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HomeMy WebLinkAboutAgenda - 12/11/2008 - 6e LateORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: December 11, 2008 Action Agen a Item No. ~ -q SUBJECT: Efland Sewer Rate Schedule Change DEPARTMENT: County Manager PUBLIC HEARING: (Y/N) NO ATTACHMENT(S): 1. Proposed Efland Sewer Rate Change Schedule -Impact on Typical Customers 2. Text to Amend the Efland Sewer System Ordinance Resolution 3. Existing Efland Sewer System Ordinance Resolution 4. Alternate 5 Year Rate Change Schedule INFORMATION CONTACT: Kevin Lindley, Engineering Specialist, 245-2313 PURPOSE: To amend the Efland Sewer System Ordinance with a new rate schedule that generates enough rate payer revenue to sustain the system without General Fund subsidy. BACKGROUND: The Efland Sewer System (System) was established by Resolution of the BOCC in November 1985 (Attachment 3). The rates set at the time were sufficient for the operation of the System. However, over the last. twenty years the cost of both operations and maintenance has increased steadily while the rates have remained unchanged. At the present time the revenue generated by the current rate structure accounts for only 20-25% of the full cost of operating and maintaining the System. The remainder of the System cost is paid from the Orange County General Fund. The BOCC authorized Raftelis Financial, a consultant who specializes in rate studies, to analyze the System and create aself-supporting revenue/cost model. The model compares the System costs versus revenue and analyzes how different rates will affect customer bills and the County's General Fund contribution. The BOCC was presented the highlights of this model and the results of the study on October 21, 2008. Using this model, staff is proposing a three year plan to raise rates to the level needed to adequately fund the System. This rate schedule (Attachment 1) was presented at a regular BOCC meeting on November 6, 2008, and was also presented at a Public Hearing on November 24, 2008. For comparison purposes a five year plan for rate increases is included at Attachment 4. Last spring, in anticipation of BOCC implementation of a new rate schedule, the General Fund contribution to the System's budget was reduced by $40,000 this fiscal year. The proposed 2 initial rate increase in January 2009 is designed to bridge the gap between the System's requested operating budget and the approved budget. This initial increase assumes rates will be raised in time for the January billing cycle, giving five to six months to generate the additional revenue necessary to balance the System this year. The subsequent rate increases over the next two fiscal years are designed to generate the revenue necessary not only to fund operation and maintenance of the System, but also to develop a Capital Reserve Fund and a System Fund Balance and eliminate the need for General Fund subsidy of the System. To change the rate schedule for the System, the BOCC will need to amend the ordinance that established the System (Attachment 3). The existing ordinance provides the rates for the current System (Attachment A). Attachment 2 is the replacement page for "Attachment A" of the current ordinance. The proposed amendment would replace the existing "Attachment A" with the new "Attachment A." Several members of the public have requested the rate increases be more gradual. For comparison purposes an alternate 5 year plan to implement the necessary rate changes is included as Attachment 4. A description of the difference between the two schedules was sent to all Commissioners in an email on December 3, 2008. The initial rate increase needs to be the same as the 3 year plan to balance the operating budget this fiscal year and the cost to the General Fund is three times that of the 3 year plan. The 5 year plan is designed to achieve the same goals as the 3 year plan; sufficient revenue for operations, maintenance, capital needs and system fund balance. None of the discussion above takes into account the hardship increased rates will have on low- income customers in the Efland area. A memo was submitted to the BOCC at the December 1, 2008 regular board meeting outlining options for assisting low-income customers. There are currently no programs in existence designed to assist customers on an ongoing, month-to- month basis. Orange County's Department of Social Services (DSS) has an Emergency Assistance program available to help citizens with bills in an emergency situation. Orange Congregations in Mission (OCIM) also has a program that performs essentially the same function. These programs are functioning and available to qualifying Efland customers. However, both programs have an assistance limit of $100-$150 per six months. Customers who may have already used the service may not have enough remaining funds through these programs to assist with their sewer bills. If the BOCC is interested in providing regular monthly assistance to low-income customers with their Efland Sewer bills, a program of that type would need to be developed. FINANCIAL IMPACT: Raising the rates as shown in Attachment 1 by the January 2009 billing cycle provides a means of balancing the FY 2008-09 operating budget for the Efland Sewer System. The net effect of this 3 year rate increase will establish the rate schedule at a level to fully fund operations, provide for a capital needs reserve fund, gradually build a fund balance and eliminate General Fund subsidy of the System. RECOMMENDATION(S): The Manager recommends the Board approve the proposed rate schedule submitted by staff as Attachment 1 by amending the Efland Sewer System Ordinance. Efland Sewer Monthlv Bill Proiections for Customers Using Between 1000 and 6000 Gallons ner Month Rate *Base Charges -Every customer pays this, regardless of usage *Charge per 1000 gallons Monthlv Customer Bills Monthl,~~e ( al~~ 1000 2000 3000 4000 5000 6000 Current Rates Proposed Rate Increases - 3 year plan (Unchanged since 1987) January 2009 July 2009 July 2010 $1.70 $12.96 $15.55 $18.66 $4.50 $11.25 $13.50 $16.20 NOTE: Currently, customers pay $15.20 for 3000 gallons or less per month $15.20 $24.21 $29.05 $34.86 $15.20 $35.46 $42.55 $51.06 $15':20 $46.71 $56.05 $67.26 $'19.70 $57.96 $69.55 $83.46 $24.20 $69.21 $83.05 $99.66 $28.70 $80.46 $96.55 $115.86 ~- N 0 ATTACHMENT A Amended 12/11/08 NOTE: This rate schedule is subject to change based on up-to-date projections of the actual cost of operations and capital needs. Date of Im lementation Rate January Jul. July 2010 and thereafter Base Charge -Every $12.96 $15.55 $18.66 customer pays this regardless of usage (minimum charge) Charge per 1000 $11.25 $13.50 $16.20 gallons (or any portion thereof) 15 ~„ /1ij I L ~ Adopted November 19, 1985 f1'tj~~'¢„7 Amended March 1, 1988 ~' Amended November 15, 1988 NORTH CAROLINA RESOLUTION ESTABLISHING RULES AND REGULATIONS FOR THE OPERATION OF A SEWER COLLECTION TREATMENT SYSTEM TO SERVE THE ORANGE COUNTY EFLAND AREA OF ORANGE COUNTY Be it resolved by the Board of Commissioners of Orange County that the following rules and regulations (hereinafter called the Rules) shall govern the operation of the Orange County Sewer Collection and Treatment System serving the Efland area of Orange County [hereinafter called the Systeml. I. CLASSIFICATION OF SERVICE (Reserved. There are presently no separate classifications of sewer service.) II. WASTEWATER TREATMENT LIMITATIONS Orange County has contracted with the Town of Hillsborough which contract provides that the Town will treat wastewater generated by the System subject to the following conditions contained in the agreement between the County and Town: No customer shall be allowed to connect to the County system unless and until such customer's proposed discharge has been found acceptable by both the Town and County. Approval shall be predicated on (1) the quality of the effluent of the potential user being compatible with the Town's NPDES discharge permit, (2) compliance with the Town's ordinance, rules and regulations concerning 1 pretreatment of industrial wastewater, and (3) all • County (subdivision, zoning, erosion, building, etc.) and State (DOT, etc.) permits having been properly granted. Under no circumstances will the County permit the discharge of septic sewage in its system. III. RATE SCHEDULE AND AVAILABILITY FEES A. Rate Schedule - Based upon monthly water consumption: See Attachment A. . B. Availability Fees: Each person, firm, or corporation connecting to the system [hereinafter user or users] other than those initially connected from among those initially applying for connection, shall pay a $600.00 per residential equivalent availability fee to the County and a $400.00 availability fee to the Town of Hillsborough. Availability fees may change from time to time pursuant to duly enacted resolutions of the County and the Town. Those users initially connecting, from those initially applying for connection, shall be exempt from the availability fee. The initial application period expired February 4, 1985. The initial connection deadline will be established by resolution of the Board of County Commissioners. C. Acreage Fee [Reserved]. 2 0 D. Stub-out Service Line Fee [Reserved]. IV. APPLICATION FOR SERVICE Persons seeking service may make application in person at the office of the Orange County Planning Department. The application requirements are as follows: 1. A deposit as provided in Article V of these rules must accompany the application and be paid at the Orange County Planning Department or such other place as is Amended designated by Orange County from time to time. A Sewer Use 3/1/88 and Easement and Agreement, must be on file, signed by the property owner(s)/users. 2. The conditions set forth in Article IX of these rules must be satisfied in the case of an application for service to undeveloped land. 3. Any former user may again become a user by fulfilling the application requirements set forth in this article and by paying any applicable availability or other fees. In addition, any such former user applying again to be a user must pay any outstanding account plus interest thereon at the legal rate as it is established in North Carolina General Statutes Section 24-1, its successor, and as the same is amended from time to time, compounded annually. Any person who has actually used and benefited from sewer service which has been supplied to premises owned or directly occupied or used by that person, for which service there is an outstanding. indebtedness remaining due the County, may 3 become a user by completing the application requirements in this article, by paying any availability fee or other applicable fee and by paying the outstanding indebtedness for the service which was supplied to the premises owned or directly occupied or used by such person. V. DEPOSIT A. A minimum cash deposit is required of all Amended users. It shall be Thirty Dollars ($30.00). The deposit 11/15/88 shall be paid either in full at the time an application for service is made or in a maximum of three equal consecutive monthly installments, the first of, which must be paid when an application for service is made. e~~-1--~e--t-~a-a~v~e-r-a•ga ~'e-j ee~ed- ~se~ae~-~-i~~-~e~-~~ae-~nea~~e-e~'- ee~~viee-~aea~l-a~~-~ha awe-r-a~}e--~~e-s~e~rt -wa~e~--wage-~ ~~ed~e~~ed--w~~e~-image--~~s- ~e~e~~ed-e~-a~~:-eee~er Deposits will not draw interest. Amended B. A separate deposit will be required for 3/1/88 each cannection. C. Each deposit may be redeemed by the user upon disconnection from the system and upon payment in full of all charges for service. VI. INITIAL OR MINIMUM CHARGE A. There will be a separate account established for each sewer connection to the system. Each such account will be in the name of the user. The minimum monthly charge as provided in the rate schedule will be made 4 for each account for any. monthly usage up to the minimum 3,000 gallons. B. In those cases where the connection is to property which receives its water by well, the minimum monthly charge will be that established in the rate schedule unless water consumption exceeds the minimum contained iri the rate schedule. The County reserves the right to meter the well of any user to determine that user's water usage. VII. COUNTY'S RESPONSIBILITY AND LIABILITY A. The County will run a service line from its collection line to the property line, except as provided in Article IX, relating to extensions of the system. Amended B. All plumbing installed by the user for 3/1/88 connection to the system will be installed according to the North Carolina State Plumbing Code and will be permitted, inspected and approved by Orange County. C. The County is not liable for damage of any kind resulting from sewage or its collection from the user's premises, unless such damage results directly from negligence on the part of the County. The County is not responsible for any damage done or resulting from any defect or operation failure in the plumbing installed by the user, or in any fixtures or appliances on the user's premises. The County is not responsible for negligence of third persons in the installation or operation of the System. The County is 5 ~o not responsible for damage caused by forces beyond its control or for the interruption of service caused by forces beyond its control. D. Except in the case of an emergency, the user will be notified in advance of any anticipated interruption of service. In the case of an emergency the user will be notified as soon thereafter as possible of the interruption of service'. VIII. USER'S RESPONSIBILITY A. The user is responsible for payment of all monthly service charges incurred in connection with se wer Amended 3/1/88 service. The owner of the premises to which services are delivered is responsible for all charges as provided for in the Sewer Easement and Agreement. If a delinquent user is not the owner of the premises to which- services are delivered, the payment of the delinquent account will not be required before providing services to the premises at the request of a new and different tenant or occupant of the premises except as provided in Article IV.3. of the Rules. B. The user is responsible for installing all plumbing and apparatus necessary to connect to the County's service line and for connecting all plumbing and apparatus to the County's service line. Provided, however, Amended no such connection shall be made without a permit to do so 3/1/88 issued by the County and upon such terms and conditions as the permit prescribes. 6 11 C. All plumbing and apparatus installed by the user will be installed and maintained at the user's expense in accordance with the County's rules and regulations and any other State or local requirements. D. The user will exercise reasonable care and will be responsible for the exercise of reasonable care by anyone on the user's premises with the user's permission over any portion of the County system located on the user's premises. Authorized County representatives will be permitted by the user to access the user's property in order to inspect, as needed, portions of the County's system located on the premises of the user. E. The user will be responsible for the cost of necessary repairs or replacement of lost or damaged property of the County which is part of the System or used in the operation and maintenance of the System which repair or replacement is caused by or results from the negligence or wrongful act of the user, the user's agents or employees. Likewise any damage or injury to persons or property which occurs on the premises of the user and which is caused by or results from the negligence or wrongful act of the user will be the sole responsibility of the user. F. The amount of any such loss or damage or the cost of repairs or replacements will be, when applicable, added as a charge to the user's account which .charge will be 7 added in full to the user's next statement unless other ~~ arrangements are made which are satisfactory to the County. IX. EXTENSIONS OF THE SYSTEM System extensions to serve undeveloped land may occur, but only as follows: A. All such extensions must be consistent with the overall System plan as adopted from time to time by ' Orange County. All such extensions must be approved by the County Engineer. B. Extension of the System to new developments can only be approved by the County Engineer if Amended all zoning, subdivision, land use plan and comprehensive plan 3/1/88 regulations of Orange County or the Town of Hillsborough, if applicable, are met. With respect to subdivisions, the subdivision preliminary plat must be approved by the County or the Town, if applicable, which preliminary plat shall include approved preliminary plans for the System extension. Planned development plans which include System extensions must include approved preliminary plans for the System extension. C. All System extensions must be consistent with Goal 9.3 of the Orange County Land Use Plan which goal "prohibit[s] the establishment of public water and sewer services in the areas designated water quality critical areas, except to address emergency situations" and with any 8 er and Sewer Polic of the County adopted as part of its Amended Wat Y 3/1/88 ~ -- Comprehensive Plan. D. All System extensions shall be installed according to and in compliance with approved plans. E. Construction of System extensions will be Amended inspected by Orange County at intervals determined by the 3/1/88 County. The person seeking System extension agrees to permit access to the System and the System extension for inspection purposes. ,User connections to the System will only be permitted after the extension of the System is finally approved in writing by Orange County. F. Upon the completion of the System extension the owner/developer will convey by deed or other appropriate instrument all portions of the System extension, including but not necessarily limited to right-of-way easements, collection lines, service lines, stub-outs, permits, pump stations and equipment, plumbing facilities and hardware. All System extensions will be at no cost to Orange County. X. ACCESS TO PREMISES OF A USER A. It will be necessary for the safe and efficient operation of the System for duly authorized agents of the County to have access at reasonable times to the premises of the user for the purpose of installing, removing. inspecting and otherwise maintaining portions of the System and for the purpose of reading and testing meters and for any 9 other purpose in connection with the installation, operation l~ and maintenance of the System. Each user and property owner upon whose property any portion of the system or connections to it is located recognizes this need and by making application for sewer services grants authority to authorized agents of the County for this purpose. B. The Sewer Easement and Agreement includes a grant to the County of an easement for the purposes described in that agreement. Each user and owner by making application for sewer services acknowledges the easement and the rights described in that easement. XI. CAANGE OF OCCUPANCY The owner of premises which is served by the Amended System is responsible for notifying the County or its duly 3/1/88 authorized agent of any change in the occupancy of his/her premises.- Any change in the use of the premises which is connected to the System will be communicated to the County and the Town of Hillsborough for prior approval as described in Article II of these rules and regulations. XII. METER READING - BILLING - COLLECTING A. Orange County and, if applicable, its billing and collecting agent's records will be the basis for all charges for service. All users are encouraged to Amended maintain receipts and other payment information and to bring 3/1/88 any discrepancies in the user's records and the County's records to the attention of the billing and collecting agent 10 of the County immediately so that corrections, if any, can be ~Jl made. The specific procedures to be followed in the event a user believes there has been a billing error are described in Article XIII. B. Meters will be read and bills rendered in accordance with the policies established by the County and any agency with which the County may contract. The County reserves the right to vary the dates or length of time covered by any statement, temporarily or permanently, if necessary for the efficient operation of-the System. C. Statements for sewer service will be computed on the basis of the published rate schedule then in effect. D. Charges for sewer service commence when connection to the System is complete as prescribed and described in the Sewer Easement and Agreement. E. Each sewer connection will be separately metered and will be maintained as a separate account. F. Monthly statements will be mailed on or about the date the user's water meter is read, if there is a meter, or the same date each month as determined by the County's billing and collecting agent where there is no water meter. Payment is due when the statement for sewer service Amended is received and delinquent 20 days after the water meter 3/1/88 reading date. If payment is not made within 20 days after the water meter reading date, sewer and water service will be 11 discontinued. Statements will be sent to the address of the '~ user as it appears on the application for service made by the user. It is the user's responsibility to immediately notify Orange County and its billing and collection agent of any change in this address. The user's failure to receive any statement or notice when it is addressed to the user at the address contained in the application or a new address provided to the County and its billing and collection agent shall not be a basis for forgiving delinquent payment and shall not be a basis for forgiving discontinuation of service. XII. DISCONTINUATION OF SERVICE A. When service is discontinued, the deposit Amended made by the user will be applied toward settlement of any 3/1/88 unpaid account. Any balance will be refunded to the user. If the deposit is not sufficient to cover the outstanding account balance, the County and its billing and collection agent may proceed to collect the balance in the manner provided in the Sewer Easement and Agreement or in any other manner provided by law for the collection of a debt. B. The County, in addition to prosecution as provided by law, may discontinue and permanently refuse service to any user or property owner who tampers with a meter or sewer connection which sewer connection has been approved by the County. Any sewer connection not approved by the County may be disconnected by the County and service 12 refused to those participating in the unauthorized connection /, or its use. XIII. COMPLAINTS - ADJUSTMENTS A. If a user believes any statement of charges to be in error, the user may present a claim in Amended 3/1/88 person to the billing and collection agent of the County before the statement becomes delinquent. Any such claim made after the statement has become delinquent will not be effective in preventing discontinuation of service as provided in these rules. and regulations. The user may pay such statement under protest and the payment will not prejudice the claim in case an error is found. Adjustment will thereafter be made for any such error. B. Request for special meter readings or tests will be governed by the rules and regulations established for that purpose by Orange County and its agents. XIV. RETURN CHECK FEE Each check for payment is accepted subject to collection. The normal policies of the County's billing and Amended collection agent regarding returned checks shall be followed. 3/1/88 All fees collected, provided they do not exceed those permitted by law, shall be the property of the County's billing and collection agent. XV. ABRIDGEMENT OR MODIFICATION OF RULES A. No promise, agreement or representation of any employee of Orange County will be binding upon the 13 County unless it is agreed upon in writing, signed and ~g accepted by the duly authorized officers of the County which authorization must~be accomplished by resolution of the Board of County Commissioners. B. No modification of rates or any of these rules and regulations may be made by any agent of the County. Any modification of rates and these rules and regulations will be accomplished by resolution of the Board of Commissioners of Orange County. XVI. ADOPTION OF RULES Until further resolution of the Orange County Board of Commissioners, the rules and regulations set out above are adopted as of the date below and become effective on and after November 19 , 1985. Upon motion made by Commissioner Moses Carey , seconded by Commissioner Shirley Marshall the foregoing resolution was adopted by the Orange County Board of Commissioners this the 19th day of November 1985. Amended by resolution of the Orange County Board of Commissioners on the 1st day of March , 1988. Amended by resolution of the Orange County Board of Commissioners on the 15th day of November, 1988. 14 ATTACHMENT A First 3,000 gals. @ $15.20 (minimum charge) Each additional 1,000 gals. (or any portion thereof) @ /1000 gals. This rate schedule is. subject to change based upon up-to-date projections of the actual cost of operations and actual cost of operations. l9 15 NORTH CAROLINA a~ ORANGE COUNTY ADDENDUM TO MARCH 24, 1988 SEWER BILLING AND COLLECTING AGREEMENT THIS ADDENDUM to the March 24, 1988 Sewer Billing and Col- lecting Agreement between ORANGE COUNTY, NORTH CAROLINA, hereinafter referred to as County, and ORANGE-ALAMANCE WATER SYSTEP4, INC., hereinafter referred to as Contractor, entered into this 15th day of idovember, 1988: WITNESSETH: Paragraph 6 of the March 24th Agreement is deleted in its entirety and replaced by the following: 6. The Contractor shall collect a deposit for each account established for the System. Accounts shall be established by the Contractor upon receipt of a copy of an approved application for service from the County and the receipt of the required deposit from the customer. The amount of the deposit shall be equal to twice the minimum charge for sewer service according to the rate schedule in effect at the time application for service is made. The deposit shall be paid either in full at the time an application for service is made or in a maximum of three equal consecutive monthly installments, the first of which must be paid when an application for service is made. The deposit shall be kept by the Contractor for the County and applied 1 ai toward settlement of the account upon disconnection from the System. Any balance of the deposit after settlement of the account shall be refunded to the customer by the Contractor. WITNESS our hands and seals on the date first above written. ORANGE COUNTY, NORTH CAROLINA ATTEST: Beverly Blythe Clerk to the Board of Commissioners of Orange County By: Moses Carey, Jr., Chair Orange County Board of Commissioners _ (OFFICIAL SEAL) ORANGE-ALAMANCE WATER SYSTEM, INC. By: Turner Forrest President of the Board of Directors 2 Efland Sewer Monthly Bill Projections for Customers Using Between 1000 and 6000 Gallons per Month Rate *Base Charges -Every customer pays this, regardless of usage *Charge per 1000 gallons Monthly Customer Bills Monthly Usage (gallonsZ 1000 2000 3000 4000 SOOU 6000 Current Rates Proposed Rate Increases - 5 year lan (Unchan ed since 1987) Janua 2009 Jul 2009 Jul 2010 Jul 2011 July 2012 $1.70 ~ $12.96 $12.96 $14.77 $16.84 $19.19 $4.50 $11.25 $11.25 $12.83 $14.62 $16.67 NOTE: Currently, customers pay $15.20 for 3000 gallons or less per month $15:2'0 $24.21 $24.21 $27.60 $31.46 $35.86 $15:20 $35.46 $35.46 $40.43 $46.08 $52.53 $15.20 $46.71 $46.71 $53.26 $60.70 $69.20 $19:70 $57.96 $57.96 $66.09 $75.32 $85.87 $24:20 $69.21 $69.21 $78.92 $89.94 $102.54 $28.70 $80.46 $80.46 $91.75 $104.56 $119.21