BUDGET BRIEFING: NEW BUSINESS  4.

COMMITTEE MEMORANDUM

ANALYSIS:

The Water and Sanitary Sewer user rate components include a base facility charge, consumption charge, and wholesale purchase pass-through charges from Miami-Dade County Water and Sewer Department (WASD).  The base facility charge serves as the monthly minimum service charge on each service, varying with the size of the meter installed.  The consumption charge is calculated on metered water consumption.  The wholesale purchase pass-through charges are designed to recover the cost of purchased potable water to the City and the sanitary sewer treatment and disposal services as provided by WASD. 

The City of Miami Beach was recently notified by WASD that there would not be an increase on the wholesale sanitary sewer  purchase pass-through charges for fiscal year 2018/2019.

The City was also notified by WASD of a planned decrease for wholesale water charge of $0.0713 or 3.89% to begin October 1, 2018.  This decrease will be reflected in wholesale purchase pass-through charges from WASD. 

On September 27, 2016, City Commission approved Miami-Dade Water and Sewer Department (WASD) pass-through costs and automatic rate increases according to the Consumer Price Index (CPI) as identified in Ordinance 2016-4039.  The base facility charge and the consumption charge will be increased for both water and sanitary sewer beginning October 1, 2018 in accordance with the Consumer Price Index (CPI) for the Miami-Fort Lauderdale-West Palm Beach as published by the Bureau of Labor Statistics effective for the month of April 2018 as compared with April of 2017.  The CPI increased 3.5% for April 2018.

Operations and maintenance costs have remained within budget for 2017-2018, and revenues are expected to be sufficient for budgeted fiscal year 2018/2019.  The existing water and sanitary sewer rate structure was designed to support the cost of the 2017 Water and Sewer bond issuance which was issued in December 2017. Therefore, it is not anticipated that the charges will need to be increased to fund the projected debt service.

Below is an illustration of a cost comparison from fiscal year 2018 and  fiscal year 2019 for a single family residential home with a 3/4" water meter.

CONCLUSION:
The Administration is presenting this information to the Finance and Citywide Committee in advance of the pending rate change for water and sewer customers.