Lee County Utilities

Management & Planning

June 1, 2009

Doug Meurer, P.E.

Introduction

•LCU Overview•Operations & Business

Practices•Key Initiatives & Projects•Financial Status

Customers Served As of April 30, 2009

Number of Customers

Equivalent ERU

Estimated Population

Water 79,875 151,500 335,800

Wastewater 58,249 112,025 245,335

Reuse 62

Water Franchise Area

WTP Capacities – May 2009

Plant Permitted

Increases Past 3 years

Current Producti

on Levels

Corkscrew 15

MGD5 MGD

expansion 15 MGDGreen

Meadows 9 MGD   9 MGDNorth Lee

County 6 MGD  4.5

MGD

Pinewoods 5.3

MGD3 MGD

Expansion5.3

MGD

Olga 5 MGD  

4.34 MGD

Waterway1.5

MGD   .45MGD

Total41.8 MGD  

38.59 MGD

Total Finished Flows

200.000

300.000

400.000

500.000

600.000

700.000

800.000

900.000

1000.0001/1

/2001

4/1/20

017/1

/2001

10/1/

2001

1/1/20

024/1

/2002

7/1/20

0210

/1/20

021/1

/2003

4/1/20

037/1

/2003

10/1/

2003

1/1/20

044/1

/2004

7/1/20

0410

/1/20

041/1

/2005

4/1/20

057/1

/2005

10/1/

2005

1/1/20

064/1

/2006

7/1/20

0610

/1/20

061/1

/2007

4/1/20

077/1

/2007

10/1/

2007

1/1/20

084/1

/2008

7/1/20

0810

/1/20

081/1

/2009

4/1/20

09

Million Gallons

Wastewater Franchise Area

Combined Franchise Area

Staffing

•274 Staff Members•Certifications•Regulatory Requirements

Operations•24/7 Operation•Plant Operations &

Maintenance•Distribution & Collection

System Maintenance•Customer Service, Meter

Services and Billing•Engineering

Efficiency

•Operations & Business Group

•Focus on What We Do Well

•Cross Training•Communication/Involvement

FY09/10 Operating Expense Budget

Operating Budget Breakdown By Function

2,694,334, 5%

3,018,189, 5%

5,254,478, 9%

30,768,849, 54%

15,139,909, 27%

FY09/10 Water &Wastewater Treatment

FY09/10 Field Services

FY09/10 UtilitiesEngineering

FY09/10 AdministrativeServices

FY09/10 Customer &Meter Services

Strategic Plan

Strategic Plan

Water Supply & Treatment

Regionalization

Infrastructure Maintenance

Water Distribution &

Supply

CustomerService

Work Force Knowledge Retention

Business Planning & Managment

Environmental Protection

Key Initiatives and Projects

•Asset Management•Integrated Water Resources Master Plan

•Capital Improvement Program

Asset Management ProgramVision & Mission Statement

Lee County Utilities is committed to an asset management program that

provides reliable service, protects the environment, and ensures regulatory

compliance. We continue to build upon our long-term asset strategy focusing on

financial sustainability, employing business practices to measure and

manage risk, optimize life-cycle costs, and prioritize capital and O&M decisions.

Asset Management

– Asset Assessment & Capture of Institutional Knowledge

– Objectively establish criticality and risk of failure of assets to create proactive Maintenance

– Structured and prioritized CIP program linked to financial Projections

– Integration of CMMS & GIS

Average Age of Infrastructure

0

5

10

15

20

25

30

Years

Infrastructure Average Age

WATER PLANT

WASTEWATER PLANT

WATER DISTRIBUTION

WASTEWATERCOLLECTION

IWRMP Project Mission

The mission of this project is to develop a single Integrated Water Resources Master Plan, which will serve as the road map that the County must follow in order to ensure that reliable and sustainable water supply and sanitary sewer services are provided within Lee County Utilities service areas in a timely and cost-effective manner.

IWRMP Source Water Management Alternatives

• Surface Water• Storm Water• Fresh

Groundwater• Brackish

Groundwater• Reclaimed

Water

• Interconnects / Regionalization

• Improved Storage Opportunities

• Sea Water• Demand

Management (Water Conservation)

IWRMP Improved Storage Opportunities

• New Surface Reservoirs• ASR within and /or below USDW• Localized Storage (e.g. cisterns)• Improve Capture and Storage of Excess

Storm Water• Groundwater to Groundwater ASR• Consider Partially

Treated Surface Water Versus Fully TreatedPotable Water ASR

Capital Improvement Projects

•Regulatory•Capacity•Renewal & Replacement

•General

LEE COUNTY UTILITIES PROPOSED 10-YEAR CIP BUDGET

BUDGET FY 09/10W/CARRYOVE

RS

BUDGET FY

10/11BUDGET FY 11/12

BUDGET FY 12/13

BUDGET FY

13/14

5 YEAR BUDGE

T TOTAL

S

BUDGET 6 - 10 YEARS OUT TOTALS

CAPACITY RELATED

PROJECTS

28.8M

8.7M 1.0M

46.0M 1.0M

85.5M

136.1M

221.6M

GENERALPROJECTS

3.1M

3.0M 2.3M 1.0M 1.5M

10.9M 16.8M

27.7M

REGULATORY

RELATED PROJECTS

4.3M

9.0M 0.7M 0.2M 0.2M

14.3M 35.4M

49.7M

REHAB & REPALCEM

ENT PROJECTS

6.6M

5.7M 6.9M

48.6M 3.0M

70.5M 60.8M

131.3M

TOTALS

42.8M

26.4M 10.9M

95.8M 5.7M

181.2M

249.1M

430.2M

LEE COUNTY UTILITIES PROPOSED 10-YEAR CIP BUDGET

BUDGET FY

09/10 w/CAR

RYOVERS

BUDGET FY

10/11

BUDGET FY

11/12

BUDGET FY

12/13

BUDGET FY

13/14

5 YEAR BUDGE

T TOTALS

BUDGET

6 - 10 Years Out

Totals

WASTEWATER

TREATMENT

18.4M

9.4M

1.8M

0.3M 0.3M 30.1

30.5M

60.6M

WATER TREATME

NT

12.5M

10.0M

1.1M

89.7M 0.3M

113.6M

101.1M

214.7M

WATER DISTRIBU

TION 1.2M0.2M

0.2M

0.2M 1.2M 3.0M

46.3M

49.3M

SEWER COLLECTI

ON 4.3M3.3M

2.2M

1.0M 0.2M

11.0M 9.3M

20.3M

DOT/FDOT

PROJECTS 1.7M 0.0 0.0 0.0 0.0M 1.7M

28.1M

29.8M

REPAIR & REPLACE

MENT 3.3M2.8M

2.9M

2.7M 1.8M

13.5M

12.5M

26.0M

GENERAL 1.3M

0.6M

2.6M

1.9M 1.9M 8.3M

21.2M

29.5M

TOTALS

42.7M

26.3M

10.8M

95.8M 5.7M

181.2M

249.0M

430.2M

Key Projects• Waterway Estates Service

Area Capacity Expansion• North Lee County RO

Expansion• Green Meadows WTP Upgrade

and Expansion• Olga WTP Enhancements and

Expansion• Regionalization

Community Job Support

Sector

Prior 12 Months Spent &

Encumbered

Positions Supporte

d Design

Services $

10,500,000 84

Construction

$ 56,000,000 560

Totals $

66,500,000 644

Financial Status

LCU Financial Condition is Good•Revenue Sources•Use of Revenue•Trends•Rate Review

Operating Funds

Lee County Utilities charges for services. That revenue is the only revenue available for operation of the utility. No property tax or any other Lee County General Fund source is utilitized.

–Rates–Connection Fees

Rate Revenue

•Monthly charge for water and wastewater services based on volume of water usage

•Rate revenue used for operations, debt service and reserve funding

Historical Revenues and Expenses

Fiscal Year Ended September 30(000’s Omitted)

32,126

43,840 44,55646,181

52,639

62,873

66,666

70,65472,681

85,727 86,314

18,47021,192 21,849 22,348

34,230

42,108

50,699

55,14356,882 56,876

22,648 22,707 23,833

28,643

24,558

19,95517,538

28,845 29,438

16,284 15,99113,349

14,866 14,99812,902

10,0077,040

16,194 15,131

27,54525,094

13,656

9,736

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

TotaloperatingrevenuesOperatingexpenses

NetoperatingrevenueNetincome

Connection Fees•Connection Fees are one

time charges for new connection to the system

•Connection fees go to a restricted fund and are used for capacity expansion necessary to meet growth demands

Historical Connection Fees Revenues

Fiscal Year Ended September 30(000’s Omitted)

8,6819,840

11,95910,474

17,932

24,46222,519

15,859

6,784

2,604

0

5,000

10,000

15,000

20,000

25,000

30,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009Note: Gulf Environmental Services (GES) w as acquired in July 2003.

Connection Fees Revenues

Rate Review

• Rate Review currently near completion• Results:

FYE 2010

FYE 2011

FYE 2012

FYE 2013

FYE 2014

Combined Rate Increase for Water & Wastewater

6% 6% 6% 6% CPI

Rate Review• Factors

1. Reduction of Customer Base (Foreclosures, etc.) therefore revenue stream is less than anticipated.

2. Zero Growth – As costs are still increasing there is no growth in revenues to offset

3. Inflation Itself4. Rates being increased in anticipation

of incremental debt payments associated with Gateway SRF Loan ($2.6MM annual payment)

5. Aging infrastructure which needs to be updated or replaced

Comparison of Monthly Charges For Combined Water and Wastewater Service

For Single Family Residential Customers Using 5,000 Gallons

$94.

29

$90.

77

$88.

57

$88.

05

$86.

95

$81.

80

$77.

52

$75.

59

$74.

90

$72.

97

$71.

14

$70.

57

$68.

23

$64.

37

$61.

52

$59.

45

$55.

27

$53.

32

$53.

10

$52.

65

$47.

29

$103

.74

$0.00

$20.00

$40.00

$60.00

$80.00

$100.00

$120.00

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City of B

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City of N

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DeSot

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Charlotte

County

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City of M

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FGUA -

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Challenges

•Water Supply•Regulatory•Value of Water•Aging Infrastructure•Economic Conditions•Aging Workforce

Discussion