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Board of County Commissioners Meeting Minutes - Final August 22, 2024 the rate study and historical perspective on the rates. He mentioned that the Indian River County Department of Utility Services (IRCDUS) operated as an enterprise fund, with its primary source of income being service fees and usage charges from customers. Additional funding come from miscellaneous charges. Over the past 25 years, service fees and volume charges from IRCDUS had increased by 12%, while miscellaneous fees had remained unchanged. In comparison, the U.S. Water & Sewerage CPI rate increased by 210% during the same period. Due to the utility rates not changing at the same pace as inflationary price increases, IRCDUS rates could no longer sustain the financial funding requirements of IRCDUS. Mr. Burnham discussed extensively the funding needs for IRCDUS operational expenses, capital improvements, and financial sustainability. He mentioned that the current rates were insufficient to cover these needs and that all reserves would be exhausted by FY 2027. It was Stantec's recommendation to implement a two-year plan for retail rate increases. He explained that the two-year plan would have an impact to the customer bill, with an increase of less than $10 for the first year and approximately $7 for the second year for a typical user. The purpose of the two-year plan was to develop a master plan to identify future capital needs. This plan aimed to assist in predicting when future expenses would be required and to provide more accurate cost estimates for those expenses. Additionally, it would offer updated information about the current system and prioritize investments for the next couple of years. Mr. Burnham discussed the impact fee study results and stated that the sewer system would have a slight reduction based on the current cost and level of service. The sewer fee would decrease slightly from $2,800 to a little over $2,600 for a typical connection. The water fee would need to increase based on the current capacity cost from $1,300 to $2,006. He pointed out that Stantec had identified a phasing in plan to increase the water fee consistent with Florida legislation governing overall impact fees. Phasing in this fee would be an approach Stantec would recommend to the Board for consideration over four years with equal annual increases. Mr. Burnham concluded his presentation with the following recommendations: 1) Reverse the trend of declining utility reserves. 2) Address the long-term impact of inflation. 3) Provide a comprehensive rate update for: a) Service availability and volume charges b) Bulk service rates c) Miscellaneous fees d) Deposits e) Impact fees Indian River County Florida Page 2