All right, Mayor, we're ready.

Welcome everyone.

Today is April 22nd, 2026.

We are here at Hollywood City Hall for a City Commission workshop.

Actually, the third workshop concerning this particular subject, utility system improvements, and of course uh the long uh discussed endeavor uh for septic to sewer conversion uh for the city of Hollywood.

So uh welcome city manager.

Um happy to see uh Vin Morello here ready at the podium manager, but I'll turn it over to you.

Thank you very much, Mayor, Vice Mayor, Commissioners.

Um as you all know, uh the City of Hollywood is moving into a phase of significant investment in stormwater infrastructure and septic to sewer infrastructure and utilities improvements generally.

These are incredibly important investments in our community, and uh as we have learned uh these types of things don't get less costly going forward.

Uh when we delay them, they only end up getting more costly.

And so uh we've looked very carefully um at those as you have uh those costs as you've directed.

Um, and uh Vin Morello and the utilities team along with our consultants have been uh meeting with you, gathering your input, uh working to refine this and are happy to uh present this information to you today.

And with that, I will turn it over to our utilities director, Vin Morello.

Good morning, Vin Morello, Director of Utilities.

Uh uh we Department of Utilities has been working uh consistently on the master plans, the water and wastewater master plans with our partner consultants Hazen and Sawyer, Arcade Hazen and Sawyer for the Wastewater Plan, Arcadis for the Watermaster Plan, and with uh Stantec for the as the rate consultant.

We have a relatively uh shorter presentation today, only 25 slides, because we've covered so much ground already.

Uh in the prior workshops, we've uh reached a consensus to adopt the water and wastewater master plans.

Uh we've reached a consensus on the five-year CIP and core infrastructure.

Umise them for any shovel ready grants that may become available.

Certainly, WIFEA loans require projects to be about 95 to 100 percent designed to qualify, and that's about the best interest rate that you can get.

And they lend at about 49% of the project's value.

So we took all of the master plans, we overlaid them on a on a complex GIS map just to kind of see what projects uh overlay, what requirements, utility requirements there are and what that looks like is uh when we from there we prioritize, we met with each of the commissioners in one-on-one, we met with different departments, we got an idea of the priorities for the city, and deriving from that we came up with the five uh five phase, five-year per phase, twenty-five-year program.

So the first phase of septic to soil would look physically like this.

These are the uh first areas identified.

That's phase one, phase two program, again, picking up those projects that had begun designed previously.

Phase three, phase four, and phase five.

So when we speak of financing a program, what does that look like?

Uh the utility took the conventional approach, which is a 50% debt funded program.

That is uh most utilities follow this uh conventional uh approach of 50% debt, 50% cash, because it it's the most fiduciary and responsible way to do it, uh provides the most flexibility of what that looks like in real uh terms, comparing just the core program here.

You see the bar chart on the left shows the escalating CIP investment each year.

The bar chart on the right shows when we would be issued uh obtaining bonds to fund that program.

So in 2026, there's no real bond, but we do have some SRF funds planned.

Uh in 27 would be about a hundred and ten million dollar bond.

Uh that would carry us to 2029, where there would be about a hundred and seventy-five million dollar bond, uh, and then uh carrying us to 2031, which would be about a 75 billion dollar bond.

And of course, each time as we get to each bond, we're actually looking very granularly at the rate of progress and how much funds we need.

So this is just all a model at today.

So what does that look like in terms of rates for the public?

Uh the core program is what would look like is a 25 percent increase for water and soar rates for each year for the first three years.

Then it would level off to 5 percent, then 3.5 percent, and working towards a cumulative rate of 112 percent.

That is to say, what people pay today would be uh 112 percent more in the year 2031.

What that looks like in terms of cash flow is this, the graph on the right.

The orange is the cash out, that's the CIP investment.

The black line is the revenue in, obviously, there's a as there's a gap.

We make up with that gap by drawing from reserves the purple bars here.

And that's how we would draw until we get the bond funding, and then we have good debt coverage.

What do these uh percentages look like in terms of real rate pay, you know, uh real payments monthly for residents.

We wanted to evaluate what the real community impacts are for these proposed rate increases.

So we look to EPA, they have an affordability guideline, and so we plugged in our rates uh to the EPA's affordability guidelines.

Uh a rate uh that is with less than two and a half percent of monthly household income is considered generally affordable by this metric.

Anything between two and a half and three and a half percent monthly household income is considered a moderate burden or an early warning range.

Uh above three and a half percent is high, a potential community level of stress, and severe is above four and a half percent.

We plugged our last 10 years of rates into this model, and the bottom graph there you can see in each case that we're well below the you know generally affordable or no impact to the community.

So then we took the main use case that we have been using in all the workshops.

The 6,500 cubic feet per month.

Uh we plugged in that so that 25 percent per year increase for the first three years, accumulating an 112.3 percent increase five years down the road.

So the rate payer that's paying $98.96 a month today for water and soar would be paying $210 a month in the year 2031 for that same quantity of water.

The water-only customers, that is the septic customers, uh, will also see a rate increase because, as I said, $222 million of that $786 million core program is for the water system, principally PFAS, among other reliability improvements.

So that customer today is paying $33.25 a month.

Uh they can uh without tying to the septic system in 2031, their rate will be around $70.59.