1. 1 Water and Wastewater Capital Charges Utilities Department Orange County Board of County Commissioners April 5, 2011

2. 2 Presentation Outline Purpose Background 2008 Update Issues Summary

3. 3 Purpose Provide the Board with an overview of our Water and Wastewater Capital Charges Discuss Commissioner Thompson’s initiative to offer a Capital Charge payment plan for small business

4. 4 Presentation Outline

5. 5 Background Capital Charges Paid by developers for infrastructure to serve growth Mechanism for growth to “pay its own way” Used only for growth related projects

6. 6 Background Capital Charges Discretionary source of funding Cannot exceed full cost recovery Can be set below full cost recovery Reduces the burden on existing rate payers

7. 7 Background Current Charges Based on 2004 study Phased in over time Set at full cost recovery Considered future alternative water infrastructure

8. 8 Background Current Charges Water – $1,950 per ERC – 350 GPD Wastewater – $3,668 per ERU – 300 GPD

9. 9 Presentation Outline

10. 10 2008 Update Assumed groundwater and alternative water as sources of supply 5 year planning horizon used for groundwater 10 year planning horizon used for alternative water

11. 11 2008 Update Charges Adjustment Water Current $1,950 Update$2,603+ $653 33.5% Wastewater Current$3,668 Update$3,673+ $ 5 0.1% Combined Current $5,618 Update$6,276+ $658 11.7%

12. 12 2008 Update Findings presented to BCC July 2009 BCC Direction – Postpone implementation of updated charges – Maintain existing Capital Charges at current levels – Update the report in two years

13. 13 Presentation Outline

14. 14 Issues Engage consultant Capital Charge Update – Revenue Sufficiency Analysis Economic climate Explore alternative payment options Revenue Bond issue

15. 15 Issues Flat Revenues

16. 16 Issues 84% Reduction

17. 17 Issues 100% Reduction

18. 18 Issues 100% Reduction

19. 19 Issues Alternative payment arrangements Installment Financing Deferral Interest and Administrative Costs Security Instruments

20. 20 Issues

21. 21 Issues Toho Water Authority Alternative Payment Options – Subject to availability or Funds – Since October 2003 – Limited eligibility – Term – Interest

22. 22 Issues Toho Water Authority Installment Plan Eligibility – Retrofit to central service – Charitable / Non-Profit organizations – Industrial or Warehouse with potential to create 5 or more jobs – Affordable Housing Projects – Projects within the Kissimmee CRA – Commercial properties who covenant not to subdivide or convert to condo ownership – Lessees with the written consent of the property owner

23. 23 Presentation Outline

24. 24 Summary Capital Charge amounts are still set at 2004 calculated amounts Operating Revenue is flat Capital Charge revenues are down 84% Capital Charge cash balances are down 100% Bond financing will be required within the next two years to fund our capital improvements program

25. 25 Summary Majority of utilities do not offer payment options Developing an installment plan for capital charges is not recommended Moving forward Proceed with Capital Charge study update Evaluate revenue sufficiency Return to the Board later this year

26. 26 Water and Wastewater Capital Charges Utilities Department Orange County Board of County Commissioners April 5, 2011