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ouncil to C Report ncil u o C o t t es es Repor arga rg n Ch. C o i t h c e t n o ectio Pro e r i F t tem ysm r. S Fire Pr e Wa. Ste t s y Water e Septemb 1 r 27, 201 A

Pumps What is “Water System Fire Protection” Hydrants ? Large Pipes Tanks Maintenance

FIRE PROTECTION � � � Water distribution system capacity includes fire flow Benefits the community as a whole Costs associated with capacity not included in water user fees High Service Pumps o Water Storage Tanks o Hydrants o Larger Pipes o

Methods for Utility to Recoup Costs � Include in customer user rates Rate increase for customers o Non-utility customers do not pay o � Add a line-item charge on utility bill Additional monthly fee for customers only o Non-utility customers do not pay o � Ad-valorem taxes Transfer from the General Fund (inside city limits) o Invoice to County (outside city limits) o

Current Practice q In-city - Annual charge to the General Fund Charge on a per-hydrant basis o $145. 00 per hydrant o 2011 – $ 496, 045 o q Outside city – Invoice Flagler County Charge on a per-hydrant basis o $145. 00 per hydrant o 2011 - $ 44, 950 o

At-Issue Flagler County has chosen not to pay invoices since 2008! Total of Unpaid Invoices = $ 175, 595

Why Now? � � Auditors have indicated we need to get this resolved and clear up the receivables City Council has requested we get it resolved, first by trying to work with the County Administrator does not want it to be funded with County-wide tax dollars One option is a separate fire tax district � Paid � only by those who receive the benefit This option has been rejected

History � � � ITT-Palm Coast Utility Corporation / Flagler County Hydrant Agreement – Mod 1994 Florida Water Services Corporation Rate Case Settlement - 1999 City of Palm Coast Purchase of Utility 2003 2006 Reinstated the Fire Protection System Fee and Based it on a per-Hydrant Charge Flagler County Paid the Invoices in 2006 and 2007 totaling $81, 490

� � � Beginning with the 2008 invoice, Flagler County quit paying Unpaid balance = $175, 595 County Attorney: “… could you please advise your hierarchy and have the pending invoices for 2008, 2009 and 2010 withdrawn and send us something to that effect so our books are cleared… Then I suppose we have to deal with the 2006 and 2007 past payments that were not authorized, again if you concur with my research. The total is just under $82 K. You can return the money to us with some cover document or we can proceed otherwise if you would prefer. ” � Meanwhile the City general fund has paid $2, 835, 040

Recommendation � � Continue to charge the General Fund for hydrants inside the City of Palm Coast on a per hydrant basis in accordance with existing rate resolution Adopt new Resolution to add a monthly fire protection charge on each account outside the City limits � $2. 33 � per month Include in Resolution, a monthly charge for past due amounts � $2. 28 per month � Charge will remain in effect for 4 years

Conclusion � � � The City utility system must recover the costs associated with providing fire protection to the community While the tax-payers of the City have paid for those services, over the last 4 years the taxpayers of the County have not Staff recommends implementing a monthly fire protection fee to all accounts outside the city limits with additional charges for past-due amounts