City of Groveland Minutes City Council Special Meeting Monday, July 29, 2024  The Groveland City Council held a Special Meeting scheduled meeting on Monday, July 29, 2024 in the E.L. Puryear Building located at 243 S. Lake Avenue, Groveland, FL 34736. Mayor Evelyn Wilson called the meeting to order at 6:02 p.m. with the following members present: Vice Mayor Mike Radzik, Council Members Barbara Gaines, Richard Skyzinski, and Dina Sweatt. Cityofficials present were City Manager Mike Hein, City Clerk Virginia Wright, Sergeant-At-Arms Chief Shawn As an alternate option, the public was provided the opportunity to attend the July 29, 2024 City Council Special Meeting virtually in listen/watch mode only. A public notice with instructions to participate was posted to the City's website under "public notices" at www.groveland-.gov. and  Ramsey and City Attorney Anita Geraci-Carver  intl the display board at City Hall.  AGENDA  1. Consideration of Approval Ordinance 2024-5: Amending Section 78-24 in Chapter78 ofthe Code of Ordinances of the City of Groveland to provide for adoption of utility An ordinance of the City of Groveland, County of Lake, State of Florida, amending Section 78-24 in Chapter 78 of the Code of Ordinances of the City of Groveland to provide for adoption of utility rates by ordinance; creating Article X in Chapter 78 of the Code of Ordinances of the City of Groveland to provide a schedule of utility rates for potable water, wastewater, and irrigation and reclaimed water; providing for codification and severability; An ordinance of the City Council of the City of Groveland, Florida, adopting new water, wastewater, and imgationreclamed water rates. This will be the first adjustment since 2020 following historic inflation. The adjusted rates will provide the City with the ability to maintain a quality level of service for operations and maintenance of the existing facilities as well as cover debt service, including on very low interest loans provided by the State of Florida. The rate structure takes into account more than $60 million in grants, thusreducing the financial burden on customers. This requested action is based on the financial report produced by consultant Raftelis. The requested action on this ordinance follows previously adopted Ordinance 2024-04, which substantially increased utility impact fees/connection fees in order to hold new development inancalyresponsibe for their impacts on the utility  rates- First Reading  and providing for an effective date.  systems.  City Clerk Wright read Ordinance 2024-5 title and headnote into the record.  T.J. Fish referenced the presentation and provided an overview as attached to these  minutes as Attachment 1 as follows:  1    JULY 29, 2024 CITY COUNCIL SPECIAL MEETING MINUTES  1. Brief History 2. Key Forecast Assumptions 3. CIP Funding Plan 4. Revenue Sufficiency Forecast 5. Rate Design 6. Findings & Recommendations  Groveland Utilities - A Recent History 2020-Present 2020 - Utility Master Planning Begins  2021 = Completion of Facilities Plans of Existing Needs - Approved by DEP 2022- Completion of Utility Master Plan (UMP) and Commencement of Design of Capital 2023 = Completion of Design Phase of Capital Projects and Commencement of Raftelis Funding  Projects - DEP Loan Program  Study  2024 - Transition into Construction Phase - Funding Agreements Pending  Recent Actions by City Council  Public Workshop on April 29 on Utilities Capital Needs Rate and Connection Fee Study dated July 1  Public Workshop on June21 on pending results of the Raftelis financial analysis Ordinance 2024-4 presented for First Reading on July 1 to adopt the Raftelis 2024 Utility Ordinance 2024-4 also adopts effective October 1 new water and wastewater connection Ordinance 2024-4 approved on Second and Final Reading on July 15 adopting significant  fees or impact fees  connection/mpact fees to ensure growth pays for growth  Mr. Williams referenced the presentation attached to these minutes as Attachment 1 and provided  an overview as follows:  Identified 5-Year Capital Needs Summary Leverage Opportunities - Success!  SRF Loans  Strategy & Next Steps to Execute Key Forecast Assumptions and Notes  CIP Funding  CIP Summary - Major Projects CIP Summary New Loans for CIP  2    JULY29, 2024 CITY COUNCIL SPECIAL MEETING MINUTES  Water & Sewer Revenue Sufficiency Forecast Existing Water Rates (October 1, 2020) Existing Irrigation & Reclaimed Rates (October 1, 2020) Existing Sewer Rates (October 1, 2020)  Projected New Development  Revenue Sufficiency at Existing Rates Forecast Rate Adjustment Revenue Sufficiency at Proposed Rates Utility Reserve Forecast  Rate Design  Pricing Objectives Proposed 2025 Rates - Water Proposed 2025 Rates - Sewer Proposed 2025 Rates - Irrigation Residential Bill Distribution Rate Design Impacts - Base Charges Rate Design Impacts - 2,000 Gallons Rate Design Impacts - 4,000 Gallons Rate Design Impacts - 20,000 Gallons  Local Utility Bill Comparison at 4,000 Gallons Consumption  Conclusions  Requested City Council Action  Motion: Vice Mayor Radzik moved to discuss Ordinance 2024-5: Amending Section 78-24 in Chapter 78 of the Code of Ordinances of the City of Groveland to provide for adoption of utility rates - First Reading; seconded  by Council Member Skyzinski.  Vice Mayor Radzik reported the issue was political innature to some degree. There were concerns about what was coming out of the ground versus what was being sold. Vice Mayor Radzik stated when an analysis was completed, there was a perceived shrinkage. He noted the three percent (3%) increase that was built into an ordinance was not followed for a number of years, and now we are looking at al huge increase. Vice Mayor Radzik stated there was also an issue with al lot of reclaimed water being wasted at the Sampey spray field. He stated he believed the rates were increased to six percent (6%) at once, however, by that time we were already behind. Vice Mayor Radzik stated we now have increases in material and labor needs with no rate structure to support  them.  3    JULY 29, 2024 CITY COUNCIL SPECIAL MEETING MINUTES  City Manager Hein pointed out Ordinance 2024-5 would set the rate structure for the next four (4) years. However, staff would be encouraged to review it annually to ensure the projections were being hit. City Manager Hein stated there had been discussion about a bigger jump in year one (1) and then ten, ten, ten (10, 10, 10). If something was found to be dramatically off in the annual Vice Mayor Radzik asked what would constitute as dramatically off. City Manager Hein stated a variety of factors such as growth slowing down or more conservation growth than anticipated. City Manager Hein reported there were checks and balances in place to ensure any operational City Manager Hein stated the forecast was a 5-year forecast for growth, development, and to Vice Mayor Radzik asked ift the rate structure would be communicated to Saint John's River' Water Management District (SJRWMD). Mr. Fish responded yes. He noted there was already a structure in place for reclaimed irrigation. This ordinance would apply those conservation strategies to the Vice Mayor Radzik inquired as to the status of the meter replacement project. Mr. Fish stated the meter replacement project would be replacing thousands of meters. The vendor has been selected and the Department of Environmental Protection will have a hearing on August 13th. Vice Mayor Radzik stated he was not happy with the increase. However, he explained how we got to this point with a forty percent (40%) increase and felt it was needed. Vice Mayor Radzik stated new homes and commercial properties being needed to support new infrastructure. Mr. Fish noted it was worth mentioning that the City Council was very protective of the customer Council Member Skyzinski stated Council has had many opportunities to meet with staff and review the plan. He stated he also does not love the idea of such an increase. However, he does Council Member Gaines asked that the drafted solicitation include metric accountabilities. If  review, staff would need to come back and fix the ordinance.  savings would be held in an operational reserve.  support the 5-year CIP.  drinking water and wastewater.  base when Covid hit, opting to not raise rates during that difficult time.  understand why it would be needed.  metrics are not met there should be actionable consequences in place. Council Member Gaines stated it is essential to go forth with the infrastructure plan.  Council Member Gaines inquired if prospective businesses look at utility rates when considering a move to Groveland. Ifso, was this seen as a detriment. Mr. Fish stated any small business was going to be far more sensitive to the difference in rates. He reported most businesses we were trying to attract, it would simply be the cost of doing business. Businesses were more concerned Council Member Gaines asked if larger businesses were more understanding of the rates. Mr. Fish stated yes; large businesses of that nature expect the costs of doing business.  with the City being able to handle the service additions.  4    JULY 29, 2024 CITY COUNCIL SPECIAL MEETING MINUTES  Council Member Sweatt stated she wanted to ensure the City would not need to go back and Mayor Wilson reported that in 2012 the majority of the Council wanted to do everything on the cheap. The Public' Works director at thet time was frustrated because the mayor at the time refused to correct the infrastructure. She reported the City of Deltona was doing the same thing and  redo anything in the years to come.  Orlando did it last year. Mayor Wilson felt this is a must.  Public Comment:  Dan Anderson read a letter into the record as attached to these minutes as Attachment 2, that he had provided to City Council on July 18, 2024 regarding support of the City's utility system rate and connection fee adjustments. Mr. Anderson stated he spoke with Finance Director Jo-Anne Drury who stated one hundred percent (100%) of the grant funds would be applied to the existing Capacity projects for the benefit of existing city customers. No future growth will benefit from any of the grant funding being applied for Robert Proper stated he was grateful for the City coming to a maturity level and understanding our problems. He stated he had concerns about the projected growth rate. Mr. Proper inquired what would be the mechanism to  help identify if we have a problem.  City Manager Hein stated identifying a mechanism was one of the trip wires that would need to be examined. This was a conservative estimate based on internal conversations of what was envisioned happening overt the next five (5)years. City Manager Hein stated there was no straight- lined system that could provide a projection; we would have to monitor every month. This would be the rate structure for the next four (4) years based on the five (5) years for CIP that would bring  the City into compliance.  Mr. Proper asked if the budget review each year would serve as the review  point.  City Manager Hein stated reviews would happen monthly; the budget review would serve as the  culmination of those reviews.  Keith Keogh inquired if there would be an impact to the General Fund and if there would be an educational component to help residents adjust.  Mayor Wilson stated discussions have been ongoing to hold an open house for the utilities. City Manager Hein stated he was not sure of the date and time for the open houses. The item would not impact the General Fund. He noted utilities were an Enterprise Fund that transferred funds to the General Fund. The rate structure does not have direct impact. Water conservation is  working closely with water management district.  Mr. Keogh felt the public relation portion would be great. However, to also include a pamphlet with the utility bill to ensure the majority of the residents  received the information.  5    JULY 29, 2024 CITY COUNCIL SPECIAL MEETING MINUTES  Communications Director Jennifer Clutts stated there would be an open house regarding utilities on August gth at the Lake David Center and residents would have the opportunity to ask questions. Mr. Fish reported Carlie Sandoval is the City's Water Conservation Specialist. She receives monthly usage reports and would be contacting high usage residents to let them know when they  An animated video presentation would also be provided.  are using a lot of water.  Elizabeth Talkington stated the water rate increase would be a hard sell to Trilogy residents for reclaim waterwhen they cannot get it to work. She asked ifthat problem would be handled by any of the proposed projects.  Mr. Fish stated yes. There were many pending projects that would help. Including a new well and a pumping system for reclaimed water. As soon as this is completed by summer next year the  problem would be a thing of the past.  Motion: Council Member Gaines moved to approve Ordinance 2024- 5: Amending Section 78-24 in Chapter 78 of the Code of Ordinances of the City of Groveland to provide for adoption of utility rates - First  Reading; seconded by Council Member Skyzinski.  Public Comment: None.  Motion passed with all Council Members present voting aye.  Vice Mayor Radzik stated had the City not entered into a contract agreement with Woodard & Curran a much higher increase would be needed today. He felt Woodard & Curran brings to the table a separate department that has been very successful with grants and loans.  ADJOURNMENT  Mayor Wilson adjourned the meeting at 7:23 p.m.  Groveland FLORIDA CiywahNimmicham  ailian Wilson, Mayor  Gde  Attest:  TyaARE Virginia Wright, City Clerk  6    ATTACHMENT 1    City of Groveland  Utility Rate Study July 29, 2024  RAFTELIS    Agenda  1. Brief History  2. Key Forecast Assumptions 3. CIP Funding Plan  4. Revenue Sufficiency Forecast  5. Rate Design  6. Findings and Recommendation:    Groveland Utilities - A Recent History 2020-Present  2020 - Utility Master Planning Begins  2021 - Completion of Facilities Plans of Existing Needs - Approved by DEP  2022 - Completion of the Utility Master Plan (UMP) and  Commencement of Design of Capital Projects - DEP Loan Program 2023 - Completion of Design Phase of Capital Projects and  Commencement of Raftelis Funding Study  2024 - Transition into Construction Phase - FUNDING AGREEMENTS PENDING  3  Woodard Curran    Recent Actions by City Council  Public Workshop on April 29 on Utilities Capital Needs  Public Workshop on June 21 on pending results of the Raftelis financial analys Ordinance 2024-04 presented for First Reading on July 1 to adopt the Raftelis  2024 Utility Rate and Connection Fee Study dated July 1  Ordinance 2024-04 also adopts effective October 1 new water and wastewate  connection fees or impact fees  Ordinance 2024-04 approved on Second and Final Reading on July 15 adoptin  significant connection/mpact fees to ensure growth pays for growth  4  Woodard Curran    Identified 5-Year Capital Needs Summary  Summary System Revenues Water Impact Fees Sewer Impact Fees Grant  Budget $5,775,948 920,404,805 $33,820,491 $10,473,379 $525,280 $177,000 $4,950,000 $131,827,061 $2,000,000 $3,620,465 $45,564,018 $259,138,447  Percent of Total 2.2% 7.8% 13% 4% 0.2% 0.1% 1.9% 51% 0.8% 1.4% 17.5%  Grant (SRF Principal Forgiveness)  Capital Lease Mascotte SRF Loan (Pending Council Action) Bank Loan 2023 Bank Loan New SAHFI Grant Total 5  Woodard &Curran    Leverage opportunities. Success!  Low Interest SRF Loans Villa City Drinking Water Villa City Drinking Water Villa City Drinking Water Lead Service Line Replacement Stormwater Wastewater Pre-Construction (Sunshine & Sampey) Wastewater (Sunshine & Sampey) Wastewater Planning (things outside of original Planning plan)  Planning and Design Phase 18 &2 Phase 1 Construction (AMR & Asbestos Line Replacement) Phase 2 Construction Production/TreatmentDistribution) Planning and Design Planning Planning and Design Construction  DW350620 DW350621 DW350621 LS35064 SW35063 WW350612 WW35061 WW35065  1.50% 2.35% 1.42% 0.00% 0.54% 0.06% 0.54% 1.79% Total  $3,071,200.00 $8,310,100.00 $24,893,836.00 $265,200.00 $300,000.00 $1,964,079.00 $38,260,302.00 $201,300.00 $77,266,017.00  Grants Secured Lead Service Line Replacement Groveland LFAI Wells at Villa City Sunshine/Sampey Sunshine/Sampey Regional WWTP Vulnerability Assessment Sampey WWTF Lower Floridan Reclaim Well at Sunshine Crystal Lake Waterside Pointe Stormwater Improvements  Planning/Design (LCRR) Construction- Sunshine Planning Design Planning/Design- - Regional WWTP Planning Construction Construction Sunshine Construction- Crystal Lake PemangDesgmConminucion  LS35064 $254,800 36640-SJRWMD $2,251,240 WW350610 $260,800 WW350612 $1,891,707 LPA0298-WW $750,000 23PLN20-V.A. $150,000 WG121-WW $6,500,000 36638-SJRWMD $1,104,112 36995-SJRWMD $87,500 Total $14,200,159  LPA0297-SW $950,000 Total Funding: $137,0  Future Grants Pending GROVELAND  DW WW SW Total  $25,740,000 $25,740,000 $26,985,000 $16,513,000 $24,370,000 $77,095,000  Woodard Curran  6  $3,310,000 $45,563,000    SRF Loans  Securing the SRF Loans: > - City does not currently qualify for borrowing Rate and Impact Fee adjustments are required Failure to secure the SRF loans will put allof these critical construction projects  Subject: FW: Groveland' WW350613 Treatment and Transmission  Good afternoon,  ljust wanted tof follow up on my previous email regarding the financials. Itc does not appear as afford this loan. Have there been anyr rate increases implemented recently that we are unaware  provide any resolutonsyordinances. Thank) you,  Scott McArthur Government Operations ConsultantI Division of Water Restoration Assistance State Revolving Fund Program SatatasPwsaDtaeA Office: 850-245-2998  in jeopardy.  Woodard Curran  7    Strategy & Next Steps to Execute  Next Steps:  - Growth will pay for Growth  Staff moving forward with examining financial mechanisms and ways to complete projects on time under State  ONe BIT  requirements  Secure FDEP SRF Loan Awarded: Nov. 2023 - Awaiting Rate Sufficiency Secure FDEP SRF Loan: August 2024 Execute Critical Construction Contracts  ( Continue to Leverage Local, State and Federal Alternative Financing (Grants!)  8  Woodard &Curran    2024 Budget  Escalation Factors for: Labor Chemicals  Health Insurance Fuel  Key Forecast Assumptions and Notes  Forecast remaining 5 years General Inflation Electricity  Significant upgrade and investment to existing facilities (including Sampey Wastewater Plant) along with capacity expansions for new development  Issuance of new debt to fund plant upgrades and other improvements (for existing and new customers)  Rate and connection fee adjustments identified to fund CIP investments and an increased level of service    CIP Funding Plan  10    CIP Summary - Major Projects  Villa City Water Improvements, $27,575,800  Sampey WWTP Improvements, $52,698,300  Major Projects Include:  Villa City Water Improvements - $27,575,800 Villa City WWTP Improvements - $71,073,300 Sampey WWTP Improvements - $52,698,300  Villa City WWTP Improvements, $71,073,300    CIP Funding Summary  Funding Source Operating Water Connection Fees Sewér Connectiont Fees Grants Mascotte Grant Developer Existing Debt Proposed Debt Total  2024 $558,000 990,800 7,264,600 54,667,700 4,950,000  2025  2026  2027  2028  Total  $596,900 $1,261,000 $1,541,500 $1,604,800 $5,562,200  643,300 1,461,400 809,200 0 6,662,500  1,416,200 2,600,400 572,100 0 6,829,100 0  3,016,300 2,687,500 604,100 0  2,489,000  8,555,600  783,300 14,797,200 0 56,653,100 0 4,950,000  0 12,374,300 91,917,000  6,999,800 14,219,900 34,711,300  0  0  0 12,374,300 2,914,100 127,277,900  4,540,000 15,079,100 12,827,700  $172,722,400 $14,713,300 $27,757,900 $27,676,900 $22,011,100 $264,881,600    New Loans for CIP  Loan  Projects  Funding Amount $668,700 $261,400 $1,050,800. $205,000 $41,248,300 $3,711,200 $12,158,400  Annual Debt First Payment  Service $76,600 $16,500 $119,300 $23,300 $2,623,000 $421,400 $754,200  2024 SRF W-1 Lead service lines 2024 SRF W-2 Lead service lines  2025 2025 2025 2025 2027 2025 2027  2025 S Design 2025 W Design  Facilities Plan & 1&! Facilities Plan  2025 Sampey SRF Sampey Upgrade  2025 Bank Loan 2026 CWSRF  Various projects Ribs/Lift Stations/etc.  2026 Villa City SRF Villa City WWTP 2026 W SRF 1 AC Mains replace 2026 W SRF -2 Various projects  $50,000,000 $5,557,100 $12,417,000 $20,000,000  $3,148,300 $364,200 $824,100 $900,000  2028 2027 2028 2025  Line of Credit  Various projects    Water and Sewer Revenue  Sufficiency Forecast  14    Existing Water Rates (October 1, 2020)  Monthly Base Charge Inside Rate  Volumetric Charge  Inside Rate  Residential Residential 2 Homes on 1 Meter Commercial 34-Inch 1-Inch 1 %-Inch 2-Inch 3-Inch 4-Inch 6-Inch  $11.80 23.59 $11.80 29.49 58.98 94.36 188.80 295.00 590.00  Residential.  Minimum Gal 4,000 (Inc. in Base) AIU Usage Above 4;000Gal Commercial AIC Consumption:  $0.00 3.09 $4,12  15    Existing Irrigation & Reclaimed Rates  (October 1, 2020)  Monthly Base Charge Inside Rate  Volumetric Charge Inside Rate  4-Inch 1-Inch 1%-Inch, 2-Inch 3-Inch,  $2.78 Block1 6.95 1389 Block3 22.22 44.43  $2.73 3.09 3.39 4.05 4.92  Block 2 Block 4 Block5  Description Block 1 Range Block 2 Range Block 3 Range Block 4 Range Block 5 Range  34-Inch 1-Inch 11 V2-Inch 2-Inch 3-Inch  0-6,000 0-6,000 0-15,000 0-15,000 0-30,000  6,001- -16,000 6,001-16,000  16,001 -30,000 30,001-50,000 16,001-30,000 30,001-50,000  Above 50,000 Above 50,000  15,001 -40,000 40,001-75,000 75,001  125,000 Above 125,000 30,001-80,000: 80,001 150,000 150,001 - 250,000 Above 250,000  15,001-40,000  40,001-75,000 75,001 - 125,000 Above 125,000  16    Existing Sewer Rates (October 1, 2020)  Monthly Base Charge Inside Rate  Volumetric Charge  Inside Rate  Residential, Residential 2 Homes on 1 Meter Gommercial 34-Inch 1-Inch 1%-Inch 2-Inch 3-Inch 4-Inch 6-Inch  $29.92 59.84 $29.92 74.84 149.67 239.49 478.75 748.05 1,496.11  Residential  Minimum Gal 4,000 (Inc. in Base) AlLgeAbove4000a Commercial All Consumption  $0.00 2.31  $2.31  17    Projected New Development  Study relies on a conservative forecast of around 3,200 units  over the 5-year forecast  Description Units per Year Cumulative  FY2024 171 171  FY2025 643 814  FY2026 993 1,807  FY - 2027 739 2,546  FY2028 643 3,189  Connection fee revenue is aligned with when units are added    Revenue  $25,000,000  Sufficiency at Existing Rates  $20,000,000  Revenues are not projected to be sufficient beginning in FY2025 Significant debt service added  $15,000,000  $10,000,000  Additional 0&M to support newlupgraded plants and increase the LOS Rate adjustments necessary to fund O&M, debt, debt covenants, capital, and maintain reserves  $5,000,000  - -  $0  FY2024 Operating Expenses  FY2025  FY2026 Debt Service  FY2027  Other Expenses/Translers -Revenues From Existing Rates  19    Forecast Rate Adjustment  Fiscal Year Rate Adjustment  Effective Date October 2024 October 2025 October 2026 October 2027  FY 2025 FY2026 FY2027 FY2028  40.0% 10.0% 10.0% 10.0%  Note: Rates in future years include inflationary adjustments  20    Revenue  $25,000,000  Sufficiency at Proposed Rates Rate phasing is balanced with immediate needs for revenue sufficiency, coverage, and fund balance needs  $20,000,000  $15,000,000  $10,000,000  $5,000,000  -  -  $0  FY2024 Operating Expenses Other Expenses /Transfers Revenues From Proposed Rates  FY2025  FY2026 Debt Service Revenues From Existing Rates  FY2027  FY:  21    Utility Reserve Forecast  920,000,000 $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0  The City has adopted a 20% reserve policy including O&M and debt service requirements Maintaining strong Connection Fee balances isr necessary since connection fees are being used to pay debt service  FY2024 Operations Fund (400) Water Connectionl Fee Fund (401) Capital Fund (403) Operating Fund Target 20% of O&M  FY2025  FY2026  FY2027 Sewer Connection Fee Fund (402)  FY2028  22    Rate Design  23    Pricing Objectives  Enhance Affordability for lowest users  Reduction of monthly minimum / base charge Conservation / demand management Introducing tiered rates for water service  Revenue Stability  Maintain strong revenue levels from base charge and low usage tiers Rate design achieves fixed revenue recovery of 30% water and 45%  sewer    Proposed 2025 Rates - Water  Existing Rate Structure [2] $16.52 $33.03  Description [1]  Rate Design [3]  Residential  $10.04 20.06  Residential = 2 Homes 1 Meter Commercial, 34-Inch 1-Inch 11 %-Inch 2-Inch 3-Inch 4-Inch 6-Inch 8-Inch 10-Inch  $16.52 41.29 82.57 132.10 264.32 413,00 826.00 N/A N/A  $10.04 25.103 50.20 80.321 160.64 251.00 502.00 803.20 1,154.60  [1)Existing rate structure includes the 40% rate increase for FY: 2025. Rate design is shown  to produce the same amount of total water revenues. [2] Includes the first 4,000 gallons of water consumption. [3] Includes 0 gallons of water consumption.  25    Proposed 2025 Rates - Water, cont.  Residential Usage Rates:  Existing Rate Design Rate Structure [2] $0.00 4.33 4.33 4.33  Description [1] Block 1 (0-4,000) Block 2 (4,001 - 8,000) Block 3 (8,001  12,000) Block 4 (Above 12,000) Commercial Usage Rates:  [3] $1.65 3.30 3.85 6.59  Existing Rate Structure [2] $5.77  Rate Design [3] $6.05  Description [1]  AlUsage  [1Existing rate structure includes the 40% rate increase for FY: 2025. Rate design is shown to produce the same amount of total water revenues. [2] Includes the first 4,000 gallons of water consumption in base charge. [3] Includes 0 gallons of water consumption in base charge.  26    Proposed 2025 Rates - Sewer  Existing Rates [2] $41.89 83.78  Description [1]  Rate Design [3]  Residential  $23.37 46.73  Residential -= 2 Homes 1 Meter Commercial 34-Inch 1-Inch 11 %2-Inch 2-Inch 3-Inch 4-Inch 6-Inch 8-Inch 10-Inch  $41.89 104.78 209.54 335.29 670.25 1,047.27 2,094.55 N/A: N/A  $23.37 58.43 116.85 186.96 373.92 584.25 1,168.50 1,869.60 2,687.55  [1)Existing rate structure includes the 40% rate increase for FY 2025. Rate design is shown to produce the same amount of total sewer revenues. [2] Includes the first 4,000 gallons of sewer consumption in the base charge. [3] Includes 0 gallons of sewer consumption ini the base charge.  27    Proposed 2025 Rates - Sewer, cont.  Residential Usage Rates:  Existing Rate Structure [2] $0.00 3.23 3.23  Description [1] Block 1(0 - 4,000) Block 2 (4,001 - 8,000). Block3 (Above:8,000): Commercial Usage Rates:  Rate Design [3] $5.28 5.28 6.59  Existing Rate Structure [2] $3.23  Description [11  Rate Design [3] $6.33  All Usagé  [1] Existing rate structure includes the 40% rate increase for FY 2025. Rate design is shown to produce the same amount of total sewer revenues. [2] Includes the first 4,000 gallons of sewer consumption in the base charge. [3] Includes 0 gallons of sewer consumption in the base charge.  28    Proposed 2025 Rates - Irrigation  Base Charges  Existing Rate Structure [1]  Description  Rate Design  Meter Size 34-Inch 1-Inch 11 %-Inch 2-Inch 3-Inch  $3.89 9.73 19.45 31.11 62.20  $5.03 12.54 25.10 40.15 80.30  [1] Existing rate structure includes the 40% rate increase for FY 2025. Rate design is shown to produce the same amount of total irrigation revenues.  29    Proposed 2025 Rates - Irrigation, cont.  Usage Rates:  Existing Rate Structure $3.82 4.33 4.75 5.67 6.89  Usage Block [1]  Rate Design  Block 1 Block 2 Block; 3 Block 4 Block 5  $3.63 4.23 7.25 9.34 11.54.  [1)Existing rate structure includes the 40% rate increase for FY 2025. Rate design is shown to produce the same amount of total irrigation  revenues.  Meter Size Block 1 Range Block 2 Range Block 3 Range Block 4 Range Block 5 Range  34-Inch 1-Inch 11-Inch 2-Inch 3-Inch  0-6,000 0-6,000 0-15,000 0-15,000 0-30,000  6,001 -16,000 6,001-16,000 15,001-40,000  16,001 -3 30,000  30,001-50,000  Above 50,000 Above 50,000  16,001-30,000 30,001-50,000  40,001-75,000: 75,001-125,000. Above 125,000  15,001-40,000 40,001-75,000 75,001-1 125,000 Above 125,000 30,001-80,000 80,001 -150,000 150,001-250,000: Above 250,000  30    Residential Bill Distribution  Monthly Usage Range % of Residential Bills  Cumulative %  OGallons 1-1,000 Gallons 1,001 2,000 Gallons 2,001 - 3,000 Gallons 3,001 4 4,000 Gallons 4,001 - 5,000 Gallons 5,001 - 6,000 Gallons 6,001 - 7,000 Gallons 7,001 - 8,000 Gallons 8,001 - 9,000 Gallons Above 9,000 Gallons  8.3% 8.4% 14.2% 15.8% 13.8% 10.8% 7,8% 5.4% 3.7% 2.7% 9.2%  8.3% 16.7% 30.9% 46.7% 60.5% 71.2% 79.1% 84.4% 88.1% 90.8% 100.0%    Rate Design Impacts - Base Charges  $50.00 $45.00 $40.00 $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00  $44.46  $41.72  $40.42  $36.75  $33.41  FY2024  FY2025  FY2026  FY2027  FY2028    Rate Design Impacts = 2,000 Galllons  70 60 50 40 30 20 10 0  $62.92  $57.20  $52.01  $47.27  $41.72  FY2024  FY2025  FY2026  FY2027  FY2028    Rate Design Impacts = 4,000 Galllons  90 80 70 60 50 40 30 20 10 0  $81.38  $73.98  $67.27  $61.13  $41.72  FY2024  FY2025  FY2026  FY2027  FY2028    Rate Design Impacts = 20,000 Galllons  350 300 250 200 150 100 50 0  $323.18  $293.74  $266.99  $242.65  $128.12  FY2024  FY2025  FY2026  FY2027  FY2028    Local Utility Bill Comparison at 4,000  Galllons Consumption  Mascotte Town of Lady Lake Fruitland Park Mount Dora City of Umatilla Town of Oakland City of Tavares City of Eustis Montverde City of Ocoee Proposed Rates Orange County City of Leesburg City of Apopka City of Clermont Existing Rates City of Minneola City of Winter Garden Howey-in-the-Hills  $106.97  $84.70 $79.70 $77.84 $75.35 $71.46 $66.54 $66.30 $64.73 $64.01 $61.13 4 $51.31 $50.98 $47.91 $46.77 $41.72 $40.94 $33.01 $31.36 $40.00  Other Utilities Average: $62.35  $0.00  $20.00  $60.00 Water Wastewater  $80.00  $100.00  $120.00  36    Conclusions  The alternate rate design should be adopted in FY 2025 along with the recommended rate adjustment to promote conservation  and minimize impacts to low-use customers  The proposed rate adjustments for future years of FY 2026 through FY 2028 should be adopted to provide funding for operating, capital, and debt-related requirements  Due to the magnitude of the CIP and the sensitivity of rate adjustments, the City should consider updating the forecast  each year for the next 2-3 years    RAFTELIS  Thank  you!  Contact: Joe Williams  Michelle Galvin mgalvin@ratels.com  407.628.2600 willams@ralrtels.com    Requested City Council Action  Following public comment as part of this public hearing, staff recommer  action to approve Ordinance 2024-05 on First Reading  Second and Final Reading has been advertised for Monday, August 12, at 6 PM  39  Woodard Curran    ATTACHMENT2    230 Silver Maple Road Groveland, Florida 34736 July 18, 2024  Mayor Evelyn' Wilson Vice Mayor Mike Radzik Councilwoman Barbara Gaines Councilman Richard Skyzinski Councilwoman Dina Sweatt  Re: Reaffirmation of Support for Groveland Utility System Rate and Connection Fee Adjustments  Honorable Mayor, Vice Mayor and Council Members:  Dan Anderson here again, a seven year resident of the City and retired utility financial consultant. lwrite you this letter to reaffirm my support for the adoption of the recommended utility rates and connection fee adjustments as proposed by our rate consultant Raftelis. Thank you for allowing me to read my previous letter of June 14, 2024 into the record at the. July 1" Council Meeting. Iwas very pleased that Council unanimously approved thet first reading of the ordinance for the adjustments of the connection My previous letter primarily addressed the need to adjust the connection fees to provide that growth in our City pays its full andi fair share of capacity expansion capital costs. This current letter focuses ont the need to adjust the utility water, wastewater and reclaimed water monthly rates. The connection fees and utility rates are interlocking components oft the foundation oft the financial plan for our utility system. Adoption oft the recommended adjustments to both is absolutely crucial for the future financial Al key table in the Raftelis draft rate study report is "Table 16: Debt Service Coverage Forecast- Utility". For Fiscal Year ("FY")2024, Projected All-In Coverage is a value of0.90. This value less than unity indicates that Net Operating Revenues for the current fiscal year are insufficient to pay total debt service. Because projected coverage values for future years incorporate recommended rate increases, acceptable levels of coverage are shown for those years beyond FY: 2024. Without the rate increases, however, unacceptably low values for Projected All-In Coverage would be shown. Achieving adequate coverage annuallyi is at fundamental financial requirement to obtain, as well as retain, the low-cost debt and grant funding that are part oft the utility financial plan. Without adoption of the recommended rate increases for next fiscal year, the City would riskj jeopardizing the entire utility financial plan. (The Finance Director and City Attorney can provide details as to specifics of the negative implications of  fees.  success of utility system.  failure to adopt the needed rate increases.)    Raftelis made several recommendations for adjustments to the rates, all ofwhichisupport. Elimination oft the gallonage allowance in the minimum monthly water charge has the double benefit ofe enhancing conservation plus reducing the cost impact on the financially vulnerable residents of our City. Adopting ani increasing block rate structure will further enhance water conservation efforts. One caveat with respect to inclining block rates is that price elasticity effects may reduce aggregate monthly metered water usage to generate revenues int the various blocks. Thus, close monitoring of total billable volumes ine each rate block over the next several years is important to maintaining our revenue sufficiency to Asa resident of our charming City, Ifeel indeed fortunate that we continue to make needed progress,  meet all financial requirements of the utility system.  including financially, with our Utility System. Thank you for your consideration.  Very truly yours, /s/ Dan Anderson