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Here’s The Scoop … Did LBTS Former Town Managers Baldwin & Colon Keep A lid On Annual Sewer Increases? …

DOES THIS PUT A LID ON 7 YEARS OF “DISTINGUISHED” BUDGET PRESENTATIONS?…

Dear Readers… this writer previously posted the sewer funding problems found and revealed last month by Int. Town Manager Hoffmann due to the previous Town Managers, Baldwin and Colon apparently not charging SRClub what Pompano Beach was charging the Town from the time they were annexed into LBTS in 1998 to the present……It was unknown to SRC just as it was to the rest of the Town’s taxpayers until last month …

On top of that was what now appears to be the common administrative practice of not passing along annual rate increases from Pompano Beach to the residents after 2003/2004 leaving the Town with a rather large increase to make up for it if done in one lump sum FY 2010-11 … Ms. Hoffmann included this in her budget proposal on July 27, 2010 (prev. post…see below)…

“SEWER ENTERPRISE FUND

“There are two serious deficiencies in the Sewer Fund that must be addressed. First the revenues generated through the sewer charges do not cover the related expenditures and it would require a 35-49% increase in the sewer rates to generate sufficient revenues to offset expenditures next year. Clearly that level of increase in a single year is not going to be acceptable to our customers.”

On Friday the Int. TM sent more bad news in a memo to the Commission … The news that Pompano Beach has again raised their rates and did  so as of Aug. 1st  ….and again in Jan. to the tune of a 23% increase on top of the percentage Ms. Hoffmann stated above!… We are told that north end residents of LBTS received notice of that increase prior to August… This writer took a look at the Pompano Beach website and found the following….

“Two Phase Utility Rate Increase
August 2010 & January 2011
On July 27, 2010, the City of Pompano Beach City Commission approved the increase for water, wastewater and reuse as proposed. The Utility Rate Consultant conducted a water and wastewater rate study and found that rates needed to be increased to ensure future bond coverage and enterprise fund operational and maintenance expenses. A two step phased approach was selected by the Commission to minimize the impacts to our customers.
Water
In response to persistent drought conditions, the South Florida Water Management District (“District”)
And Broward County implemented a “Year-Round Landscape Irrigation Conservation Measures” which established permanent three-day irrigation watering for some parts of the District outside of water shortage orders. Broward County (“County”) determined that two-day irrigation watering should be the maximum number of days and therefore enacted a year-round ordinance that was more stringent than the District’s three-day watering rule. The County also restricted reuse water service between the hours of 10am to 4pm daily.
The residential customer using 10,000 gallons per month will see an 8.8% increase in August and 12.7% in January.
Wastewater
The City collects wastewater and transmits it to Broward County for treatment.. The treatment rates charged by Broward County increased 17.6%. The debt service component also increased 9%. The City increased its reserve capacity from 15.71 MGD to 17 MGD, which also contributed to the increase in treatment charges paid to Broward County. This additional capacity will ensure treatment for future City needs until 2030. The residential customer will see a 6% increase in August and 6.4% in January.
Reuse will be increased five percent and Stormwater will not be increased at this time.
Summary
With these increases the Utility will continue to meet bond requirements and cover operational/maintenance costs preventing the continued drain on reserves. Broward County has 20 water/wastewater utilities. Pompano Beach will rank 17th in comparison with our neighboring Broward County utilities for water and wastewater charges after this”

http://www.mypompanobeach.org/directory/utilities/index.html

This writer was interested before the above information came my way in finding out what was included in previous Town budgets for the proprietary budgets 2004/2005 to 2009/2010 to see what was what and why in the world two prior administrations would not have simply passed on any annual rate increases to the consumers after the Int. TM indicated in her 2010-11 preliminary budget the following on pgs. 15-17…

“There are two serious deficiencies in the Sewer Fund that must be addressed. First, the revenues generated through sewer charges do not cover the related expenditures and it would require over a 30% increase in sewer rates to generate sufficient revenues to offset expenditures next year. Clearly the level of increase in a single year is not going to be acceptable to our customers.

In trying to understand why this has occurred, we determined there had been no adjustments in the Town’s sewer rates since 2003. Since that time, the annual operating expenses have increased from approximately $800,000 to $1.2 million, yet our revenues have actually decreased (from $1.1 million to $900,000). Pompano Beach has raised their rates to the Town, as would be expected over the course of seven years and Pompano’s rate increases account for approximately 65% of our operating cost increase. (Pompano has raised the rates paid by Town residents in northern portion of the Town where Pompano provides and bills water and sewer directly.)

We are not able to say, at this point, why revenues have fallen over the past seven years. It is possible that water conservation efforts have had an impact as many other cities are reporting that trend and sewer rates are tied directly to water consumption rates. But the bottom line is that the very significant increase in the Town’s costs has not been passed on to our sewer customers.

The Town’s current budget book says rates are evaluated annually to avoid a subsidy from the General Fund, but does not mention that the current rate structure was no longer sufficient to support the operation. But it was apparently known that the Sewer Fund would experience a negative operating balance between revenues and expenditures because an appropriation of $142,084 from the $1,583,398 fund and balance in the sewer Enterprise Fund was necessary to balance the current year’s budget. (our current year analysis suggests an even larger appropriation from the fund balance will be necessary –approximately $182,000– as budgeted revenues are not likely to be realized.)

Without a rate increase, we project that, an even larger appropriation from the fund balance– approximately $375,000– will be necessary in order to balance the sewer budget. (We project the Sewer Fund will have a fund balance of $1.4 million at the end of this fiscal year, but will diminish to $1.05 million if rates are not increased at all effective with the October 2010 billings.)

It is politically and financially prudent to regularly adjust water and sewer rates to assure that they offset costs, so that consumers experience small incremental increases in their budgets that they can absorb rather than be hit with a big increase in rates every five years or so. Unfortunately, that hasn’t occurred so the Commission is going to have to consider rate increases.”

Ms. Hoffmann went on to state…. “Since I assume that the need for a rate increase is a surprise to the Commission, and I have only identified the need this week, I have simply balanced the Sewer Fund with a $375,000 appropriation from the fund balance in the recommended budget for now. But I do feel strongly that some rate increase must be implemented to keep the situation from getting worse and will bring back rate increase options to the Commission for consideration before the budget is adopted in September.”…

………………….

Town Budgets … Proprietary Funds…

2004/2005 pg. 36-

“Sewer Fund

Sewer Fees

The current sewer fees range from $7.60 for single family and multi-family. Commercial accounts vary from $7.60 to $190.00 depending on the meter size. All customers pay $3.00 consumption rate per 1,000 gallons over their monthly cap, which are 2,000 gallons for a single family and 1,000 gallons for  multi-family and commercial. There was no rate change for fiscal year 2004/2005.

Sewer rates are reviewed annually. Any increase passed on to the Town by the City of Pompano is passed on to the consumer to eliminate General Fund subsidy. The Town expects to collect $1,172,000 in sewer fees during fiscal year 2004/2005.”

2005/2006 pg. 36-

“Sewer Fund

The current sewer fees range from $7.60 for single family and multi-family. Commercial accounts vary from $7.60 to $190.00 depending on the meter size. All customers pay $3.00 consumption rate per 1,000 gallons over their monthly cap, which are 2,000 gallons for a single family and 1,000 gallons for  multi-family and commercial. There was no rate change for fiscal year 2005/2006.

Any increase passed on to the Town by the City of Pompano is passed on to the consumer to eliminate General Fund subsidy. The Town expects to collect $1,172,000 in sewer fees during fiscal year 2005/2006 which is the same as fiscal year 2004/2005”

2006/2007 pg. 38-39

“Sewer Fund

The current sewer fees range from $7.60 for single family and multi-family. Commercial accounts vary from $7.60 to $190.00 depending on the meter size. All customers pay $3.00 consumption rate per 1,000 gallons over their monthly cap, which are 2,000 gallons for a single family and 1,000 gallons for  multi-family and commercial.”

Any increase passed on to the Town by the City of Pompano is passed on to the consumer to eliminate General Fund subsidy. Sewer fees have remained the same since fiscal year 2003-2004.

There is no rate change for fiscal year 2006/2007. The Town expects to collect $1,175,544 in revenue during fiscal year 2006/2007, which is $1,579 less than fiscal year 2005/2006 amended budget.”

2007/2008 pg. 38-39

“Water & Sewer Fund

The current sewer fees range from $7.60 for single family and multi-family. Commercial accounts vary from $7.60 to $190.00 depending on the meter size. All customers pay $3.00 consumption rate per 1,000 gallons over their monthly cap, which are 2,000 gallons for a single family and 1,000 gallons for  multi-family and commercial.”

Any increase passed on to the Town by the City of Pompano is passed on to the consumer to eliminate General Fund subsidy. Sewer fees have remained the same since fiscal year 2003-2004.

There is no sewer rate change for fiscal year 2007/2008. The Town expects to collect $1,221,204 in sewer revenue during fiscal year 2007/2008, which is $45,660 more than fiscal year 2006/2007 amended budget.

In regards to water the Town expects to collect $40,000 in interest revenue during fiscal year 2007/2008.

During fiscal year 2006/2007, the General Fund subsidized the Water and Sewer System Fund in the amount of $815,454. However, for fiscal year 2007/2008 there are no budget transfers therefore no subsidy from the general fund.

Overall, the water and sewer fund is expected to collect $780,263 less than fiscal year 2006/2007 amended budget.”

2008/2009 pg. 39-

“Sewer Fund

The current sewer fees range from $7.60 for single family and multi-family. Commercial accounts vary from $7.60 to $190.00 depending on the meter size. All customers pay $3.00 consumption rate per 1,000 gallons over their monthly cap, which are 2,000 gallons for a single family and 1,000 gallons for  multi-family and commercial.”

Any increase passed on to the Town by the City of Pompano is passed on to the consumer to eliminate General Fund subsidy. Sewer fees have remained the same since fiscal year 2003-2004.

There is no rate change for fiscal year 2008/2009. The Town expects to collect $1,2,36,895 in revenue during fiscal year 2008/2009, which is $15,691 more than fiscal year 2007/2008 amended budget.”

2009/2010 pg. 39-

“Sewer Fund

The current sewer fees range from $7.60 for single family and multi-family. Commercial accounts vary from $7.60 to $190.00 depending on the meter size. All customers pay $3.00 consumption rate per 1,000 gallons over their monthly cap, which are 2,000 gallons for a single family and 1,000 gallons for  multi-family and commercial. The sewer system services approximately 1,438 accounts.

Any increase passed on to the Town by the City of Pompano is passed on to the consumer to eliminate General Fund subsidy. Sewer fees have remained the same since fiscal year 2003-2004.

There is no rate change for fiscal year 2009/2010. The Town expects to collect $1,224,399 in revenue during fiscal year 2009/2010, which is $12,496 less than fiscal year 2008/2009 amended budget.”

………………

The Int. Town Manager was correct that each budget from 2004-2010 states the following…”Any increase passed on to the Town by the City of Pompano is passed on to the consumer to eliminate General Fund subsidy.” …or a variation of it as the years progressed …. but what was stated and what was actually enacted were quite different…

If this all pans out…shouldn’t the last 7 years of GFOA (Government Finance Officers Assoc.) Distinguished Budget Presentation Awards be rescinded?… (tongue in cheek…people)…..

Budgets from 2004-2009/2010 under Finance ….2010/2011 Budget Presentation on right side of the home page Town website…http://www.lauderdalebythesea-fl.gov/

more to come….

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