CITY OF HALLANDALE BEACH

MEMORANDUM

DATE:             October 1, 2008

TO:                  D. Mike Good, City Manager

FROM:            William M. Brant, P.E., Director, Public Works, Utilities and Engineering

SUBJECT:     Consideration of Adoption of Water and Wastewater Impact Fees

CAD# 23/06

PURPOSE:

Request the City Commission adopt on Second Reading the attached ordinance for water and wastewater impact fees

BACKGROUND:

In recent years the City of Hallandale Beach has been impacted by growth and redevelopment.  One of the most crucial and costly area of impact entails the water and wastewater utilities.  Impact fees are designed to assign growth related capital costs to those new customers responsible for such costs.  The City has utilized water impact fees for years and has used development agreements to ensure that developers pay for required wastewater system expansion.  On August 28, 2008, the Commission endorsed the impact fee study for the water and wastewater impact fees prepared by the City’s consultant, Public Resources Management Group, Inc. (PRMG). Further, the Commission endorsed preparation of the amended Water and Wastewater Fees Impact Ordinance.

The City Commission adopted the Ordinance on First Reading on September 29, 2008 and scheduled Second Reading on October 15, 2008.

DISCUSSION

In accordance with the PRMG report, staff recommends a 6.3% increase in the present water impact fees, and the creation of a new wastewater fee.  The new rate would be $1,318 per ERU (equivalent residential unit) for water and $572 per ERU for the transmission component of wastewater. Currently the City charges non-residential customers impact fees based solely upon the water meter size.  In accordance with the PRMG report, the attached ordinance reflects an attribute based method, which estimates water and wastewater demands based upon the characteristics of each specific enterprise.  This method would provide better equity between non-residential customers when estimating total demand upon each system.

The Accrued Guaranteed Revenue Charge represents the City’s investment in facilities in advance of and reserved for future growth and the annual carrying cost associated with such investment.  These funds can be used as operating expenses since they represent a reimbursement to existing rate payers for the carrying costs of unused capacity.  This amount would be minimal for new customers in the first few months, but would grow month by month.  By the end of FY 2014, the cost would be $376.84 per ERU for water system impact and $163.54 per ERU for wastewater system impact.

The following table provides a comparison of the proposed impact fees with those of other local municipalities.

Comparison of Impact Fees (1)

   Water   Wastewater(3) Combined

Proposed Rates (2)                                $1,318 $572                   $1,890

City of Boca Raton                                  $5,195                $4,168                   $9,363

City of Dania Beach                                  1,557                     725                     2,282

City of Deerfield Beach                             1,150                     540                     1,690

City of Delray Beach                                    788                  1,084                     1,872

City of Hollywood                                         624                  1,770                     2,394

City of Margate                                             390                  1,610                     2,000

City of Pembroke Pines                            2,120                  1,980                     4,100

City of Pompano Beach                               700                     700                     1,400

City of Sunrise                                          1,500                  1,350                     2,850

City of Tamarac                                        1,700                  2,200                     3,900

City of West Palm Beach                         2,190                  1,270                     3,460

Village of Royal Palm Beach                    1,425                  2,000                     3,425

Other Utilities’ Average                           $1,612                $1,616                   $3,228

(1)  Amounts reflect charges anticipated to be collected for the typical residential unit or

      1 ERU derived from a survey of Florida utilities obtained in July 2008.

(2)  Amount proposed to be effective ninety (90) days from the date of the first hearing.

(3)  Amount reflects only the transmission component of the City’s wastewater system; it does not

      include the treatment component.

It should be noted that this report does not take into account the treatment component of the wastewater system. Per the existing Large Users Agreement, there is a proportionate share for treatment costs charged to the City. Determination of this value is dependent upon an in-depth evaluation of the City of Hollywood’s Southern Regional Wastewater Treatment Plant records. Staff is in the process of retaining a consultant to perform the required analysis to determine the impact fee for wastewater treatment costs and will present those findings to the Commission at a future time.  Furthermore, any development that is either in progress or currently being negotiated with the City, will be responsible to pay their proportionate share once this cost is determined. In the meantime, the City Manager may negotiate development agreements to account for the component of the wastewater treatment impact fee pertaining to Hollywood.

RECOMMENDATION:

The City Commission adopt on Second Reading the attached ordinance for water and wastewater impact fees.

Reviewed:

_______________________________                                                          __________

D. Mike Good, City Manager                                                                             Date

_____Approved                _____Disapproved                _____Hold for Discussion