CITY OF RIVIERA BEACH, FLORIDA UTILITY SPECIAL DISTRICT S SYSTEMS AND OPERATIONS FOR FISCAL YEAR ENDING SEPTEMBER 30, 2010.

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1 UTILITY SPECIAL DISTRICT S SYSTEMS AND OPERATIONS FOR FISCAL YEAR ENDING SEPTEMBER 30, 2010 Overview The service area of the Utility District s Water System includes the entire City of Riviera Beach (approximately 6.8 square miles) and also includes approximately 2.7 square miles of land outside the District s boundaries. Water is provided to approximately 38,000 persons and 2,600 commercial, industrial and hotel/motel establishments. The System s water treatment facilities have a permitted capacity of approximately 14.5 million gallons per day. The service area of the Utility District s Sewer System is approximately 10.3 square miles. The City has purchased and reserved 8 million gallon per day of capacity in the East Central Regional Wastewater Treatment and Disposal Facility. Administration The System is a Utility Special District structure and the District Head, Louis Aurigemma reports directly to the City Manager. Water treatment has been under the supervision of Mr. David Danford, a Class A operator, and the water distribution/wastewater collection systems under the supervision of Mr. Allen Davis. There are 54 permanent full-time positions in the Department: four (4) administrative and 50 operational. All financial matters of the Department are managed by the District s Finance Department. Existing Water Facilities Water facilities of the system are comprised of raw water supply wells, raw water distribution mains, water treatment facilities, treated water distribution mains, water storage, and booster pumping facilities. The District s water supply system, serves the City proper, the Town of Palm Beach Shores, the Gramercy Park subdivision and other areas. Water System The Water System serves all of the incorporated area of the City (approximately 6.8 square miles) plus the Town of Palm Beach Shores and an area west of the City between Military Trail and Florida s Turnpike, 45 th Street and Northern Palm Beach County Water Control District Canal No. EPB-10. Raw water supply is drawn from a total of 27 deep wells drilled into two separate aquifers. The eastern wellfield is comprised of 16 wells constructed in the vicinity of the water treatment facility. The 1

2 western wellfield consists of 11 deep wells in the vicinity of Military Trail, 45 th Street, and Park Avenue. The District s Consumptive Use Permit issued by the South Florida Water Management District allocates a total withdrawal of 14.5 million gallons per day. The untreated raw water is transmitted to the water treatment facility through an 8.5- mile network of 6-inch through 30-inch raw water mains. The water treatment facility has a permitted capacity of 14.5 million gallons per day (MGD), consisting of air stripping, lime softening, clarification, filtration and pumping facilities, along with the necessary appurtenant equipment for chemical coagulation and disinfection. The treatment plant is actually divided into two plants with the first two phases combined into one unit and the third phase into another. Although built at different times, all of the facilities use similar equipment and all can be operated in unison for a full capacity of 17.5 MGD. Principal treatment units consist of an air stripping system, 3 up flow softener-clarifier units, 16 gravity filters, 5 high service pumps and 2 transfer pumps. Chemical feeds consist of alum, lime, polymer, chlorine and ammonia. Storage and Repump Stations Water storage facilities included in the water system are comprised of both below and above ground level units. The following Table reflects the existing capacity of treated water storage facilities. Summary of Water Storage Facilities Location Type Volume, Gallons Water Treatment Plant Ground-Concrete 1,000,000 Water Treatment Plant Clearwell-Concrete 300,000 N. Singer Island Ground-Concrete 1,000,000 Ave. C at 12 th Street Ground-Concrete 1,000,000 Ave. U Repump Ground-Concrete 1,000,000 TOTAL 4,300,000 The water distribution system consists of approximately 65 miles of an extensive grid of 4-inch through 30-inch diameter water mains. These water mains extend outward from the water treatment facility to all areas within the City limits and to certain areas, which are not within the corporate limits, including the Town of Palm Beach Shores on the barrier island and areas west of Military Trail, which are not now incorporated. The water distribution system has emergency interconnections with the Seacoast Utility Authority to the northwest and the City of West Palm Beach to the south. 2

3 Statistical Data The following table provides statistical water production and use data for the combined water system for the past four fiscal years including raw water pumped, treated water pumped and water billed to customers. Total System Water Pumped and Used (Fiscal years ) (1000 s) Fiscal Raw Water Treated Water Water Billed Year Total Avg. Total Avg. Total , , , , , , , , , , , , , , ,214.76* , , , *2009 Treated water meters were out of calibration however, in January 2010, USD addressed this problem and the meter has been recalibrated. The System was serving approximately 13,500 residential accounts, which equates to approximately 38,000 persons and 2,600 Commercial, Industrial and Motel establishments. Existing Wastewater Facilities Wastewater facilities of the system are comprised of gravity collector sewers, manholes, wastewater pumping stations, and wastewater transmission mains (force mains). The total sewer area covers approximately 10.3 square miles and includes the City, the Town of Palm Beach Shores, the Town of Mangonia Park, the Gramercy Park subdivision, and the Cypress Run subdivision. Wastewater Collection System The wastewater collection System is comprised of approximately 75 miles of gravity pipe varying in size from 8-inch to 24-inch diameter which discharge into 50 wastewater pumping stations varying in capacity from 60 GPM to 4,300 GPM. The pumping stations discharge into pressure force mains varying from 4-inch diameter to 36-inch diameter. All wastewater flow is discharged southwesterly from the City into the 70 MGD capacity East Central Regional Wastewater Treatment and Disposal Facility. This facility is owned and operated by the City of West Palm Beach. The City of Riviera Beach has purchased and has reserved 8 MGD of capacity in the East Central Regional Wastewater Treatment and Disposal Facility. 3

4 Statistical Data The following table summarizes wastewater flows generated from the System from each metering station for fiscal years 2005 through Total average annual daily flow discharged by the City of Riviera Beach into the East Central Regional Facility was MGD in Average Historical Wastewater Flow (1) Data By Metering Station Fiscal Years Fiscal City: Mangonia 45 th Gramercy Haverhill Total Year Avenue U Park Street Park_ Road Flow (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) (2) N/A (2) (2) (2) (1) Data expressed as million gallons per day (MGD). (2) Individual flows no longer measured, included in total. 4

5 Riviera Beach (Florida), City of, Utility Special District Water & Sewer Revenue Bonds, Series 2004, $31,495,000, Dated: September 23, 2004 Riviera Beach, Florida, City of, Sales Tax Revenue Refunding Bonds, Series 2002, $4,135,000, Dated: November 1, 2002 Riviera Beach, Florida, City of, Water & Sewer Revenue Bonds, Series 1997, $9,000,000, Dated: February 1, 1997 Rates, Fees and Charges - Water and Sewer WATER Residential Motels and Hotels Readiness to serve charge/unit $11.98 Readiness to serve charge/unit $11.98 Commercial 1st 9,000 $2.46 1st 10,000 $4.51 next 5,000 $3.08 next 30,000 $5.23 next 5,000 $3.69 over 40,000 $5.95 over 19,000 $4.31 Water 3/4" meter Readiness to serve charge/unit $ " meter ss to serve charge/unit $ st 10,000 $4.51 1st 10,000 $4.51 next 30,000 $5.23 next 30,000 $5.23 over 40,000 $5.95 over 40,000 $5.95 1" meter Readiness to serve charge/unit $ " meter ss to serve charge/unit $11.98 Plus usage, Rate per thousand gallons 1st 10,000 $4.51 1st 10,000 $4.51 next 30,000 $5.23 next 30,000 $5.23 over 40,000 $5.95 over 40,000 $ " meter Readiness to serve charge/unit $ " meter ss to serve charge/unit $ st 10,000 $4.51 1st 10,000 $4.51 next 30,000 $5.23 next 30,000 $5.23 over 40,000 $5.95 over 40,000 $5.95 2" meter Readiness to serve charge/unit $ " meter ss to serve charge/unit $ st 10,000 $4.51 1st 10,000 $4.51 next 30,000 $5.23 next 30,000 $5.23 over 40,000 $5.95 over 40,000 $5.95 3" meter Readiness to serve charge/unit $ st 10,000 $4.51 next 30,000 $5.23 over 40,000 $5.95 Capital Fees per Equivalent Residential Unit: water $1, sewer $1, $3,

6 IRRIGATION METERS Residential and Commercial Residential Commercial Readiness to serve charge/unit $11.98 $ st 9,000 $2.46 1st 10,000 $4.51 next 5,000 $3.08 next 30,000 $5.23 next 5,000 $3.69 over 40,000 $5.95 over 19,000 $4.31 Miscellaneous Turn-on charge: $12.50 Turn-off charge: $12.50 Turn-on charge if "Requested After Regular Working Hours" : $35.00 Late-Payment Charge: $10.00 Recheck & Meter Test $30.00 (When test results show it reads Odor Low) Returned Check Charge or 5% if greater: $20.00 Water or Sewer Tap Inspection Fee: residential, single unit $10.00 commercial and multi-unit res. $25.00 Unauthorized connection $ SEWER RATES Residential Readiness to serve charge/unit $7.00 usage/ 1,000 gal. $1.57 (based on metered water, up to a maximum of 10,000 gal. per unit.) Commercial Readiness to serve charge/unit $7.00 usage/ 1,000 gal. $3.39 (based on metered water, no max.) Hotel/Motel Readiness to serve charge/unit $7.00 usage/ 1,000 gal. $2.44 (based on metered water, no max.) Unmetered Sewer/ Unit $14.00 Meter Connection (Installation) meter size:.75" $ " $ " $ " $ " and larger at cost Fire Lines/ Fire Sprinklers Monthly charge meter size: 2" $6.63 3" $ " $ " $ " $ " $63.14 Fire Hydrants per month $28.93 OTHER CHARGES TRASH & GARBAGE Residential / unit $15.53 Utility Tax (only on water) = 10% commercial minimum $87.94 Outside City Limits: rates are one and one-forth (1.25) times the inside city rates. STAND-BY SERVICE: The regular minimum charge (readiness to serve, or stand-by charge) remains until the building is demolished and the meter removed permanently. No Charge Services: Account transfers 6

7 Payment plans and payment extensions Audits of accounts Comparison of Total Monthly Residential Bills for Water and Sewer Service Water 7,500 Sewer 7,500 Combined 7,500 Water 15,000 Sewer 15,000 Combined 15,000 Gallons Gallons Gallons Gallons Gallons Gallons City of Riviera Beach $30.43 $18.78 $49.21 $53.21 $22.70 $75.91 Other Local Florida Utilities City of Delray Beach $21.35 $43.48 $64.82 $30.72 $68.92 $99.64 Ft. Pierce Utilities Authority $32.93 $51.58 $84.50 $66.82 $78.10 $ Town of Jupiter/ENCON $27.45 $18.25 $45.70 $39.07 $18.25 $57.32 Martin County $30.04 $44.71 $74.74 $48.76 $54.33 $ Palm Beach County $22.60 $28.86 $51.46 $43.50 $50.37 $93.87 Seacoast Utility $25.22 $26.48 $51.70 $49.59 $30.68 $80.27 City of West Palm Beach $35.83 $12.79 $48.62 $71.81 $56.44 $ * Above comparions are based on single family & 5/8" meter size Other Florida Utilities Average $27.91 $32.31 $60.22 $50.04 $51.01 $ Revenues and Expenses - Water and Sewer Revenues, Expenses and Debt Service Coverage for the Fiscal Year Ended September Revenues Water System $6,808,447 $6,252,259 $6,802,545 $11,214,279 Wastewater System $5,406,812 $5,631,568 $5,807,957 $5,876,911 Hydrant Rental $155,082 $161,288 $163,902 $165,608 Interest on Operations $102,573 $138,468 $113,398 $169,750 Miscellaneous $79,436 $164,653 $65,902 $103,868 Total Revenue $12,552,350 $12,348,236 $12,953,704 $17,530,416 Expenses Personnel $3,282,962 $3,343,300 $3,508,893 $3,380,952 Operation and Contract Services $3,505,904 $3,244,138 $3,269,891 $3,058,775 Supplies, Materials, Maintenance $2,803,739 $2,569,792 $3,080,300 $2,880,063 Utilities $720,995 $694,826 $648,647 $600,138 Total Expenses $10,313,600 $9,852,056 $10,507,731 $9,919,928 Net Operating Revenue $2,238,750 $2,496,180 $2,445,973 $7,610,488 Annual Debt Service $1,987,581 $1,987,331 $1,990,144 $1,990,794 Debt Service Coverage 1.13 x 1.26 x 1.23 x 3.82 Projected Revenues, Expenses Debt Service and Debt Service Coverage 2011* Revenues Water System $10,408,514 $10,616,684 $10,829,018 $11,045,598 $11,266,510 Wastewater System $5,583,192 $5,809,520 $6,096,846 $6,340,719 $6,594,348 Hydrant Rental $148,362 $152,813 $157,397 $162,119 $166,983 Miscellaneous $89,920 $92,618 $95,396 $98,258 $101,206 Interest on Operations $144,793 $149,140 $153,614 $158,222 $162,969 Indexing Increases $0 $0 $0 $0 $0 Total Revenues $16,374,781 $16,820,775 $17,332,271 $17,804,916 $18,292,016 Expenses Personnel Services $3,864,845 $3,865,083 $3,865,326 $3,865,575 $3,865,831 Operation and Contract Services $3,036,206 $3,112,111 $3,189,914 $3,269,662 $3,351,403 Supplies, Materials, Maintenance $5,876,552 $6,023,466 $6,174,052 $6,328,404 $6,486,614 Utilities $838,500 $859,463 $880,949 $902,973 $925,547 Total Expenses $13,616,103 $13,860,123 $14,110,241 $14,366,614 $14,629,395 Net Operating Income $2,758,678 $2,960,652 $3,222,030 $3,438,302 $3,662,621 Debt Service $1,990,794 $1,989,181 $1,990,206 $1,988,581 $1,986,019 Debt Service Coverage * Based on adopted budget for FY 2010/

8 Capital Improvement Plan - Water and Sewer Capital Projects for Water System Estimated Cost 1) Improving water and sewer lines - SR A1A & Park Avenue $500,000 2) Improving water and sewer lines - SR A1A $540,000 3) Rehabilitating water wells in Group 1 $25,000 4) Improving water and sewer lines - Haverhill Rd & Dyer Blvd $150,000 5) Improving water and sewer lines - MLK Blvd $985,000 6) Developing utilities master plan, Hydraulic model water & sewer system, leak detection & infiltration study $1,050,000 7) Improving water & sewer infrasturture in North Strategy area, Old Dixie Hwy & Blue Heron Blvd, Silver Beach Rd $620,000 8) Improving the water treatment plant and facilities $1,700,000 TOTAL $5,570,000 Capital Projects for Wastewater System Estimated Cost 1) Rehabilitating lift station #10 $2,750,000 2) Rehabilitating pump station on North Singer Island $1,200,000 3) Rehabilitating lift station #50 $200,000 TOTAL $4,150,000 Historical County Sales Tax Collections Fiscal Year Ending Palm Beach September 30 County Percent Change 2000 $100,533, % 2001 $104,362, % 2002 $108,283, % 2003 $111,338, % 2004 $122,226, % 2005 $118,457, % 2006 $134,520, % 2007 $129,406, % 2008 $123,148, % 2009 $101,004, % 2010 $108,581, % Source: State of Florida, Department of Revenue Percentage Distribution of Local Government Half-Cent Sales Tax Fiscal Year Ending September 30 Percentage Distribution % % % % % % % % % % % Source: State of Florida, Department of Revenue 8

9 Receipt of Sales Tax Revenues Fiscal Year Ending Sales Tax September 30 Revenues Percent Change 2000 $2,074, % 2001 $2,128, % 2002 $2,127, % 2003 $2,211, % 2004 $2,356, % 2005 $2,236, % 2006 $2,608, % 2007 $2,482, % 2008 $2,325, % 2009 $2,131, % 2010 $1,990, % Debt Service Requirement for the Parity Bonds and the Series 2006 Bonds Fiscal Year Fiscal Year 2010 Series 2006 Bonds Aggregate Sales Tax Debt Service Debt Service Parity Bonds Debt Service Revenues Coverage $537,101 $537,101 $1,990, $538,901 $538,901 $1,990, $539,796 $539,796 $1,990, $539,521 $539,521 $1,990, $542,546 $542,546 $1,990, $539,240 $539,240 $1,990,

10 Statement of Net Assets Proprietary Fund: Utility Special District September 30, 2010 DRAFT / UNAUDITED Utility Special District Assets Current assets Cash and cash equivalents $27,738,670 Receivables (net) Accounts 4,239,182 Accrued interest Unbilled Accounts (300,010) Due from other funds Accrued interest receivable Supplies inventory 58,654 Prepaid expenses Restricted assets Cash and cash equivalents Investment in ECR 11,298,488 Accounts receivable Accrued interest Accounts receivable Cash with fiscal agent Total current assets 43,034,984 Non-current assets Unamortized bond issuance costs 765,061 Capital assets Property, plant, and equipment 68,364,361 Less accumulated depreciation (39,054,410) Total non-current assets 30,075,012 Total assets 73,109,996 Liabilities Current liabilities Accounts payable & Contracts payable 1,974,464 Deposits 1,044,178 Due to other funds Current portion of long term debt 712,857 Deferred revenue Accrued liabilities Total current liabilities 3,731,499 Non-current liabilities Long-term portion of bonds payable 27,416,432 Long-term portion of notes payable Total non-current liabilities 27,416,432 Total liabilities 31,147,931 Net Assets Invested in capital assets, net of related debt 1,128,458 Restricted: equity in joint venture 11,298,488 Restricted for Capital 27,416,432 Unrestricted 2,118,687 Total net assets $ 41,962,065 10

11 DRAFT / UNAUDITED Operating revenue City of Riviera Beach Statement of Revenues, Expenses, and Change in Fund Net Assets Proprietary Fund: Utility Special District For the year ending September 30, 2010 Utility Special District Charges for services - Water $11,379,888 Charges for services - Sewer 5,876,911 License fee Rental income Miscellaneous 103,868 Total operating revenues 17,360,667 Operating expenses Personal services 3,380,952 Contractual services and operations 5,061,602 Supplies, materials and maintenance 970,886 Heat, light and power 600,209 Depreciation 1,978,832 Total operating expenses 11,992,481 Operating income / (loss) 5,368,186 Nonoperating revenues (expenses) Intergovernmental Interest revenue 668,475 Interest expense (1,522,810) Gain(Loss) on sale of investment Total nonoperating revenues (expenses) (854,335) Income (loss) before contributions and transfers 4,513,851 Capital contributions 44,547 Transfers in 4,884,813 Transfers (out) (4,884,813) Change in net assets 4,558,398 Net assets - beginning (as restated) 37,403,667 Net assets - ending $ 41,962,065 11

12 Balance Sheet Governmental Funds with Marina, Stormwater, and CRA September 30, 2010 DRAFT / UNAUDITED General Fund Special Revenue Capital Projects Debt Service Pension Internal Service Fund Enterprise Funds (excluding USD) Assets Current assets Cash and cash equivalents 2,387,915 3,715,831 4,194, ,640 8,252,102 5,718,245 6,416,359 31,069,454 Cash and cash equivalents-restricted 16,711,926 47,747,723 64,459,649 Receivables (net) - Accounts 2,843,998 1,403, ,416 1,037,441 2,260,555 46,515 7,758,545 Special Assessments 317, ,795 Unbilled Accounts - Due from other funds 8,254,726 8,254,726 Advance to other funds 8,062,552 8,062,552 Supplies inventory 231,729 2,080,747 51,105 2,363,581 Long-term assets 4,961,275 4,961,275 Total assets 13,718,368 7,518,266 20,907, ,640 47,913,139 17,352,095 12,991,180 6,462, ,247,577 Liabilities Current liabilities Accounts payable & Contracts payable 1,365, , ,355 80,125 2,402,769 1,374,953 1,425,576 7,008,893 Deposits - Due to other funds 1,371,371 2,747,778 3,648, ,913 8,254,716 Deferred revenue 404,101 1,797,102 1,785, ,626 49,958 4,531,327 Accrued liabilities 1,204,395 19,561 36,489 1,704 1,262,149 Total liabilities 2,974,278 3,407,367 2,888,133-80,125 4,188,309 5,554,722 1,964,151 21,057,085 Fund Balances Reserved for: Pension payments 43,083,004 43,083,004 Encumbrances 100,664 11,533, ,496 2,333, ,137 14,378,271 Inventory 219, ,398 Long term advance 8,062,552 8,062,552 Capital projects 383, ,139 Unreserved / undesignated 10,424,028 (7,422,127) 17,746,386 1,501 4,750,010 2,767,286 7,298,321 4,498,723 40,064,128 Total fund balances 10,744,090 4,110,899 18,018, ,640 47,833,014 13,163,786 7,436,458 4,498, ,190,492 Total Liabilities and Fund Balances 13,718,368 7,518,266 20,907, ,640 47,913,139 17,352,095 12,991,180 6,462, ,247,577 CRA Total 12

13 DRAFT / UNAUDITED Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds with Marina, Stormwater, and CRA For the year ending September 30, 2010 General Fund Special Revenue Capital Projects Debt Service Pension Internal Service Fund Enterprise Funds (excluding USD) CRA Total Revenues: Taxes 35,927, ,899 5,348,440 41,484,663 Licenses & permits 647, ,994 Intergovernmental 3,636,154 2,161,468 1,114,717 6,912,339 Charges for services 6,768, ,283 5,786,860 7,655,306 20,352,629 Fines & forfeitures 295,258 19, ,773 Investment earnings 59,892 (123,736) 20,479 1,498 4,467, ,364 28,006 8,425 4,750,300 Miscellaneous 810, , ,346 4,220, , ,301 72,215 7,039,467 Total operating revenues 48,144,816 2,639, ,724 1,498 8,687,856 6,526,792 9,704,330 5,429,080 81,502,165 Expenditures: Current General government 16,713,608 24,700 1,900 3,937,845 4,212,254 24,890,307 Public Safety 29,747, ,632 30,664,674 Transportation 1,080, ,054 62,467 1,118,263 2,384,406 Human Services 233, , ,976 Physical Environment 4,569,304 4,569,304 Economic Environment 304, ,601 Culture & recreation 3,793, ,277 2,492,650 6,505,000 Redevelopment program 2,130,504 2,130,504 Capital outlay 464,273 1,067,416 3,934,630 9,521 8,169,075 13,644,915 Debt service: - Principal retirement 206, , ,249 Interest & fiscal charges 67,851 54, , ,168 Total expenditures 52,032,210 3,234,064 3,998, ,971 3,937,845 4,212,254 8,244,259 11,070,504 87,004,104 Excess (deficiency) of revenues over expenditures (3,887,394) (594,995) (3,630,273) (272,473) 4,750,011 2,314,538 1,460,071 (5,641,424) (5,501,939) Other financing sources (uses) Proceeds from loan 8,062,552 8,062,552 Transfers in , , , ,845 2,288,442 Transfers out (728,999) (130,017) (703,581) (725,845) (2,288,442) Total other financing sources (uses) (728,982) 455, , ,062,552 8,062,552 Net change in fund balances (4,616,376) (139,987) (3,630,273) 1,501 4,750,011 2,314,538 1,460,071 2,421,128 2,560,613 Fund balance - beginning (as restated) 15,360,466 4,250,886 21,649, ,139 43,083,003 10,849,248 5,976,387 2,077, ,629,879 Fund balance - ending 10,744,090 4,110,899 18,018, ,640 47,833,014 13,163,786 7,436,458 4,498, ,190,492 13