MEMO REGARDING PINELLAS COUNTY UTILITIES WHOLESALE WATER RATE ADJUSTMENT
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Interoffice Memorandum
To:
William Home, Gty Manager
From:
Tracy Mercer, Public Utilities Director
Pinellas County Utilities Wholesale Water Rate Adjustment
Subject:
Date:
10/26/2007
Pinellas County Utilities (Peu) sent a letter dated October 3,2007 advising the Gty, as a
wholesale water customer to PCU, of a proposed wholesale water rate adjustment. The
letter stated that staff's recommendation to the Board of County Commissioners (B~
will be for a three percent (3%) increase for both fiscal year FY08 and FY09. The water rate
adjustment will be the subject of a public hearing and BOCC vote on December 18, 2007.
This memorandum summarizes my evaluation of the effect of the PCU wholesale water rate
increase on the Gty of Oearwater Public Utilities (PU) Water Supply budget and planning.
According to the Pinellas County Water, Wastewater, and Solid Waste Rate Study (Burton &
Associates, March 2006) the wholesale water rate was scheduled to increase six percent (6%)
per year in FY08, FY09, and FYI0. Therefore, the rate adjustment being recommended is
actually only half of the Gty anticipated increase for FY08 and FY09.
Over the last several years PU has been working to maximize its existing local production of
potable water as well as develop new sources and treatment facilities in an effon to offset the
increasing cost of wholesale water purchase. Thus the amount of money budgeted and
planned as a pan of the Gty utility rate studies for wholesale purchase from PCU is a
function of both the wholesale price as well as the quantity of water to be purchased each
year.
In FY07 PU experienced a delay in meeting local water production goals due to
mechanicaVelectrical failure in some of our existing local production wells. According to
the most recent evaluation by the finance controller, the Water Supply budget for period 12
of the FY07 ended $772,000 over budget entirely due to water purchases. These failures
are continuing to challenge both staff and consultants for a satisfactory resolution and may
continue impacting the Water Supply budget well into FY08.
This windfall will assist and lessen the expense of increased water purchases during this
period until the issues with the production wells are resolved. Public Utilities will be
addressing all water, wastewater and reclaim rates in 2008 with the new Rate Study.
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RECEIVED
~ ~ NC>c(\.A-- oM C-('
Susan Latvala
CITY COUNCIL
OCT 22 2007
PRESS
October 3~!0~RK/ ATTORNFV
RECEIVED
Pinellas
County
UTILITIES
BOARD OF COUNTY
COMMISSIONERS
Ronnie E. Duncan - Chairman CITY MANAGER'S OFFle'
Rob~rt B. Ste~art - Vice chair"COPIES TO
Calvin D. Hams
OCl 1 9 2007
John Morroni
Karen Williams See I
Kenneth T. Welch
OCT 10 2007
FOR YOUR INFORMATION
OFFICIAL RECORDS AND FROM: CITY MANAGER'S OFFICE
LEGISLATiVE SRVCS DEPT ~
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Ms. Cynthia Goudeau
City of Clearwater
1650 North Arcturas Avenu3, Bldg. C
Clerwater, FL 33765
Via Certified Mail
Return Receipt Requested
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To r;; ~ oS E=-TO
Subject: Pinellas County Utilities Wholesale Water Rate Adjustment
Dear Ms. Goudeau:
Pursuant to the Agreement for the sale and purchase of potable water between Pinellas County and your City, we
have reviewed the wholesale water rate currently charged and determined that a 3% rate increase is necessary for
both FY 07/08 and FY 08/09. .This letter will serve as written notice as required by the Agreement before a rate
increase is to be considered for adoption by the Board of County Commissioners.
The primary reasons for the need for water rate increases are the increased costs of purchasing water from Tampa
Bay Water, the increased conservation measures from water customers which have reduced water sales, and the
debt service costs of a new bond issue to be issued primarily for the construction of a new water blending facility.
The Pinellas County Board of County Commissioners will be voting on the proposed rate increases at a public
hearing to be held at 6:30 P.M. on Tuesday, December 18,2007, in the assembly room of the Board of County
Commissioners. The assembly room is located on the fifth floor of the Pinellas County Courthouse at 315 Court
Street in Clearwater.
The proposed new wholesale water rate for FY 07/08 will be $2.8626 per thousand gallons and, if adopted, will be
effective March 1, 2008. The proposed new rate for FY 08/09 will be $2.9485 per thousand gallons and, if
adopted, will be effective with the beginning of the new fiscal year, October 1,2008.
Please feel free to call Lisa Ledoux at 464-4284 or myself at 464-4228 if you have any questions.
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PLEASE ADDRESS REPLY TO:
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Stephen B
Director,inance & Business Support
14 S. Fort Harrison Avenue
Clearwater, Florida 33757
Website: www.pinellascounty.org
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