District staff recommends NSCUDD raise water rates by 25%

[twoplanekid]

At the NSCUDD meeting this Monday at 3PM at the Seebreeze Rec Center, listen to the discussion to raise water rates by 25% and increase the yearly automatic compounded rate increases. All NSCUDD customers located in the CSU area of operation, south of 466A and north of 44 will be affected by this rate increase. I will post my comments as a board member after the meeting to avoid any Florida Sunshine issues. Please attend to listen and make comments if you feel so inclined.

[Altavia]

Thanks for the heads up.

Is there any pre-read material available?

[Bill14564]

Thanks for the heads up.

Is there any pre-read material available?

Go to districtgov.org -> Your District -> NSCUDD -> Agendas and Minutes -> Jan 9 Meeting (towards bottom of page) -> Agenda Packet -> Page 83

[twoplanekid]

Below is part of what I stated at the meeting.

A few years ago, the Sumter County Commissioners voted to raise property taxes by 25%. I am sure that the county staff and other experts advised them that this increase was necessary and correct. We all know what happened next. At today’s NSCUDD board meeting, we are asked to raise our current CSU/SWCA water rates by 25% all at once or over a three year time period and to then increase our yearly compounded rates. Who can accurately forecast the future? I don’t know of a single person that can beyond one year at best. The Feds cant’ say for sure when inflation will be controlled or what degree of a recession we might face. And, raising our rate doesn’t help the fight against inflation and should be done very cautiously.

We purchased CSU less than four and then SWCA about two years ago based on forecasts created by experts and approved by staff. These forecasts certainly didn’t reflect any need to raise rates to our customers by 25% today. However, examine the R&R amounts in those valuation forecasts. We purchased both stating to our customers that we would be very careful about raising rates. As our costs to purchase the systems were large based of these forecasts, our bond payments consume most of our operating revenues. So, these two forecasts didn’t help in any way except to inflate our purchase cost.

We are now presented with a rate study that doesn’t have any underlying figures for us to review. No board member as far as I know was asked to attend any of the meetings between staff and consultants to generate these numbers. When we have a budget meeting to plan a budget for the following year, it’s a dedicated meeting that covers all figures in detail that takes us some time to review. I don’t see this happening today with this proposal to increase rates by 25%.

I represent our board on the investment advisory committee that meets several times a year to in detail review investment advice given by experts. Those experts are very cautious to say that their advice reflects on the current and a six month outlook. It’s hard to predict the future.

I would suggest that we consider raising our rates once by 10% to cover our operation out for one year. At the 2024 budget meeting, the board can then review the current economic situation and our operation figures in detail. If at that time a further rate increase is deemed necessary, we can address it then. I will not vote to increase our rates by 25% today as currently proposed.


I am pleased to say that the current board seems to agree to take a cautious approach to any rate increase. So, we will wait and see what the next staff proposal to the board will look like at the next board meeting.

Stay tuned.

Rick

[JP]

Sounds like a money grab by the new owners. Really???

[twoplanekid]

It's (CSU/SWCA) a public owned utility serving the Village residents/customers who reside south of 466A to 44 and governed by a seven member board who are elected to serve a four year term in office. Staff is shared with other Village CDDs. This same board, NSCUDD also govern NSU ( water systems from 466 to 466A) and Sumter Sanitation for solid waste service for CDDs 1 through 11. The 25% rate increase discussion is only for the CSU/SWCA part of the operation on NSCUDD (North Sumter County Utility Dependent District)

[twoplanekid]

It's (CSU/SWCA) a public owned utility serving the Village residents/customers who reside south of 466A to 44 and governed by a seven member board who are elected to serve a four year term in office. Staff is shared with other Village CDDs. This same board, NSCUDD also govern NSU ( water systems from 466 to 466A) and Sumter Sanitation for solid waste service for CDDs 1 through 11. The 25% rate increase discussion is only for the CSU/SWCA part of the operation on NSCUDD (North Sumter County Utility Dependent District)

Every resident is always invited to attend our public once a month meetings to hear what is said and ask questions.

[DAVES]

At the NSCUDD meeting this Monday at 3PM at the Seebreeze Rec Center, listen to the discussion to raise water rates by 25% and increase the yearly automatic compounded rate increases. All NSCUDD customers located in the CSU area of operation, south of 466A and north of 44 will be affected by this rate increase. I will post my comments as a board member after the meeting to avoid any Florida Sunshine issues. Please attend to listen and make comments if you feel so inclined.

I'm not familiar with this particular nonsense. We've all seen this over and over and over again. Say they NEED a 10% raise. If, they put in a 10% raise people would be upset. What they do is to ask for 25% and settle for 10% and the people say GREAT IT IS ONLY A 10% RAISE.

[Bill14564]

I'm not familiar with this particular nonsense. We've all seen this over and over and over again. Say they NEED a 10% raise. If, they put in a 10% raise people would be upset. What they do is to ask for 25% and settle for 10% and the people say GREAT IT IS ONLY A 10% RAISE.

Is that what you heard at the recent meeting? I was there and didn’t hear anything like that.

[Bogie Shooter]

I'm not familiar with this particular nonsense. We've all seen this over and over and over again. Say they NEED a 10% raise. If, they put in a 10% raise people would be upset. What they do is to ask for 25% and settle for 10% and the people say GREAT IT IS ONLY A 10% RAISE.

Is that what you heard at the recent meeting? I was there and didn’t hear anything like that.

:boom:

[twoplanekid]

At the January board meeting, staff presented two options for the rate increase.

Option 1: Higher Rate Adjustment Upfront
• Year 1 - 25% increase, Years 2-10 -3% annual increases
• Debt Service Coverage and Cash Targets Met By Fiscal Year 2027
• Better Ability to Handle Unforeseen Cost Increases
• User Rates Are Affordable and Competitive
• CSU Would Have Better Historical Financial Performance If Debt Financing Is
Needed
• Having Healthy Cash Reserves Is the Best Way to Improve a Utility's Credit
Rating (Lower Interest Rates and Issuance Costs When Debt Financing;
Lower User Rates Over Long Term)Page 83 of 245

Option 2: Phased Adjustments
• Years 1-3 - 10% increases annually, Years 4-10 -3% annual increases
• Financially Feasible
• Lower Rates in Fiscal Years 2023 and 2024
• Debt Service Coverage Target Met By Fiscal Year 2027, But Not Cash Target
(Do Not Have Time Value of Money Compared With Option 1)
• User Rates Are Affordable and Competitive

Staff recommended that the board Adopt Either Rate Adjustment Option 1 or
Option 2

At the board meeting, I said the following.

"I would suggest that we consider raising our rates once by 10% to cover our operation out for one year. At the 2024 budget meeting, the board can then review the current economic situation and our operation figures in detail. If at that time a further rate increase is deemed necessary, we can address it then. "

The following was sent to all board members the day after the meeting.

"You will find the updated CSU Rate Study Option 2 as directed by the Board. It is a 10-year spreadsheet, but it will be written in the rule change for 5 years, versus 10, based on board discussions. The board can change this as desired (would require advertising and a public hearing). "

It is my understanding that option 2 will result in even higher rates for our customers in years 2025 and beyond.

The next board meeting will take place Monday Feb. 13.

Stay tuned

[twoplanekid]

At the January board meeting, staff presented two options for the rate increase.

Option 1: Higher Rate Adjustment Upfront
• Year 1 - 25% increase, Years 2-10 -3% annual increases
• Debt Service Coverage and Cash Targets Met By Fiscal Year 2027
• Better Ability to Handle Unforeseen Cost Increases
• User Rates Are Affordable and Competitive
• CSU Would Have Better Historical Financial Performance If Debt Financing Is
Needed
• Having Healthy Cash Reserves Is the Best Way to Improve a Utility's Credit
Rating (Lower Interest Rates and Issuance Costs When Debt Financing;
Lower User Rates Over Long Term)Page 83 of 245

Option 2: Phased Adjustments
• Years 1-3 - 10% increases annually, Years 4-10 -3% annual increases
• Financially Feasible
• Lower Rates in Fiscal Years 2023 and 2024
• Debt Service Coverage Target Met By Fiscal Year 2027, But Not Cash Target
(Do Not Have Time Value of Money Compared With Option 1)
• User Rates Are Affordable and Competitive

Staff recommended that the board Adopt Either Rate Adjustment Option 1 or
Option 2

At the board meeting, I said the following.

"I would suggest that we consider raising our rates once by 10% to cover our operation out for one year. At the 2024 budget meeting, the board can then review the current economic situation and our operation figures in detail. If at that time a further rate increase is deemed necessary, we can address it then. "

The following was sent to all board members the day after the meeting.

"You will find the updated CSU Rate Study Option 2 as directed by the Board. It is a 10-year spreadsheet, but it will be written in the rule change for 5 years, versus 10, based on board discussions. The board can change this as desired (would require advertising and a public hearing). "

It is my understanding that option 2 will result in even higher rates for our customers in years 2025 and beyond.

The next board meeting will take place Monday Feb. 13.

Stay tuned


Everyone in CDD 9, 10 and 11 should attend the NSCUDD board meeting on Monday Feb 13th at 3PM at Seabreeze Rec Center when the board will decide to vote for or against staffs proposal of option 2 which is a larger increase than their first proposal.

details are found here starting on page 29

Public Portal • CivicClerk (https://thevillagesfl.portal.civicclerk.com/event/1246/files)

then type on agenda packet

If you can't make it to this meeting, I will post my comments made at the meeting on this site later that day.

[rhood]

When you use an acronym like NSCUDD or any other, you should spell it out at least once in each narrative. I hate looking up acronyms. There are just too many.

[photo1902]

When you use an acronym like NSCUDD or any other, you should spell it out at least once in each narrative. I hate looking up acronyms. There are just too many.

https://districtgov.org/images/Organizational%20Chart.pdf?v=20230123

[rhood]

https://districtgov.org/images/Organizational%20Chart.pdf?v=20230123

Told you I hate to look them up. Did you not understand? Acronyms shoe outlawed.

[JoMar]

Told you I hate to look them up. Did you not understand? Acronyms shoe outlawed.

I know it's sometimes hard to read an organization chart, maybe your grandkids could help.

[Bill14564]

Told you I hate to look them up. Did you not understand? Acronyms shoe outlawed.

lmftfy... "ty"

[Bogie Shooter]

When you use an acronym like NSCUDD or any other, you should spell it out at least once in each narrative. I hate looking up acronyms. There are just too many.

You will find this list helpful.
https://www.districtgov.org/images/Acronyms.pdf?v=20220824

[Garywt]

I don’t believe any of this is an issue for me but who would know with all the initials used. What does it all stand for.

[tophcfa]

When an entity overpays to acquire assets big price increases to customers are inevitable!

[twoplanekid]

I don’t believe any of this is an issue for me but who would know with all the initials used. What does it all stand for.

from my post # 6

"It's (CSU/SWCA) a public owned utility serving the Village residents/customers who reside south of 466A to 44 and governed by a seven member board who are elected to serve a four year term in office. Staff is shared with other Village CDDs. This same board, NSCUDD also govern NSU ( water systems from 466 to 466A) and Sumter Sanitation for solid waste service for CDDs 1 through 11. The 25% rate increase discussion is only for the CSU/SWCA part of the operation on NSCUDD (North Sumter County Utility Dependent District)"

[ohiosbestus]

If this passes I would recommend all residents to quit watering their lawns.

[photo1902]

I don’t believe any of this is an issue for me but who would know with all the initials used. What does it all stand for.

Then you must really struggle with trying to figure out TOTV

[Happydaz]

If water rates go up 25% it might be wise to change your landscaping. At this time I am converting my landscape to a more native plant environment as these plants require less water. I plan to reduce my reclaimed landscape consumption of water by 50%. With 401K’s losing value and inflation reducing pensions it might be prudent to cut fixed costs like water. Didn’t we just buy this water company with our amenity fees? Is it already another developer albatross passed over to us?

[twoplanekid]

If water rates go up 25% it might be wise to change your landscaping. At this time I am converting my landscape to a more native plant environment as these plants require less water. I plan to reduce my reclaimed landscape consumption of water by 50%. With 401K’s losing value and inflation reducing pensions it might be prudent to cut fixed costs like water. Didn’t we just buy this water company with our amenity fees? Is it already another developer albatross passed over to us?


NSCUDD had to sell over $200 million worth of bonds to purchase these two system from the Developer. And now, NSCUDD has to pay for what we purchased which does affect our cost to then influence our water rates. I will post my comments made at the Monday meeting for all to read on this site.

However, if you can please attend the meeting this Monday at 3PM in the Seabreeze Rec Center. All residents living in CDD9, 10 and 11 will have their rates raised by a yet to be approved amount. If the current staff proposed rate structure is approved( Years 1-3 - 10% increases annually, Years 4-5 -3% annual increases), your rates will be going up by way over 25%.

[Bill14564]

...
However, if you can please attend the meeting this Monday at 3PM in the Seabreeze Rec Center. All residents living in CDD9, 10 and 11 will have their rates raised by a yet to be approved amount. If the current staff proposed rate structure is approved( Years 1-3 - 10% increases annually, Years 4-10 -3% annual increases), your rates will be going up by way over 25%.

There is some questionable math being used for year 1.

I hope to be at the meeting to bring this up but in case I am not: The rates proposed for residential fresh water usage, irrigation base rate, and irrigation usage are all increases of 13% over the current rates and not the 10% that seems to be advertised.

- It appears the 10% increase is being calculated on top of the current 2.5% increase rather than instead of this increase (the proposal seems to be to increase our rates twice by April 1).

- The tables with the 2022 rates and proposed 2023 rates are in the agenda packet for anyone to check on this.

- The previous calculation used in the January proposal would have been a single increase, not an increase on top of an increase.

[Happydaz]

NSCUDD had to sell over $200 million worth of bonds to purchase these two system from the Developer. And now, NSCUDD has to pay for what we purchased which does affect our cost to then influence our water rates. I will post my comments made at the Monday meeting for all to read on this site.

However, if you can please attend the meeting this Monday at 3PM in the Seabreeze Rec Center. All residents living in CDD9, 10 and 11 will have their rates raised by a yet to be approved amount. If the current staff proposed rate structure is approved( Years 1-3 - 10% increases annually, Years 4-5 -3% annual increases), your rates will be going up by way over 25%.

I am considering attending this meeting. I have begun to read the report. It looks like the $200,000,000 price we paid for this utility by floating bonds is not adequately covered by revenues. I also noticed that there were a large number of spreadsheets that purport to show that our increased rates for 2023 (10%+) are in line with the average for all water utilities in Central Florida, but if we consider that future yearly additional increases of 10% per year are planned for the two years after 2023 then our rates will be higher than that average by 2025. Another interesting thought that occurred to me is that if people cut their water use by 25-50% what will this do to these income projections? More than likely people won’t cut back this much, but if they do, the utility will have to increase rates much higher than projected as revenue will fall far short. Villagers overuse their irrigation systems and proper usage could cut water consumption by at least 25%. I hope they were smart enough to include this possibility in their calculations.

[twoplanekid]

below is what I stated at the NSCUDD board meeting today ->

"The following are my thoughts on the CSU operation and rate increases. At the February 6th Village Financial Advisory meeting that I attended, it was stated that there is a potential declining health of US Household finances. We should be very cautious and take our time to raise rates for our customers who can’t shop around.

Some staff members didn’t seem to welcome me when I attended the residential district 10 and 11 board meetings to give supervisors notification that the NSCUDD board was discussing raising water rates by 25% or more and to invite them to visit our new waste management facility. Because of staff’s comments to me before the meetings, I made sure not to suggest that I was speaking for the board but only providing information and asking the supervisors to personally contact any NSCUDD board member or attend a board meeting if they have questions to ask. Most supervisors had no inkling that their residents might face rate increases and welcomed my comments. At some future board meeting, I would like to have a full discussion by this board covering what this board can talk about when we attend board meeting in the districts we represent and to let staff understand what this board is allow to say when attending those meetings.

I asked staff to present to you through district email the two valuations prepared by the firm that represented NSCUDD’s interests when the purchases of CSU and SWCA were made. As I could not tell you directly in that email because of the Florida Sunshine laws, I hope you looked at the projected figures for the 30 year period that helped to determine the purchase price for both. I believe that many of the figures were inaccurate especially the ones that forecasted replacement and contingency costs. Again, at a future board meeting I would like to cover what I believe took place and how we should change flaws in the procedures used to make those two purchases to prevent future mistakes.

Bruce sent an email to all board members stating that “both of which are still less costly than today’s rates charged by NSU and many other Central Florida Utilities”. When questioned by me, he did say that he did not mean to say NSU. However, let’s look at comparing the current rates for NSU to CSU. Both are operated by the NSCUDD board with help from the same District staff people and operated by Jacobs using the same consultants. Supplies purchased by both are the same with inflation factors being identical. CSU is the newer of the two systems. I would ask my fellow board members, which system has the higher current rates based on 3000 gallon used which staff believes is appropriate? Our customers in the CSU area of operation are charged almost 7% more than those living in the NSU area. If we increase CSU rates by option 2 and then yearly increases of 3%, I would calculate that the water rates in CSU compared to NSU will be 45% higher in 5 years. What in the world is happening?

I find it interesting that staff suggests that a higher than 25% increase is what they heard the board recommend at the last NSCUDD board meeting. In the minutes it states that “The Board provided consensus for Mr. Mantz to proceed with Option 2”. I did not hear any motion made by this board at the last board meeting to do that nor did I hear a consensus. And, we are asked to vote for a huge rate increase based in part by capital projects that we have not yet approved. I will say once again that I will only vote for a 10% increase in the first year to then discuss at a 2024 budget planning meeting what new rates might be needed at that time. So, I ask all board members to please, please, move very cautiously ahead. And, I formally propose a 10% rate increase for one year to then review any further possible rate adjustments at the 2024 budget planning meeting."

The board approved a one year 10% increase starting in April 2023 with our determining further rate increases at future board budget meetings.

[Bogie Shooter]

below is what I stated at the NSCUDD board meeting today ->

"The following are my thoughts on the CSU operation and rate increases. At the February 6th Village Financial Advisory meeting that I attended, it was stated that there is a potential declining health of US Household finances. We should be very cautious and take our time to raise rates for our customers who can’t shop around.

Some staff members didn’t seem to welcome me when I attended the residential district 10 and 11 board meetings to give supervisors notification that the NSCUDD board was discussing raising water rates by 25% or more and to invite them to visit our new waste management facility. Because of staff’s comments to me before the meetings, I made sure not to suggest that I was speaking for the board but only providing information and asking the supervisors to personally contact any NSCUDD board member or attend a board meeting if they have questions to ask. Most supervisors had no inkling that their residents might face rate increases and welcomed my comments. At some future board meeting, I would like to have a full discussion by this board covering what this board can talk about when we attend board meeting in the districts we represent and to let staff understand what this board is allow to say when attending those meetings.

I asked staff to present to you through district email the two valuations prepared by the firm that represented NSCUDD’s interests when the purchases of CSU and SWCA were made. As I could not tell you directly in that email because of the Florida Sunshine laws, I hope you looked at the projected figures for the 30 year period that helped to determine the purchase price for both. I believe that many of the figures were inaccurate especially the ones that forecasted replacement and contingency costs. Again, at a future board meeting I would like to cover what I believe took place and how we should change flaws in the procedures used to make those two purchases to prevent future mistakes.

Bruce sent an email to all board members stating that “both of which are still less costly than today’s rates charged by NSU and many other Central Florida Utilities”. When questioned by me, he did say that he did not mean to say NSU. However, let’s look at comparing the current rates for NSU to CSU. Both are operated by the NSCUDD board with help from the same District staff people and operated by Jacobs using the same consultants. Supplies purchased by both are the same with inflation factors being identical. CSU is the newer of the two systems. I would ask my fellow board members, which system has the higher current rates based on 3000 gallon used which staff believes is appropriate? Our customers in the CSU area of operation are charged almost 7% more than those living in the NSU area. If we increase CSU rates by option 2 and then yearly increases of 3%, I would calculate that the water rates in CSU compared to NSU will be 45% higher in 5 years. What in the world is happening?

I find it interesting that staff suggests that a higher than 25% increase is what they heard the board recommend at the last NSCUDD board meeting. In the minutes it states that “The Board provided consensus for Mr. Mantz to proceed with Option 2”. I did not hear any motion made by this board at the last board meeting to do that nor did I hear a consensus. And, we are asked to vote for a huge rate increase based in part by capital projects that we have not yet approved. I will say once again that I will only vote for a 10% increase in the first year to then discuss at a 2024 budget planning meeting what new rates might be needed at that time. So, I ask all board members to please, please, move very cautiously ahead. And, I formally propose a 10% rate increase for one year to then review any further possible rate adjustments at the 2024 budget planning meeting."

The board approved a one year 10% increase starting in April 2023 with our determining further rate increases at future board budget meetings.
Good job!

[twoplanekid]

Staff still want's the board to approve option 2 which would raise our water rates much more than 25% in a 5 year period. I will have more to say at the NSCUDD board meeting this afternoon at the SeaBreeze Rec Center at 3PM. Please attend this meeting as we have many interesting topics to discuss.