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1. Executive Summary 0 1. EXECUTIVE SUMMARY Stantec Consulting Services Inc. (Stantec) has conducted a Water, Sewer, and Reclaimed Water Rate Study (Rate Study or Study) for the water, sewer, and reclaimed water utility systems of the Indian River County (County) Department of Utility Services (IRCDUS or Utility). This report outlines the assumptions, detailed analysis, and results of the Rate Study, including final conclusions and recommendations. 1.1 BACKGROUND Indian River County owns and operates a potable water system, managed by the Indian River County Department of Utility Services which provides water service to approximately 56,000 retail customers in unincorporated Indian River County with an average of 11.5 million gallons per day (MGD). The water system consists of groundwater supply wells', two water treatment plants, potable water storage, and approximately 900 miles of distribution system. The County owns and operates a collection system of over 500 miles of gravity sewers and force main sewers to collect and deliver wastewater for treatment from its approximately 34,000 retail service connections in unincorporated Indian River County. IRCDUS also provides bulk sewer treatment service to the City of Fellsmere (City). Wastewater collected throughout the sewer service area is conveyed to four • active wastewater treatment facilities with a combined permitted treatment capacity of 12.02 MGD. IRCDUS disposes of a portion of treated effluent approximately 5.5 MGD gallons of effluent into its reclaimed water system which is distributed to various golf courses for irrigation purposes. The County has established an enterprise fund for its water, sewer, and reclaimed water utility systems that account for the operating, capital, and other financial requirements. To ensure that the combined utility system is generating sufficient revenue to satisfy its ongoing financial requirements, the Board of County Commissioners (BOCC) has periodically conducted formal rate studies and reviews of its user rates. IRCDUS' most recent water, sewer, and reclaimed water rate study was completed in 2018 which recommended several rate structure modifications and annual rate indexing based on the lower of the annual change in the Consumer Price Index for All Urban Consumers (CPI -U) or 3.0%. The BOCC adopted the recommended rate structure modifications effective in FY 2019 and IRCDUS has implemented various levels of annual rate indexing during from FY 2020 through FY 2024. A proactive rate and financial planning approach allows IRCDUS to identify and address challenges that will influence its sustainability and financial performance over both immediate and longer-term horizons. Like the rest of the water resources industry, IRCDUS faces challenges including increasing operating and ' IRCDUS' current consumptive use permit (CUP) is 12.838 MGD average daily flow. IRCDUS applied for a new CUP in April 2024 for 16.228 MGD average daily flow.