-funded capital expenditures, it is expected that the District will
retain liquidity levels in line with the current high rating.
The Fitch report also mentions that the District's water and wastewater charges are considered affordable
but are close to the median household income affordability threshold, which implies some diminished rate
flexibility. With the proposed rate adjustments, the District's user rates are anticipated to remain
competitive with the rates of neighboring utility systems throughout the Forecast Period.
Raftelis also reviewed the District's miscellaneous service charges. The District historically has had charges
or fees that are billed to customers to recover costs for specific services provided by the District at the
request of a customer that benefit only that customer (e.g., service turn-on). These charges are commonly
referred to as "miscellaneous service charges." Miscellaneous service charges provide a mechanism for the
District to recover direct costs associated with a service that benefits one individual customer rather than
the overall customer base. Such miscellaneous service charges thereby reduce the revenue requirements
that must be recovered from all customers via monthly user rates. The District's miscellaneous service
charges have not been adjusted since 2018.
Following this letter, we have provided an executive summary that briefly summarizes the results of our
Study and outlines our recommendations and conclusions. The accompanying sections of the report
provide additional details regarding the rate and financial analyses conducted on behalf of the District.
We appreciate the opportunity to be of service to the County and would like to thank the County staff for
their assistance and cooperation during the course of this Study.
Respectfully submitted,
Raftelis Financial Consultants, Inc.
Robert J. Ori, CPA
Executive Vice President
Nick T. Smith, CGFM
Senior Consultant
Attachments
11.E.1
Packet Pg. 219 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
ES-1
COLLIER COUNTY WATER-SEWER DISTRICT
FISCAL YEAR 2021
WATER, WASTEWATER, IRRIGATION QUALITY WATER, AND WHOLESALE POTABLE
WATER USER RATE AND FEE STUDY
Executive Summary
The Collier County (the "County") Water-Sewer District (the "District") water, wastewater, and irrigation
quality ("IQ") water system (the "System") provides an essential service on a continual basis. The utility
operates in a highly regulated environment. Regulatory agencies for the District include the Florida
Department of Environmental Protection ("FDEP"), the South Florida Water Management District
("SFWMD"), and the Florida Department of Health. Permits issued to the utility by these regulatory
agencies require ongoing satisfactory performance.
The District System is established as a utility enterprise fund. According to the Governmental Accounting
Standards Board:
"Enterprise Funds should be used to account for operations that are financed and operated in a manner similar
to private business enterprises – where the intent of the governing body is that costs of providing services to the
general public on a continuing basis be financed or recovered primarily through user charges."
General accounting policies and prudent utility management recommend that the System have revenues
(financial resources) at least equal to the costs of providing services by the System. Additionally, pursuant
to the Collier County Water-Sewer District Special Act (formally known as House Bill 849) (the "Act"),
which re-created and reenacted the District charter, the District shall set rates, fees, and charges so as to
provide moneys which, with other funds available for such purposes, shall: i) be sufficient at all times to
pay the expenses of operating and maintaining the system, including reserves for such purposes; ii) the
principal of and interest on revenue bonds as shall become due and reserves therefore, and to provide a
margin of safety over and above the total amount of such payments; and iii) to comply fully with any
covenants contained in the resolution authorizing the issuance of any bonds or other obligations of the
District. As such, the County should establish rates sufficient to meet the cost of operating, maintaining,
and repairing the system, finance the ongoing capital improvements of the System, and provide adequate
reserves, in order to continue to provide a safe and reliable service to the County's water, wastewater, and
IQ water customers.
The District is currently rated "AAA" (the highest credit rating) with a stable outlook by Fitch Ratings
(Fitch). The rating and outlook were reflected in the Fitch credit report dated March 13, 2019. In the most
recent Fitch credit report, Fitch indicated the following key drivers behind the utility's AAA rating:
● Strong Financial Metrics. Financial results continued to yield strong debt service coverage levels,
robust liquidity, and sound operating margins.
● Manageable Debt Burden and Capital Needs. The District's leverage metrics (i.e., debt to net plant,
debt per customer, etc.) were favorable and comparable to peer credits despite capital needs.
● Excellent Financial Performance. The System's strong financial profile is evidenced by robust debt
service coverage and liquidity. Although cash balances are predicted to decline gradually over the
next five years with additional cash-funded capital expenditures, it is expected that the District will
retain liquidity levels in line with the current high rating.
11.E.1
Packet Pg. 220 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
ES-2
The Fitch report also mentions that the District's water and wastewater charges are considered affordable
but are close to the median household income affordability threshold, which implies some diminished rate
flexibility. With the proposed rate adjustments, the District's user rates are anticipated to remain
competitive with the rates of neighboring utility systems throughout the Forecast Period.
In the preparation of the current rate Study, the Utility Administration and Raftelis determined that certain
guidelines should be followed while evaluating the sufficiency of the user rates and developing proposed
rates. These guidelines included:
1. The user rates should be sufficient to recover the full costs of providing service. The cost of service
includes System operating costs and debt service along with the accrual of funds for working capital
and pay-as-you-go capital financing that is anticipated in future years.
2. The user rates should maintain the overall financial creditworthiness of the System. This guideline
entails the following:
a. Maintenance of adequate operating reserves consistent with the County's reserve policies.
b. Compliance with the minimum rate covenants outlined in the Bond Resolution that authorized
the issuance of the outstanding senior lien bonds and subordinate lien note.
c. Maintenance of strong financial position consistent with performance criteria used by rating
agencies and the utility industry.
3. The proposed rates should promote the conservation of potable water and the utilization of IQ water
as an alternative water resource.
4. The proposed rates should be fair and reasonable among customer classes.
5. The proposed rates should be consistent when they are based on the same rate parameter (e.g., meter
size).
6. The proposed user rates should be competitive with those of neighboring or similar utility systems.
7. The proposed miscellaneous service charges should be based on the District's direct costs (e.g., labor,
vehicles, equipment, and parts / supplies) of providing such services.
Although the financial forecast presented in this report was for the six-fiscal year period ending 2026, we
are recommending rate adjustments for the next three fiscal years (i.e., Fiscal Years 2022 to 2024); the
remainder of the forecast was to provide an indication of anticipated trends in revenues and expenditures
for future financial and strategic planning purposes. Based on the assumptions relied upon in the
development of the System expenditure requirements and discussions with County staff, Raftelis is
recommending the County consider the following user rate revenue adjustments for the System over the
next three years:
Summary of Proposed Water, Wastewater, and IQ Water Revenue Adjustments
Effective Date
Water
System
Wastewater
System
IQ Water
System
Combined
System
October 1, 2021 4.00% 5.00% 9.00% 4.65%
October 1, 2022 4.00% 5.00% 9.00% 4.66%
October 1, 2023 4.00% 5.00% 9.00% 4.67%
11.E.1
Packet Pg. 221 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
ES-3
As can be seen above, the estimated recommended rate adjustments for the Fiscal Years 2022 through 2024
approximate 4.6% annually for the System. It should be noted that the rates for utility service in both
Florida and nationally are anticipated to increase over time based on our conversations with several other
utilities in Florida and information published on a national perspective regarding the needs for future rate
adjustments. The table below provides a national indication of the recent trends in rate adjustments
(referred to as the NACWA Index, which is based on a composite of 176 utilities serving 110 million
people) as compared to the consumer price index, all as published by the National Association of Clean
Water Agencies ("NACWA"). As can be seen below, NACWA reports that the adjustments to rates have
outpaced inflation since 2002 and on average have been approximately 5%. Rate adjustments are estimated
to continue outpacing inflation with adjustments of approximately 4% over the next four years. The
projected increases for the District utility system over the next three fiscal years as shown above are similar
to the projected increases as identified by NACWA and tends to illustrate the overall reasonableness in the
rate adjustments being proposed for the District's system.
Prior to the start of Fiscal Year 2025, the County should review the need for any future rate adjustments
beyond Fiscal Year 2024 as currently identified in this Study to ascertain if such adjustments remain
reasonable or if additional change is warranted. The primary reasons for the identified revenue adjustments
are to:
1. Provide sufficient revenues and cash flow to fund the six-year capital improvement program ("CIP")
of the District, including the issuance of additional indebtedness. The projects in the CIP are
considered by the utility staff to be necessary to provide long-term, reliable, and sustainable utility
service to all System customers. The need for capital re-investment and having an ongoing
sustainable funding program for such re-investment is a critical issue facing most utilities today,
including the District. The District as identified that portions of its utility asset base have or will be
reaching its intended useful service lives and will need replacement and rehabilitation. The multi-
year capital program developed by the District has been structured to mitigate and manage the
System utility service and environmental risks. Since a majority of the CIP is considered by the utility
staff to consist of projects representing ongoing renewals and replacements of assets that are reaching
the end of their service lives or operational effectiveness and which generally benefit existing
customers of the System, these projects are recognized in the financial forecast as being funded as a
11.E.1
Packet Pg. 222 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
ES-4
first priority through annual deposits from System revenues to the District's capital-related funds
(i.e., pay-as-you-go funding). This approach provides the District with increased flexibility in the
funding of the capital program and promotes long-term rate sustainability.
2. Continue to fund the costs of operations and maintenance of the System. The costs of operations are
projected to continue to increase during the Forecast Period due to, among other things, the
following:
a. Inflationary effects on the costs of electricity, chemicals, fuel, and other major expenditures for
the utility.
b. Increased labor costs, including incremental increases in staffing as a result of System growth,
utility acquisition to promote regionalized facilities, and the implementation of the capital
program identified by the District.
c. Economic recovery has increased bid prices on contractual services and the cost of infrastructure
construction (e.g., more competition for limited resources).
The Congressional Budget Office has projected the national consumer price index ("CPI") to increase
slightly over 2% per year during the Forecast Period.
3. Continue to fund the District's payment-in-lieu-of-taxes ("PILT") to the General Fund. The County's
projected transfer is equivalent to 5.75% of previous year gross receipts for the Forecast Period.
4. The need to continue funding capital reinvestment for asset renewals, replacements, upgrades and
betterments to fund assets that are scheduled to reach their service life and as a result of projects that
may cause early asset retirements (such as a road widening that requires utility relocates).
5. Maintain compliance with System rate covenants, which include debt service coverage margins and
the maintenance of certain funds and accounts.
6. Maintain adequate operating reserves and margins consistent with County policies to ensure the
continued creditworthiness of the System and to provide funds for emergencies (e.g., hurricane
preparedness) and other purposes.
The existing and proposed monthly water, wastewater, and IQ water user rates are shown in Tables ES-1,
ES-2, and ES-3, respectively, at the end of this section.
In addition to providing potable water service to the District's retail customers, the District historically has
provided wholesale potable water service to the City of Marco Island pursuant to a wholesale agreement
approved between the parties to provide potable water service to an area within the City's water service
district identified as Hammock Bay. While this agreement has expired, the County may be required in the
future to provide service to the cities, including water sold on an emergency or as needed basis. Based on
the allocation of costs to provide wholesale service, it was determined that the wholesale water rates should
be adjusted as follows:
(Remainder of page intentionally left blank)
11.E.1
Packet Pg. 223 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
ES-5
Recommended Wholesale Water Rates
Effective
Date
Rate per
1,000 Gallons
Percent
Change
October 1, 2020 – Existing $4.39
October 1, 2021 4.60 4.9%
October 1, 2022 4.82 4.9%
October 1, 2023 5.06 4.9%
Raftelis also reviewed the District's miscellaneous service charges. The proposed miscellaneous charges are
shown in Table ES-4 at the end of this section and are primarily based on the District's estimated direct
costs (e.g., labor, vehicles, equipment, and parts / supplies) of providing such services. They do not include
supervisory, administrative, departmental overhead, or contingency allowances, which are sometimes
included in such charges. The increases in certain fees such as meter and cross connection device
installation charges can be attributed to:
1. General inflation on the cost of materials and supplies attributable to providing the service.
2. Increases in the cost of personnel services, including the recognition of any increased benefits costs.
3. Increases in equipment and vehicle asset costs and overall utilization expenses (e.g., fuel) associated
with the performance of the installations at the customer premise.
Table ES-5 at the end of this section provides a financial overview of forecasted System operations. This
table indicates the following for all projected fiscal years:
1. In support of the fiscal position of the System, maintenance of an overall ("All-in") annual debt
service coverage (net revenues divided by the annual debt service requirement for all outstanding
senior and subordinate lien debt) of at least 150%. As discussed herein and based on discussions with
the County's Financial Advisor as well as information published by bond rating agencies, a financial
benchmark for the debt service coverage ratio of 150% is recognized. According to the Utility
Revenue Bond Rating Guidelines published by Fitch Ratings (a rating agency, which evaluates
creditworthiness):
"For utilities in the most stable operating environments with a suitably diverse and healthy service area economy,
1.5x annual coverage, with consistently maintained unrestricted financial liquidity of at least 90 days of operating
revenues, could be sufficient for 'AA-' or higher ratings. For utilities with substantial growth, compliance
demands, or significant annual volatility in revenues or expenditures, greater financial flexibility may be
necessary."
As mentioned previously, the District's utility system is currently rated AAA (the highest credit rating
awarded by Fitch Ratings) with a stable outlook.
2. Maintenance of adequate operating reserves consistent with levels recognized in the Board-approved
reserve policies to promote a strong fiscal position for the System to allow access at lowest costs to
credit markets and to limit financial risk due to emergency or unknown conditions that could affect
the System.
3. Full utilization of internal funding sources (e.g., operating reserves, capacity charge collections) as
the first or primary source of capital before use of external debt financing to fund the System capital
improvement program.
Based on the assumptions relied upon in the preparation of the financial forecast, the utility is anticipated
to remain in a good financial position throughout the Forecast Period identified in this report.
11.E.1
Packet Pg. 224 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
ES-6
Findings, Conclusions, and Recommendations
Based on our studies, assumptions, considerations, and analyses, Raftelis offers the following observations
and opinions for consideration by the Board of County Commissioners:
1. The District's existing monthly user rates for water, wastewater, and IQ water service are not
anticipated to recover the District's projected potable water, wastewater, and IQ water revenue
requirements for the Fiscal Years 2021 through 2026.
2. The County should consider adopting the Fiscal Years 2022 through 2024 water, wastewater, and
IQ water system user rates as outlined in this report. These adjustments are anticipated to generate
the following increases in revenue:
Estimated Increase in System Revenue
Effective Date
Water
System
Wastewater
System
IQ Water
System
Combined
System
October 1, 2021 4.00% 5.00% 9.00% 4.65%
October 1, 2022 4.00% 5.00% 9.00% 4.66%
October 1, 2023 4.00% 5.00% 9.00% 4.67%
3. The proposed water and wastewater user rates for Fiscal Year 2022 are comparable with the rates
charged by "neighboring" utility systems. The following table contains bill comparisons of the
existing and proposed rates for combined water and wastewater service at various monthly usage
levels:
Single-Family Residential Bill Comparison – Combined Water and Wastewater Monthly User Rates
Residential Service for a 3/4" Meter
0
Gallons
2,000
Gallons
5,000
Gallons [1]
7,000
Gallons
10,000
Gallons
20,000
Gallons
50,000
Gallons
COMBINED USER RATES
Existing Rates $60.34 $77.04 $102.09 $122.11 $152.14 $242.84 $519.64
Proposed Rates – Fiscal Year 2022 63.11 80.59 106.81 127.75 159.16 253.76 541.66
Increase Over Existing Rates:
Amount $2.77 $3.55 $4.72 $5.64 $7.02 $10.92 $22.02
Percent 4.6% 4.6% 4.6% 4.6% 4.6% 4.6% 4.5%
Utility Survey:
Survey Average [2] $42.31 $61.49 $91.83 $113.37 $145.21 $255.50 $658.96
Minimum 23.18 40.69 57.37 68.49 87.92 118.92 247.92
Maximum 65.39 89.83 126.49 162.90 232.59 503.19 1,475.79
__________
[1] This monthly consumption level represents the average monthly usage of 3/4-inch single-family residential customer in System.
[2] Based on a survey of 20 neighboring utilities; represents rates in effect as of January 2021; the proposed District rates are for Fiscal Year 2022 and many of
the utilities surveyed anticipate adjusting rates during Fiscal Year 2022.
At an average monthly usage level of 5,000 gallons, the typical usage of a single-family residential customer
of the System, bills for combined water and wastewater service under the proposed rates are slightly higher
than the average bill charged by 20 surveyed utilities for similar service. It should be noted that most of the
surveyed utilities: i) are involved in a rate study; ii) are planning to conduct a rate study; or iii) plan to
implement a rate revision within the next twelve months. The increase in the monthly bill for a typical
water and wastewater residential user of 5,000 gallons under the proposed rates would be $4.72 or $0.15
per day. It should be noted that, when making bill comparisons for water and wastewater service, several
factors may affect the levels of rates charged. These factors may include:
● Level of treatment required before the distribution of water to the ultimate customer.
11.E.1
Packet Pg. 225 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
ES-7
● Level of treatment and effluent disposal methods of sanitary sewer service.
● Plant capacity utilization, utility plant age and remaining service life, and assistance in
construction by federal grants, impact fees, contributed capital, etc.
● Customer use demographic, size of the utility system, and per customer demand requirements
(e.g., water use by customer).
● Rate covenants adopted in the support of bonds and overall funding requirements of the rates.
● Fiscal policies and targets, including long-term capital re-investment rates for ongoing utility
plant replacement, recognized by the provider of utility service.
For the utilities included in the rate comparisons contained in this report, no analysis has been made
of the above-mentioned factors, as they related to the reported water and sanitary sewer rates
currently being charged.
4. The proposed IQ water user rates for Fiscal Year 2022 are comparable with the rates charged by
"neighboring" utility systems. At an average monthly usage level of 15,000 gallons, the typical usage
of a 3/4-inch meter pressurized and distributed customer of the System (IQ water delivered to the
residential property), bills for IQ water service under the proposed rates are slightly higher than the
average bill charged by eight surveyed utilities for similar service. The increase in the monthly bill
for a residential pressurized and distributed user of 15,000 gallons under the proposed IQ water rates
effective in Fiscal Year 2022 would be $2.60.
5. The District should consider increasing the wholesale water service rate to $4.60 per 1,000 gallons
effective October 1, 2021 and $4.82 per 1,000 gallons effective October 1, 2022 and $5.06 per 1,000
gallons effective October 1, 2023. The proposed wholesale water rates are approximately 61% of the
overall average water system costs per 1,000 gallons by Fiscal Year 2024.
6. The District should consider adopting the proposed miscellaneous service charges to continue to
recover the estimated direct costs of providing the respective services. The proposed miscellaneous
service charges are comparable to charges for similar services by other utilities in the State of Florida.
It is important to note that, whereas the proposed charges are based on current costs, many of the
other utilities may not have adjusted their miscellaneous charges for several years.
7. The actual results achieved during the Forecast Period reflected in this report may vary from those
projected, and such variations may be material. For example:
a. Actual customer growth and usage may be higher or lower than projected.
b. The District's capital needs may be higher or lower than those projected and assumed in this
report.
c. The rate of inflation and other constraints placed on the utility (increasing difficulty to obtain
contractual resources) may be higher than anticipated which may result in declining operating
margins.
d. Unforeseen events such as the occurrence of major storm events, continuation of the pandemic,
etc. that may disrupt service and revenue collectability.
11.E.1
Packet Pg. 226 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
ES-8
e. The cost of goods and services (e.g., fuel and oil-based products) may be higher than projected,
which may directly affect the operating margins of the utility and the long-term ability to fund
capital improvements.
Raftelis recommends that the District re-evaluate the sufficiency of its water, wastewater, and IQ
water user rates on at least an annual basis to reconcile actual results with those projected herein and
to validate the overall financial forecast for ongoing strategic planning purposes.
8. The proposed rates, when implemented as assumed in this report, are anticipated to be sufficient to
meet the rate covenants of the Bond Resolution and subordinate lien note agreement. Recognizing
that the financial forecast presented in this report assumes the issuance of additional parity bonds to
fund the identified capital needs, the proposed rates are also projected to be sufficient to meet the
additional bonds test requirement as delineated in the Bond Resolution for the issuance of such
additional bonds.
The ability of the System to meet the debt service requirements and comply with the rate covenants of the
Bond Resolution, which authorized the issuance of the outstanding System debt is subject to assumptions
and considerations identified in this report and information obtained during preparation of the report
regarding the System. As such, this report should be read in its entirety relative to such assumptions and
considerations and the projections contained herein.
(Remainder of page intentionally left blank)
11.E.1
Packet Pg. 227 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Table ES-1
Collier County Water-Sewer District
Fiscal Year 2021 Water, Wastewater, Irrigation Quality (IQ) Water, and Wholesale Potable Water User Rate and Fee Study
Water System
Summary of Existing and Proposed Monthly Water User Rates
Existing
Monthly Rates Proposed Monthly Rates [1]
Line Effective Effective Effective Effective
No. 10/1/2020 10/1/2021 10/1/2022 10/1/2023
WATER SERVICE BASE CHARGES
(Residential, Multifamily, Commercial, and Irrigation-Only)
Meter Size:
1 5/8" $24.09 $25.05 $26.05 $27.09
2 3/4" 24.09 25.05 26.05 27.09
3 1" 37.96 39.48 41.06 42.70
4 1-1/4" 48.94 50.90 52.94 55.06
5 1-1/2" 72.34 75.23 78.24 81.37
6 2" 113.76 118.31 123.04 127.96
7 3" 314.03 326.59 339.65 353.24
8 4" 693.64 721.39 750.25 780.26
9 6" 1,384.11 1,439.47 1,497.05 1,556.93
10 8" 2,419.62 2,516.40 2,617.06 2,721.74
11 10" 4,382.72 4,558.03 4,740.35 4,929.96
12 12" 6,497.01 6,756.89 7,027.17 7,308.26
VOLUMETRIC CHARGE PER 1,000 GALLONS [2]
(Residential, Multifamily, Commercial, and Irrigation-Only)
13 Block 1 $3.25 $3.38 $3.52 $3.66
14 Block 2 4.91 5.11 5.31 5.52
15 Block 3 6.52 6.78 7.05 7.33
16 Block 4 8.14 8.47 8.81 9.16
17 Block 5 9.77 10.16 10.57 10.99
18 Block 6 13.02 13.54 14.08 14.64
19 Wholesale Water Rate Per 1,000 Gallons (All Usage) $4.39 $4.60 $4.82 $5.06
Footnotes:
[1] Proposed rates to become effective with service rendered on and after October 1st of each fiscal year indicated.
[2] All water is billed based on water consumption per block based on the size of meter in service.
ES-9
11.E.1
Packet Pg. 228 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Table ES-2
Collier County Water-Sewer District
Fiscal Year 2021 Water, Wastewater, Irrigation Quality (IQ) Water, and Wholesale Potable Water User Rate and Fee Study
Wastewater System
Summary of Existing and Proposed Monthly Wastewater User Rates
Existing
Monthly Rates Proposed Monthly Rates [1]
Line Effective Effective Effective Effective
No. Description 10/1/2020 10/1/2021 10/1/2022 10/1/2023
WASTEWATER SERVICE BASE CHARGES
(Residential, Multifamily, and Commercial)
Meter Size:
1 5/8" $36.25 $38.06 $39.96 $41.96
2 3/4" 36.25 38.06 39.96 41.96
3 1" 58.29 61.20 64.26 67.47
4 1-1/4" 75.72 79.51 83.49 87.66
5 1-1/2" 112.89 118.53 124.46 130.68
6 2" 178.67 187.60 196.98 206.83
7 3" 496.74 521.58 547.66 575.04
8 4" 1,099.65 1,154.63 1,212.36 1,272.98
9 6" 2,196.27 2,306.08 2,421.38 2,542.45
10 8" 3,840.87 4,032.91 4,234.56 4,446.29
11 10" 6,958.71 7,306.65 7,671.98 8,055.58
12 12" 10,316.66 10,832.49 11,374.11 11,942.82
VOLUMETRIC RATE PER 1,000 GALLONS
(Residential, Multifamily, and Commercial)
13 All Usage [2] $5.10 $5.36 $5.63 $5.91
Footnotes:
[1] Proposed rates to become effective with service rendered on and after October 1st of each fiscal year indicated.
[2] Monthly individually metered residential usage charges are capped at 15,000 gallons.
ES-10
11.E.1
Packet Pg. 229 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Table ES-3
Collier County Water-Sewer District
Fiscal Year 2021 Water, Wastewater, Irrigation Quality (IQ) Water, and Wholesale Potable Water User Rate and Fee Study
Summary of Existing and Proposed Monthly IQ Water User Rates
Existing
Monthly Rates Proposed Monthly Rates [*]
Line Effective Effective Effective Effective
No. Description 10/1/2020 10/1/2021 10/1/2022 10/1/2023
SERVICE BASE CHARGES
Meter Size:
1 5/8" $8.92 $9.72 $10.59 $11.54
2 3/4" 8.92 9.72 10.59 11.54
3 1" 14.90 16.24 17.70 19.29
4 1-1/2" 29.70 32.37 35.28 38.46
5 2" 47.54 51.82 56.48 61.56
6 3" 133.80 145.84 158.97 173.28
7 4" 297.30 324.06 353.23 385.02
8 6" 594.70 648.22 706.56 770.15
9 8" 1,040.70 1,134.36 1,236.45 1,347.73
10 10" 1,886.22 2,055.98 2,241.02 2,442.71
11 12" 2,796.87 3,048.59 3,322.96 3,622.03
VOLUMETRIC CHARGE PER 1,000 GALLONS
Customer Type:
12 Bulk $0.52 $0.57 $0.62 $0.68
13 Pressurized 0.69 0.75 0.82 0.89
14 Pressurized and Distributed 1.33 1.45 1.58 1.72
Footnote:
[*] Proposed rates to become effective with service rendered on and after October 1st of each fiscal year indicated.
ES-11
11.E.1
Packet Pg. 230 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Table ES-4
Collier County Water-Sewer District
Fiscal Year 2021 Water, Wastewater, Irrigation Quality (IQ) Water, and Wholesale Potable Water User Rate and Fee Study
Summary of Existing and Proposed Miscellaneous Service Charges
Line
No. Description Existing Proposed
Meter and Cross-Connection Control Device Installation Charges:
With Service Line Installation
1 3/4" Meter $1,042.00 $1,580.00
2 1" Meter 1,202.00 1,693.00
3 1-1/2" Meter 1,860.00 2,323.00
4 2" Meter 2,273.00 2,677.00
Without Service Line Installation (Drop-In or Hang)
5 3/4" Meter $563.00 $584.00
6 1" Meter 693.00 693.00
7 1-1/2" Meter 1,132.00 1,171.00
8 2" Meter 1,462.00 1,476.00
Meter Installation Charges:
With Service Line Installation
9 3/4" Meter Actual time and material cost Actual time and material cost
10 1" Meter Actual time and material cost Actual time and material cost
11 1-1/2" Meter Actual time and material cost Actual time and material cost
12 2" Meter Actual time and material cost Actual time and material cost
Without Service Line Installation (Drop-In or Hang)
13 3/4" Meter Actual time and material cost Actual time and material cost
14 1" Meter Actual time and material cost Actual time and material cost
15 1-1/2" Meter Actual time and material cost Actual time and material cost
16 2" Meter Actual time and material cost Actual time and material cost
Cross-Connection Control Device Charge - Meter Already Installed:
(formerly known as Backflow Device)
17 3/4" Meter Actual time and material cost Actual time and material cost
18 1" Meter Actual time and material cost Actual time and material cost
19 1-1/2" Meter Actual time and material cost Actual time and material cost
20 2" Meter Actual time and material cost Actual time and material cost
Equipment (Per Hour Rates):
21 Rehab and Electrician's Truck - (1-3/4 Ton) $24.00 $25.00
22 Crew Truck - (1-1/2 Ton) 23.00 23.00
23 Vactor Truck 85.00 85.00
24 Camera Truck 55.00 57.00
25 Boom Truck 41.00 42.00
26 Large Dump Truck 68.00 81.00
27 Small Dump Truck 49.00 58.00
28 Pumper Truck 85.00 86.00
29 Track Hoe (Big or Small) 18.00 19.00
30 Back Hoe 39.00 44.00
31 Portable Generators 35.00 44.00
32 Portable By-Pass Pump (Small) 19.00 19.00
ES-12
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Packet Pg. 231 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Table ES-4
Collier County Water-Sewer District
Fiscal Year 2021 Water, Wastewater, Irrigation Quality (IQ) Water, and Wholesale Potable Water User Rate and Fee Study
Summary of Existing and Proposed Miscellaneous Service Charges
Line
No. Description Existing Proposed
Equipment (Per Hour Rates) (cont.):
33 Portable By-Pass Pump (Large) $34.00 $35.00
34 Dewatering System 15.00 15.00
35 Trash Pump 9.00 9.00
36 Mud Hog 7.00 7.00
37 Trailer 15.00 17.00
38 Signs, Barricades and/or Traffic Board Actual Cost Actual Cost
39 Road Saw 8.00 8.00
40 Compactor 26.00 27.00
41 Soft Dig Truck 74.00 76.00
42 Portable Lights Actual Cost Actual Cost
43 Bucket Truck 18.00 19.00
44 Pickup Truck - (1/2 Ton) 13.00 13.00
Labor (Per Hour Rates):
45 Utility Operator, Apprentice (formerly Utility Technician) $32.00 $33.00
46 Field Supervisor 40.00 41.00
47 Utility Operator II (formerly Crew Leader) 35.00 37.00
48 Utility Operator, Senior (formerly Senior Crew Leader) 36.00 41.00
49 Utility Operator (formerly Maintenance Specialist) 34.00 35.00
50 Maintenance Worker 27.00 27.00
51 Safety Coordinator 47.00 47.00
52 SCADA Operator 40.00 38.00
53 GIS Technician 39.00 37.00
54 Odor Control Specialist 36.00 37.00
55 Operations Coordinator 37.00 37.00
56 Parts Clerk 34.00 32.00
57 Equipment Operator 31.00 34.00
58 Laboratory Technician 35.00 35.00
59 Industrial Pretreatment Inspector 38.00 38.00
60 Chemist 42.00 43.00
61 Principal Environmental Specialist 51.00 51.00
Miscellaneous Charges:
62 Administration (Per Incident) 5% or $100; whichever is smaller 5% or $100; whichever is smaller
63 Parts Actual Invoice Cost Actual Invoice Cost
64 Sub-contractors Actual Invoice Cost Actual Invoice Cost
65 Right of Way Permits Actual Cost Actual Cost
66 Laboratory Tests (Per Test) 25.00 25.00
67 New Accounts - Change of Ownership 22.00 23.00
68 Service Turn On or Turn Off at Owner's Request 37.00 38.00
69 Meter Re-Read (if different - charge is $0) 33.00 34.00
70 Meter Data Log Analysis 41.00 43.00
ES-13
11.E.1
Packet Pg. 232 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Table ES-4
Collier County Water-Sewer District
Fiscal Year 2021 Water, Wastewater, Irrigation Quality (IQ) Water, and Wholesale Potable Water User Rate and Fee Study
Summary of Existing and Proposed Miscellaneous Service Charges
Line
No. Description Existing Proposed
Miscellaneous Charges (cont.):
Meter Test:
71 Utility Meter Testing Facility $176.00 $181.00
(more than 3% error - charge is $0)
72 Independent Meter Testing Facility 241.00 246.00
(more than 3% error - charge is $0)
73 Meter Lock and Unlock, 1st Event During Calendar Year 55.00 56.00
74 Meter Lock and Unlock, 2nd Event During Calendar Year 83.00 84.00
75 Meter Lock and Unlock, 3rd and Subsequent Events During
Calendar Year 110.00 112.00
76 Meter Unlock After Normal Business Hours 68.00 70.00
77 Meter Pull 119.00 120.00
78 Meter Removal Actual time and material cost Actual time and material cost
79 Discontinuance of Service - Meter Removal Actual time and material cost Actual time and material cost
80 Illegal Connection, Unlawful Connection, and Tampering Actual time and material cost, plus
consumption*, plus other
applicable fees as provided for in
Section 2-2044(b) of the Collier
County Code of Laws and
Ordinances
Actual time and material cost, plus
consumption*, plus other
applicable fees as provided for in
Section 2-2044(b) of the Collier
County Code of Laws and
Ordinances
81 Convenience Fee - Credit Card 0.00 0.00
82 Temporary Meter Account Deposit 1,000.00 1,550.00
83 Duplicate Bill Processing Fee 1.00 1.00
84 Non-Sufficient Funds (NSF) Processing Charge per Florida Statute 832.07: $0 to
$50 is a $25 charge; $50.01 to
$300 is a $30 charge; over $300 is
$40 or 5% of check amount,
whichever is greater
per Florida Statute 832.07: $0 to
$50 is a $25 charge; $50.01 to
$300 is a $30 charge; over $300 is
$40 or 5% of check amount,
whichever is greater
85 Late Payment Penalty 5% of current charges 5% of current charges
86 Removal of Landscaping to Access Utility Assets Actual time and material cost Actual time and material cost
87 Septage Processing Charge/1,000 gallons ** 35.00 35.00
88 Grease Trap Waste Charge/1,000 gallons ** 45.00 45.00
* Consumption charges to be based on meter size, calculated by time connected, or average consumption, or 100,000 gallons
** On an emergency basis only
ES-14
11.E.1
Packet Pg. 233 Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Table ES-5Collier County Water-Sewer DistrictFiscal Year 2021 Water, Wastewater, Irrigation Quality (IQ) Water, and Wholesale Potable Water User Rate and Fee StudyUtility System Financial OverviewManagement Dashboards and Performance MetricsSUMMARY OF REVENUE ADJUSTMENTS ABOVE ADOPTED RATES SURPLUS / (DEFICIENCY) AND CASH BALANCES UNDER PROPOSED RATES ($ millions) Fiscal YearFiscal YearIdentified Revenue Adjustments: 2021 2022 2023 2024 2025 2026 Annual Surplus / (Deficiency): 2021 2022 2023 2024 2025 2026Water System0.00% 4.00% 4.00% 4.00% 2.50% 2.50% Water System($4.18) ($3.46) ($0.52) $0.50 ($0.39) $0.77Wastewater System0.00% 5.00% 5.00% 5.00% 2.50% 2.50% Percent of Rate Revenue -5.6% -4.4% -0.6% 0.6% -0.4% 0.8%IQ Water System0.00% 9.00% 9.00% 9.00% 9.00% 9.00% Wastewater System$9.30 $4.87 $5.66 $9.19 $3.31 $0.44Combined System - All Systems 0.00% 4.65% 4.66% 4.67% 2.70% 2.71% Percent of Rate Revenue 11.0% 5.4% 5.9% 9.0% 3.1% 0.4%Combined System - W/WW Only 0.00% 4.53% 4.53% 4.54% 2.50% 2.50% IQ Water System($0.44) ($0.48) ($0.29) ($0.08) $0.03 ($0.01)Effective Month of Adjustments Oct. Oct. Oct. Oct. Oct. Oct. Percent of Rate Revenue -9.5% -9.4% -5.3% -1.3% 0.5% -0.1%Water System12 12 12 12 12 12 Combined System$4.68 $0.93 $4.84 $9.61 $2.95 $1.20Wastewater System12 12 12 12 12 12 Percent of Rate Revenue 2.9% 0.5% 2.6% 4.9% 1.4% 0.6%IQ Water System12 12 12 12 12 12 Working Capital Cash Balance $49,384 $50,318 $55,162 $64,777 $67,729 $68,931 Water-Sewer District$0$20$40$60$80$100$120$1402021 2022 2023 2024 2025 2026Amount ($ millions)2) Revenue Requirements ‐Wastewater SystemOperating ExpensesNet Debt Service [*]Transfer to Wastewater Capital AccountTransfer to ReservesCapital Funded From RatesProjected Revenue Under Proposed RatesProjected Revenues Under Existing Rates$0$20$40$60$80$100$1202021 2022 2023 2024 2025 2026Amount ($ millions)1) Revenue Requirements ‐Water SystemOperating ExpensesNet Debt Service [*]Transfer to Water Capital AccountTransfer to ReservesCapital Funded From RatesProjected Revenue Under Proposed RatesProjected Revenues Under Existing RatesWater-Sewer DistrictES-1511.E.1Packet Pg. 234Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Table ES-5Collier County Water-Sewer DistrictFiscal Year 2021 Water, Wastewater, Irrigation Quality (IQ) Water, and Wholesale Potable Water User Rate and Fee StudyUtility System Financial OverviewManagement Dashboards and Performance MetricsWater-Sewer District$0$50$100$150$200$2502021 2022 2023 2024 2025 2026Amount ($ millions)4) Revenue Requirements ‐Combined SystemOperating ExpensesNet Debt Service [*]Transfer to Capital AccountsTransfer to ReservesCapital Funded From RatesProjected Revenue Under Proposed RatesProjected Revenues Under Existing Rates$0$1$2$3$4$5$6$7$82021 2022 2023 2024 2025 2026Amount ($ millions)3) Revenue Requirements ‐IQ Water SystemOperating ExpensesNet Debt Service [*]Transfer to IQ Water Capital AccountTransfer to ReservesCapital Funded From RatesProjected Revenue Under Proposed RatesProjected Revenues Under Existing Rates$0$20$40$60$80$100$120$140$160$1802021 2022 2023 2024 2025 2026Millions5) Ending Cash Balance ‐Combined FundsUnrestricted (Operating and Capital Accounts)Restricted (R&R and Impact Fee Funds)$0$10$20$30$40$50$60$70$802021 2022 2023 2024 2025 2026Millions6) Ending Cash Balance ‐Operating Fund (Fund 408)Ending Cash Balance90 Days of Revenue90 Days of Operating ExpensesES-1611.E.1Packet Pg. 235Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Table ES-5Collier County Water-Sewer DistrictFiscal Year 2021 Water, Wastewater, Irrigation Quality (IQ) Water, and Wholesale Potable Water User Rate and Fee StudyUtility System Financial OverviewManagement Dashboards and Performance MetricsWater-Sewer District$0$5$10$15$20$25$30$352021 2022 2023 2024 2025 2026Millions7) Ending Cash Balance ‐Water Capital (Fund 412)Ending Cash BalanceMinimum DepositAdditional DepositAnnual Depreciation ‐ Target BalanceCapital Expenditures$0$10$20$30$40$50$60$702021 2022 2023 2024 2025 2026Millions8) Ending Cash Balance ‐Wastewater Capital (Fund 414)Ending Cash BalanceMinimum DepositAdditional DepositAnnual Depreciation ‐ Target BalanceCapital Expenditures$0$1$2$32021 2022 2023 2024 2025 2026Millions9) Ending Cash Balance ‐IQ Water Capital (Fund 414)Ending Cash BalanceNet DepositAnnual Depreciation ‐ Target BalanceCapital Expenditures30.2%26.4%41.8%1.6%10) Capital Improvement Program Funding Sources (Total CIP = $597.0 Million)Wastewater and IQ WaterCapital Account Deposits,Reserves, and Rate RevenueWater Capital AccountDeposits, Reserves, and RateRevenueAdditional DebtOtherES-1711.E.1Packet Pg. 236Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Table ES-5Collier County Water-Sewer DistrictFiscal Year 2021 Water, Wastewater, Irrigation Quality (IQ) Water, and Wholesale Potable Water User Rate and Fee StudyUtility System Financial OverviewManagement Dashboards and Performance MetricsWater-Sewer District$0$5$10$15$20$25$30$35Millions13) Annual Debt Service PaymentsExisting Senior Lien Bond PaymentsExisting Subordinate Lien Loan PaymentsProposed Debt ServiceTotal Annual Payment$0$50$100$150$200$250$300$350$400$450$500Millions12) Existing and Proposed Debt Outstanding ‐Ending Principal BalanceExisting Senior Lien BondsExisting Subordinate Lien LoansAnticipated / Proposed Debt257%224%265%279%219%209%0%50%100%150%200%250%300%2021 2022 2023 2024 2025 202614) All‐In Debt Service Coverage: Net Revenues and System Development FeesAll‐In Debt Service CoverageTarget Debt Service Coverage (200%)$0$50$100$150$200$250$3002016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026Millions11) Historical and Projected Capital SpendingActual SpendNet Forecast SpendPlanned SpendHistorical Average Inflation AdjustedES-1811.E.1Packet Pg. 237Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Table ES-5Collier County Water-Sewer DistrictFiscal Year 2021 Water, Wastewater, Irrigation Quality (IQ) Water, and Wholesale Potable Water User Rate and Fee StudyUtility System Financial OverviewManagement Dashboards and Performance MetricsWater-Sewer District194%170%206%226%181%177%0%50%100%150%200%250%300%350%400%450%500%2021 2022 2023 2024 2025 202615) All‐In Debt Service Coverage: Net Revenues OnlyAll‐In Debt Service CoverageTarget Debt Service Coverage (200%)27.2%24.6%24.2%27.0%27.0%28.3%0.0%5.0%10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%50.0%2021 2022 2023 2024 2025 202616) Net Revenue MarginCalculated Operating RatioFitch Median (42%)39.75%33.17%31.73%42.18%37.27%35.48%0.00%10.00%20.00%30.00%40.00%50.00%60.00%2021 2022 2023 2024 2025 2026Debt to Net Plant InvestmentDebt to Net Plant InvestmentMaximum Target (50%)107.12%93.55%101.35%115.22%97.96%96.12%0.00%20.00%40.00%60.00%80.00%100.00%120.00%140.00%2021 2022 2023 2024 2025 202618) Free Cash Flow to DepreciationFree Cash Flow to DepreciationLower Limit Target (90%)Upper Limit Target (110%)ES-1911.E.1Packet Pg. 238Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
Table ES-5Collier County Water-Sewer DistrictFiscal Year 2021 Water, Wastewater, Irrigation Quality (IQ) Water, and Wholesale Potable Water User Rate and Fee StudyUtility System Financial OverviewManagement Dashboards and Performance MetricsWater-Sewer District0.00%0.50%1.00%1.50%2.00%2.50%3.00%3.50%4.00%4.50%5.00%2021 2022 2023 2024 2025 202619)Single Family Residential Bill AffordabilityMedian Household Income (FY19 ‐ $69,653)50% of Median Household Income (FY19 ‐ $31,099)General Target ‐ 2.0% of MHIUpper Target ‐ 4.5% (EPA)Avg. = $91.83 $0.00$20.00$40.00$60.00$80.00$100.00$120.00$140.0020)Single Family Residential Rate Comparison ‐CombinedMonthly Water and Sewer BillWaterSewer[*] Plans to conduct a rate study or implement a rate revision within the next twelve months.ES-2011.E.1Packet Pg. 239Attachment: Rate Study Letter and Executive Summary (15214 : CCWSD User Rate Study - 2021)
2021 User Rate StudyWater,Wa stewate r,IQ Wate r &Wholesale Potable Wate r
BCC Presentation
July 13, 2021
Amia Curry
Manager Financial & Operational
Support Division
Public Utilities Depar tment
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Packet Pg. 240 Attachment: User Rate Study 2021 BCC Presentation Final w-Extra Slides (15214 : CCWSD User Rate
Primary Rate Drivers
§CIP outlay to repair, rehab and replace aging
infrastructure -$409 million
§Naples Park Basin Optimization $52.9M
§Wa ter Reclamation Facilities Repairs -$34.2M
§North County Water Reuse Facility Headworks -$29.0M
§Pa lm River Public Utilities Renewal -$22.7M
§Inflationary effects on operating costs
§Cost of Clean Water Index 3.71%
§Utility parts price increases
§2”meters up 59%
§¾” meters up 10%
§Grip joint PVC pipe up 27%
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Utility Rate Index Comparison
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Proposed Rate Adjustments
§Operate the utility
§Repair, rehab & replace utility infrastructure
§Meet user fee debt service obligations
§Maintain disciplined rate setting cited in AAA rating
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User Rate Comparison
Single Family Residential
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Re commendation
That the Board accept the Water, Wastewater, Irrigation
Quality Water, and Wholesale Potable Water User Rate
and Fee Study and direct the County Manager or his
designee to advertise a resolution amending the rate
schedules with an effective date of October 1, 2021.
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Thank you!
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Rate Study Guidelines
User Rates for Potable Water, Wastewater, IQ Water, and Wholesale Potable Water must:
§Re cover the operating and maintenance costs of a growing system to provide life sustaining services 24/7/365 in compliance with federal and state regulations
§Support critical repair and rehabilitation capital projects identified in the Annual Update Inventory Report
§Meet debt service obligations in accordance with bond covenants
§Maintain CCWSD’s financial creditworthiness (Fitch rating of AAA since 2016) to ensure favorable terms for future borrowing
§Promote conservation of water and IQ resources
§Be fair, reasonable, and competitive with those of neighboring utilities
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Wa ter
User
Rates
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Wa stewater
User
Rates
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Combined Water -Wa stewater User Rates
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IQ Wate r
User
Rates
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IQ Water Revenue
Surplus / Deficiency
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Wholesale Wate r Rate s
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NACWA Cost of Clean Wate r Index
(National Association of Clean Water Agencies)
Outpaced inflation every year since 2002
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