1. 1 City of Cocoa Michael Burton - President Andrew Burnham - Senior Vice President Ashley Venturoni – Project Consultant Presented by: FY 2013 Water, & Sewer Revenue Sufficiency Analysis Update Presentation Utility Advisory Board June 26, 2013

2. Background and Scope  Background  In FY 2010 Burton & Associates conducted a comprehensive Water, Sewer and Reclaimed Water Rate Study  The City adopted the recommended rate adjustments for FY 2011 with 5% annual rate increases effective each October 1 thereafter subject to prior approval by Council  The City contracted with Burton & Associates to verify and adjust as necessary the annual plan of rate adjustments for FY 2012 and beyond.  Scope  Update the ten (10) year financial plan originally developed in the above referenced Study  Verify, or adjust, the annual plan of rate increases as required 2

3. Basis for Analysis  FY 2013 Amended Budget  Budgeted expenses for FY 2013 per amended budget  Proposed FY 2014 Budget  Basis of projected expenses for future fiscal years through FY 2023  FY 2014 – FY 2018 Capital Improvements Program  Use of FY 2010 bond proceeds and other carry forward funds for designated projects  Identification of new borrowing for projects not able to be funded with current resources  FY 2014 - $16.9 par amount to generate $15.6 million of project proceeds  FY 2016 - $19.7 par amount to generate $18.0 million of project proceeds 3

4. Other Requirements of the Analysis  Operating Reserve equal to Five Months of Operating Expenses  Within Industry Standards and Consistent with “Strong” Utility Systems per Bond Rating Agencies  Minimum Debt Service Coverage Target of 1.50 x net income  Target of Rating Agencies for “Strong” Utility Systems 4

5. Results  Plan of 5% annual rate adjustments is verified  Ten year financial plan projections (see chart on following page) 5

6. Ten Year Financial Plan Projections 6 5% annual rate adjustments are verified Debt Service Coverage is strong Borrowing in FY 14 & 16 of $16.9 & $19.7 million respectively Reserve balance target maintained Sustainable financial plan

7. Recommendations  Recommendations  Implement the scheduled 5% across-the-board increase in all water, sewer and reclaimed water rates to be effective October 1, 2013  Meets financial planning targets and provides balanced/sustainable funding of capital improvement requirements (i.e. cash vs. debt) 7

8. Residential Water & Sewer Rate Survey Results 8

9. Residential Water Rate Survey Results 9

10. 10 Discussion