CITY OF MARCO ISLAND, FLORIDA

1
CITY OF MARCO ISLAND, FLORIDA

• PRESENTATION OF
• CAPITAL FACILITIES FEE UPDATE
• October 9, 2006
• Presented By
• Public Resources Management Group, Inc.

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Purpose of Study

• Update Capital Facilities Fees Charged to New
  Development
• Capital Facilities Fees Last Reviewed Summer 2004
• Cost of Capacity has Increased
• Recognize Cost Recovery from Growth

3
Purpose of Capital Facilities Fees

• Application of Capital Facilities Fee Common in
  Utility Industry
• Historically Used By City as a Capital Financing
  Tool
• Recover Capital Cost of Capacity Allocable to New
  Users
• Must Meet Rational Nexus Provisions Dictated By
  Case Law
• Fees Must Be Reasonable
• Support Capital Needs For System Growth
• Growth Must Pay Its Own Way
• Long-Term Effect Stabilize Rates for Service
  (e.g., Reduces Need For Future User Rate
  Increases)
• Shifts Portion of Cost Recovery Burden to New
  Development
• Links to Funding of Capital Expenditures to
  Future Users
• Reduces Debt Service Component of Rates for
  Existing Users

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Primary Assumptions forCapital Facilities Fees

• Fee based on a Single System Approach
• Level of Service Reserved Capacity per ERC
• ERC Use of Standard Residential Household
• Water 440 Gallons Per Day AADF
• Wastewater 220 Gallons Per Day AADF
• Consistent with City Comprehensive Plan
  Requirements
• Capital Costs Based on Current CIP
• Reflects Production / Treatment Plant Major
  Conveyance Systems
• Not Include On-site Costs
• Recognizes Blend of Existing Plant not Used and
  Future Plant
• Average Cost to Meet Total System Build-out
  Growth

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Capital Improvement Program(CIP) Needs

• Capital Expenditures Required To
• Meet Future Capacity (Growth) Demands
• Upgrade / Improve System
• Replace Assets Reaching End of Service Life
• City Identified CIP FY 2006 to 2013
• Water 54,982,829
• Wastewater 70,658,812
• Neighborhood Program 90,772,093
• CIP Funded From a Combination Of
• Capital Facilities Fee Collections (Future
  Customer)
• Special Assessments (Future Customer)
• User Rate Revenues (Existing Customer)

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Capital Improvement Plan - Recap
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Recommendations Impact Analysis

• Study Recommendations
• Proposed Water Capital Facilities Fee 3,740 /
  ERC
• Proposed Wastewater Capital Facilities Fee
  4,610 / ERC
• Impact Per ERC

• Adopted Fees Can Be Implemented 90 Days After
  Advertisement

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Water WastewaterCapital Facilities Fees
Comparison
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Comparison of Water Wastewater Capital
Facilities Fees (cont)

• Some Reasons Why Capital Facilities Fees Differ
  Among Utilities

• Some Reasons Why Capital Facilities Fees Differ
  Among Utilities
• Source of Supply
• Proximity of Source of Supply
• Type of Treatment
• Availability of Grant Funding to Finance CIP
• Administrative Policies

• Time of Last Fee
• Density Within Service Area / Size of System
• Age of System / Level of Renewals and
  Replacements
• Utility Life Cycle (Growth-Oriented vs. Mature)
• Level of Service Per ERC Standards

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Questions and Discussion

• Questions and Discussion