Staff is pleased to present the proposed Fiscal Year (FY) 2023-2024 Seacoast Utility Authority (the Authority) Operating and Capital Budget (Budget). The summary below outlines the annual budget process and the baseline assumptions upon which revenue and expense projections are formulated. The proposed FY 2023-2024 Budget reflects a combination of both historical and “zero-based” budgeting techniques. In general, historical figures are used where a line item comprises small and dissimilar components, too numerous to analyze effectively individually, or where there is no way to predict expenses accurately. Recurring operating expense items, capital expenditures, and most revenue figures are zero-based.

Authority Ordinance 2-2021 authorizes an adjustment to all Authority water, sewer, and reclaimed water rates effective each October 1:

"By an amount not to exceed the percentage increase or decrease in the Consumer Price Index (measured May to May), all Urban Consumers, Water and Sewerage Maintenance, published by the U.S. Department of Labor, Bureau of Labor Statistics (“Water and Sewer CPI”) over the prior year’s Water and Sewer CPI". 

The May 2023 Water and Sewer CPI is 4.9%. After estimating the Authority’s operation, maintenance, debt service and capital needs for FY2023-2024 and beyond, the full 4.9% indexed rate increase on the board approved October 1, 2022 rates for the coming fiscal year is prudently recommended and would provide for approximately $3.3 million of additional revenue to offset sharply rising costs.

operating budget

Under the Authority’s “cost of service” rate system, most revenue is derived from the fixed monthly base facility charges. This dampens the monthly revenue peaks and valleys associated with weather variations that affect water consumption.

Below are assumptions used to project the FY 2023-2024 Revenue.

• Rates are based upon the Authority's October 1, 2022 rates with an index of 4.9%.
• New meters are estimated at 300 for the Eastern service area and 200 for the Western service area. The latter is served by interconnection with Palm Beach County Water Utilities (Bulk Water/Sewer).
• Water consumption from May 1, 2022, to April 30, 2023, was used to estimate proposed sold gallons.
• Capacity reserved by future customers is expected to remain the same as FY 2022-2023.
• Reclaimed Water usage and contracts are expected to remain the same as FY 2022-2023.
• Other Revenue:
  • Private System Maintenance Fees include privately owned and specialized water and sewer services for HOA's and businesses.
  • Land Development/Administrative Fees are expected to remain the same as FY 2022-2023.
  • Miscellaneous charges for late fees, shut-off notices, billable repairs, etc., are expected to remain the same as FY 2022-2023.
• Non-Operating Revenue:
  • Interest income will increase due to higher yields.
  • Miscellaneous lease payments are by the terms of two cellular phone providers' lease agreements.
• Other Sources of Revenue:
  • Connection charges for new customers will remain the same as FY 2022-2023.
  • Grants include a $5.6 million DOT infrastructure reimbursement.

• Electricity – based upon historical operating data, with increases for usage and an estimated 7% FPL increase which took effect in FY 2022-2023.
• Treatment Chemicals – based upon estimated treatment demands while applying existing and expected increases due to historical inflation and supply disturbances. Chemical costs continue to rise.
• Bulk Water Purchase – expected to rise as the Authority now services three new communities, expects to add 200 new residential customers, and more non-residential development. These new customers receive water and sewer service via the Authority’s bulk water and sewer purchase from Palm Beach County.
• General Inflation – A general inflation rate of 7% has been applied where cost increases are unknown.
• Personal Services Budget – The following is a description of certain Authority compensation adjustment programs:
  • Merit Adjustment/Proposed Merit Increases - Each Authority employee is evaluated annually on the employee’s employment anniversary date. Some employees are at the top of their paygrade and will receive their merit increase via a lump sum. Proposed Merit raises are unchanged from FY 2022-2023 and are as follows: 0% - Satisfactory, 2% - Above Satisfactory, 3% - Excellent.
  • Longevity Pay – provides employees a lump sum payment of 0.1% of base pay for each continuous year of employment.
  • Cost of Living Adjustment (COLA) – 5% is budgeted for all employees, effective October 1, 2023.
  • PTO Leave Conversion-to-Pay Program – Depending on specific criteria, the Authority requires employees to convert accrued PTO leave to pay each year.
  • Pension and 457 Deferred Compensation Pension Plans – will continue to be contributed at 8.0% of each eligible employee’s wages to the Money Purchase Pension (MPP, defined contribution) and matching of up to 2% (into the MPP) based upon the employee’s contribution made into the 457 Deferred Compensation Plan.
  • Health & Dental Insurance – is based on existing programs with an expected 15% employer increase.
  • Disaster/Benefit Pay Contingency – will continue to be budgeted to administer costs related to hurricane pay, emergency closures and other unknown costs.
  • Staffing – a new position in Information Technology Department, promotion of the IT Administrator for assuming IT/OT responsibilities, promotion of the Programs and Compliance Coordinator for assuming additional regulatory filing responsibilities, and .50 FTE in Engineering to fill the void left from a long tenured retired part-time supervisor. Total 135 (FTE) positions as compared to 133.5 (FTE) positions budgeted for FY 2022-2023. A FTE schedule by department is presented below.

EXPENSE COMPARISON SUMMARY

SUMMARY OF MAJOR PROJECTS

FY2023-2024 Capital Budget for both Renewal and New projects totals approximately $36 million. The tables following this narrative summarize the costs of anticipated capital project/purchases for FY 2023-2024 by each department. Highlighted capital projects and improvements are described below. All projects are funded from current revenue or renewal & replacement reserve funds. Further details can be found in each Department's Budget.

Water Treatment

Water and Reclaimed Water Main Relocations, Juno Beach FIND Property

Florida Inland Navigation District (“FIND”) owns a large parcel of land located immediately north of Juno Isles between the Intracoastal Water Way and Ellison Wilson Road. The Authority owns 12-inch water and reclaimed water mains that cross the FIND parcel, east to west, approximately 200 ft. north of the parcel’s south property line. FIND has requested that the Authority relocate its pipelines to the parcel’s southern boundary so that FIND’s current site utilization plan can be achieved. The budgeted relocation cost is $500,000.

Water Distribution

Water and Reclaimed Water Main Relocations, Juno Beach FIND Property

Florida Inland Navigation District (“FIND”) owns a large parcel of land located immediately north of Juno Isles between the Intracoastal Water Way and Ellison Wilson Road. The Authority owns 12-inch water and reclaimed water mains that cross the FIND parcel, east to west, approximately 200 ft. north of the parcel’s south property line. FIND has requested that the Authority relocate its pipelines to the parcel’s southern boundary so that FIND’s current site utilization plan can be achieved. The budgeted relocation cost is $500,000.

Richard Road /Prosperity Farms Road Intersection Water Main Replacement

Palm Beach County plans to replace the C-17 bridge crossing at Prosperity Farms Road, incorporating replacement of Seacoast’s attached water main pipeline, air release valve, and 12-inch and 16-inch valves located within the paved intersection of Richard Road and Prosperity Farms Road. Seacoast’s budgeted share/cost for the water main and valve replacement work is $800,000.

Wastewater Treatment

PGA WWTP Return and Waste Activated Sludge Pump Station Replacement

The Return Activated Sludge (RAS) and the Waste Activated Sludge (WAS) pump station is located downstream of the plant clarifiers. Its purpose is to return settled sludge from the clarifiers back to plant headworks to support the biological treatment process or to the digesters for pre-disposal processing . The existing station is hydraulically inadequate and deteriorated. The budgeted cost is $6,000,000 for this remedial project.

Wastewater Collection

Crystal Pointe Force Main Replacement

The Crystal Point force main extends from the community’s master lift station at its north end southward along the west plat line, connecting to the gravity sewage collection system at Hood Road. As with many ductile iron pipe force mains discharging to gravity sewers, the pipe is failing due to the corrosive effect of sewer gases on pipelines that routinely empty. $400,000 is budgeted for this project that will replace at-risk pipeline segments.

General & Administration

Juno Isles Neighborhood, Phase 2 Water Improvements

Installed 60 years ago, the community’s cement composite water distribution system has failed numerous times over the past ten years. Planning for Phase 1 of the water main replacement project, which includes 111 single-family residential properties lying west of Ellison Wilson Road, began in FY 2022-2023. Phase 2 is budgeted at $11 million and, will include 220 Juno Isles properties east of Ellison Wilson Road.

Captains Landing Neighborhood Utility Improvements

Roadways within the Captains Landing community will soon be replaced. The community’s water mains are approaching 50 years in service and will soon need to be replaced, and residents have recently expressed interest in low pressure sewer service. As the pipeline work will require numerous pavement cuts, Seacoast proposes installation of new potable water and low pressure sewer mains before the new pavement is placed. The budgeted cost of this project is $1,380,000.

DEBT SERVICE & COMPLIANCE