Nelsnick Enterprises provides consulting services to the City of Gainesville as needed. Recent projects include updating the connection fee calculation for the water and wastewater system, a cost of service analysis and providing assistance in the Public Utilities annual workshop for City Council.
Annual Council Workshop Preparation
The annual workshop is conducted late winter or early spring to provide a summary to the Gainesville City Council of the Public Utility’s operations and planned capital improvements. Nelsnick Enterprises has supported the Public Utility Department annually since 2003. This service includes an analysis of historic expenses and revenues, projections of expenses and revenues, funding source selection for planned projects, and rate increase requirements. Nelsnick Enterprise performs an update to the Comprehensive Financial Model (CFM), prepares presentation materials as needed, and is available for questions during the two day event. Mr. Sills had been assisting the City of Gainesville annually for this presentation since 1999, and providing rate calculation assistance since 1996. Workshop preparation typically starts in November and is part of the budget update process.
Connection Fee Study
The connection fee is an update to the 2006 calculation. It includes a review of all existing assets and uses the current book value to establish the total value of the water and wastewater system. Each system is disaggregated into its components: water distribution; water treatment; wastewater collections; and wastewater treatment. The cost of debt to build the system is also added to this value. Construction in progress and planned projects are included in the calculation. The result is a cost per equivalent dwelling unit to provide water and wastewater capacity. Since new customer’s pay off debt through rates, a credit is calculated to offset this contribution. The connection fee is only paid when a customer purchases a meter for new or expanded water service capacity. The wastewater connection fee is applied when wastewater service is also provided.
Conservation Rate Structure
The Conservation Rate structure is required by the Metropolitan North Georgia Water Planning District regulations. The proposed rate structure is a three tiered increasing block rate structure where the unit charge for the first tier of consumption is the lowest per unit and subsequent tiers would have a higher per unit charge. The goal of the rate structure is to isolate water used for residential and commercial irrigation and use pricing to encourage water conservation. Nelsnick Enterprises provided all data collection, analysis and rate structure model alternatives.
Cost of Services Analysis
The Cost of Services Analysis included a review of budgets, fixed assets, audit data, and consumption data in order to determine system costs. Departmental managers were interviewed in order to establish services provided and appropriate cost recovery. Costs are separated by water and wastewater volume charges, user fees, and account servicing fees. Costs include operational, maintenance, existing and proposed debts and capital improvements. Nelsnick Enterprises performed data collection, analysis, document preparation and the update of the comprehensive financial model (CFM) Microsoft Excel workbook. JJG/Jacobs provided meeting facilitation, document review and printing.
Revenue Bond Services
Mr. Sills was project manager for preparing a water and sewer revenue bond engineering report for the City of Gainesville Public Utilities Department. The $58 million bond issue was completed in November 2001. The bond report included development of bond projects, cost estimates and system financial analysis. Income and expenses were projected over the life of the bond to show rate increase requirements to ensure sufficient revenues to cover future debt payments, operating expenses and capital improvements.