1. TROPICAL STORM FAY UPDATE PRESENTER: TIME REQUIRED: … Agendas/090808.pdf · PRMG is a...

BOARD MANAGEMENT AND PLANNING COMMITTEE AGENDA MONDAY, SEPTEMBER 8, 2008

1:00 PM - 4:00 PM COUNTY COMMISSION CHAMBERS

1. TROPICAL STORM FAY UPDATE PRESENTER: John Wilson, Public Safety Roland Ottolini, Natural Resources Ann Arnall, Human Services John Yarbrough, Parks and Recreation Scott Gilbertson, Department of Transportation TIME REQUIRED: 10 Minutes

2. UPDATE ON IMPACT FEES – ROAD, SCHOOLS AND PARKS PRESENTER: Mary Gibbs, Community Development TIME REQUIRED: 5 Minutes

3. NORTH FORT MYERS UTILITIES VALUATION AND WATERWAY ESTATES WASTEWATER TREATMENT PLANT ALTERNATIVES PRESENTER: Doug Meurer, Utilities TIME REQUIRED: 30 Minutes

BOARD COMMENTS/DISCUSSION

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The Management & Planning Meeting is carried live on the following cable channel: Comcast Cable Channel 11

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Public Resources Management Group, Inc. Utility, Rate, Financial and Management Consultants

Public Resources Management Group, Inc. Utility, Rate, Financial and Management Consultants

K:\1042-14\NFMU Valuation Report Draft 3.doc

341 NORTH MAITLAND AVENUE - SUITE 300 - MAITLAND, FL 32751 TEL (407) 628-2600 - FAX (407) 628-2610 - EMAIL [email protected]

September 5, 2008 Draft

Mr. Doug Meurer, P.E. Mr. Tony Reeves Utilities Director Director Lee County Utilities North Fort Myers Utility, Inc. 1500 Monroe St. 5660 Bayshore Road Fort Myers, FL 33902 Fort Myers, FL 33917 Subject: Estimate of Value of the North Fort Myers Utility, Inc. (NFMU) Gentlemen:

Public Resources Management Group, Inc. (PRMG) is pleased to submit this report to the Lee County Public Works – Utilities Division (LCU) of Lee County, Florida (the "County") and the management of North Fort Myers Utility, Inc. ("NFMU" and collectively with the County, the "Parties") regarding our financial evaluation of the water and wastewater utility facilities of the North Fort Myers Utility, Inc. water and wastewater utility system (the "NFMU System"). The purpose of this report was to determine a reasonable cost of acquisition of the NFMU System in order to assist the County with its evaluation regarding the potential purchase of the assets and corresponding service area (i.e., the business) of the NFMU System. This report did not incorporate any aspects of the County's Waterway Estates' wastewater service area as part of the valuation analysis as it is a separate and distinct transaction of the County which should be analyzed exclusive from the NFMU valuation. The NFMU System is currently owned by The Old Bridge Park Corporation (the “Parent Corporation”) and provides water and wastewater service pursuant to a certificate approved by the Florida Public Service Commission (the "FPSC") in accordance with Florida Statutes, Chapter 367. The NFMU System includes water production and treatment facilities, wastewater treatment and disposal facilities, water distribution and wastewater collection lines, and other appurtenances. As of May, 2008 the NFMU System served approximately 1,855 water and 13,710 wastewater customers comprised primarily of residential and retail commercial customers. The NFMU System has a larger wastewater system customer base due to the fact that the County currently serves a large portion of the NFMU certificated service territory potable water service. The County provides NFMU with the monthly water billing information for these customers in order for NFMU to bill for wastewater treatment and disposal service which it provides. PRMG is a financial consulting firm which has evaluated the value of a number of private utility assets sales to municipal or governmental entities and has been retained by the Parties to provide a reasonable acquisition value of the NFMU System. PRMG utilized the income approach

Mr. Doug Meurer, P.E. Draft Lee County Utilities Mr. Tony Reeves North Fort Myers Utility, Inc. September 5, 2008 Page 2 method of valuation which is a common and accepted method for evaluating transactions similar to the transfer of the NFMU System facilities. The income approach is a method which is based on the present value of the net cash flow of the particular business or entity being evaluated. In addition to the income approach, PRMG also prepared a comparable sales analysis regarding the potential acquisition of the NFMU System by the County. Although the comparable sales analysis should not be considered as a determination of value for the NFMU System, it does provide a "reasonableness" check of the acquisition price. Finally, since it is expected that the County would issue utility revenue bonds which would be pledged for repayment primarily from the net revenues of the acquired NFMU system, a debt capacity evaluation was also conducted. The evaluation was performed to assist the County with the development/structuring of a financing program and to identify potential issues that could exist relative to the financing of the transaction. In the development of the estimated present value based on the net cash flow of the NFMU System, several different revenue scenarios were considered which were based on the scope of services agreed by the Parties. The scenarios essentially focused on the rates to be charged for monthly utility service and included: i) the current NFMU rates; ii) the projected rates if NFMU were to file for a general rate increase before the Florida Public Service Commission; and iii) the current County rates. The Parties requested these three scenarios to aid in the evaluation and purchase negotiations of the NFMU System. Based on the assumptions and analyses documented in the attached report, which should be read in its entirety, PRMG has estimated the present value of the net cash flow anticipated to be derived from the acquired NFMU as follows with respect to the rate scenarios:

Estimated Amount Income Approach - Estimated Future Cash Flow: County Rates [1] $60.4 million County Rates w/Connection Charges [1] $80.1 million Existing NFMU Rates [2] $42.9 million Existing NFMU Rates w/Main Extension Charges [2] $51.0 million Adjusted NFMU Rates [3] $75.0 million Adjusted NFMU Rates w/Main Extension Charges [3] $82.5 million __________ [1] Amount shown derived from Table 9. [2] Amount shown derived from Table 10. [3] Amount shown derived from Table 11.

The comparable sales approach considered the weighted average cost per net investment (assets) and equivalent residential connection (service area) for approximately 39 utility transactions that PRMG was able to compile information on such transaction. Based on the weighted average cost paid by the purchaser and recognizing the growth of the NFMU System, the following implied purchased price was estimated:


Mr. Doug Meurer, P.E. Draft Lee County Utilities Mr. Tony Reeves North Fort Myers Utility, Inc. September 5, 2008 Page 3


Comparable Sales – Current Condition Estimated Amount Net Investment Basis [1] $56.5 Million ERU Basis [2] $37.6 Million Comparable Sales – Future Condition Net Investment Basis [3] $55.4 Million ERU Basis [4] $73.7 Million __________ [1] Amount shown derived from Table 16. [2] Amount shown derived from Table 15. [3] Amount shown derived from Table 20. [4] Amount shown derived from Table 19.

The net present value of the estimated cash flow of the NFMU System does not recognize any capital synergies that may accrue to the benefit of the County as a result of the acquisition. Specifically, if the County were to avoid any capital expenditures as a result of the acquisition of the NFMU assets, then the potential for additional value or benefit could possibly be recognized as a component of the transaction. For the purposes of this analysis presented herein, no additional capital synergies, if any, were recognized. Additionally, the analysis does not recognize any financing issues that could affect the ability of the County to finance the acquisition. To the extent that restrictions or constraints are placed on the County as part of the financing (e.g. compliance with a rate covenant requirement, issues regarding system growth and building capability, etc.) then the amount that would be paid for the system would be affected.

We appreciate the opportunity to assist both the County and NFMU management with the financial evaluation and acquisition of the facilities that comprise the North Fort Myers Utility, Inc. System. Very truly yours,

Public Resources Management Group, Inc. Robert J. Ori President

Julian J. Burgiel Associate Attachments RJO/skc

LEE COUNTY, FLORIDA

NORTH FORT MYERS UTILITY, INC.

NORTH FORT MYERS UTILITY SYSTEM VALUATION ANALYSIS

TABLE OF CONTENTS

Title Page No.

Introduction ..................................................................................................................................... 1 Utility Facilities to be Acquired ...................................................................................................... 2 Valuation Methodology .................................................................................................................. 2 Rates and Charges ........................................................................................................................... 4

NFMU and Lee County Water and Wastewater Rates ............................................................... 4

Main Extension Charges (System Connection Charges) ............................................................ 8 Customer Forecast .......................................................................................................................... 9

Other Considerations ................................................................................................................ 14 Income Approach – Assumptions and Analysis ........................................................................... 14 Estimate of Net Present Value – Income Approach ..................................................................... 24 Debt Capacity Approach ............................................................................................................... 25 Comparable Sales Analysis ........................................................................................................... 26

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LEE COUNTY, FLORIDA



LIST OF TABLES (*)

Table No. Title

Income Approach Tables

1 Summary of Historical and Projected Customer Statistics – Water System

2 Summary of Historical and Projected Customer Statistics – Wastewater System

3 Customer Growth Projection Above Calendar Year 2007 Levels

4 Estimation of Adjusted Fiscal Year 2007 Operating Expenses – Utility System

5 Projection of Operating Expenses – Utility System

6 Projection of Other Operating Expenses – Utility System – Escalation References

7 Projection of Other Operating Revenues – Lee County Rates

7a Projection of Other Operating Revenues – NFMU Rates

8 Estimate of Capital Expenditures and Funding Needs – Utility System

9 Summary of Net Present Value of Utility System Cash Flow – Lee County Rates

10 Summary of Net Present Value of Utility System Cash Flow – NFMU Rates

11 Summary of Net Present Value of Utility System Cash Flow – Increased NFMU Rates

Debt Capacity Tables

12 Estimate of Preliminary Utility Acquisition Value – Debt Capacity Approach / Lee County Rates

Comparable Sales Approach Tables – Existing Customer Levels

13 Summary of Transactions and Development of Time Adjusted Purchase Prices

14 Allocation of Adjusted Purchase Price Between Water and Wastewater Systems

15 Development of Implied Purchase Price Per ERU Basis - Current Service Levels

16 Development of Implied Purchase Price Per Net Investment Basis – Current Service Levels

Comparable Sales Approach Tables – Assumed Build Out Levels

17 Summary of Transactions and Development of Time Adjusted Purchase Prices

18 Allocation of Adjusted Purchase Price Between Water and Wastewater Systems

19 Development of Implied Purchase Price Per ERU Basis – Build Out Service Levels

20 Development of Implied Purchase Price Per Net Investment Basis – Build Out Service Levels __________ (*) All Tables Are Located at the End of This Report

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LEE COUNTY, FLORIDA



INTRODUCTION The North Fort Myers Utility, Inc. (NFMU) water and wastewater utility system (the “NFMU System”) is a privately owned and operated utility system providing utility service in the northwestern portion of Lee County. The NFMU System is currently owned by The Old Bridge Park Corporation (the “Parent Corporation”) and provides water and wastewater service pursuant to a certificate approved by the Florida Public Service Commission (the "FPSC") in accordance with Florida Statutes, Chapter 367. The NFMU System includes water production and treatment facilities, wastewater treatment and disposal facilities, water distribution and wastewater collection lines, and other appurtenances. As of May, 2008 the NFMU System served approximately 1,855 water and 13,710 wastewater customers comprised primarily of residential and retail commercial customers. The NFMU System has a larger wastewater system customer base due to the fact that the County currently serves a large portion of the NFMU certificated service territory with potable water service. The County provides NFMU with the monthly water billing information for these customers in order for NFMU to bill for wastewater treatment and disposal service which it provides. Representatives of NFMU and the County have entered into negotiations to determine the estimated value of the NFMU System and the formulation of a purchase price suitable to both parties. As a result of the offer from NFMU to sell the utility and recognizing the goals and objectives of the County as it relates to the consolidation of wastewater and wastewater facilities and providing service on a regionalized basis that promotes economies of scale and long-range planning of utility service, the Lee County Utilities Division (LCU) and the management of NFMU requested that Public Resources Management Group, Inc. (PRMG) perform a financial evaluation of the NFMU System. PRMG was not responsible for any engineering evaluation of the NFMU System; such evaluation was done separately and is independent of the financial evaluation presented herein. However, to the extent required, PRMG did rely on certain engineering information provided by the Consulting Engineers retained for the NFMU valuation by both parties in the preparation of the analysis reflected in this report. This report only focuses on the evaluation of the NFMU System and does not incorporate the County system operations which are separate and distinct and do not have any impact on the determination of the net present value of the cash flow and debt capacity derived from NFMU System operations. Recently, it has come to the County's attention that its Waterway Estates' wastewater treatment facility would be required to be upgraded and expanded in order to meet the service area needs of the customer base within the part of the County where this regional wastewater facility currently operates. The County is in the process of studying various alternatives in lieu of upgrading and expanding the Waterway Estates wastewater treatment facility with one of its options being to acquire the NFMU System and interconnect to NFMU's existing Del Prado Wastewater Treatment Facility. This report does not reflect any operating or

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capital synergies that may exist due to the interconnect of the County’s and NFMU’s wastewater systems and the ultimate decision of providing wastewater treatment service by the County is a separate business decision which was beyond the scope of this study. The remainder of this report presents our analysis and findings associated with the financial analysis of the NFMU System anticipated to be acquired by the County. UTILITY FACILITIES TO BE ACQUIRED The utility facilities that comprise the NFMU System to be acquired by the County include the following:

NFMU System Assets (*) Water System Wastewater System

Land and Land Rights $4,054 Land and Land Rights $670,835 Structures and Improvements 58,694 Structures and Improvements 4,395,948 Wells and Springs 18,213 Collection Sewers – Force 12,696,931 Supply Mains 960 Special Collecting Structures 452,716 Pumping Equipment 4,442 Collection Sewers – Gravity 5,172,617 Water Treatment Equipment 50,895 Services to Customers 1,029,981 Hydrants 72,646 Receiving Wells 2,363,703 Transmission & Distribution Mains 534,516 Pumping Equipment 1,053,151 Services, Meters and Meter Installation 86,233 Reuse Distribution System 2,751,815 Treatment and Disposal Equipment 4,539,461

Subtotal $826,599 Subtotal $35,127,158

Construction Work in Progress 0 4,339,805

Total Water System $826,599 $39,466,963 __________ (*) Amounts shown represent net investment as of December 31, 2007, as reported by NFMU, and are expressed in 2007 dollars and do not include intangible or general plant or the value of any records, as-built drawings, easements and right-of-ways or similar items, or adjustments to the net investment due to changes in fair market value, which could be substantial. All of the to-be-acquired NFMU System facilities reported by the NFMU management and the consulting engineers retained to perform the Replacement Cost New Less Depreciation (referred to as the Replacement Cost New less Depreciation or "RCNLD" method) Valuation Analysis are said to be in fair to good condition with some immediate improvements recommended to be performed to wastewater system and pump lift stations. As such, the existing System facilities, with continued maintenance are expected by the two parties to be sufficient to provide continued utility services within the NFMU service territory and thus, promote the continuation of the revenues assumed for the purposes of the preparation of this report. VALUATION METHODOLOGY There are three (3) general valuation approaches used to determine the value of assets and service areas. These three approaches include the: i) cost approach; ii) comparable sales approach; and iii) income approach. Generally, the parties to the transaction would consider all three methods in the determination of the overall price to be paid for the utility since the methods generally tend to support each other (assets are required to generate revenues for benefit of seller, with both the assets and revenue stream being evaluated and considered in terms of establishing a value). Issues such as plant condition and remaining service lives, existing capacity and ability


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for the system to expand and grow, rates and the net revenues available to be generated by the assets, availability of the receipt of cash contributions-in-aid-of-construction, and other factors are considered between the evaluation methods for the determination of value. The replacement cost approach values the property based on what it would cost the owner to replace the assets with like kind facilities. This evaluation focuses on the assets in service with the value being equal to the current installed cost of the facilities less an allowance for depreciation (to determine remaining service live) in order to develop the fair market value. Generally, this method requires an engineering evaluation as to condition, remaining service lives, regulatory compliance, and other factors. This analysis was performed independently by the two parties' consulting engineers and is not included in this report. Furthermore, although PRMG relied upon certain components of the engineering analysis, such analysis was considered as being an independent review of the NFMU System and was not considered in the evaluation reflected in this report. The comparable sales approach compares the specifics of previous or recent like-kind transactions with the current transaction to develop a price relationship. Although numerous utility transactions have taken place over the last several years, the potential of having a like-kind transaction similar to the NFMU System purchase by the County is somewhat difficult to identify due to differences in type of service area, facilities in service, asset age, operational synergies that may exist and strategic initiatives of the purchase. In many instances a comparable sales analysis provides a general reasonableness check as to the evaluation since it recognizes the sales of other utilities and an analysis was included in this report for informational purposes and to assist the Parties with the evaluation of the System. Less emphasis is placed on this analysis because of the difficulty in identifying like-kind transactions. The income approach focuses on the net cash flow derived from the operation of the assets to be purchased with the assumption that the value would equal the present value of such net cash proceeds (benefits) being derived from the assets being acquired and the operation of the NFMU System facilities. This analysis focuses solely on the financial aspects of the System and complements the replacement cost approach. Specifically under this approach, the value to the seller would be the net present value of the cash flow anticipated to be derived from the operations, which would include asset replacement and maintenance in order to preserve the generation of the revenues and financial benefits of the NFMU System. In addition and in order to assist the two parties in the evaluation of the NFMU System and recognizing that the County will need to finance the transaction with external funds (debt), a dept capacity analysis was also prepared. Although not considered as a direct valuation analysis, the debt capacity approach focuses on the ability of the utility to be purchased to support itself financially as a result of the buyer assuming a liability in the form of annual debt service payments to finance the purchase of the system. It serves as a check to the buyer that its existing rate payers will not be materially impacted in the form of rate increases from the purchase taking place. In our experience with respect to the valuation of utility systems, the income approach supported by the debt capacity analysis are often a method used in determining the value of a utility system and is a reasonable method for valuing the NFMU System.


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The scope of our analysis which was necessary to complete the valuation using the income approach included the following activities: 1. Evaluation of the service area water and wastewater usage and growth characteristics and the

corresponding revenues to be derived from monthly rates or user charges, including contribution charges.

2. Identify the cost of operation of the NFMU System facilities, recognizing an allowance for

the cost of asset replacement and betterment required to allow the assets to reach or exceed their useful life.

3. Identify the capital funding of the NFMU System which would require resources to finance. 4. Determine the net cash flow of the NFMU System facilities for all existing and anticipated

customers to determine the estimated present value of such net cash flow. RATES AND CHARGES

NFMU and Lee County Water and Wastewater Rates In the development of the income approach analysis as outlined later in this report, two (2) schedules of rates for monthly water and wastewater service were utilized in the derivation of sales revenues for the thirty (30) year projection period. The current rate schedules of the County and NFMU have been utilized in order to identify the present value of the future cash flows of the NFMU System under each specific rate application. The rates for water and wastewater service as reflected in the NFMU rate tariff were filed with and approved by the Florida Public Service Commission (FPSC), the regulatory jurisdiction having authority regarding rates for service of the NFMU System. Subsequent to the acquisition of the NFMU System by the County, the FPSC will no longer have regulatory jurisdiction over the rate levels and structure of the NFMU System. Such regulatory requirements will be the responsibility of the Lee County Board of County Commissioners. The current NFMU rates were implemented on May 28, 2007 (pursuant to a price index and pass-through rate adjustment) and are differentiated into two (2) distinct service areas; the Pine Lakes/Lake Fairway service area and the NFMU service area. The Pine Lakes/Lake Fairways service territory is a relatively small portion of NFMU's total certificated service area and is served both potable water and wastewater service by NFMU whereby the NFMU service area receives wastewater-only service from NFMU with the County providing all retail potable water service. The rates for Pine Lakes and Lake Fairway water service areas currently in effect include: i) monthly service charge (readiness-to-serve charge) which varies by meter size which also serves as the minimum bill; and ii) a volumetric flow charge based on metered water consumption which is uniform for all metered consumption (applicable to all customer classes). The current rates for wastewater service in both service areas are similar in structure to that of the water system and include: i) a monthly service charge (readiness-to-serve charge) which varies by meter size that also serves as the minimum bill; ii) a volumetric flow charge based on


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metered water consumption which serves as the basis for wastewater use; and iii) a maximum residential billing threshold (to recognize that water use for irrigation and other purposes is not returned to the wastewater system) of 6,000 gallons per month per unit billed for customers located within the Pine Lakes/Lake Fairways service territory and 10,000 gallons per month per unit for the billing of the volumetric flow charge for the residential class of customer within the NFMU service territory. The following is a summary of the current monthly NFMU System rates for service as delineated in the utility's Rate Tariff as approved by the FPSC:

Monthly Pine Lakes and Lake Fairways System Water and Wastewater Rate Schedule [1] Water System: Wastewater System: Monthly Service Charge: Monthly Service Charge: Residential Service Residential Service Meter Size 5/8 x 3/4" $6.81 Meter Size 5/8 x 3/4" $9.90

Full 3/4" 10.25 Full 3/4" 9.90 1" 17.08 1" 9.90 1-1/2" 34.14 1-1/2" 9.90 2" 54.66 2" 9.90

General Service (Commercial, Master Metered and Irrigation Service)

General Service (Commercial and Master Metered)

Meter Size 5/8 x 3/4" $6.81 Meter Size 5/8 x 3/4" $9.90 Full 3/4" 10.25 Full 3/4" 14.86

1" 17.08 1" 24.74 1-1/2" 34.14 1-1/2" 49.49 2" 54.66 2" 79.22 3" 109.29 3" 158.40 4" 168.98 4" 247.52 6" 337.94 6" 495.04

Consumption Charge (per 1,000 gallons of metered water)

Consumption Charge (per 1,000 gallons of metered water)

Residential Service Residential Service [2] $4.58 All Consumption $4.01 General Service 4.58 General Service All Consumption 4.01

(Remainder of page intentionally left blank)


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Monthly NFMU (Proper) System Wastewater Rate Schedule [1]

Monthly Service Charge: Residential Rates All Meter Sizes $11.62 Commercial Rates

Full 3/4" $11.45 1" 28.58 1-1/2" 57.15 2" 91.43 3" 182.86 4" 285.70 6" 571.50 Consumption Charge (per 1,000 gallons of metered wastewater)

Residential Service All Consumption [3] $4.22 General Service All Consumption 4.22 __________ [1] Reflects current rates as approved by the Florida Public Service Commission on behalf of NFMU. [2] For all individually metered residential units, the consumption charge shall not apply to monthly usage (metered water sales) in excess of 6,000 gallons. [3] For all individually metered residential units, the consumption charge shall not apply to monthly usage (metered water sales) in excess of 10,000 gallons.

With respect to the County, the existing rates for monthly water and wastewater service were adopted pursuant to Resolution No. 07-08-7 approved by the Lee County Board of County Commissioners on August 14, 2007 and became effective for bills rendered on and after October 1, 2007. The existing monthly County rates for water and wastewater service include: i) a monthly administrative fee applied to each account billed regardless of the number of dwelling units served; ii) for residential service, a monthly service charge based on the number of dwelling units served which varies based on the type of residential property; iii) for commercial and non-residential service, a monthly service charge which varies by meter size; iv) a volumetric or usage charge which increases in cost based on water use (i.e., an inclining block rate) to promote water conservation which is based on metering to each users premise; and v) for the wastewater system, a monthly maximum billing threshold of 9,000 gallons of metered water consumption.



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The following is a summary of the existing County rates for water and wastewater service:

Summary of Monthly County Water and Wastewater Rates Customer

Classification Monthly

Service Charge Usage Charge per Unit

(Per 1,000 gallons) Water Service: Administrative Fee $2.82 per bill rendered Rates by Customer Class:

Residential Services: Single-Family $7.78 per unit 0 - 6,000 $2.84 6,001 - 12,000 3.49 12,001 - 18,000 4.14 18,001 and above 5.43 Multi-Family $6.21 per unit 0 - 4,800 $2.84 4,801 - 9,600 3.49 9,601 - 14,400 4.14 14,401 and above 5.43 Recreational Vehicle Unit/Lot $3.14 per unit 0 - 2,400 $2.84 2,401 - 4,800 3.49 4,801 - 7,200 4.14 7,201 and above 5.43 Commercial and Non-Residential:

Meter Size 5/8” $7.78 For Each ERU 3/4” 11.68 1 - 6,000 $2.84 1” 19.46 6,001 - 12,000 3.49

1 1/2” 38.91 12,001 - 18,000 4.14 2” 62.25 18,001 and above 5.43 3” 124.50 4” 194.53 Non-Irrigation Class 6” 389.05 Per 1,000 $2.84 8” 622.48

10” 1,128.25 Irrigation Class 1 - 6,000 $3.49 6,001 - 12,000 4.14 12,001 and above 5.43

ERU = Equivalent Residential Unit and is defined as the equivalent usage requirements of a single-family residential customer. Since commercial or multi-family customers can be served by larger sized meters than the standard residential customer, it is more useful to present such customers on a basis equivalent to the residential class.


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Summary of Monthly County Water and Wastewater Rates (cont'd) Customer

Classification Monthly

Service Charge Usage Charge per Unit

(Per 1,000 gallons) Wastewater Service: Administrative Fee $4.05 per bill rendered Rates By Customer Class:

Residential Services:

Single-Family [1] $12.57 per unit $4.59 per 1,000 gallons metered consumption; $20.68 for unmetered service

Multi-Family [1] $10.08 per unit $4.59 per 1,000 gallons metered consumption; $16.55 for unmetered service

Recreational Vehicle Unit/Lot $5.10 per unit $4.59 per 1,000 gallons metered consumption; $8.28 for unmetered service

Commercial and All Non-Residential:

Meter Size 5/8” $12.57 $4.59 per 1,000 gallons metered consumption 3/4” 18.92 1” 31.49

1 1/2” 63.49 2” 100.84 3” 201.38 4” 314.05 6” 630.59 8” 1,008.76

10” 1,826.47 __________ [1] No wastewater user charge shall be imposed on metered water usage above nine-thousand (9,000) gallons per residential service dwelling unit. Main Extension Charges (System Connection Charges) In addition to the monthly rates for water and wastewater, NFMU and the County also charge a Main Extension or System Connection Charge based upon an equitable and proportionate share of the cost for: i) water production and transmission facilities; and ii) wastewater transmission, treatment and effluent disposal capacity. The purposes of the Main Extension/Connection Charges are for paying or reimbursing the equitable share of the capital costs relating to the construction, expansion, or equipping of excess or unused capacity of the Systems in order to serve new users. The following table summarizes the water and wastewater system connection charges for both the NFMU and County System:

Connection Charges (*)

County System NFMU

Water - $ per ERU $2,440.00 $300.00 Wastewater - $ per ERU 2,660.00 635.00

__________ (*) Residential charges applied on a per ERU basis; all other retail customers requesting capacity based on the demand (gallons) required.


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CUSTOMER FORECAST In order to determine the amount of revenues to be derived from monthly water and wastewater user charges, it was necessary to develop a forecast of customers or accounts served by class and corresponding water sales and billed wastewater flow. The forecast was based on a trend analysis of customers served and average water use and wastewater billed as shown on Table 1 for the water system and Table 2 for the wastewater system. The analysis included a review of the last two (2) calendar year's accounts and corresponding flow characteristics and an estimate of the current calendar year statistics (the reporting period for the NFMU System are the twelve months ended December 31). The current year estimate of accounts and usage was based on i) actual statistics for the four (4) months ended April 2008 as provided by NFMU management; ii) an estimate of the customers and sales for the remainder of the year predicated on a review of monthly usage statistics for similar periods over the last two (2) years and assumptions regarding growth of the NFMU System based on discussions with the Parties; and iii) a review of historical customer usage requirements. The following is a summary of the historical average water customers served by the NFMU System and the corresponding water sales over the past three years:

NFMU Water System [1]

Fiscal Year Ended December 31

(Historical)

Average Annual Water

Accounts

Water Sales

(000s of gallons)

Average Monthly Water

Use per Account 2006 1,853 63,266 2,845 2007 1,855 62,053 2,788

2008 (est.) [2] 1,855 62,053 2,788 Average Annual

Historical Growth Rate

0.05%

0.09%

__________ [1] Amounts shown derived from Table 1. [2] Amounts shown based on four (4) months actual and eight (8) months estimated customer billing data;

assumes lower water use per account recognizing continued conservation effects on the service area. As can be seen above, the water service area has experienced essentially no growth in customers served and water use; the NFMU management reports that this component of the NFMU service area is relatively built-out with limited ability to provide service to new development. Unlike the water system, the NFMU wastewater system service area, which is significantly larger than that of the NFMU water system, has experienced significant levels of growth over the recent historical period.



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The following is a summary of the trends in average customers or accounts served and billed wastewater flow for the corresponding period for the wastewater system:

NFMU Wastewater System (*)

Fiscal Year Ended December 31 (Historical)

Average Annual Wastewater Accounts

Wastewater Flow Billed (000s of gallons)

Average Monthly Wastewater Flow

Billed per Account 2006 12,373 566,827 3,818 2007 13,711 539,773 3,281

2008 (est.) 14,563 575,857 3,295 Average Annual

Historical Growth Rate

8.5%

0.8%

__________ (*) Amounts shown derived from Table 2; wastewater billed flow (sales) is based on metered water use and the average monthly use per

customer has remained relatively constant over the last two calendar years due to the application of a maximum billing threshold on residential use which reduces effects of changes in irrigation flow on billed sales.

As can be seen above, historical average wastewater billed per customer is higher than average monthly water use per customer. This may be attributed to the wastewater-only customers of the NFMU service area receiving potable water service from the County which generally results in lower bills for customers using between 3,500 and 10,000 gallons per month which is representative of average indoor (sewer) use, with such customers having a lower cost of service (price elasticity). Also, average use per customer has remained level over the recent historical period. This could be attributed to reduced water usage due to conservation efforts which would, in turn, result in lower wastewater revenue gallons being billed to customers. With respect to the forecast of water and wastewater customers and respective water use/billed wastewater flow, discussions with NFMU management have indicated that the residential dwelling units to be served within the existing service territory will increase significantly for the wastewater system over the course of the projection period. Additionally, the service area does provide for increased customer growth associated with commercial development. As stated previously, the water system service area served by NFMU is essentially built-out, therefore, all anticipated customer growth is projected to occur within the wastewater service area.



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Based on information provided by NFMU management, a significant amount of residential growth is anticipated to occur over the next several years, the following is a listing of potential development and the estimated number of equivalent residential connections (ERUs) associated with each development.

Residential Development [1]

Development Available ERUs Service Provided T.W. Magnolia Landing [2] 1,662 Wastewater Only Stoneybrook N – Metro [2] 1,342 Wastewater Only Oak Creek [2] 775 Wastewater Only Tara Woods Phase A,B, & C [2] 137 Wastewater Only GFY Enclaves of Eagle Nest [2] 229 Wastewater Only Estates at Entrada [2] 1,313 Wastewater Only Athyrid Development – Diplomat Rd [2] 475 Wastewater Only Fountain Bridge Preserve [2] 74 Wastewater Only Pine Prairie Preserve [2] 1 Wastewater Only Northrop Project – E Bayshore [2] 47 Wastewater Only Yeatter – Henderson – Brook Rd [2] 71 Wastewater Only Paradise Development Group [2] 80 Wastewater Only Palermo [2] 1,150 Wastewater Only Sloanes Gate 365 Wastewater Only Laurel Rd – 10AC MFD 122 Wastewater Only Bayshore Road 65AC 356 Wastewater Only Chapel Creek 891 Wastewater Only Stone Hill Manor 71 Wastewater Only Julia Park 14 Wastewater Only Slater Bend 97 Wastewater Only N Trail Ventures 655 Wastewater Only Nalle Grade 130 Project 584 Wastewater Only Bayshore – Cove E I-75 24 Wastewater Only Tamiami Pines 30 Wastewater Only Park 41 Commons 1,193 Wastewater Only North River Village [3] 1,582 Wastewater Only Bayshore Crossings 264 Wastewater Only Buccaneer MHC Addition 192 Wastewater Only Bay Point Condos 162 Wastewater Only Pioneer Village 334 Wastewater Only Coon Rd Phase II 46 Wastewater Only Existing Projects MHC 160 Wastewater Only New Projects 3,400 Wastewater Only

Total Estimated ERUs 17,998

__________ [1] Based on development information as provided by NFMU management. [2] These developments have entered Developer Agreements with NFMU and have or are contracted to remit connection charges for the purpose of capacity reservation. [3] Due to potential land use issues, it was assumed that this development would accommodate 60% of

identified potential housing units to be constructed in this subdivision as originally provided by NFMU.


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As can be seen above, there is a significant amount of potential growth within the NFMU wastewater service territory. Customer connection rates for these developments were provided to PRMG by NFMU management, and based on discussions with the two parties, current trends being experienced in the service area, and to reflect a conservative evaluation since customer growth will not be secured (guaranteed) by the seller, the customer growth rates were subsequently dampened to reflect more reasonable growth trends. The projection of customer growth rates for the developments identified above to follow are illustrated on Table 3 at the end of this report. In addition to the residential customer growth assumption, NFMU management has also identified additional growth for the general service (commercial) class during the forecast period. The following table summarizes the anticipated growth that may occur during the next several years for this class of service:

General Service (Commercial) Development [1]

Development Available ERUs Services Provided US-41 Comm Next to Walgreens [2] 33 Wastewater Only LCEC New Office Site [2] 12 Wastewater Only Racetrac – Bayshore Road I-75 [2] 7 Wastewater Only Littleton Center Commercial [2] 116 Wastewater Only Diplomat Center Commercial [2] 70 Wastewater Only Bayshore Samville Roads Commercial [2] 93 Wastewater Only Rainbow Motel [2] 21 Wastewater Only Commercial New [2] 825 Wastewater Only Upriver Campground [2] 132 Wastewater Only Bayshore Commons Comm Park 49 Wastewater Only CC Hospital Site 55 Wastewater Only Bayshore Road – Station Center 6 Wastewater Only Bayshore Village Market Square 64 Wastewater Only Raymond Lumber 15 Wastewater Only Bayshore Self Storage 5 Wastewater Only Bayshore Convenience Store 2 Wastewater Only Total Estimated ERUs 1,505 __________ [1] Based on development information as provided by NFMU management. [2] These developments have entered Developer Agreements with NFMU and have or are contracted to remit connection charges for the purpose of capacity reservations.

With respect to water customer growth water sales, we assumed that the average monthly sales (use) per account for the forecast period would be held constant with what is currently being experienced for the current year 2008 since the water system service area, as stated earlier in this report, is essentially built-out.


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The first five years of customer forecast for the water system recognized in the development of the valuation analysis for the water system is summarized below:

NFMU Water System [1]

Fiscal Year Ending September 30 [Projected]

Average Annual Water

Accounts

Water Sales

(000s of gallons)

Average Monthly Water

Use per Account 2008 (estimated) 1,855 62,053 2,788

2009 1,855 62,053 2,788 2010 1,855 62,053 2,788 2011 1,855 62,053 2,788 2012 1,855 62,053 2,788

2013 1,855 62,053 2,788 Average Annual

Projected Growth Rate [2]

0.00%

0.00%

__________ [1] Amounts shown derived from Table 1, which shows both the water customers and corresponding water sales. [2] Compound growth rate based on change in water statistics from 2008 through 2013.

With respect to the wastewater system, the following table summarizes the first five years of the customer forecast recognized in the development of the valuation analysis using the income approach as discussed later in this report:

NFMU Wastewater System [1]

Fiscal Year Ending September 30 (Projected)

Average Annual Wastewater Accounts

Billed Wastewater Flow

(000s of gallons)

Average Monthly Wastewater Billed

per Account 2008 (estimated) 14,563 575,857 3,144

2009 16,085 596,532 3,191 2010 16,560 618,215 3,211 2011 17,175 647,838 3,243 2012 17,877 680,253 3,271

2013 18,866 725,053 3,299 Average Annual

Projected Growth Rate [2]

5.31%

4.72%

__________ [1] Amounts shown derived from Tables 2 and 3 at the end of this report, which shows both the wastewater customers and

corresponding billed wastewater flows. Average annual wastewater accounts include both residential and commercial service.

[2] Compound growth rate based on change in wastewater statistics from 2008 through 2013.

NFMU also provides wholesale wastewater service to the City of Cape Coral to allow the City with the ability to provide retail wastewater service by the City within its corporate city limits. The City and NFMU have entered into an Agreement Establishing Procedures for Use of a Wastewater Interconnect on December 15, 2003 (the “Interconnect Agreement”) with subsequent amendments whereby NFMU will provide wastewater treatment capacity for use by the City of up to approximately 0.76 MGD. The term of the Interconnect Agreement is for twenty (20) years. Currently, NFMU provides approximately 0.26 million gallons per day (mgd) of wholesale wastewater service but the Interconnect Agreement with the City allows NFMU to serve approximately 5,718 additional ERUs within the Entrada (1,818 ERUs), Judd Creek (900 ERUs) and Zemel (3,000 ERUs) developments located within the City.


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Based on an estimation of projected connection rates as outlined in Table 3 at the end of this report, the following sales projections for service to the City were assumed as follows:

Fiscal Year Ending September

30 [Projected]

Cumulative

ERU Growth

Bulk Sales

(000s) 2009 229 19,780 2010 458 27,475 2011 687 35,169 2012 916 42,863

2013 1,145 50,558 Average Annual

Projected Growth Rate

49.54% 26.44% Other Considerations With respect to the development of the net revenues derived from NFMU System operations, a critical assumption that may have an impact on the estimated net present value of the cash flow deals with the customer forecast. To the extent that the forecast is too high in the early portion of the forecast or analytical period, the higher the net present value of the cash flow. As shown above, the financial forecast assumes a significant amount of customer growth during the next five years; with such forecast being provided by NFMU management and being considered as reasonable by the owners of NFMU. One option to limit the risk to the County would be to have NFMU guarantee the connections from an economic standpoint, whether such connections actually occur. The two parties could adopt a guaranteed revenue structure whereby the revenues that should be generated from the new connections to the extent such connections do not occur would materialize for the benefit of the County and that the risk of receiving the estimated cash flow as identified in this report is reduced. Another option would be to enter into a "futures" based transaction which would provide payment to the owners as connections occur over time (e.g. payment of connection fees received). Any guarantee, futures payment, or forward looking funding plan must be formally agreed to by the Parties and should be accomplished prior to the closing of the transaction by the Parties. INCOME APPROACH – ASSUMPTIONS AND ANALYSIS

Tables 1 through 11 for the NFMU System located at the end of this report document our analysis of the income approach for the determination of the present values of the net cash flows associated with the operation of the NFMU System facilities operated by the County. In the development of the financial evaluation, three (3) different scenarios were considered. The three scenarios were based on the rates that may be charged for monthly utility service. The three scenarios included the following rate options:

i) County Existing Rates ii) NFMU Existing Rates iii) NFMU Proposed Rates


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These three scenarios were considered to devise a recognized value for the System and to assist the Parties in the development of a potential purchase price. With respect to the scenario, this was considered as an alternative to the scenarios assuming maintenance of existing NFMU rates. NFMU management reports that the utility operations are not earning a reasonable rate of return (based on information reported in the 2007 Annual Report filed by NFMU management to the FPSC) and that an adjustment in rates is probable (will ultimately depend on the findings of the FPSC). NFMU management has estimated this potential increase in rates at approximately 0.31% system-wide above the current rates for utility service. The development of the income approach analyses to determine the net present values of the NFMU System operations required a number assumptions and analyses. The following is a summary of the specific and assumptions used in this report which we consider to be reasonable.

1. The sales revenues for the evaluation predicated on NFMU System rates was based on the existing monthly water and wastewater user fees currently in effect as approved by the FPSC and the customer forecast as outlined earlier in this report. For purposes of this analysis, it has been assumed that no indexing of monthly user charges of the NFMU System for inflationary allowances would be recognized. As previously mentioned, the management of NFMU anticipates that there exists the ability to adjust rates before the FPSC. Specifically, NFMU management has calculated a possible rate adjustment to recover a fair rate of return rate base of 0.41%. Recognizing that a potential rate adjustment may be available to NFMU (although must be approved by the FPSC), an additional evaluation assuming increased rates from an approved rate adjustment was prepared. The revenues were based on the existing NFMU rates adjusted uniformly by 39.5% and 21.9% for the Pine Lakes Fairway water and wastewater systems, respectively and 29.6% for the NFMU wastewater service area coupled with the customer forecast, as discussed earlier in this report.

With respect to the projection of water and wastewater sales revenues when performing the scenario analysis utilizing County rates, projected sales revenues have been based on the schedule of rates and charges adopted by the County on August 14, 2007 pursuant to Rate Resolution No. 07-08-70. Such rates were applied to the customer and sales forecast discussed earlier in this report. As was the case with the income approach analysis utilizing existing NFMU rates, no indexing of County rates for inflationary allowances has been recognized. A summary of the forecasted water and wastewater system revenues are included on Tables 9 through 11 at the end of this report (Income Approach Analysis Summary tables) for the analyses performed under County and NFMU existing and adjusted rates and charges, respectively.

2. The basis for the determination of the operating expenses applicable to the NFMU System was predicated on operating and maintenance reported by NFMU management for the Calendar Year 2007 as contained in the 2007 Annual Report submitted to the FPSC. Additionally, NFMU management provided PRMG a General Ledger for the


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NFMU System that provided further detail of the operating expenses and other financial information which was relied upon for the establishment of the Test Year (2007) operating expenses. The estimated operating expenses for the Test Year 2007 are included on Table 4 at the end of this report.

3. Since the transaction is a private to public sale, our experience has been in recognizing

the operations of the utility under public ownership. In order to recognize the income approach analysis of the system assuming County operations, it was necessary to make adjustments to the NFMU Test Year 2007 operating expenses to reflect changes in operation assuming public ownership of the facilities by the County. The adjustments to the reported NFMU 2007 operating results are detailed on Table 4 at the end of this report and summarized below:

a. A reduction in salary expense was made to reflect estimated labor-related costs under existing operating conditions to be incurred by the County to operate the NFMU System. Specifically, the labor-related costs associated with the administrative function and the management function (officers, stockholders, and directors of NFMU) whose functions are assumed to be absorbed by the existing County staff have not been recognized. A summary of such adjustments to Test Year 2007 operating expenses is as follows:

Salary Reduction Amount

Salaries / Wages - Employees $78,479 Salaries / Wages – Officers, Directors and Stockholders 152,332

Total

$230,811

b. Reductions to specific contracted services expenses were made to the Test Year 2007 operating results to remove certain costs that would be absorbed by existing County staff as part of the day-to-day business of operating the County utility on a consolidated system. Such costs are associated with the accounting and engineering functions along with contracted management services. A summary of these specific expenditure reductions is as follows:

Contractual Services Contracted Services

Cost Reductions

Engineering

$ 91,665 Accounting 152,332

Management Fees 26,495

Total

$180,003

c. An adjustment was made to recognize a reduction in the cost of contract management of the NFMU System. Currently, NFMU has entered into the


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Operations and Maintenance Agreement ("O&M Agreement") with Woodard and Curran to operate and maintain the NFMU System. It has been assumed that coincident with the transfer of utility system ownership, the County will assume operational control of the utility replacing contracted staff and system operations with County personnel. For purposes of this analysis, it has been assumed that current contracted costs for the operation and maintenance of utility plant is incurred by the NFMU System would be similar to those incurred by the County with the exception of contracted administrative and customer service costs which are assumed to be absorbed by existing County personnel. These specific costs, amounting to approximately $56,500 annually, were not included in the development of the 2007 Test Year operating expenses.

d. An adjustment has been recognized to the rental of building/real property expense

item associated with the rent of office space by NFMU to house the utility's customer service center. Based on discussions with County staff, the customer service function will be incorporated into existing County customer service facilities and, therefore, this expenditure will no longer be incurred under public ownership.

e. A portion of the insurance and miscellaneous expense costs have been removed to

recognize certain administrative costs such as bank fees, NFMU bond service costs and other specific overhead related costs will not be incurred by the utility under County ownership and operations. These adjusted costs amount to approximately $516,638 annually and are summarized as follows:

Adjusted Costs Insurance – Other: Administrative Expenses $53,676

Miscellaneous Expenses Customer Service Expenses 54,281 Administrative Expenses 307,265

Other General Expenses 56,166

Total $516,638

f. Regulatory commission expense associated with the amortization of rate case expenses and other associated costs attributable to the regulation by the FPSC was adjusted from the analysis since the utility subsequent to acquisition by the County will not be regulated by the FPSC and will not be subject to such costs.

g. An allowance for bad debt expenses was assumed in the analysis and for purposes of this report was estimated to be approximately 0.15% of the System's Test Year sales revenues which is generally consistent with the bad debt expenses of the County and Florida utilities in general.


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h. A contingency allowance of 2.5% of total operating expenses was recognized for the utility system for the Test Year. The allowance has been included in order to provide additional funds to meet unknown or unplanned expenditures throughout the year and to recognize potential changes in revenues due to weather, conservation, and other factors. This allowance increases the operating expenses of the combined water and wastewater utility systems by approximately $85,700.

4. Based on discussions with the County, we have recognized additional personnel during

the forecast period that have been determined to be required to support maintaining adequate levels of service to the NFMU customer base within the NFMU service territory. The additional employees that are recognized in the development of the operating expense projections that are, according to County staff, required to be added to existing staffing levels, in addition to what is currently recognized, is as follows:

Position

Number of Personnel

Fiscal Year

Total Expense in Year of Addition

Lift Station Technician 2 2009 $112,320 Instrumentation Technician 1 2009 65,520

5. In order to provide incremental infrastructure maintenance to meet the level of service

standards currently provided by the County in projected growth areas to be served by the County subsequent to the acquisition, incremental operating costs have been recognized coincident with the addition of personnel as identified in Assumption No. 4 above.

These incremental costs have been incorporated into the analysis to account for system maintenance costs that would occur as service expands to previously undeveloped areas within the NFMU service territory. Based on current cost relationships incurred by the County to serve its existing customer base with respect to transmission and collection system maintenance, the following increases in operating costs associated with serving new growth have been incorporated in the analysis:

Department Fiscal Year Recognized

Amount

Meter Services 2009 $ 33,726 Wastewater Collection 2009 74,461

Total $108,187

6. For purposes of this analysis and in order to take into account the projected growth anticipated to occur within the NFMU service territory during the forecast period, it has also been assumed that new lift station additions would be a utility plant asset required to serve new development. It has been projected that approximately twenty-seven (27) lift stations would be required through Fiscal Year 2014 (one lift station for each significant development or customer). Based on an analysis of average power costs per annum assumed for a local lift station, an annual cost of $745 per year per lift station was recognized. Based on an estimation of lift station addition rates, the following annual incremental purchased power costs were determined:


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Fiscal Year

Additions

Cumulative Annual Expense

2009 8 $5,960 2010 6 10,560 2011 6 15,293 2012 1 16,165 2013 5 20,281 2014 1 21,141 Total 27

7. In order to ensure adequate operations and maintenance of the existing deep well of the

NFMU System, an allowance has been made to fund the need for performing periodical mechanical integrity tests which generally occur every five (5) years on the NFMU System deep well. For purposes of this analysis, an expenditure requirement of approximately $150,000 per occurrence has been recognized commencing in Fiscal Year 2011 with the test to be repeated every five (5) years.

8. An allowance was recognized in order to recover those costs associated with LCU allocable administrative and overhead which would normally be incurred by County Staff and management in the oversight of the day-to-day operations of the NFMU System once owned and operated by the County. For purposes of this analysis, it has been assumed that the allocation of administrative costs to be recognized as an operating expense of the NFMU System would be based on the current relationship of existing County budgeted administrative expenses incurred on a per customer basis applied to the customer base of the NFMU System. The annual allocation to NFMU administrative expense was determined as follows:

Amount FY 2009 County Administrative Budget $568,009

Estimated County Water System Customers 76,405 Annual Expense per Account 7.4354

Estimated FY 2009 Customer Base 16,085

Estimated Annual Expense $119,598

9. With respect to the forecast of operating expenses, as identified on Table 5 at the end of this report, all NFMU System variable operating costs (i.e. purchased power, chemicals, sludge removal, etc.) for the water and wastewater system were based on the annual cost of the expense as identified in the 2007 Annual Report submitted to the FPSC by NFMU management and escalated for the forecast period based on the projection of flow requirements (growth) as discussed earlier in this report. Escalation factor references are outlined on Table 6 at the end of this report. All non-variable related operating costs were maintained at Test Year 2007 reported levels to provide a link to the monthly rates for service that were adjusted based, in part, on the 2007 operating expenses. Any


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increase in operating costs due to inflation would be assumed to be offset by a like-kind increase in rate revenue (to maintain the same revenue margins). The analysis attempts to recognize only those expenses that would change due to growth (which has a corresponding increase in revenue) or time due to asset age.

10. A contingency allowance of 2.50% of annual operating expenses was recognized annually for each year of the forecast period in order to provide sufficient funds to meet any unknown or unplanned expenditures throughout each year and to recognize potential changes in sales revenues due to weather, water conservation or other factors.

11. An annual allowance for bad debt expense has been recognized each year subsequent to the Test Year as a revenue requirement of the NFMU System to recognize that a certain amount of revenues will be considered as uncollectible and written off throughout the year. This expenditure item was projected based on trends incurred by utilities statewide. A bad debt ratio estimated at 0.15% of sales revenues was subsequently applied to the level of sales revenues projected for the forecast period to estimate the amount of expense to recognize.

12. NFMU currently provides reclaimed water service to several developments and golf courses located within the City of Cape Coral (the "City"). Based on information provided by NFMU, the utility has entered into individual agreements with each respective development to provide reclaimed water service for periods of up to thirty (30) years. For the current year, it is estimated that the City will on behalf of the various reclaimed water customers purchase approximately 0.28 mgd of reclaimed water, which under existing rates generates approximately $25,290 annually. The amount of reclaimed water sales is projected to increase as the City continues to develop. There are two developments, or properties, referenced as Entrada and Zemel properties, which projected by NFMU management to add approximately 4,818 ERUs as reclaimed customers during the course of the projection period with the potential of an additional 500 ERUs connecting within the existing NFMU service territory over the same forecast period (a total of 1.68 mgd in addition to reclaimed water sales). For purposes of this analysis and as outlined on Table 7 at the end of this report, it has been assumed that these properties will continue to develop and customers will connect to the reclaimed water system uniformly over a twenty-five (25) year period. In addition to anticipated reclaimed water service within the City of Cape Coral, recognition of potential reclaimed water revenues to entities within the NFMU service area currently receiving reclaimed water service has also been reflected in this analysis. Specifically, and based on information provided by NFMU, several golf courses and commercial farming interests currently receive an estimated 1.5 mgd of reclaimed water annually from NFMU. Taking into account the County currently bills such entities for the provision of like-kind service, it has been assumed for this analysis that the County would serve these same customers at the current billing rate of $0.25 per thousand gallons of reclaimed water purchased. Under this assumption, reclaimed water revenues for this analysis are estimated to increase approximately $102,375 annually.


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13. As discussed previously, NFMU currently provides bulk or wholesale wastewater

treatment and disposal services to the City of Cape Coral. NFMU and the City originally entered into the Agreement Establishing Procedures for Use of a Wastewater Interconnect (the "Interconnect Agreement") on December 15, 2003 with subsequent amendments allowing the City to transmit up to 0.76 mgd of wastewater to NFMU for treatment and disposal. As of Calendar Year 2007, NFMU had treated on average approximately 0.033 mgd for the City of Cape Coral generating approximately $42,284 in sales revenues. Based on information provided by NFMU, it has subsequently amended the Interconnect Agreement to provide up to 0.76 mgd of wastewater treatment capacity in anticipation of the development of the properties referred to as the Entrada, Judd Creek and Zemel. As was the case with the projection of customer growth for reclaimed water service and as illustrated on Table 7 at the end of this report, it has been assumed that these units will become wholesale customers of the NFMU System and connect uniformly over a twenty (20) year period.

14. Included in the financial projections for the NFMU system are other operating revenues associated with service initiation and septic truck disposal services. The projection of the other operating revenues is summarized on Table 7 under County rates and Table 7A under existing NFMU rates at the end of this report. For purposes of this report, the receipt of septic truck disposal revenues currently being collected for disposal of raw wastewater delivered at NFMU facilities has been discontinued for the purpose of revenue projections due to County policy of not accepting such deliveries at its wastewater treatment facilities. Therefore, this revenue source has been removed for purposes of determining the income approach system value. With respect to projection of service initiation sales revenues, revenue projections were based on the current service initiation rate of $15.00 per occurrence under the NFMU rate valuation approach and $45.00 per occurrence under the County rate valuation approach coupled with turn-on/turn-off levels being consistent with current rates of occurrence.

15. In addition to the operating expenses, the County will annually conduct capital improvements to the NFMU System facilities to maintain the usefulness and service lives of the acquired utility plant assets. The capital expenditures recognized in the analysis included two primary components which are i) general plant; and ii) an allowance for renewals, replacements and betterments. A summary of the capital expenditures assumed for the analysis is shown on Table 8 at the end of this report. The following is a discussion of the three expenditure components:

a. Based on a review of the Annual Report, the assets to be acquired include general

plant. General plant would include short-lived assets such as vehicles, equipment, and furniture/fixtures/computers. For the purposes of this analysis, an allowance for the continued replacement of general plant was recognized in the analysis for the NFMU System. The amounts were based on i) the fixed asset list contained in the 2007 Annual Report as submitted to the FPSC for the NFMU System, adjusted


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for inflationary allowances on such original cost; and ii) an assumed asset service life (replacement) of 8 years based on the estimated composite depreciation lives for such plant. As shown on Table 8 at the end of this report, an allowance of approximately $75,000 annually for the analytical period for the ongoing replacement of general plant assets were assumed.

b. In addition to the ongoing replacement of general plant, the County also must

perform improvements to allow the NFMU System facilities to reach their useful life. Examples of such improvements (which ultimately depends on the capitalization policies of the County) recognized by the County could include, but not be limited to, the following: i) improvements to water and wastewater treatment facilities, ii) upgrades of lift station pumps and control panels; iii) replacement of water and irrigation meters; iv) upgrade of wastewater manholes; v) repair of water, irrigation, and/or wastewater transmission or distribution/collection system lines; and vi) hydrant replacement. With respect to the development of the net present value analysis, it was assumed that the County would annually deposit monies into its Renewal and Replacement Fund (a fund created by the Bond Resolution) to provide for the funding of future capital improvements and asset replacement needs.

The Bond Resolution requires that the County establish a Renewal and Replacement Fund for its utility system. Since the purchase of the NFMU System may be financed by the issuance of bonds under the Bond Resolution, PRMG has recognized the funding of the Renewal and Replacement Fund in the analysis. Pursuant to the Bond Resolution, the County must fund (minimum allowance) an amount equal to 5% of the Gross Revenues received during previous fiscal year (the "Renewal and Replacement Fund Requirement"). It was assumed that the County would initially fund annually an amount equal to the Renewal and Replacement Fund Requirement, regardless if the amount on deposit in such fund was at least equal to such requirement. Additionally, as a result of asset age, an increase in the funding of the deposit to the Renewal and Replacement Fund was recognized since the analysis did not recognize any capital improvement funding (asset replacement or betterment) above the deposits to the Fund. The deposit to the Renewal and Replacement Fund expressed as a percentage of Gross Revenue assumed in the analysis was increased from the 5.0% level at a rate of 0.05% annually commencing in Year 2013 through the remainder of the thirty (30) year projection period.

16. As stated earlier in this report, one of the valuation methodologies involved in utility analysis by the Parties involved the replacement coast approach which for purposes of this valuation process was performed by the Parties' Consulting Engineers. As part of this analysis, the Consulting Engineers were tasked with identifying water and wastewater facility system improvements that would be required to be performed to bring any utility plant facilities to a proper functioning capability. Typically, the costs of such needed improvements, once identified, are recognized as an expenditure which must be funded from the cash flow of the System and which, therefore, serves as an offset to the net present value determination. Based on information as provided by the Consulting


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Engineers, approximately $1,138,750 in primarily pump station improvements were identified and recognized as an immediate capital expenditure from system operations.

In addition to the pump station deficiency deductions, the issue associated with the capacity of the Del Prado wastewater treatment plant being fully utilized during the course of the projection period and its link to the seller receiving future main extension charge/collection fees as growth occurs during the forecast period has been addressed. For purposes of this analysis, it has been estimated based on connection rate projections outlined on Table 3 at the end of this report that the Del Prado facility will realize full capacity utilization in Fiscal Year 2021 and that a wastewater facility expansion will be recognized in order to serve projected growth past this time period where capacity utilization is projected to be exceeded. Based on information provided by the Consulting Engineers, the cost to expand the Del Prado facility by 4.0 mgd will cost approximately $22,500,000 in 2008 dollars with approximately 10% of the total estimated cost being recognized in Fiscal Year 2016 for design related activities with the balance recognized recognized in Fiscal Year 2021 for expansion-related construction. This improvement was also recognized as a capital deduction from the valuation estimates. The recognition of this expansion will allow growth to continue and the ability to recognize the continued benefit of main extension charge/connection fee receipts through the remainder of the projection period due to sufficient wastewater capacity being available over the forecast period.

17. As of December 31, 2007, the NFMU System has outstanding $29,375,000 principal

amount of Lee County Industrial Development Revenue Bonds as summarized below:

Outstanding as of December 31, 2007 (*)

Outstanding NFMU System Bonds: Lee County Industrial Development Bonds, Series 2003 (the "Series 2003 Bonds") $9,755,000 Lee County Industrial Development Revenue Bonds, Series 2005 ("Series 2005 Bonds")

14,520,000

Lee County Industrial Development Revenue Bonds, Series 2006 ("Series 2006 Bonds")

5,100,000

Total Outstanding NFMU System Bonds (the "Lee County Industrial Development Revenue Bonds")

$29,375,000

__________ (*) Source – 2007 Annual Report submitted by NFMU management to the Florida Public Service Commission.

The analysis did not recognize the payment of the Lee County Industrial Development Bonds since this is a current obligation of the NFMU System and it is assumed these debt obligations will be defeased at the time of the NFMU System transfer with acquisition proceeds received by the Seller.


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18. In order to estimate the net present value of the future cash flow of the NFMU System, it is necessary to establish a discount factor. For the purposes of this analysis, the discount factor used in the development of the net present value of the future cash flow of the NFMU System operations was 5.0%. This discount rate is the estimated equivalent to the blended or average cost of capital (True Interest Cost) associated with the issuance of utility revenue bonds as discussed with the County and was assumed to represent the County's cost of capital for the transaction. Additionally, a thirty year analysis term was assumed consistent with the overall general useful life of the facilities and the term of any financing the Series 2008 Bonds which is anticipated by the County to be issued to acquire the additional NFMU System facilities. It should be noted that the discount rate of 5.0% is an estimate of the cost to borrow funds by the County. It is recommended by PRMG that the discount rate of 5.0% should be the minimum rate used to establish the estimated value of the NFMU System. To the extent the market dictates a higher cost to borrow funds, then the acquisition value should be adjusted downward proportionately to account for the higher cost of capital. Because of the need to establish a maximum price by the County, if the cost to borrow funds was less than the recognized 5.0% rate, then we would recommend that the County benefit from such reduced interest rate.

19. Included as another source of funds for the NFMU System is the receipt of main extension charges (also known as System Connection Charges) under both Lee County (Table 9) and NFMU rates (Tables 10 and 11) which are received from new connections requesting capacity from the NFMU System. The main extension/connection charges represent a source of funds derived from the ongoing development of the System and have been assumed a financial revenue for the determination of the net present value of such resources. It must be emphasized that the availability to receive main extension/connection charges is also dependent on having the necessary or available conveyance (transmission) capacity. Based on discussions with the Parties and their Consulting Engineers, no additional transmission lines to carry wastewater to the Del Prado treatment facilities were required to meet the service area needs of the NFMU System, nor were any existing transmission lines assumed to be undersized and needing an upgrade. This would assume that any transmission lines that may be required would need to be dedicated by the property/applicant requesting the wastewater capacity. As such, no additional capital expenditures for the extension of the wastewater transmission grid was assumed in the analysis presented in this report. For purposes of this analysis, it has been assumed that the system will continue to receive the main extension charges until the available capacity in the water and wastewater treatment plants are fully purchased by the new connections.

ESTIMATE OF NET PRESENT VALUE – INCOME APPROACH As shown on Table 9 at the end of this report for the NFMU System and based on the assumptions and analyses as discussed above and shown on the tables at the end of this report, PRMG estimates that the net present value of the cash flow derived from the operations of the NFMU System utilizing Lee County rates and charges in determining the net revenue stream is


Draft

$60.4 million with the exclusion of main extension charges (i.e. connection fees) and $80.1 million with the inclusion of main extension/connection charges. With respect to the valuation utilizing existing NFMU rates and charges as the basis for determining the Utility's income stream value as shown on Table 10 at the end of this report, PRMG estimates that the net present value of the NFMU System is $42.9 million with the exclusion of main extension charges (i.e. connection fees) and $51.0 million with the inclusion of main extension/connection charges. Under NFMU adjusted rates as illustrated on Table 11 at the end of this report, the estimated net present value of the NFMU System is $75.0 million and $82.5 million with the inclusion of main extension/connection charges. DEBT CAPACITY APPROACH In the evaluation of the feasibility regarding the potential value the County should assign the NFMU System, a consideration which should be reviewed by the County deals with whether the acquired system can support itself in relation to the acquisition price paid by the County. In other words, it is beneficial to have an understanding of the debt bearing capacity of the system which relates the amount of revenue contribution that is available from the revenue stream to finance the acquisition by the County at a specific point in time. The primary issue regarding this analysis is that the existing customers of the utility system are not materially or negatively impacted from an occurance or a level of service (capacity availability) standpoint. In the development of the debt capacity analysis for the NFMU System, the determination of the debt capacity assumed: i) the current County rates for water and wastewater service; ii) NFMU actual Calendar Year 2007 operating results escalated, for inflationary allowances to reflect estimated 2008 operating levels; and iii) adjustments to the reported Calendar Year 2007 NFMU operating results to reflect NFMU System operations under County ownership. Table 12 at the end of this report details the debt capacity analysis of the NFMU System. The adjustments to reflect County operations were similar to those for the income approach analysis with the following exceptions:

• A Renewal and Replacement Fund transfer for the test year (2008) commencing at 5.0%% of gross system and increasing revenues to 5.4% in FY 2020 (assumed that NFMU service territory is essentially at a stage of build-out) was recognized as opposed to the ramped annual percent transfer as recognized in the income approach analysis.

• In the development of the debt capacity analysis, we have assumed a 15% coverage requirement in order to meet the minimum rate covenant requirements associated with the County's governing Bond Resolution.

• In the development of the debt capacity of the estimated net revenues of the utility, the assumptions used in the development of the principal amount of bonds included: i) a payment term of 30 years; ii) an average annual interest rate of 5.00%; iii) recognition of the funding of a surety in lieu of cash funding debt service reserve fund from the proceeds of such bonds; iv) no capitalized interest funded from bond proceeds; and v) issuance costs equal to 2.50% of the total principal amount of bonds assumed to be issued.


Draft

• The use of a conventional financing approach which assumes level debt service payments initiating with the issuance of the acquisition bonds. No analysis as to the use of alternative financing structures (e.g. ascending debt payments, subordinate debt, etc.) were recognized in the evaluation to more adequately match debt repayment schedule to the customer base anticipated to be served.

• In the development of the debt capacity analysis, no connection charge receipts were recognized since the County's bond resolution does not reflect such revenues in the determination of the net revenues for complying with the rate covenant as referenced in the Bond Resolution. It should be noted that such funds received would be used to: i) support the payment of a subordinate debt; or ii) paid to the seller as a "futures" payment, both of which would increase the overall estimated debt capacity of the NFMU System.

Based on these significant assumptions, the debt capacity analysis of the NFMU System assuming County operations is approximately $42.7 million based on estimated operating conditions for the current year utilized (2008) under current conditions and potentially reaching $91.2 million under estimated build-out conditions (for purposes of this analysis assumed to occur in Fiscal Year 2020). The primary reason for the increase in the debt capacity is due to the growth of the System being recognized as providing an economic benefit (increased net revenues) and thus the ability to secure a higher level of debt.

COMPARABLE SALES ANALYSIS In order to provide additional information to the County regarding the purchase of the NFMU System, PRMG has prepared a comparable sales analysis. The purpose of the comparative sales analysis is to develop an implied purchase price based on the net investment and service area characteristics of the NFMU system when compared to the other utility transactions reflected on the survey. This analysis is included on Tables 13 through 20 at the end of this report. Although the comparable sales analysis is not considered as a determination of value for the NFMU System, it does provide a "reasonableness" check of the purchase price based on the results of the other transactions. In the development of the comparable sales analysis, PRMG identified several transactions that either have occurred and closed during the last 10 years. In the preparation of this analysis, no attempt was made to determine the relative relationship to the NFMU System as being a similar system due to the overall complexity of determining "like kind" characteristics of the systems included in the comparable analysis. In the development of the implied purchase price assuming the comparative analysis, two different approaches were conducted. The first approach was an equivalent residential unit (ERU) based approach which corresponds more closely to the service area characteristics of the utility. The second approach focused on the net investment of the utility and identified the purchase price based on the net assets in service. These two approaches were performed under current conditions (i.e., utilizing current ERUs of system and plant investment figures as identified in the Calendar Year 2007 Annual Report). Since the service area has the ability to grow, a similar analysis was prepared assuming a build-out condition (this is considered appropriate since NFMU management has opined that the majority of the infrastructure is in service to support such growth. As can be seen below and based on the


Draft


assumptions recognized in the analysis, the ERU based analyses under the present and at build-out scenarios approximate the net present value of the cash receipts presented on a "net to seller" basis.

Current Conditions

Build-Out Conditions

Comparable Sales – ERU Based Approach [1] $37,684,005 $73,744,921 Comparable Sales – Net Investment Approach [2] 56,492,813 55,438,785 [3] __________ [1] Amounts derived from Tables 15 and 19 for current and build-out conditions, respectively. [2] Amounts derived from Tables 16 and 20 for current and build-out conditions, respectively. [3] Amount shown does not include the capital cost for a plant expansion, (estimated at $22.5 million), which would need to be made to serve such growth.

It should be noted that in the evaluation of the sales comparisons, no evaluation of the amount of debt outstanding for each utility was performed which would serve as a deduct to the amount of monies received by the respective seller of the utility.

TTAABBLLEESS

of 3Table 1Lee County, FloridaNFMU Acquisition Analysis

Historical and Projected Customer StatisticsPine Lakes/Lake Fairways Water System [1]

Line Historical [1] EstimatedNo. Description 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Residential

1 Customer Growth N/A N/A 0 0 0 0 0 0 0 0 0 02 Average Monthly Customers 1,838 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,8403 Annual Revenue Flow (000s) 55,213 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,0994 Avg. Monthly Flow Per Customer (000s) 2.5 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4

Commercial

5 Customer Growth N/A N/A 0 0 0 0 0 0 0 0 0 06 Average Monthly Customers 15 15 15 15 15 15 15 15 15 15 15 157 Annual Revenue Flow (000s) 8,053 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,9548 Avg. Monthly Flow Per Customer (000s) 44.7 44.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2

Total Wastewater System9 Customer Growth N/A N/A 0 0 0 0 0 0 0 0 0 0

10 Customer Growth (%) N/A N/A 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%11 Average Monthly Customers/Units 1,853 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,85512 Annual Revenue Flow (000s) 63,266 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,05313 Avg. Monthly Flow Per Customer (000s) 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8

Footnotes:[1] Historical Fiscal Years 2006 and 2007 are based on

actual billing data as provided by NFMU.



LineNo. Description

Residential

1 Customer Growth2 Average Monthly Customers3 Annual Revenue Flow (000s)4 Avg. Monthly Flow Per Customer (000s)

Commercial


Total Wastewater System9 Customer Growth

10 Customer Growth (%)11 Average Monthly Customers/Units12 Annual Revenue Flow (000s)13 Avg. Monthly Flow Per Customer (000s)



Fiscal Year Ended September 30,

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

0 0 0 0 0 0 0 0 0 0 0 01,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840

54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,0992.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4

0 0 0 0 0 0 0 0 0 0 0 015 15 15 15 15 15 15 15 15 15 15 15

7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,95444.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2

0 0 0 0 0 0 0 0 0 0 0 00.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855

62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,0532.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8



LineNo. Description

Residential


Commercial


Total Wastewater System9 Customer Growth

10 Customer Growth (%)11 Average Monthly Customers/Units12 Annual Revenue Flow (000s)13 Avg. Monthly Flow Per Customer (000s)



2030 2031 2032 2033 2034 2035 2036 2037

0 0 0 0 0 0 0 01,840 1,840 1,840 1,840 1,840 1,840 1,840 1,840

54,099 54,099 54,099 54,099 54,099 54,099 54,099 54,0992.4 2.4 2.4 2.4 2.4 2.4 2.4 2.4

0 0 0 0 0 0 0 015 15 15 15 15 15 15 15

7,954 7,954 7,954 7,954 7,954 7,954 7,954 7,95444.2 44.2 44.2 44.2 44.2 44.2 44.2 44.2

0 0 0 0 0 0 0 00.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%1,855 1,855 1,855 1,855 1,855 1,855 1,855 1,855

62,053 62,053 62,053 62,053 62,053 62,053 62,053 62,0532.8 2.8 2.8 2.8 2.8 2.8 2.8 2.8

of 3Table 2Lee County, FloridaNorth Fort Myers Utility Acquisition

Historical and Projected Customer Statistics -Wastewater System [1]

Line Historical [1]No. Description 2006 2007 2008 [2] 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Residential

1 Customer Growth N/A 705 765 267 437 572 659 955 924 918 959 921 921 879 8342 Average Monthly Customers 7,781 8,486 9,251 9,518 9,955 10,527 11,186 12,141 13,065 13,983 14,942 15,863 16,784 17,663 18,4973 Annual Revenue Flow (000s) 286,401 272,483 297,043 305,616 319,647 338,013 359,173 389,836 419,504 448,980 479,772 509,344 538,915 567,139 593,9174 Avg. Monthly Flow Per Customer (gallons) 3,067 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676

Commercial

5 Customer Growth N/A 41 38 45 28 43 43 54 43 62 43 43 43 28 286 Average Monthly Customers 244 285 323 368 396 439 482 536 579 641 684 727 770 798 8267 Annual Revenue Flow (000s) 79,855 74,607 84,555 96,335 103,664 114,921 126,177 140,313 151,570 167,800 179,057 190,313 201,570 208,899 216,2298 Avg. Monthly Flow Per Customer (gallons) 27,282 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815

Bulk

9 Customer Growth N/A 0 0 0 0 0 0 0 0 0 0 0 0 0 010 Average Monthly Customers 1 1 1 1 1 1 1 1 1 1 1 1 1 1 111 Annual Revenue Flow (000s) 32,753 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,71012 Avg. Monthly Flow Per Customer (gallons) 2,729,417 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308

Mobile Homes

13 Customer Growth N/A (310) 49 10 10 0 0 0 0 0 0 0 0 0 014 Average Monthly Customers/Units 4,347 4,036 4,085 4,095 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,10515 Annual Revenue Flow (000s) 167,818 129,928 131,505 131,827 132,149 132,149 132,149 132,149 132,149 132,149 132,149 132,149 132,149 132,149 132,14916 Avg. Monthly Flow Per Customer (gallons) 3,217 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682

Recreational Vehicle

17 Customer Growth N/A 2,050 0 0 0 0 0 0 0 0 0 0 0 0 018 Average Monthly Customers 12 12 12 12 12 12 12 12 12 12 12 12 12 12 1219 Average Monthly Units 0 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,05020 Annual Revenue Flow (000s) 0 31,277 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,27621 Avg. Monthly Flow Per Customer (gallons) 0 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271

Multi-Family

22 Customer Growth N/A 52 0 0 0 0 0 0 0 0 0 0 0 0 023 Average Monthly Customers 0 52 52 52 52 52 52 52 52 52 52 52 52 52 5224 Average Monthly Units 944 944 944 944 944 944 944 944 944 944 944 944 944 944 94425 Annual Revenue Flow (000s) 0 768 768 768 768 768 768 768 768 768 768 768 768 768 76826 Avg. Monthly Flow Per Customer (gallons) 0 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231

Total Wastewater System27 Customer Growth N/A 2,538 852 322 475 615 702 1,009 967 980 1,002 964 964 907 86228 Customer Growth (%) N/A 20.51% 5.71% 2.04% 2.95% 3.71% 4.09% 5.64% 5.12% 4.94% 4.81% 4.41% 4.23% 3.82% 3.49%29 Average Monthly Customers 12,373 13,711 14,563 16,085 16,560 17,175 17,877 18,886 19,853 20,833 21,835 22,799 23,763 24,670 25,532

Average Monthly Units30 Annual Revenue Flow (000s) 566,827 539,773 575,857 596,532 618,215 647,838 680,253 725,053 765,978 811,684 853,732 894,560 935,389 970,942 1,005,05031 Avg. Monthly Flow Per Customer (gallons) 3,817,634 3,016,705 3,044,415 3,090,583 3,111,048 3,143,378 3,171,049 3,199,309 3,215,260 3,246,838 3,258,320 3,269,783 3,280,316 3,279,810 3,280,403

Footnotes:[1] Historical Fiscal Years 2006 and 2007 are based on information compiled from information provided by NFMU and the County.[2] Amounts shown are derived from four months actual and eight months projected customer billing information.



LineNo. Description

Residential

1 Customer Growth2 Average Monthly Customers3 Annual Revenue Flow (000s)4 Avg. Monthly Flow Per Customer (gallons)

Commercial


Bulk


Mobile Homes

13 Customer Growth14 Average Monthly Customers/Units15 Annual Revenue Flow (000s)16 Avg. Monthly Flow Per Customer (gallons)


17 Customer Growth18 Average Monthly Customers19 Average Monthly Units20 Annual Revenue Flow (000s)21 Avg. Monthly Flow Per Customer (gallons)

Multi-Family


Total Wastewater System27 Customer Growth28 Customer Growth (%)29 Average Monthly Customers

Average Monthly Units30 Annual Revenue Flow (000s)31 Avg. Monthly Flow Per Customer (gallons)

Footnotes:

Calender Year Ended December 31,Projected

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035

766 766 681 632 632 632 589 451 385 260 260 260 260 260 22419,263 20,029 20,710 21,342 21,974 22,606 23,195 23,646 24,031 24,291 24,551 24,811 25,071 25,331 25,555

618,512 643,107 664,973 685,265 705,558 725,851 744,762 759,243 771,605 779,953 788,301 796,650 804,998 813,346 820,5382,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676 2,676

28 28 28 28 28 28 28 28 28 28 28 28 28 28 28854 882 910 938 966 994 1,022 1,050 1,078 1,106 1,134 1,162 1,190 1,218 1,246

223,559 230,889 238,219 245,549 252,878 260,208 267,538 274,868 282,198 289,527 296,857 304,187 311,517 318,847 326,17621,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815 21,815

0 0 0 0 0 0 0 0 0 0 0 0 0 0 01 1 1 1 1 1 1 1 1 1 1 1 1 1 1

30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,710 30,7102,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308 2,362,308

0 0 0 0 0 0 0 0 0 0 0 0 0 0 04,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105 4,105

132,149 132,149 132,149 132,149 132,149 132,149 132,149 132,149 132,149 132,149 132,149 132,149 132,149 132,149 132,1492,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682 2,682

0 0 0 0 0 0 0 0 0 0 0 0 0 0 012 12 12 12 12 12 12 12 12 12 12 12 12 12 12

2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,050 2,05031,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,276 31,2761,271 1,271 1,271 # 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271 1,271

0 0 0 0 0 0 0 0 0 0 0 0 0 0 052 52 52 52 52 52 52 52 52 52 52 52 52 52 52

944 944 944 944 944 944 944 944 944 944 944 944 944 944 944768 768 768 768 768 768 768 768 768 768 768 768 768 768 768

1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231 1,231

794 794 709 660 660 660 617 479 413 288 288 288 288 288 2523.11% 3.02% 2.61% 2.37% 2.32% 2.26% 2.07% 1.57% 1.34% 0.92% 0.91% 0.90% 0.89% 0.89% 0.77%26,326 27,120 27,829 28,489 29,149 29,809 30,426 30,905 31,318 31,606 31,894 32,182 32,470 32,758 33,010

1,036,975 1,068,900 1,098,095 1,125,718 1,153,340 1,180,962 1,207,204 1,229,015 1,248,706 1,264,384 1,280,062 1,295,740 1,311,418 1,327,096 1,341,6183,282,521 3,284,516 3,288,262 3,292,881 3,297,292 3,301,507 3,306,429 3,313,994 3,322,688 3,333,748 3,344,609 3,355,275 3,365,752 3,376,044 3,386,932



LineNo. Description

Residential


Commercial


Bulk


Mobile Homes

13 Customer Growth14 Average Monthly Customers/Units15 Annual Revenue Flow (000s)16 Avg. Monthly Flow Per Customer (gallons)



Multi-Family


Total Wastewater System27 Customer Growth28 Customer Growth (%)29 Average Monthly Customers

Average Monthly Units30 Annual Revenue Flow (000s)31 Avg. Monthly Flow Per Customer (gallons)

Footnotes:

2036 2037

176 17625,731 25,907

826,189 831,8402,676 2,676

28 281,274 1,302

333,506 340,83621,815 21,815

0 01 1

30,710 30,7102,362,308 2,362,308

0 04,105 4,105

132,149 132,1492,682 2,682

0 012 12

2,050 2,05031,276 31,2761,271 1,271

0 052 52

944 944768 768

1,231 # 1,231

204 2040.62% 0.61%33,214 33,418

1,354,599 1,367,5803,398,699 3,410,322

DRAFTTable 3

Lee County, FloridaPreliminary Financial Evaluation - North Fort Myers Utility Inc.

Customer Growth Projections Above Calendar Year 2007 Levels

Number of Obligation toLine Total ERCs Committed Net ERCs Years Growth Pay ConnectionNo. Development Name Meter Size Available to Date Available Will Occur Over Start Year Charge 2008 2009 2010 2011 2012 2013 2014 2015

Residential

Projects Under Contract1 T.W. Magnolia Landing 5/8 1,662 0 1,662 20 2008 N [1] 83 83 83 83 83 83 83 832 Stoneybrook N - Metro 5/8 1,342 0 1,342 20 2010 N [1] 0 0 67 67 67 67 67 673 Oak Creek 5/8 775 0 775 18 2009 N [1] 0 43 43 43 43 43 43 434 Tara Woods Phase A,B, & C 5/8 137 0 137 12 2008 N [1] 11 11 11 11 11 11 11 115 GFY Enclaves of Eagle Nest 5/8 229 0 229 10 2011 N [1] 0 0 0 23 23 23 23 236 Estates at Entrada 5/8 1,313 0 1,313 20 2009 N [1] 0 66 66 66 66 66 66 667 Athyrid Development - Diplomat Rd 5/8 475 0 475 10 2013 N [1] 0 0 0 0 0 48 48 488 Fountain Bridge Preserve 5/8 74 0 74 8 2011 N [1] 0 0 0 9 9 9 9 99 Pine Prairie Preserve 5/8 1 0 1 1 2009 N [1] 0 1 0 0 0 0 0 0

10 Northop Project - E Bayshore 5/8 47 0 47 5 2015 N [1] 0 0 0 0 0 0 0 911 Yeatter - Henderson - Brook Rd 5/8 71 0 71 5 2012 N [1] 0 0 0 0 14 14 14 1412 Paradise Development Group 5/8 80 0 80 3 2009 N [1] 0 27 27 27 0 0 0 013 Palermo 5/8 1,150 0 1,150 20 2010 N [1] 0 0 58 58 58 58 58 58

14 Total Under Contract 7,356 0 7,356 94 231 355 387 374 422 # 422 431

Proposed Projects15 Sloanes Gate 5/8 365 0 365 10 2013 Y 0 0 0 0 0 37 37 3716 Laurel Rd - 10AC MFD 5/8 122 0 122 5 2012 Y 0 0 0 0 24 24 24 2417 Bayshore Road 65AC 5/8 356 0 356 8 2013 Y 0 0 0 0 0 45 45 4518 Chapel Creek 5/8 891 0 891 25 2010 Y 0 0 36 36 36 36 36 3619 Stone Hill Manor 5/8 71 0 71 5 2011 Y 0 0 0 14 14 14 14 1420 Julia Park 5/8 114 0 114 5 2009 Y 0 23 23 23 23 23 0 021 Slater Bend 5/8 97 0 97 8 2012 Y 0 0 0 0 12 12 12 1222 N Trail Ventures 5/8 655 0 655 12 2016 Y 0 0 0 0 0 0 0 023 Nalle Grade 130 Project 5/8 584 0 584 12 2012 Y 0 0 0 0 49 49 49 4924 Bayshore - Cove E-I 75 5/8 24 0 24 3 2011 Y 0 0 0 8 8 8 0 025 Tamiami Pines 5/8 30 0 30 3 2010 Y 0 0 10 10 10 0 0 026 Park 41 Commons 5/8 1,193 0 1,193 25 2011 Y 0 0 0 48 48 48 48 4827 North River Village 5/8 1,582 0 1,582 25 2013 Y 0 0 0 0 0 63 63 6328 Bayshore Crossings 5/8 264 0 264 8 2011 Y 0 0 0 33 33 33 33 3329 Buccaneer MHC Addition 5/8 192 0 192 1 2008 N 192 0 0 0 0 0 0 030 Bay Point Condo's 5/8 132 0 132 1 2008 N 132 0 0 0 0 0 0 031 Pioneer Village 5/8 334 0 334 1 2008 N 334 0 0 0 0 0 0 032 Coon Rd Phase II 5/8 46 0 46 3 2012 Y 0 0 0 0 15 15 15 033 Existing Prjoects MHC 5/8 160 0 160 12 2008 Y 13 13 13 13 13 13 13 1334 New Projects 5/8 3,400 0 3,400 30 2013 Y 0 0 0 0 0 113 113 113

35 Total Proposed 10,612 0 10,612 671 36 82 185 285 533 # 502 487

36 Total Customer Growth Residential 17,968 0 17,968 765 267 437 572 659 955 924 918

DRAFTTable 3



Number of Obligation toLine Total ERCs Committed Net ERCs Years Growth Pay ConnectionNo. Development Name Meter Size Available to Date Available Will Occur Over Start Year Charge

Residential

Projects Under Contract1 T.W. Magnolia Landing 5/8 1,662 0 1,662 20 2008 N2 Stoneybrook N - Metro 5/8 1,342 0 1,342 20 2010 N3 Oak Creek 5/8 775 0 775 18 2009 N4 Tara Woods Phase A,B, & C 5/8 137 0 137 12 2008 N5 GFY Enclaves of Eagle Nest 5/8 229 0 229 10 2011 N6 Estates at Entrada 5/8 1,313 0 1,313 20 2009 N7 Athyrid Development - Diplomat Rd 5/8 475 0 475 10 2013 N8 Fountain Bridge Preserve 5/8 74 0 74 8 2011 N9 Pine Prairie Preserve 5/8 1 0 1 1 2009 N

10 Northop Project - E Bayshore 5/8 47 0 47 5 2015 N11 Yeatter - Henderson - Brook Rd 5/8 71 0 71 5 2012 N12 Paradise Development Group 5/8 80 0 80 3 2009 N13 Palermo 5/8 1,150 0 1,150 20 2010 N

14 Total Under Contract 7,356 0 7,356

Proposed Projects15 Sloanes Gate 5/8 365 0 365 10 2013 Y16 Laurel Rd - 10AC MFD 5/8 122 0 122 5 2012 Y17 Bayshore Road 65AC 5/8 356 0 356 8 2013 Y18 Chapel Creek 5/8 891 0 891 25 2010 Y19 Stone Hill Manor 5/8 71 0 71 5 2011 Y20 Julia Park 5/8 114 0 114 5 2009 Y21 Slater Bend 5/8 97 0 97 8 2012 Y22 N Trail Ventures 5/8 655 0 655 12 2016 Y23 Nalle Grade 130 Project 5/8 584 0 584 12 2012 Y24 Bayshore - Cove E-I 75 5/8 24 0 24 3 2011 Y25 Tamiami Pines 5/8 30 0 30 3 2010 Y26 Park 41 Commons 5/8 1,193 0 1,193 25 2011 Y27 North River Village 5/8 1,582 0 1,582 25 2013 Y28 Bayshore Crossings 5/8 264 0 264 8 2011 Y29 Buccaneer MHC Addition 5/8 192 0 192 1 2008 N30 Bay Point Condo's 5/8 132 0 132 1 2008 N31 Pioneer Village 5/8 334 0 334 1 2008 N32 Coon Rd Phase II 5/8 46 0 46 3 2012 Y33 Existing Prjoects MHC 5/8 160 0 160 12 2008 Y34 New Projects 5/8 3,400 0 3,400 30 2013 Y

35 Total Proposed 10,612 0 10,612

36 Total Customer Growth Residential 17,968 0 17,968

2016 2017 2018 2019 2020 2021 2022 2023 2024

83 83 83 83 83 83 83 83 8367 67 67 67 67 67 67 67 6743 43 43 43 43 43 43 43 4311 11 11 11 0 0 0 0 023 23 23 23 23 0 0 0 066 66 66 66 66 66 66 66 6648 48 48 48 48 48 48 0 0

9 9 9 0 0 0 0 0 00 0 0 0 0 0 0 0 09 9 9 9 0 0 0 0 0

14 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

58 58 58 58 58 58 58 58 58

431 417 417 408 388 365 365 317 317

37 37 37 37 37 37 37 0 024 0 0 0 0 0 0 0 045 45 45 45 45 0 0 0 036 36 36 36 36 36 36 36 36

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

12 12 12 12 0 0 0 0 055 55 55 55 55 55 55 55 5549 49 49 49 49 49 49 49 0

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

48 48 48 48 48 48 48 48 4863 63 63 63 63 63 63 63 6333 33 33 0 0 0 0 0 0

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

13 13 13 13 0 0 0 0 0113 113 113 113 113 113 113 113 113

528 504 504 471 446 401 401 364 315

959 921 921 879 834 766 766 681 632

DRAFTTable 3




Residential





35 Total Proposed 10,612 0 10,612


2025 2026 2027 2028 2029 2030 2031 2032 2033

83 83 83 0 0 0 0 0 067 67 67 67 67 0 0 0 043 43 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

66 66 66 66 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

58 58 58 58 58 0 0 0 0

317 317 274 191 125 0 0 0 0

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

36 36 36 36 36 36 36 36 360 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

55 55 55 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

48 48 48 48 48 48 48 48 4863 63 63 63 63 63 63 63 63

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

113 113 113 113 113 113 113 113 113

315 315 315 260 260 260 260 260 260

632 632 589 451 385 260 260 260 260

DRAFTTable 3




Residential





35 Total Proposed 10,612 0 10,612


2034 2035 2036 2037

0 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 0

0 0 0 0

0 0 0 00 0 0 00 0 0 0

36 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 0

48 48 0 063 63 63 63

0 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 0

113 113 113 113

260 224 176 176

260 224 176 176

DRAFTTable 3



Number of Obligation toLine Total ERCs Committed Net ERCs Years Growth Pay ConnectionNo. Development Name Meter Size Available to Date Available Will Occur Over Start Year Charge 2008 2009 2010 2011 2012 2013 2014 2015

Commercial

Projects Under Contract37 Bayshore Commons Comm Pk 2 49 0 49 4 2010 N 0 0 12 12 12 12 0 038 CC Hospital Site 2 55 0 55 1 2013 N 0 0 0 0 0 55 0 039 Bayshore Rd-Station Center 5/8 6 0 6 1 2009 N 0 6 0 0 0 0 0 040 Bayshore Village Market Square 2 64 0 64 2 2010 N 0 0 32 32 0 0 0 041 Raymond Lumber 1 15 0 15 1 2008 N 15 0 0 0 0 0 0 042 Bayshore Self Storage 5/8 5 0 5 1 2008 N 5 0 0 0 0 0 0 043 Bayshore Convienience Store 5/8 2 0 2 1 2009 N 0 2 0 0 0 0 0 0

44 Total Under Contract 196 0 196 20 8 44 44 12 67 0 0

Proposed Projects45 US-41 Comm Next to Walgreens 1 33 0 33 3 2011 Y 0 0 0 11 11 11 0 046 LCEC New Office Site 1 12 0 12 1 2009 Y 0 12 0 0 0 0 0 047 Racetrac - Bayshore Rd I-75 5/8 7 0 7 1 2009 Y 0 7 0 0 0 0 0 048 Littleton Center Commercial 3/4 116 0 116 8 2011 Y 0 0 0 15 15 15 15 1549 Diplomat Center Commercial 2 70 0 70 5 2010 Y 0 0 14 14 14 14 14 050 Bayshore Samville Rds Commercial 2 93 0 93 5 2011 Y 0 0 0 19 19 19 19 1951 Rainbow Motel 1 21 0 21 1 2009 Y 0 21 0 0 0 0 0 052 Commercial New 5/8 825 0 825 30 2008 Y 28 28 28 28 28 28 28 2853 Upriver Campground 1 132 0 132 1 2008 N 132 0 0 0 0 0 0 0

54 Total Proposed 1,309 0 1,309 160 68 42 87 87 87 76 62

Total Commercial Customer Growth by Meter Class55 5/8 5/8 845 0 845 33 43 28 28 28 28 28 2856 3/4 3/4 116 0 116 0 0 0 15 15 15 15 1557 1 1 213 0 213 147 33 0 11 11 11 0 058 1 1/2 1 1/2 0 0 0 0 0 0 0 0 0 0 059 2 2 331 0 331 0 0 58 77 45 100 33 1960 3 3 0 0 0 0 0 0 0 0 0 0 0

61 Total Customer Growth Commercial 1,505 0 1,505 180 76 86 131 99 154 76 62

Multi-Family

Projects Under Contract62 River Bend Duplex 5/8 20 0 20 2 2009 N 0 10 10 0 0 0 0 0

63 Total Under Contract 20 0 20 0 10 10 0 0 0 0 0

Proposed Projects64 Coconut MHP & RV 5/8 49 0 49 1 2008 N 49 0 0 0 0 0 0 0

65 Total Proposed 49 0 49 49 0 0 0 0 0 0 0

66 Total Customer Growth Multi-Family 69 0 69 49 10 10 0 0 0 0 0

67 Total Customer Growth 19,542 0 19,542 994 353 533 703 758 1,109 1,000 980

[1] Developments shown are under contract with NFMU to remit capacity charges and are still in the process of doing soare identified on Tables 9 and 10 (Line 26) as a lump sum credit towards the purchase price determination and not counted in this table.

DRAFTTable 3




Commercial

Projects Under Contract37 Bayshore Commons Comm Pk 2 49 0 49 4 2010 N38 CC Hospital Site 2 55 0 55 1 2013 N39 Bayshore Rd-Station Center 5/8 6 0 6 1 2009 N40 Bayshore Village Market Square 2 64 0 64 2 2010 N41 Raymond Lumber 1 15 0 15 1 2008 N42 Bayshore Self Storage 5/8 5 0 5 1 2008 N43 Bayshore Convienience Store 5/8 2 0 2 1 2009 N

44 Total Under Contract 196 0 196

Proposed Projects45 US-41 Comm Next to Walgreens 1 33 0 33 3 2011 Y46 LCEC New Office Site 1 12 0 12 1 2009 Y47 Racetrac - Bayshore Rd I-75 5/8 7 0 7 1 2009 Y48 Littleton Center Commercial 3/4 116 0 116 8 2011 Y49 Diplomat Center Commercial 2 70 0 70 5 2010 Y50 Bayshore Samville Rds Commercial 2 93 0 93 5 2011 Y51 Rainbow Motel 1 21 0 21 1 2009 Y52 Commercial New 5/8 825 0 825 30 2008 Y53 Upriver Campground 1 132 0 132 1 2008 N

54 Total Proposed 1,309 0 1,309

Total Commercial Customer Growth by Meter Class55 5/8 5/8 845 0 84556 3/4 3/4 116 0 11657 1 1 213 0 21358 1 1/2 1 1/2 0 0 059 2 2 331 0 33160 3 3 0 0 0

61 Total Customer Growth Commercial 1,505 0 1,505

Multi-Family

Projects Under Contract62 River Bend Duplex 5/8 20 0 20 2 2009 N


Proposed Projects64 Coconut MHP & RV 5/8 49 0 49 1 2008 N

65 Total Proposed 49 0 49

66 Total Customer Growth Multi-Family 69 0 69

67 Total Customer Growth 19,542 0 19,542


2016 2017 2018 2019 2020 2021 2022 2023 2024

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

15 15 15 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

28 28 28 28 28 28 28 28 280 0 0 0 0 0 0 0 0

43 43 43 28 28 28 28 28 28

28 28 28 28 28 28 28 28 2815 15 15 0 0 0 0 0 0

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

43 43 43 28 28 28 28 28 28

0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0

1,002 964 964 907 862 794 794 709 660

DRAFTTable 3




Commercial







Multi-Family








2025 2026 2027 2028 2029 2030 2031 2032 2033

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

28 28 28 28 28 28 28 28 280 0 0 0 0 0 0 0 0

28 28 28 28 28 28 28 28 28

28 28 28 28 28 28 28 28 280 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

28 28 28 28 28 28 28 28 28

0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0

660 660 617 479 413 288 288 288 288

DRAFTTable 3




Commercial







Multi-Family








2034 2035 2036 2037

0 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 0

0 0 0 0

0 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 0

28 28 28 280 0 0 0

28 28 28 28

28 28 28 280 0 0 00 0 0 00 0 0 00 0 0 00 0 0 0

28 28 28 28

0 0 0 0

0 0 0 0

0 0 0 0

0 0 0 0

0 0 0 0

288 252 204 204

DRAFTTable 4Page 1 of 1


Estimation of Adjusted Fiscal Year 2007 Operating Expenses - Utility System

Line Utility AsNo. Amount (1) Adjustments Adjusted

1 Operating Expenses2 Salaries and Wages - Employees 172,064$ (78,479)$ [2] 93,585$3 Salaries and Wages - Officers, Directors and Majority Stockholders 152,332 (152,332) [2] 04 Employee Pensions and Benefits 0 0 05 Purchased Water Treatment 99,618 0 99,6186 Purchased Sewer Treatment 0 0 07 Sludge Removal 487,777 0 487,7778 Purchased Power 358,539 0 358,5399 Fuel for Power Purchased 0 0 0

10 Chemicals 0 0 011 Materials and Supplies 69,993 0 69,99312 Repairs and Maintenance 0 0 013 Contractual Services - Engineering 6,170 0 6,17014 Contractual Services - Accounting 91,665 (91,665) [3] 015 Contractual Services - Legal 61,842 (61,842) [3] 016 Contractual Services - Management Fees 26,495 (26,495) [3] 017 Contractual Services - Testing 0 0 0

Contractual Services - Other (5)18 Labor 720,856 0 720,85619 Utilities 15,084 0 15,08420 Chemicals 95,471 0 95,47121 Repairs and Maintenance 189,377 0 189,37722 Lab Supplies 52,465 0 52,46523 Office Supplies 4,153 0 4,15324 Training and Miscellaneous 33,781 0 33,78125 Administrative and Customer Costs 56,537 (56,537) [5] 026 Other Operating Expenses 65,432 0 65,43227 Rental of Building / Real Property 36,506 (36,506) [6] 028 Rental of Equipment 0 0 029 Transportation Expenses 1,773 (1,773) 030 Insurance - Vehicle 0 0 031 Insurance - General Liability 76,652 0 76,65232 Insurance - Workman's Comp. 78 0 7833 Insurance - Other 64,290 (56,376) [7] 7,91434 Advertising Expenses 0 0 035 Amortization of Rate Case Expense 0 0 036 Regulatory Commission Expenses - Other 5,142 (5,142) 037 Bad Debt Expense 0.15% 360 8,898 (4) 9,25838 Miscellaneous Expenses 484,012 (462,962) [7] 21,05039 Contingency Allowance 1.00% 0 24,073 (8) 24,073

40 Total Operating Expenses 3,428,464$ (997,138)$ 2,431,327$

__________________________(1) Amounts shown derived from provided by the Company management and adjusted to reflect

County ownership and operations.

[2] Amount adjusted to eliminate administrative and management salaries which would be anticipatedto be absorbed by existing County personnel.

[3] Amounts shown eliminate contractual services costs anticipated to be absorbed under Countyownership and operations.

(4) Adjustment to recognize an allowance for bad debt expenses based on an assumed non-paymentrate equivalent to 0.15% of system sales revenue.

(5) Contractual Services Other includes costs primarily associated with retaining a contract operator tooperate the system in addition to administrative and customer service costs.

[6] Adjustment reflects elimination of rental costs associated with customer service office which is anticipatedto be absorbed by existing County customer service office space.

[7] Amount reduction eliminates incremental administrative insurance and overhead costs not anticipatedto occur under County ownership.

(8) Adjustment to recognize contingency allowance to account for unexpected operating expenses orchanges in operating revenues; allowance estimated as a percent of all other operating revenues.

DRAFTTable 5


Projection of Operating Expenses - Utility System

Line Escalation Adjusted (2)No. Reference (1) 2007 2008 (3) 2009 2010 2011 2012 2013 2014 2015 2016 2017

Operating Expenses1 Salaries and Wages - Employees Labor 93,585$ 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,8972 Salaries and Wages - Officers, Directors and Majority Stockholders Labor 0 0 0 0 0 0 0 0 0 0 03 Employee Pensions and Benefits Labor 0 0 0 0 0 0 0 0 0 0 04 Purchased Water Treatment W-Customer 99,618 102,079 102,079 102,079 102,079 102,079 102,079 102,079 102,079 102,079 102,0795 Purchased Sewer Treatment S-Customer 0 0 0 0 0 0 0 0 0 0 06 Sludge Removal S-Customer 487,777 530,864 586,340 603,637 626,032 651,637 688,389 723,635 759,383 795,909 831,0097 Purchased Power Customer 358,539 387,491 423,412 434,632 449,149 465,723 489,521 512,333 535,439 559,105 581,8618 Fuel for Power Purchased Customer 0 0 0 0 0 0 0 0 0 0 09 Chemicals S-Customer 0 0 0 0 0 0 0 0 0 0 0

10 Materials and Supplies Customer 69,993 75,645 82,658 84,848 87,682 90,917 95,563 100,016 104,527 109,147 113,58911 Mechanical Integrity Test Allowance (2) CPI 0 0 0 0 150,000 0 0 0 0 150,000 012 Repairs and Maintenance Repair 0 0 0 0 0 0 0 0 0 0 013 Contractual Services - Engineering CPI 6,170 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,32214 Contractual Services - Accounting CPI 0 0 0 0 0 0 0 0 0 0 015 Contractual Services - Legal CPI 0 0 0 0 0 0 0 0 0 0 016 Contractual Services - Management Fees CPI 0 0 0 0 0 0 0 0 0 0 017 Contractual Services - Testing CPI 0 0 0 0 0 0 0 0 0 0 0

Contractual Services - Other18 Labor Labor 720,856 738,661 738,661 738,661 738,661 738,661 738,661 738,661 738,661 738,661 738,66119 Incremental Labor (4) Labor 0 0 177,840 177,840 177,840 177,840 177,840 177,840 177,840 177,840 177,84020 Utilities Customer 15,084 16,302 17,813 18,285 18,896 19,593 20,594 21,554 22,526 23,522 24,47921 Incremental Purchased Power (5) CPI 0 0 5,960 10,560 15,293 16,105 20,281 21,141 21,141 21,141 21,14122 Incremental Water Meter Services Expenses (6) CPI 0 0 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33,72623 Incremental Wastewater Collection Expenses (6) CPI 0 0 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74,46124 Chemicals Customer 95,471 103,180 112,745 115,733 119,598 124,011 130,348 136,422 142,575 148,877 154,93625 Repairs and Maintenance Repair 189,377 194,055 194,055 194,055 194,055 194,055 194,055 194,055 194,055 194,055 194,05526 Lab Supplies Customer 52,465 56,702 61,958 63,600 65,724 68,149 71,631 74,969 78,350 81,813 85,14327 Office Supplies CPI 4,153 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,25628 Training and Miscellaneous CPI 33,781 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,61529 Administrative and Customer Costs CPI 0 0 0 0 0 0 0 0 0 0 030 Other Operating Expenses CPI 65,432 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,04831 Incremental Other Operating Expenses (4) CPI 0 0 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20,00732 Rental of Building / Real Property CPI 0 0 0 0 0 0 0 0 0 0 033 Rental of Equipment CPI 0 0 0 0 0 0 0 0 0 0 034 Transportation Expenses CPI 0 0 0 0 0 0 0 0 0 0 035 Insurance - Vehicle Insurance 0 0 0 0 0 0 0 0 0 0 036 Insurance - General Liability Insurance 76,652 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,54537 Insurance - Workman's Comp. Insurance 78 80 80 80 80 80 80 80 80 80 8038 Insurance - Other Insurance 7,914 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,10939 Advertising Expenses CPI 0 0 0 0 0 0 0 0 0 0 040 Amortization of Rate Case Expense CPI 0 0 0 0 0 0 0 0 0 0 041 Regulatory Commission Expenses - Other CPI 0 0 0 0 0 0 0 0 0 0 042 Bad Debt Expense Revenue 9,258 12,380 12,676 13,033 13,511 14,045 14,801 15,503 16,289 17,012 17,71143 Miscellaneous Expenses GDP 21,050 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,57044 Administrative Overhead Allocation CPI 0 0 119,598 119,598 119,598 119,598 119,598 119,598 119,598 119,598 119,59845 Contingency Allowance 1.0% Calculate 24,073 25,964 29,608 30,016 32,032 31,075 31,884 32,628 33,375 35,638 34,871

46 Total Operating Expenses 2,431,327$ 2,559,766$ 3,110,039$ 3,151,213$ 3,354,786$ 3,258,124$ 3,339,881$ 3,415,070$ 3,490,474$ 3,719,033$ 3,641,609$__________________________

(1) Amounts shown derived from Table 6.

(2) Reflects $150,000 allowance for MIT test every five years.

(3) Amounts escalated utilizing approved FPSC inflationary factor of 2.47%.

(4) Amounts derived as follows on County information: Amount2 Lift Station Technicians Including Benefits $112,320

I Instrumentation Technician Including Benefits 65,520Total $177,840

Other Operating Expenses incremental cost of $6,669 pernew person based on County personnel cost relationships

(5) Assumes addition of 27 lift stations from FY 2009-2014 inorder to serve anticiptaed new growth. Amounts shown assume$745 per year for each incremental lift station added.

(6) Amounts shown reflect incremental meter services, distributioncosts to meet anticipated County levels of service.

DRAFTTable 5



Line EscalationNo. Reference (1)

Operating Expenses1 Salaries and Wages - Employees Labor2 Salaries and Wages - Officers, Directors and Majority Stockholders Labor3 Employee Pensions and Benefits Labor4 Purchased Water Treatment W-Customer5 Purchased Sewer Treatment S-Customer6 Sludge Removal S-Customer7 Purchased Power Customer8 Fuel for Power Purchased Customer9 Chemicals S-Customer

10 Materials and Supplies Customer11 Mechanical Integrity Test Allowance (2) CPI12 Repairs and Maintenance Repair13 Contractual Services - Engineering CPI14 Contractual Services - Accounting CPI15 Contractual Services - Legal CPI16 Contractual Services - Management Fees CPI17 Contractual Services - Testing CPI

Contractual Services - Other18 Labor Labor19 Incremental Labor (4) Labor20 Utilities Customer21 Incremental Purchased Power (5) CPI22 Incremental Water Meter Services Expenses (6) CPI23 Incremental Wastewater Collection Expenses (6) CPI24 Chemicals Customer25 Repairs and Maintenance Repair26 Lab Supplies Customer27 Office Supplies CPI28 Training and Miscellaneous CPI29 Administrative and Customer Costs CPI30 Other Operating Expenses CPI31 Incremental Other Operating Expenses (4) CPI32 Rental of Building / Real Property CPI33 Rental of Equipment CPI34 Transportation Expenses CPI35 Insurance - Vehicle Insurance36 Insurance - General Liability Insurance37 Insurance - Workman's Comp. Insurance38 Insurance - Other Insurance39 Advertising Expenses CPI40 Amortization of Rate Case Expense CPI41 Regulatory Commission Expenses - Other CPI42 Bad Debt Expense Revenue43 Miscellaneous Expenses GDP44 Administrative Overhead Allocation CPI45 Contingency Allowance 1.0% Calculate

46 Total Operating Expenses__________________________









2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,8970 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 0

102,079 102,079 102,079 102,079 102,079 102,079 102,079 102,079 102,079 102,079 102,0790 0 0 0 0 0 0 0 0 0 0

866,161 899,248 930,632 959,575 988,554 1,014,355 1,038,395 1,062,486 1,086,498 1,108,989 1,126,400604,612 626,015 646,360 665,104 683,860 700,615 716,169 731,781 747,368 761,942 773,219

0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 0

118,030 122,208 126,180 129,839 133,500 136,771 139,807 142,855 145,898 148,743 150,9440 0 0 150,000 0 0 0 0 150,000 0 00 0 0 0 0 0 0 0 0 0 0

6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,3220 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 0

738,661 738,661 738,661 738,661 738,661 738,661 738,661 738,661 738,661 738,661 738,661177,840 177,840 177,840 177,840 177,840 177,840 177,840 177,840 177,840 177,840 177,840

25,436 26,336 27,192 27,981 28,770 29,475 30,129 30,786 31,442 32,055 32,52921,141 21,141 21,141 21,141 21,141 21,141 21,141 21,141 21,141 21,141 21,14133,726 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33,72674,461 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74,461

160,994 166,693 172,111 177,102 182,096 186,557 190,699 194,856 199,006 202,887 205,890194,055 194,055 194,055 194,055 194,055 194,055 194,055 194,055 194,055 194,055 194,055

88,472 91,604 94,581 97,324 100,069 102,521 104,797 107,082 109,363 111,496 113,1464,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256

34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,6150 0 0 0 0 0 0 0 0 0 0

67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,04820,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007

0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 0

78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,54580 80 80 80 80 80 80 80 80 80 80

8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,1090 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0 0 0

18,411 19,042 19,644 20,204 20,764 21,271 21,745 22,219 22,694 23,141 23,50221,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570

119,598 119,598 119,598 119,598 119,598 119,598 119,598 119,598 119,598 119,598 119,59835,605 36,296 36,951 39,055 38,160 38,700 39,202 39,705 41,707 40,677 41,040

3,715,731$ 3,785,452$ 3,851,661$ 4,064,194$ 3,973,783$ 4,028,275$ 4,078,953$ 4,129,780$ 4,331,986$ 4,227,940$ 4,264,680$

DRAFTTable 5




Operating Expenses1 Salaries and Wages - Employees Labor2 Salaries and Wages - Officers, Directors and Majority Stockholders Labor3 Employee Pensions and Benefits Labor4 Purchased Water Treatment W-Customer5 Purchased Sewer Treatment S-Customer6 Sludge Removal S-Customer7 Purchased Power Customer8 Fuel for Power Purchased Customer9 Chemicals S-Customer

10 Materials and Supplies Customer11 Mechanical Integrity Test Allowance (2) CPI12 Repairs and Maintenance Repair13 Contractual Services - Engineering CPI14 Contractual Services - Accounting CPI15 Contractual Services - Legal CPI16 Contractual Services - Management Fees CPI17 Contractual Services - Testing CPI

Contractual Services - Other18 Labor Labor19 Incremental Labor (4) Labor20 Utilities Customer21 Incremental Purchased Power (5) CPI22 Incremental Water Meter Services Expenses (6) CPI23 Incremental Wastewater Collection Expenses (6) CPI24 Chemicals Customer25 Repairs and Maintenance Repair26 Lab Supplies Customer27 Office Supplies CPI28 Training and Miscellaneous CPI29 Administrative and Customer Costs CPI30 Other Operating Expenses CPI31 Incremental Other Operating Expenses (4) CPI32 Rental of Building / Real Property CPI33 Rental of Equipment CPI34 Transportation Expenses CPI35 Insurance - Vehicle Insurance36 Insurance - General Liability Insurance37 Insurance - Workman's Comp. Insurance38 Insurance - Other Insurance39 Advertising Expenses CPI40 Amortization of Rate Case Expense CPI41 Regulatory Commission Expenses - Other CPI42 Bad Debt Expense Revenue43 Miscellaneous Expenses GDP44 Administrative Overhead Allocation CPI45 Contingency Allowance 1.0% Calculate

46 Total Operating Expenses__________________________









2029 2030 2031 2032 2033 2034 2035 2036 2037

95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,897 95,8970 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

102,079 102,079 102,079 102,079 102,079 102,079 102,079 102,079 102,0790 0 0 0 0 0 0 0 0

1,141,494 1,151,996 1,162,479 1,172,941 1,183,380 1,193,912 1,203,105 1,210,564 1,217,948782,962 789,774 796,566 803,337 810,165 816,970 822,934 827,789 832,590

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

152,846 154,176 155,502 156,824 158,157 159,486 160,650 161,598 162,5350 0 150,000 0 0 0 0 150,000 00 0 0 0 0 0 0 0 0

6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,322 6,3220 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

738,661 738,661 738,661 738,661 738,661 738,661 738,661 738,661 738,661177,840 177,840 177,840 177,840 177,840 177,840 177,840 177,840 177,840

32,939 33,226 33,512 33,797 34,084 34,370 34,621 34,825 35,02721,141 21,141 21,141 21,141 21,141 21,141 21,141 21,141 21,14133,726 33,726 33,726 33,726 33,726 33,726 33,726 33,726 33,72674,461 74,461 74,461 74,461 74,461 74,461 74,461 74,461 74,461

208,484 210,298 212,107 213,910 215,728 217,540 219,128 220,421 221,699194,055 194,055 194,055 194,055 194,055 194,055 194,055 194,055 194,055114,572 115,569 116,563 117,554 118,553 119,549 120,422 121,132 121,835

4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,256 4,25634,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615

0 0 0 0 0 0 0 0 067,048 67,048 67,048 67,048 67,048 67,048 67,048 67,048 67,04820,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007 20,007

0 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,545 78,54580 80 80 80 80 80 80 80 80

8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,109 8,1090 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 00 0 0 0 0 0 0 0 0

23,819 24,057 24,295 24,533 24,771 25,009 25,224 25,411 25,59721,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570 21,570

119,598 119,598 119,598 119,598 119,598 119,598 119,598 119,598 119,59841,355 41,575 43,294 42,013 42,233 42,452 42,645 44,302 42,956

4,296,481$ 4,318,681$ 4,492,328$ 4,362,919$ 4,385,081$ 4,407,298$ 4,426,739$ 4,594,052$ 4,458,197$

DRAFT

Table 6


Projection of Operating Expenses - Utility SystemEscalation References

Line EscalationNo. Escalation Factors Reference 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

1 Constant Factor Constant 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00002 Repairs and Maintenance Expenses Repair 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00003 Inflation (CPI) CPI 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00004 Inflation (GDP) GDP 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00005 Labor Labor 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00006 Rate Revenue Revenue 1.3050 1.0239 1.0282 1.0367 1.0395 1.0538 1.0474 1.0507 1.0444 1.04117 Marginal Marginal 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00008 Insurance Insurance 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00009 Water Customer Growth Plus W-Customer 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000

10 Wastewater Customer Growth S-Customer 1.0621 1.1045 1.0295 1.0371 1.0409 1.0564 1.0512 1.0494 1.0481 1.044111 Customer Growth Customer 1.0547 1.0927 1.0265 1.0334 1.0369 1.0511 1.0466 1.0451 1.0442 1.040712 R&R Fund Deposit Percent R&R Fund 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.050013 Eliminate Eliminate 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

DRAFT

Table 6



Line EscalationNo. Escalation Factors Reference

1 Constant Factor Constant2 Repairs and Maintenance Expenses Repair3 Inflation (CPI) CPI4 Inflation (GDP) GDP5 Labor Labor6 Rate Revenue Revenue7 Marginal Marginal8 Insurance Insurance9 Water Customer Growth Plus W-Customer

10 Wastewater Customer Growth S-Customer11 Customer Growth Customer12 R&R Fund Deposit Percent R&R Fund13 Eliminate Eliminate

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0395 1.0343 1.0316 1.0285 1.0277 1.0244 1.0223 1.0218 1.0214 1.0197 1.01561.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0423 1.0382 1.0349 1.0311 1.0302 1.0261 1.0237 1.0232 1.0226 1.0207 1.01571.0391 1.0354 1.0325 1.0290 1.0282 1.0245 1.0222 1.0218 1.0213 1.0195 1.01480.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.05000.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

DRAFT

Table 6



Line EscalationNo. Escalation Factors Reference

1 Constant Factor Constant2 Repairs and Maintenance Expenses Repair3 Inflation (CPI) CPI4 Inflation (GDP) GDP5 Labor Labor6 Rate Revenue Revenue7 Marginal Marginal8 Insurance Insurance9 Water Customer Growth Plus W-Customer

10 Wastewater Customer Growth S-Customer11 Customer Growth Customer12 R&R Fund Deposit Percent R&R Fund13 Eliminate Eliminate

2029 2030 2031 2032 2033 2034 2035 2036 2037 2038

1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0135 1.0100 1.0099 1.0098 1.0097 1.0096 1.0086 1.0074 1.0073 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.00001.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 0.00001.0134 1.0092 1.0091 1.0090 1.0089 1.0089 1.0077 1.0062 1.0061 0.00001.0126 1.0087 1.0086 1.0085 1.0085 1.0084 1.0073 1.0059 1.0058 1.00000.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.0500 0.05000.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000 0.0000

DRAFTTable 7


Projection of Other Operating Revenues - Utility System

Line EscalationNo. Reference (1) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

1 Reclaimed Water Sales (000s of gallons)2 City of Cape Coral (Existing Flows) 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,5573 Incremental ERC Growth 5,318 (2)4 Number of Years Growth Will Occur 255 Start Year 20096 Annual Incremental Growth 0 213 213 213 213 213 213 213 213 2137 Subtotal Incremental Growth 0 213 426 639 852 1,065 1,278 1,491 1,704 1,9178 Assumed Average Monthly Use per ERC (gallons) (3) 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,6009 Incremental Reclaimed Water Sales (000s) 0 24,538 49,075 73,613 98,150 122,688 147,226 171,763 196,301 220,838

10 Total Reclaimed Water Sales 0 91,095 115,632 140,170 164,707 189,245 213,783 238,320 262,858 287,395

11 Pine Lakes Golf Course (City of Cape Coral) 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,61512 Reclaimed Sales Within Existing NFMU Service Territory 0 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,50013 Total Annual Reclaimed Water Sales 34,615 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115

14 Total 34,616 101,172 601,767 626,304 650,842 675,379 699,917 724,455 748,992 773,530 798,06715 Annual Price Index Adjustment 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%16 Current Rate for Service per Thosand Gallons 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.2517 Annual Reclaimed Water Sales Revenues Calculate 8,654$ 25,293$ 150,442$ 156,576$ 162,710$ 168,845$ 174,979$ 181,114$ 187,248$ 193,382$ 199,517$

18 Bulk Wastewater Sales (000s of gallons)19 City of Cape Coral (Existing Flows) 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086

20 Incremental ERC Growth 5,71821 Number of Years Growth Will oCurr Over 2522 Start Year 2,00923 Incremental ERC Growth 0 229 229 229 229 229 229 229 229 22924 Subtotal Incremental Growth 0 229 458 687 916 1,145 1,374 1,603 1,832 2,06125 Assumed Average Monthly Use per ERC (gallons) (4) 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,80026 Incremental Bulk Wastewater Sales (000s) 0 7,694 15,389 23,083 30,778 38,472 46,166 53,861 61,555 69,25027 Total Wholesale Wastewater Sales (000s) 0 19,780 27,475 35,169 42,863 50,558 58,252 65,947 73,641 81,33528 Annual Price Index Adjustment 0.00% 0.00% 11.30% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%29 Current Rate for Service per Thosand Gallons Calculate 3.54 3.54 3.94 3.94 3.94 3.94 3.94 3.94 3.94 3.94 3.9430 Annual Reclaimed Water Sales Revenues 42,784$ 42,784$ 125,553$ 155,869$ 186,185$ 216,500$ 246,816$ 277,132$ 307,448$ 337,764$ 368,080$

31 Turn-On/Turn-Off Fees32 NFMU Proper 863 863 863 863 863 863 863 863 863 863 86333 Pine Lakes/ Lake Forest Area 104 104 104 104 104 104 104 104 104 104 10434 Total Accounts Charged Service Charge 967 967 967 967 967 967 967 967 967 967 96735 Annual Price Index Adjustment 0.00% 0.00% 200.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%36 Current Initiation of Service Charge for Utility (5) Calculate 15.00$ 15.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.0037 Total Initiation of Service Charge Revenue 14,510$ 14,510$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$

38 SepticTruck Deliveries Sales Revenues39 Annual Trips to Plant 995 995 995 995 995 995 995 995 995 995 99540 Current Septic (4) Constant 32.80$ 32.80$ -$ -$ -$ -$ -$ -$ -$ -$ -$41 Total Meter Installation Fee Receipts 32,636$ 32,636$ -$ -$ -$ -$ -$ -$ -$ -$ -$

42 Total Other Operating Revenues 98,584$ 115,223$ 319,525$ 355,975$ 392,426$ 428,876$ 465,326$ 501,777$ 538,227$ 574,677$ 611,128$

______________________________

(1) Escalation references summarized in Table 6 andrepresents basis of other operating revenue projections.

(2) Amount does not include ERCs in Judd Creek subdivisionsince no reclaimed water service is to be provided.

(3) Assumes weekly watering of approximately 3/4- inch per week for atypical single family lot which equates to approximately 2,400gallons per week or 9,600 gallons per month.

(4) Assumes typical unit will contribute approximately 2,800 gallonsper month per ERC based on the last two years of historicalinformation for the NFMU wactewater customer base.

(5) Rate based on information as provided by NFMU. Amounts tosingle family residential Monthly Base Charge ($9.90) plus5,000 gallon assumed septic tank volume (at $4.58 per 1,000).

DRAFTTable 7




1 Reclaimed Water Sales (000s of gallons)2 City of Cape Coral (Existing Flows)3 Incremental ERC Growth 5,318 (2)4 Number of Years Growth Will Occur 255 Start Year 20096 Annual Incremental Growth7 Subtotal Incremental Growth8 Assumed Average Monthly Use per ERC (gallons) (3)9 Incremental Reclaimed Water Sales (000s)

10 Total Reclaimed Water Sales

11 Pine Lakes Golf Course (City of Cape Coral)12 Reclaimed Sales Within Existing NFMU Service Territory13 Total Annual Reclaimed Water Sales

14 Total15 Annual Price Index Adjustment16 Current Rate for Service per Thosand Gallons17 Annual Reclaimed Water Sales Revenues Calculate

18 Bulk Wastewater Sales (000s of gallons)19 City of Cape Coral (Existing Flows)

20 Incremental ERC Growth 5,71821 Number of Years Growth Will oCurr Over 2522 Start Year 2,00923 Incremental ERC Growth24 Subtotal Incremental Growth25 Assumed Average Monthly Use per ERC (gallons) (4)26 Incremental Bulk Wastewater Sales (000s)27 Total Wholesale Wastewater Sales (000s)28 Annual Price Index Adjustment29 Current Rate for Service per Thosand Gallons Calculate30 Annual Reclaimed Water Sales Revenues

31 Turn-On/Turn-Off Fees32 NFMU Proper33 Pine Lakes/ Lake Forest Area34 Total Accounts Charged Service Charge35 Annual Price Index Adjustment36 Current Initiation of Service Charge for Utility (5) Calculate37 Total Initiation of Service Charge Revenue

38 SepticTruck Deliveries Sales Revenues39 Annual Trips to Plant40 Current Septic (4) Constant41 Total Meter Installation Fee Receipts

42 Total Other Operating Revenues

______________________________






2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557

213 213 213 213 213 213 213 213 213 213 2132,130 2,343 2,556 2,769 2,982 3,195 3,408 3,621 3,834 4,047 4,2609,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600

245,376 269,914 294,451 318,989 343,526 368,064 392,602 417,139 441,677 466,214 490,752311,933 336,471 361,008 385,546 410,083 434,621 459,159 483,696 508,234 532,771 557,309

34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115

822,605 847,143 871,680 896,218 920,755 945,293 969,831 994,368 1,018,906 1,043,443 1,067,9810.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25205,651$ 211,786$ 217,920$ 224,054$ 230,189$ 236,323$ 242,458$ 248,592$ 254,726$ 260,861$ 266,995$

12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086

229 229 229 229 229 229 229 229 229 229 2292,290 2,519 2,748 2,977 3,206 3,435 3,664 3,893 4,122 4,351 4,5802,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800

76,944 84,638 92,333 100,027 107,722 115,416 123,110 130,805 138,499 146,194 153,88889,030 96,724 104,419 112,113 119,807 127,502 135,196 142,891 150,585 158,279 165,9740.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

3.94 3.94 3.94 3.94 3.94 3.94 3.94 3.94 3.94 3.94 3.94398,396$ 428,712$ 459,028$ 489,344$ 519,660$ 549,976$ 580,292$ 610,608$ 640,924$ 671,239$ 701,555$

863 863 863 863 863 863 863 863 863 863 863104 104 104 104 104 104 104 104 104 104 104967 967 967 967 967 967 967 967 967 967 967

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00

43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$

995 995 995 995 995 995 995 995 995 995 995-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

647,578$ 684,028$ 720,479$ 756,929$ 793,379$ 829,830$ 866,280$ 902,730$ 939,181$ 975,631$ 1,012,081$

DRAFTTable 7













______________________________






2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039

66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557

213 213 213 213 213 0 0 0 0 0 04,473 4,686 4,899 5,112 5,325 5,325 5,325 5,325 5,325 5,325 5,3259,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600

515,290 539,827 564,365 588,902 613,440 613,440 613,440 613,440 613,440 613,440 613,440581,847 606,384 630,922 655,459 679,997 679,997 679,997 679,997 679,997 679,997 679,997

34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115

1,092,519 1,117,056 1,141,594 1,166,131 1,190,669 1,190,669 1,190,669 1,190,669 1,190,669 1,190,669 1,190,6690.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25273,130$ 279,264$ 285,398$ 291,533$ 297,667$ 297,667$ 297,667$ 297,667$ 297,667$ 297,667$ 297,667$

12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086

229 229 229 229 229 0 0 0 0 0 04,809 5,038 5,267 5,496 5,725 5,725 5,725 5,725 5,725 5,725 5,7252,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800

161,582 169,277 176,971 184,666 192,360 192,360 192,360 192,360 192,360 192,360 192,360173,668 181,363 189,057 196,751 204,446 204,446 204,446 204,446 204,446 204,446 204,446

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%3.94 3.94 3.94 3.94 3.94 3.94 3.94 3.94 3.94 3.94 3.94

731,871$ 762,187$ 792,503$ 822,819$ 853,135$ 853,135$ 853,135$ 853,135$ 853,135$ 853,135$ 853,135$

863 863 863 863 863 863 863 863 863 863 863104 104 104 104 104 104 104 104 104 104 104967 967 967 967 967 967 967 967 967 967 967

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00 45.00

43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$ 43,531$

995 995 995 995 995 995 995 995 995 995 995-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

1,048,532$ 1,084,982$ 1,121,432$ 1,157,883$ 1,194,333$ 1,194,333$ 1,194,333$ 1,194,333$ 1,194,333$ 1,194,333$ 1,194,333$

DRAFTTable 7A




1 Reclaimed Water Sales (000s of gallons)2 City of Cape Coral (Existing Flows) 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,5573 Incremental ERC Growth 5,318 (2)4 Number of Years Growth Will Occur 255 Start Year 20096 Annual Incremental Growth 0 213 213 213 213 213 213 213 213 2137 Subtotal Incremental Growth 0 213 426 639 852 1,065 1,278 1,491 1,704 1,9178 Assumed Average Monthly Use per ERC (gallons) (3) 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,6009 Incremental Reclaimed Water Sales (000s) 0 24,538 49,075 73,613 98,150 122,688 147,226 171,763 196,301 220,838

10 Total Reclaimed Water Sales 0 91,095 115,632 140,170 164,707 189,245 213,783 238,320 262,858 287,395

11 Pine Lakes Golf Course (City of Cape Coral) 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,61512 Reclaimed Sales Within Existing NFMU Service Territory 0 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,50013 Total Annual Reclaimed Water Sales 34,615 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115

14 Total 34,616 101,172 601,767 626,304 650,842 675,379 699,917 724,455 748,992 773,530 798,06715 Annual Price Index Adjustment 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%16 Current Rate for Service per Thosand Gallons 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.2517 Annual Reclaimed Water Sales Revenues Calculate 8,654$ 25,293$ 150,442$ 156,576$ 162,710$ 168,845$ 174,979$ 181,114$ 187,248$ 193,382$ 199,517$

18 Bulk Wastewater Sales (000s of gallons)19 City of Cape Coral (Existing Flows) 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086

20 Incremental ERC Growth 5,71821 Number of Years Growth Will oCurr Over 2522 Start Year 2,00923 Incremental ERC Growth 0 229 229 229 229 229 229 229 229 22924 Subtotal Incremental Growth 0 229 458 687 916 1,145 1,374 1,603 1,832 2,06125 Assumed Average Monthly Use per ERC (gallons) (4) 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,80026 Incremental Bulk Wastewater Sales (000s) 0 7,694 15,389 23,083 30,778 38,472 46,166 53,861 61,555 69,25027 Total Wholesale Wastewater Sales (000s) 0 19,780 27,475 35,169 42,863 50,558 58,252 65,947 73,641 81,33528 Annual Price Index Adjustment 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%29 Current Rate for Service per Thosand Gallons Calculate 3.54 3.54 3.54 3.54 3.54 3.54 3.54 3.54 3.54 3.54 3.5430 Annual Reclaimed Water Sales Revenues 42,784$ 42,784$ 112,806$ 140,044$ 167,283$ 194,521$ 221,759$ 248,997$ 276,235$ 303,473$ 330,712$

31 Turn-On/Turn-Off Fees32 NFMU Proper 863 863 863 863 863 863 863 863 863 863 86333 Pine Lakes/ Lake Forest Area 104 104 104 104 104 104 104 104 104 104 10434 Total Accounts Charged Service Charge 967 967 967 967 967 967 967 967 967 967 96735 Annual Price Index Adjustment 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%36 Current Initiation of Service Charge for Utility (5) Calculate 15.00$ 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.0037 Total Initiation of Service Charge Revenue 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$

38 SepticTruck Deliveries Sales Revenues39 Annual Trips to Plant 995 995 995 995 995 995 995 995 995 995 99540 Current Septic (4) Constant 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$41 Total Meter Installation Fee Receipts 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$

42 Total Other Operating Revenues 98,584$ 115,223$ 310,394$ 343,766$ 377,139$ 410,511$ 443,884$ 477,256$ 510,629$ 544,002$ 577,374$

______________________________






DRAFTTable 7A













______________________________






2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557

213 213 213 213 213 213 213 213 213 213 2132,130 2,343 2,556 2,769 2,982 3,195 3,408 3,621 3,834 4,047 4,2609,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600

245,376 269,914 294,451 318,989 343,526 368,064 392,602 417,139 441,677 466,214 490,752311,933 336,471 361,008 385,546 410,083 434,621 459,159 483,696 508,234 532,771 557,309

34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115

822,605 847,143 871,680 896,218 920,755 945,293 969,831 994,368 1,018,906 1,043,443 1,067,9810.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25205,651$ 211,786$ 217,920$ 224,054$ 230,189$ 236,323$ 242,458$ 248,592$ 254,726$ 260,861$ 266,995$

12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086

229 229 229 229 229 229 229 229 229 229 2292,290 2,519 2,748 2,977 3,206 3,435 3,664 3,893 4,122 4,351 4,5802,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800

76,944 84,638 92,333 100,027 107,722 115,416 123,110 130,805 138,499 146,194 153,88889,030 96,724 104,419 112,113 119,807 127,502 135,196 142,891 150,585 158,279 165,9740.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

3.54 3.54 3.54 3.54 3.54 3.54 3.54 3.54 3.54 3.54 3.54357,950$ 385,188$ 412,426$ 439,664$ 466,902$ 494,141$ 521,379$ 548,617$ 575,855$ 603,093$ 630,332$

863 863 863 863 863 863 863 863 863 863 863104 104 104 104 104 104 104 104 104 104 104967 967 967 967 967 967 967 967 967 967 967

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00

14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$

995 995 995 995 995 995 995 995 995 995 99532.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$

32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$

610,747$ 644,119$ 677,492$ 710,865$ 744,237$ 777,610$ 810,982$ 844,355$ 877,727$ 911,100$ 944,473$

DRAFTTable 7A













______________________________






2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039

66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557 66,557

213 213 213 213 213 0 0 0 0 0 04,473 4,686 4,899 5,112 5,325 5,325 5,325 5,325 5,325 5,325 5,3259,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600 9,600

515,290 539,827 564,365 588,902 613,440 613,440 613,440 613,440 613,440 613,440 613,440581,847 606,384 630,922 655,459 679,997 679,997 679,997 679,997 679,997 679,997 679,997

34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615 34,615409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500 409,500444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115 444,115

1,092,519 1,117,056 1,141,594 1,166,131 1,190,669 1,190,669 1,190,669 1,190,669 1,190,669 1,190,669 1,190,6690.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25273,130$ 279,264$ 285,398$ 291,533$ 297,667$ 297,667$ 297,667$ 297,667$ 297,667$ 297,667$ 297,667$

12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086 12,086

229 229 229 229 229 0 0 0 0 0 04,809 5,038 5,267 5,496 5,725 5,725 5,725 5,725 5,725 5,725 5,7252,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800 2,800

161,582 169,277 176,971 184,666 192,360 192,360 192,360 192,360 192,360 192,360 192,360173,668 181,363 189,057 196,751 204,446 204,446 204,446 204,446 204,446 204,446 204,446

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%3.54 3.54 3.54 3.54 3.54 3.54 3.54 3.54 3.54 3.54 3.54

657,570$ 684,808$ 712,046$ 739,284$ 766,522$ 766,522$ 766,522$ 766,522$ 766,522$ 766,522$ 766,522$

863 863 863 863 863 863 863 863 863 863 863104 104 104 104 104 104 104 104 104 104 104967 967 967 967 967 967 967 967 967 967 967

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00

14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$ 14,510$

995 995 995 995 995 995 995 995 995 995 99532.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$ 32.80$

32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$ 32,636$

977,845$ 1,011,218$ 1,044,590$ 1,077,963$ 1,111,335$ 1,111,335$ 1,111,335$ 1,111,335$ 1,111,335$ 1,111,335$ 1,111,335$

DRAFT

Table 8


Estimate of Capital Expenditures and Funding Needs - Utility System


1 General Plant (Departmental Capital) (2) CPI 71,839$ 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,83923 Meter Installation Costs - New Services (3) -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$45 Renewal and Replacement Fund Equivalent (4)6 Projected Gross System Revenues7 Water Rate Revenue 347,822$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$8 Wastewater Rate Revenue 4,309,145 5,640,811 5,785,842 5,961,164 6,196,122 6,458,133 6,828,842 7,173,257 7,559,279 7,914,578 8,258,0609 Other Operating Revenue (per Table 7) 98,584 115,223 319,525 355,975 392,426 428,876 465,326 501,777 538,227 574,677 611,128

10 Interest Income (per Table 7) - - - - - - - - - - -1112 Total Gross System Revenues 4,755,551$ 6,192,597$ 6,541,930$ 6,753,703$ 7,025,110$ 7,323,572$ 7,730,732$ 8,111,597$ 8,534,069$ 8,925,818$ 9,305,750$

13 Incremental R&R Fund Transfer Percentage 0.05% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.05% 5.10% 5.15% 5.20% 5.25%

14 Renewal and Replacement Fund Requirement (5.0 percent) R&R Fund 237,778$ 309,630$ 327,097$ 337,685$ 351,256$ 366,179$ 390,402$ 413,691$ 439,505$ 464,143$ 488,552$

15 Other Capital Expenditures16 NFMU Additional Costs for Improvements to Standard Operating Levels -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

17 Total Capital Improvements/Asset Replacement Funding Recognized 309,617$ 381,469$ 398,936$ 409,524$ 423,095$ 438,018$ 462,241$ 485,530$ 511,344$ 535,982$ 560,391$

(1) Escalation reference summarized on Table 6 and represents basisof other operating revenue projections.

(2) Amount based on i) fixed asset list contained in the 2007 Annual Report assubmitted to the Florida Public Service Commission for General Plant (accountnos. 340 to 347 for the water system and 390 to 397 for the wastewater system);ii) an assumed asset service life (replacement) of 8 years based on the compositedepreciation lives included in the Annual Report; and iii) application of theconsumer price index to estimate replacement cost. Amount calculated as follows:

AmountWater System General Plant (acct. nos. 340 - 347) 812$Wastewater System General Plant (acct. nos. 390 - 397) 573,898

Total Reported General Plant 574,710$Average Service Life (years) 8Fiscal Year 2007 Departmental Capital Allowance 71,839$Adjustment for Inflation on Asset Replacement (CPI) 0.00%Fiscal Year 2008 Departmental Capital Allowance 71,839$

(3) Based on discussions with NFMU staff, the NFMU retail water system isessentially built out and the utility does not bill for any potential Water meterinstallations.

(4) The Bond Resolution requires that the County System maintain a Renewal andReplacement Fund with the purpose to replace assets as may be required from timeto time. The Resolution requires a deposit in an amount equal to 5% of the previousyears' Gross Revenues (the "Renewal and Replacement Fund Requirement").

DRAFT

Table 8




1 General Plant (Departmental Capital) (2) CPI23 Meter Installation Costs - New Services (3)45 Renewal and Replacement Fund Equivalent (4)6 Projected Gross System Revenues7 Water Rate Revenue8 Wastewater Rate Revenue9 Other Operating Revenue (per Table 7)

10 Interest Income (per Table 7)1112 Total Gross System Revenues

13 Incremental R&R Fund Transfer Percentage 0.05%

14 Renewal and Replacement Fund Requirement (5.0 percent) R&R Fund

15 Other Capital Expenditures16 NFMU Additional Costs for Improvements to Standard Operating Levels

17 Total Capital Improvements/Asset Replacement Funding Recognized

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$8,601,542 8,911,357 9,207,178 9,481,855 9,756,531 10,004,776 10,237,784 10,470,792 10,703,801 10,923,437 11,100,162

647,578 684,028 720,479 756,929 793,379 829,830 866,280 902,730 939,181 975,631 1,012,081- - - - - - - - - - -

9,685,683$ 10,031,948$ 10,364,220$ 10,675,347$ 10,986,474$ 11,271,169$ 11,540,627$ 11,810,086$ 12,079,544$ 12,335,631$ 12,548,806$

5.30% 5.35% 5.40% 5.45% 5.50% 5.55% 5.60% 5.65% 5.70% 5.75% 5.80%

513,341$ 536,709$ 559,668$ 581,806$ 604,256$ 625,550$ 646,275$ 667,270$ 688,534$ 709,299$ 727,831$

-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

585,180$ 608,548$ 631,507$ 653,645$ 676,095$ 697,389$ 718,114$ 739,109$ 760,373$ 781,138$ 799,670$

DRAFT

Table 8




1 General Plant (Departmental Capital) (2) CPI23 Meter Installation Costs - New Services (3)45 Renewal and Replacement Fund Equivalent (4)6 Projected Gross System Revenues7 Water Rate Revenue8 Wastewater Rate Revenue9 Other Operating Revenue (per Table 7)

10 Interest Income (per Table 7)1112 Total Gross System Revenues

13 Incremental R&R Fund Transfer Percentage 0.05%

14 Renewal and Replacement Fund Requirement (5.0 percent) R&R Fund

15 Other Capital Expenditures16 NFMU Additional Costs for Improvements to Standard Operating Levels

17 Total Capital Improvements/Asset Replacement Funding Recognized

2029 2030 2031 2032 2033 2034 2035 2036 2037

71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839 71,839

-$ -$ -$ -$ -$ -$ -$ -$ -$

436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$11,256,363 11,373,695 11,491,026 11,608,357 11,725,689 11,843,020 11,949,157 12,040,368 12,131,579

1,048,532 1,084,982 1,121,432 1,157,883 1,194,333 1,194,333 1,194,333 1,194,333 1,194,333- - - - - - - - -

12,741,458$ 12,895,239$ 13,049,021$ 13,202,803$ 13,356,585$ 13,473,916$ 13,580,053$ 13,671,264$ 13,762,475$

5.85% 5.90% 5.95% 6.00% 6.05% 6.10% 6.15% 6.20% 6.25%

745,375$ 760,819$ 776,417$ 792,168$ 808,073$ 821,909$ 835,173$ 847,618$ 860,155$

-$ -$ -$ -$ -$ -$ -$ -$ -$

817,214$ 832,658$ 848,256$ 864,007$ 879,912$ 893,748$ 907,012$ 919,457$ 931,994$



Summary of Net Present Value of Utility System Cash Flow

LineNo. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Utility System Cash Receipts1 Water Rate Revenue (1) 347,822$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$2 Wastewater Rate Revenue (2) 4,309,145 5,640,811 5,785,842 5,961,164 6,196,122 6,458,133 6,828,842 7,173,257 7,559,279 7,914,578 8,258,060

Other Operating Income (3)3 Reclaimed Water Revenues 8,654 25,293 150,442 156,576 162,710 168,845 174,979 181,114 187,248 193,382 199,5174 Bulk Wastewater Sales Revenues 42,784 42,784 125,553 155,869 186,185 216,500 246,816 277,132 307,448 337,764 368,0805 Meter Turn-On/Turn-Off Charges 14,510 14,510 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,5316 Septic Disposal Charges 32,636 32,636 - - - - - - - - -

7 Total Utility System Revenues 4,755,551$ 6,192,597$ 6,541,930$ 6,753,703$ 7,025,110$ 7,323,572$ 7,730,732$ 8,111,597$ 8,534,069$ 8,925,818$ 9,305,750$

8 Interest Income 0 0 0 0 0 0 0 0 0 0 0

9 Total Utility Cash Receipts - Operations 4,755,551 6,192,597 6,541,930 6,753,703 7,025,110 7,323,572 7,730,732 8,111,597 8,534,069 8,925,818 9,305,750

10 Direct Utility System Expenditures11 Operating Expenses (4) 2,431,327 2,559,766 3,110,039 3,151,213 3,354,786 3,258,124 3,339,881 3,415,070 3,490,474 3,719,033 3,641,609

12 Capital Expenditures Funded from Operations (5) 309,617 381,469 398,936 409,524 423,095 438,018 462,241 485,530 511,344 535,982 560,39113 Less Capital Expenditures Funded By the Company 0 0 0 0 0 0 0 0 0 0 014 Net Capital Expenditures Funded from Operations 309,617 381,469 398,936 409,524 423,095 438,018 462,241 485,530 511,344 535,982 560,391

15 Net Available for Acquisition and Debt Retirement of System 2,014,607 3,251,361 3,032,955 3,192,965 3,247,230 3,627,431 3,928,610 4,210,996 4,532,251 4,670,803 5,103,75016 Net Present Value of Net Available (5) 5.00% 2,014,607$ 3,251,361$ 2,888,529$ 2,896,114$ 2,805,080$ 2,984,296$ 3,078,168$ 3,142,310$ 3,220,986$ 3,161,384$ 3,289,923$17 Total Gross Cash Net Present Value - Sum of All Periods 88,238,912$

18 Total Utility System Expenditures19 Operating Expenses (4) 2,431,327 2,559,766 3,110,039 3,151,213 3,354,786 3,258,124 3,339,881 3,415,070 3,490,474 3,719,033 3,641,60920 Total System Capital Expenditures (5) 309,617 381,469 398,936 409,524 423,095 438,018 462,241 485,530 511,344 535,982 560,391

21 Net Available for Acquisition of System 2,014,607 3,251,361 3,032,955 3,192,965 3,247,230 3,627,431 3,928,610 4,210,996 4,532,251 4,670,803 5,103,75022 Net Present Value of Net Available 5.00% 2,014,607$ 3,251,361$ 2,888,529$ 2,896,114$ 2,805,080$ 2,984,296$ 3,078,168$ 3,142,310$ 3,220,986$ 3,161,384$ 3,289,923$23 Total Net Cash Present Value - Sum of All Periods 86,224,305$

24 Capacity/Connection Charges Applied to Capital Construction (6) - - 276,640 329,840 723,520 989,520 1,649,200 1,537,480 1,460,340 1,518,860 1,455,02025 Net Present Value of Capacity/Connection Charges 5.00% -$ -$ 263,467$ 299,175$ 625,004$ 814,081$ 1,292,191$ 1,147,291$ 1,037,836$ 1,028,024$ 937,919$

26 Addition Of Capacity/Connection Charges from Approved Contracts (7) 4,427,706$27 Total Net Present Value Capacity Charges - Sum of all Periods and Adjustments 19,687,424$

Capital Deductions:28 Del Prado Plant Expansion to 7.5 MGD -$ -$ -$ -$ -$ -$ -$ -$ -$ 3,324,275$ -$29 Immediate Pump Station Improvements -$ -$ 438,750$ -$ -$ -$ -$ -$ -$ -$ -$30 Telemetry and Plant Computerized and Odor Control Improvements -$ -$ 700,000$ -$ -$ -$ -$ -$ -$ -$ -$31 Additional Field Crew and Instrumentation Technician Vehicles -$ -$ 168,000$ -$ -$ -$ -$ -$ -$ -$ -$32 Total Capital Deductions -$ -$ 1,306,750$ -$ -$ -$ -$ -$ -$ 3,324,275$ -$33 Net Present Value of Capital Deductions -$ -$ 1,244,524$ -$ -$ -$ -$ -$ -$ 2,250,000$ -$34 Total Net Present Value of Capital Deductions - Sum of all Periods 23,744,524$

Other Deductions:35 Other Recognized Deductions 036 Financing Charges 2.50% 2,054,180$37 Total of Other Adjustments 2,054,180$

38 Total Net Present Value Cash and Capacity/Connection Charges -39 Sum of All Periods 80,113,025$

(1) Amounts shown based on estimated customer growth projections (reference Table 1) and existing County rates for utility service.



(4) Amounts shown derived from Tables 4 and 5.


(6) Amount shown reflects estimated future connection fee collections that for purposes of this analysis have been assumed to accrue to the seller for valuation determination.

(7) Based on information provided by NFMU, approximately $4,427,706 in connection charges are due to be paid the Company per signed wastewater agreements entered betweenNFMU and developments desiring to reserve treatment capacity. For purposes of this analysis it has been assumed that such contracted payments would be remitted to NFMU atthat point in time when such charges are collected by the County assuming the purchase transaction occurs.

DRAFTTable 9



LineNo.

Utility System Cash Receipts1 Water Rate Revenue (1)2 Wastewater Rate Revenue (2)

Other Operating Income (3)3 Reclaimed Water Revenues4 Bulk Wastewater Sales Revenues5 Meter Turn-On/Turn-Off Charges6 Septic Disposal Charges

7 Total Utility System Revenues

8 Interest Income

9 Total Utility Cash Receipts - Operations

10 Direct Utility System Expenditures11 Operating Expenses (4)

12 Capital Expenditures Funded from Operations (5)13 Less Capital Expenditures Funded By the Company14 Net Capital Expenditures Funded from Operations

15 Net Available for Acquisition and Debt Retirement of System16 Net Present Value of Net Available (5) 5.00%17 Total Gross Cash Net Present Value - Sum of All Periods

18 Total Utility System Expenditures19 Operating Expenses (4)20 Total System Capital Expenditures (5)

21 Net Available for Acquisition of System22 Net Present Value of Net Available 5.00%23 Total Net Cash Present Value - Sum of All Periods

24 Capacity/Connection Charges Applied to Capital Construction (6)25 Net Present Value of Capacity/Connection Charges 5.00%

26 Addition Of Capacity/Connection Charges from Approved Contracts (7)27 Total Net Present Value Capacity Charges - Sum of all Periods and Adjustments

Capital Deductions:28 Del Prado Plant Expansion to 7.5 MGD29 Immediate Pump Station Improvements30 Telemetry and Plant Computerized and Odor Control Improvements31 Additional Field Crew and Instrumentation Technician Vehicles32 Total Capital Deductions33 Net Present Value of Capital Deductions34 Total Net Present Value of Capital Deductions - Sum of all Periods

Other Deductions:35 Other Recognized Deductions36 Financing Charges 2.50%37 Total of Other Adjustments

38 Total Net Present Value Cash and Capacity/Connection Charges -39 Sum of All Periods

Page 2 of 3

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$8,601,542 8,911,357 9,207,178 9,481,855 9,756,531 10,004,776 10,237,784 10,470,792 10,703,801 10,923,437 11,100,162

205,651 211,786 217,920 224,054 230,189 236,323 242,458 248,592 254,726 260,861 266,995398,396 428,712 459,028 489,344 519,660 549,976 580,292 610,608 640,924 671,239 701,555

43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531- - - - - - - - - - -

9,685,683$ 10,031,948$ 10,364,220$ 10,675,347$ 10,986,474$ 11,271,169$ 11,540,627$ 11,810,086$ 12,079,544$ 12,335,631$ 12,548,806$

0 0 0 0 0 0 0 0 0 0 0

9,685,683 10,031,948 10,364,220 10,675,347 10,986,474 11,271,169 11,540,627 11,810,086 12,079,544 12,335,631 12,548,806

3,715,731 3,785,452 3,851,661 4,064,194 3,973,783 4,028,275 4,078,953 4,129,780 4,331,986 4,227,940 4,264,680

585,180 608,548 631,507 653,645 676,095 697,389 718,114 739,109 760,373 781,138 799,6700 0 0 0 0 0 0 0 0 0 0

585,180 608,548 631,507 653,645 676,095 697,389 718,114 739,109 760,373 781,138 799,670

5,384,771 5,637,948 5,881,052 5,957,507 6,336,595 6,545,505 6,743,561 6,941,197 6,987,185 7,326,554 7,484,4563,305,782$ 3,296,391$ 3,274,790$ 3,159,393$ 3,200,411$ 3,148,500$ 3,089,303$ 3,028,421$ 2,903,320$ 2,899,366$ 2,820,813$

3,715,731 3,785,452 3,851,661 4,064,194 3,973,783 4,028,275 4,078,953 4,129,780 4,331,986 4,227,940 4,264,680585,180 608,548 631,507 653,645 676,095 697,389 718,114 739,109 760,373 781,138 799,670

5,384,771 5,637,948 5,881,052 5,957,507 6,336,595 6,545,505 6,743,561 6,941,197 6,987,185 7,326,554 7,484,4563,305,782$ 3,296,391$ 3,274,790$ 3,159,393$ 3,200,411$ 3,148,500$ 3,089,303$ 3,028,421$ 2,903,320$ 2,899,366$ 2,820,813$

1,455,020 1,327,340 1,260,840 1,141,140 1,141,140 1,042,720 912,380 912,380 912,380 912,380 766,080893,256$ 776,068$ 702,083$ 605,171$ 576,353$ 501,566$ 417,972$ 398,068$ 379,113$ 361,060$ 288,727$

-$ -$ -$ 38,184,395$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ 38,184,395$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ 20,250,000$ -$ -$ -$ -$ -$ -$ -$

DRAFTTable 9



LineNo.




8 Interest Income












Page 3 of 3

2029 2030 2031 2032 2033 2034 2035 2036 2037

436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$ 436,563$11,256,363 11,373,695 11,491,026 11,608,357 11,725,689 11,843,020 11,949,157 12,040,368 12,131,579

273,130 279,264 285,398 291,533 297,667 297,667 297,667 297,667 297,667731,871 762,187 792,503 822,819 853,135 853,135 853,135 853,135 853,135

43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531- - - - - - - - -

12,741,458$ 12,895,239$ 13,049,021$ 13,202,803$ 13,356,585$ 13,473,916$ 13,580,053$ 13,671,264$ 13,762,475$

0 0 0 0 0 0 0 0 0

12,741,458 12,895,239 13,049,021 13,202,803 13,356,585 13,473,916 13,580,053 13,671,264 13,762,475

4,296,481 4,318,681 4,492,328 4,362,919 4,385,081 4,407,298 4,426,739 4,594,052 4,458,197

817,214 832,658 848,256 864,007 879,912 893,748 907,012 919,457 931,9940 0 0 0 0 0 0 0 0

817,214 832,658 848,256 864,007 879,912 893,748 907,012 919,457 931,994

7,627,762 7,743,900 7,708,437 7,975,877 8,091,592 8,172,870 8,246,302 8,157,755 8,372,2842,737,927$ 2,647,251$ 2,509,646$ 2,473,063$ 2,389,469$ 2,298,544$ 2,208,758$ 2,080,991$ 2,034,015$

4,296,481 4,318,681 4,492,328 4,362,919 4,385,081 4,407,298 4,426,739 4,594,052 4,458,197817,214 832,658 848,256 864,007 879,912 893,748 907,012 919,457 931,994

7,627,762 7,743,900 7,708,437 7,975,877 8,091,592 8,172,870 8,246,302 8,157,755 8,372,2842,737,927$ 2,647,251$ 2,509,646$ 2,473,063$ 2,389,469$ 2,298,544$ 2,208,758$ 2,080,991$ 2,034,015$

766,080 766,080 766,080 766,080 766,080 766,080 670,320 542,640 542,640274,979$ 261,884$ 249,414$ 237,537$ 226,226$ 215,453$ 179,544$ 138,424$ 131,832$

-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$




LineNo. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017


Other Operating Income (3)3 Reclaimed Water Revenues 8,654 25,293 150,442 156,576 162,710 168,845 174,979 181,114 187,248 193,382 199,5174 Bulk Wastewater Sales Revenues 42,784 42,784 112,806 140,044 167,283 194,521 221,759 248,997 276,235 303,473 330,7125 Meter Turn-On/Turn-Off Charges 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,5106 Septic Disposal Charges 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636


8 Interest Income 0 0 0 0 0 0 0 0 0 0 0






21 Net Available for Acquisition of System 2,016,806 2,035,942 1,878,138 2,128,644 2,282,583 2,735,396 3,069,710 3,409,389 3,721,358 3,866,724 4,314,34922 Net Present Value of Net Available 5.00% 2,016,806$ 2,035,942$ 1,788,703$ 1,930,743$ 1,971,781$ 2,250,417$ 2,405,198$ 2,544,138$ 2,644,700$ 2,617,151$ 2,781,068$23 Total Net Cash Present Value - Sum of All Periods 67,999,548$

24 Capacity/Connection Charges Applied to Capital Construction (6) - - 138,430 320,675 487,680 464,185 579,120 577,215 483,235 467,995 467,99525 Net Present Value of Capacity/Connection Charges 5.00% -$ -$ 131,838$ 290,862$ 421,276$ 381,886$ 453,756$ 430,727$ 343,426$ 316,757$ 301,674$












DRAFTTable 10



LineNo.




8 Interest Income












Page 2 of 3

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

400,338$ 400,338$ 400,338$ 400,338$ 400,338$ 400,338$ 400,338$ 400,338$ 400,338$ 400,338$ 400,338$7,837,279 8,156,223 8,432,529 8,647,495 8,862,462 9,077,428 9,220,581 9,339,050 9,399,918 9,460,787 9,521,656

205,651 211,786 217,920 224,054 230,189 236,323 242,458 248,592 254,726 260,861 266,995357,950 385,188 412,426 439,664 466,902 494,141 521,379 548,617 575,855 603,093 630,332

14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,51032,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636

8,848,364$ 9,200,681$ 9,510,359$ 9,758,698$ 10,007,036$ 10,255,375$ 10,431,901$ 10,583,742$ 10,677,984$ 10,772,225$ 10,866,466$

0 0 0 0 0 0 0 0 0 0 0

8,848,364 9,200,681 9,510,359 9,758,698 10,007,036 10,255,375 10,431,901 10,583,742 10,677,984 10,772,225 10,866,466

3,714,077 3,783,815 3,849,986 4,062,395 3,971,860 4,026,282 4,076,775 4,127,367 4,329,217 4,224,845 4,261,346

540,802 564,075 585,398 603,688 622,226 641,012 656,025 669,820 680,484 691,242 702,0940 0 0 0 0 0 0 0 0 0 0

540,802 564,075 585,398 603,688 622,226 641,012 656,025 669,820 680,484 691,242 702,094

4,593,484 4,852,790 5,074,975 5,092,615 5,412,950 5,588,081 5,699,101 5,786,555 5,668,282 5,856,138 5,903,0262,820,001$ 2,837,326$ 2,825,936$ 2,700,723$ 2,733,908$ 2,687,962$ 2,610,824$ 2,524,655$ 2,355,288$ 2,317,473$ 2,224,788$

3,714,077 3,783,815 3,849,986 4,062,395 3,971,860 4,026,282 4,076,775 4,127,367 4,329,217 4,224,845 4,261,346540,802 564,075 585,398 603,688 622,226 641,012 656,025 669,820 680,484 691,242 702,094

4,593,484 4,852,790 5,074,975 5,092,615 5,412,950 5,588,081 5,699,101 5,786,555 5,668,282 5,856,138 5,903,0262,820,001$ 2,837,326$ 2,825,936$ 2,700,723$ 2,733,908$ 2,687,962$ 2,610,824$ 2,524,655$ 2,355,288$ 2,317,473$ 2,224,788$

458,470 - - - - - - - - 89,535 89,535281,461$ -$ -$ -$ -$ -$ -$ -$ -$ 35,432$ 33,745$

-$ -$ -$ 38,184,395$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ 38,184,395$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ 20,250,000$ -$ -$ -$ -$ -$ -$ -$

DRAFTTable 10



LineNo.




8 Interest Income












Page 3 of 3

2029 2030 2031 2032 2033 2034 2035 2036 2037

400,338$ 400,338$ 400,338$ 400,338$ 400,338$ 400,338$ 400,338$ 400,338$ 400,338$9,582,525 9,643,393 9,704,262 9,765,131 9,826,000 9,886,868 9,947,737 10,008,606 10,069,475

273,130 279,264 285,398 291,533 297,667 297,667 297,667 297,667 297,667657,570 684,808 712,046 739,284 766,522 766,522 766,522 766,522 766,522

14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,510 14,51032,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636 32,636

10,960,708$ 11,054,949$ 11,149,190$ 11,243,432$ 11,337,673$ 11,398,542$ 11,459,410$ 11,520,279$ 11,581,148$

0 0 0 0 0 0 0 0 0

10,960,708 11,054,949 11,149,190 11,243,432 11,337,673 11,398,542 11,459,410 11,520,279 11,581,148

4,292,951 4,315,036 4,488,569 4,359,044 4,381,090 4,403,194 4,422,542 4,589,791 4,453,874

713,040 724,081 735,216 746,445 757,768 767,150 776,593 786,096 795,6610 0 0 0 0 0 0 0 0

713,040 724,081 735,216 746,445 757,768 767,150 776,593 786,096 795,661

5,954,716 6,015,832 5,925,405 6,137,943 6,198,815 6,228,198 6,260,275 6,144,392 6,331,6142,137,400$ 2,056,511$ 1,929,142$ 1,903,179$ 1,830,527$ 1,751,623$ 1,676,804$ 1,567,395$ 1,538,242$

4,292,951 4,315,036 4,488,569 4,359,044 4,381,090 4,403,194 4,422,542 4,589,791 4,453,874713,040 724,081 735,216 746,445 757,768 767,150 776,593 786,096 795,661

5,954,716 6,015,832 5,925,405 6,137,943 6,198,815 6,228,198 6,260,275 6,144,392 6,331,6142,137,400$ 2,056,511$ 1,929,142$ 1,903,179$ 1,830,527$ 1,751,623$ 1,676,804$ 1,567,395$ 1,538,242$

89,535 89,535 89,535 89,535 89,535 89,535 89,535 89,535 89,53532,138$ 30,608$ 29,150$ 27,762$ 26,440$ 25,181$ 23,982$ 22,840$ 21,752$

-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$




LineNo. 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017


Other Operating Income (3)3 Reclaimed Water Revenues 8,654 25,293 150,442 156,576 162,710 168,845 174,979 181,114 187,248 193,382 199,5174 Bulk Wastewater Sales Revenues 42,784 42,784 125,553 155,869 186,185 216,500 246,816 277,132 307,448 337,764 368,0805 Meter Turn-On/Turn-Off Charges 14,510 14,510 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,5316 Septic Disposal Charges 32,636 32,636 - - - - - - - - -


8 Interest Income 0 0 0 0 0 0 0 0 0 0 0






21 Net Available for Acquisition of System 3,331,733 3,508,130 3,373,875 3,681,993 3,859,100 4,328,530 4,758,001 5,192,524 5,591,179 5,819,289 6,348,59022 Net Present Value of Net Available 5.00% 3,331,733$ 3,508,130$ 3,213,214$ 3,339,676$ 3,333,636$ 3,561,092$ 3,728,018$ 3,874,741$ 3,973,547$ 3,938,724$ 4,092,357$23 Total Net Cash Present Value - Sum of All Periods ###########

24 Capacity/Connection Charges Applied to Capital Construction (6) - - 63,500 238,125 293,370 293,370 534,035 532,130 438,150 422,910 422,91025 Net Present Value of Capacity/Connection Charges 5.00% -$ -$ 60,476$ 215,986$ 253,424$ 241,356$ 418,430$ 397,084$ 311,385$ 286,242$ 272,612$












DRAFTTable 11



LineNo.




8 Interest Income












Page 2 of 3

2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

558,311$ 558,311$ 558,311$ 558,311$ 558,311$ 558,311$ 558,311$ 558,311$ 558,311$ 558,311$ 558,311$9,871,099 10,261,567 10,596,767 10,852,459 11,108,150 11,363,842 11,526,450 11,657,061 11,769,895 11,882,730 11,961,628

205,651 211,786 217,920 224,054 230,189 236,323 242,458 248,592 254,726 260,861 266,995398,396 428,712 459,028 489,344 519,660 549,976 580,292 610,608 640,924 671,239 701,555

43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531- - - - - - - - - - -

11,076,988$ 11,503,907$ 11,875,557$ 12,167,699$ 12,459,841$ 12,751,982$ 12,951,041$ 13,118,102$ 13,267,387$ 13,416,672$ 13,532,021$

0 0 0 0 0 0 0 0 0 0 0

11,076,988 11,503,907 11,875,557 12,167,699 12,459,841 12,751,982 12,951,041 13,118,102 13,267,387 13,416,672 13,532,021

3,713,668 3,783,369 3,849,502 4,061,874 3,971,303 4,025,687 4,076,143 4,126,698 4,328,602 4,224,284 4,260,785

658,919 687,298 713,119 734,979 757,130 779,574 797,097 813,012 828,080 843,298 856,6960 0 0 0 0 0 0 0 0 0 0

658,919 687,298 713,119 734,979 757,130 779,574 797,097 813,012 828,080 843,298 856,696

6,704,401 7,033,240 7,312,936 7,370,846 7,731,408 7,946,721 8,077,801 8,178,392 8,110,705 8,349,090 8,414,5404,115,921$ 4,112,190$ 4,072,116$ 3,908,917$ 3,904,886$ 3,822,509$ 3,700,534$ 3,568,205$ 3,370,165$ 3,304,019$ 3,171,352$

3,713,668 3,783,369 3,849,502 4,061,874 3,971,303 4,025,687 4,076,143 4,126,698 4,328,602 4,224,284 4,260,785658,919 687,298 713,119 734,979 757,130 779,574 797,097 813,012 828,080 843,298 856,696

6,704,401 7,033,240 7,312,936 7,370,846 7,731,408 7,946,721 8,077,801 8,178,392 8,110,705 8,349,090 8,414,5404,115,921$ 4,112,190$ 4,072,116$ 3,908,917$ 3,904,886$ 3,822,509$ 3,700,534$ 3,568,205$ 3,370,165$ 3,304,019$ 3,171,352$

413,385 - - - - - - - - 156,210 89,535253,783$ -$ -$ -$ -$ -$ -$ -$ -$ 61,818$ 33,745$

-$ -$ -$ 38,184,395$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ 38,184,395$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ 20,250,000$ -$ -$ -$ -$ -$ -$ -$

DRAFTTable 11



LineNo.




8 Interest Income












Page 3 of 3

2029 2030 2031 2032 2033 2034 2035 2036 2037

558,311$ 558,311$ 558,311$ 558,311$ 558,311$ 558,311$ 558,311$ 558,311$ 558,311$12,040,526 12,119,424 12,198,322 12,277,221 12,356,119 12,435,017 12,513,915 12,592,813 12,671,711

273,130 279,264 285,398 291,533 297,667 297,667 297,667 297,667 297,667731,871 762,187 792,503 822,819 853,135 853,135 853,135 853,135 853,135

43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531 43,531- - - - - - - - -

13,647,369$ 13,762,718$ 13,878,066$ 13,993,414$ 14,108,763$ 14,187,661$ 14,266,559$ 14,345,457$ 14,424,355$

0 0 0 0 0 0 0 0 0

13,647,369 13,762,718 13,878,066 13,993,414 14,108,763 14,187,661 14,266,559 14,345,457 14,424,355

4,292,391 4,314,476 4,488,008 4,358,483 4,380,528 4,402,631 4,421,980 4,589,228 4,453,311

870,210 883,839 897,584 911,444 925,419 937,286 949,232 961,257 973,3610 0 0 0 0 0 0 0 0

870,210 883,839 897,584 911,444 925,419 937,286 949,232 961,257 973,361

8,484,768 8,564,402 8,492,474 8,723,487 8,802,815 8,847,743 8,895,347 8,794,972 8,997,6833,045,543$ 2,927,740$ 2,764,906$ 2,704,874$ 2,599,496$ 2,488,346$ 2,382,604$ 2,243,541$ 2,185,954$

4,292,391 4,314,476 4,488,008 4,358,483 4,380,528 4,402,631 4,421,980 4,589,228 4,453,311870,210 883,839 897,584 911,444 925,419 937,286 949,232 961,257 973,361

8,484,768 8,564,402 8,492,474 8,723,487 8,802,815 8,847,743 8,895,347 8,794,972 8,997,6833,045,543$ 2,927,740$ 2,764,906$ 2,704,874$ 2,599,496$ 2,488,346$ 2,382,604$ 2,243,541$ 2,185,954$

89,535 89,535 89,535 89,535 89,535 89,535 89,535 89,535 89,53532,138$ 30,608$ 29,150$ 27,762$ 26,440$ 25,181$ 23,982$ 22,840$ 21,752$

-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$-$ -$ -$ -$ -$ -$ -$ -$ -$

Table 12


Summary of Debt Service Capacity From Ratesand Comparison to Net Present Value of Utility System Cash Flow - Lee County Rates

Line For Fiscal Year For Fiscal YearNo. Description 2008 2020

System Revenues:1 Water Rate Revenue 436,563$ 436,563$2 Wastewater Rate Revenue 5,640,811 9,207,1783 Other Operating Income 115,223 720,479

4 Total Utility System Revenues 6,192,597$ 10,364,220$

5 Interest Income 0 0

6 Total System Revenues 6,192,597$ 10,364,220$

7 Operating Expenses 2,559,766 3,851,661

8 Net Operating Revenues Before Other Deductions 3,632,830$ 6,512,559$

Allowance for Other Deductions:9 Renewal and Replacement Fund Deposit 309,630 559,668

10 Meter Installation Cost 0 011 General Plant / Vehicle Replacement Allowance 71,839 71,83912 Debt Coverage Allowance for Financing 15.0% 424,091 767,094

13 Net Annual Cash Flow for Acquisition / Additional Capital Funding 2,827,271$ 5,113,958$

14 Estimated Principal Amount of Bonds Available for Issue 42,621,304$ 77,093,274$

Other Funding Sources15 Cumulative Extension Fees 109,060$ 14,092,680$16 Other Funds - -

17 Total Available Funds For Disbursement 42,730,364$ 91,185,954$

Expenditures:18 Deposit to Project Fund For Capital Deficiencies 0 019 Bond Issue Costs 2.50% 1,065,533 1,927,33220 Working Capital Deposit 0 021 Debt Service Reserve Fund Deposit Yes 2,779,671 -

22 Net Available for Purchase 38,885,160$ 89,258,622$

23 Total Expenditures 42,730,364$ 91,185,954$

24 Net Present Value of Cash Flow 80,113,025 80,113,025

Estimated Debt Service Payment25 Years 30 3026 Interest Rate 5.00% 5.00%27 Annual Debt Service Payment - Interest Only -Yes or No Yes 4,005,651$ 0 5,211,467$

DRAFT

Time AdjustedLine Year Acquisition Adjustment PurchaseNo. Name of Utility (Seller) Name of Utility (Buyer) Purchased Price Factor [1] Price

1 Kingsley Service Company 1992 22,260,000$ [2] 9.34% $24,338,342

2 Clay Utilities Co., d/b/a South Broward Utility, Inc. 1997 12,300,000 2.52% 12,610,370

3 Ortega Utility Company 1998 7,180,000 3.65% 7,441,831

4 AquaSource Utilities, Inc. (Rotonda System) 1998 20,300,000 3.65% 21,040,273

5 IBSCO, Inc. 1998 695,000 [3] 3.65% 720,344

6 Gulf Utility Company 1998 43,000,000 3.65% 44,568,067

7 Florida Cities Water Company - Poinciana Utilities, Inc. 1999 25,216,737 3.83% 26,182,538

8 Florida Cities Water Company - Sarasota System 1999 12,493,568 3.83% 12,972,072

9 Florida Cities Water Company - North/South Ft. Myers 1999 128,859,183 3.83% 133,794,490

10 Jillington Creek Platation (JCP) Utilities 1999 18,856,162 3.83% 19,578,353

11 Fisherman's Cove Utilities 1999 1,000,000 3.83% 1,038,300

12 Spruce Creek South Utilities, Inc. 2000 7,321,236 [4] 3.68% 7,590,901

13 Pinelake Village 2000 160,000 3.68% 165,893

14 United Water of Florida, Inc. 2001 219,000,000 4.51% 228,869,600

15 Regency Utilities Inc. 2001 7,718,000 4.51% 8,065,825

16 Decca Utilities 2001 11,915,000 [5] 4.51% 12,451,969

17 Florida Public Utilities Company 2003 24,355,070 [6] 4.47% 25,444,554

18Florida Water Services, Inc. - Fox Run, Leliani Heights, andFisherman's Haven (bundled purchase) 2003 2,350,000 4.47% 2,455,123

19Florida Water Services, Inc. - Beacon Hills, Woodmere, PalmValley, Remington Forest (bundled purchase) 2003 25,000,000 4.47% 26,118,333

20 Florida Water Services Corporation - Palm Coast System 2003 82,772,934 4.47% 86,475,643

21 Florida Water Services Corporation - Spring Hill System 2003 35,574,025 4.47% 37,165,370

22Florida Water Services - Marco Island and Marco Shores Systems

(bundled purchase) 2003 85,313,143 [7] 4.47% 89,129,484

23 Florida Water Services Corporation - Citrus 2003 16,548,337 4.47% 17,288,599

24 Florida Water Services Corporation - Lehigh 2003 34,596,839 [8] 4.47% 36,144,470

25 Realnor Hallandale Inc. 2003 500,034 4.47% 522,402

26 Florida Water Services Corporation 2003 17,200,000 4.47% 17,969,413




30 Little Sumter Utility Company 2003 80,837,006 [9] 4.47% 84,453,114


32 Ocean City Utilities, Inc. 2004 1,127,582 0.64% 1,134,761

33 Burkim Enterprises, Inc. System Serving Snug Harbor 2005 1,595,000 -1.05% 1,578,253

34 St. Johns Service Company 2006 26,800,000 -2.05% 26,251,493

35 Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures 2002 10,000 4.03% 10,403

36 East Pasco Utilities 2003 2,850,000 4.47% 2,977,490

37 Forest Hills Utilities 2004 3,745,000 0.64% 3,768,843

38 Intercoastal Utilities, Inc. 2007 24,500,000 -1.55% 24,119,433

39 Hudson Utilities Inc. 2007 5,600,000 -1.55% 5,513,013

Footnotes on Following Page

Ni America Operating LLC

St. Johns County

Pasco County

Pasco County

Pasco County

St. Johns County

Brevard County

Flagler County

City of Marco Island

Florida Governmental Utility Authority


Village Center Community Development District

Deltona

City of Bonita Springs

Nassau County

City of Groveland

Tohopekaliga Water Authority

Martin County

JEA (Duval County)

City of Palm Coast

Hernando County

JEA (Duval County)

JEA

Marion County

City of Fernandina Beach

JEA

Martin County

Florida Water Services, Inc.

Martin County

Gulf Environmental Services Inc.



Lee County

Marion County

Table 13Comparable Sales Analysis of Florida Utilities

North Fort Myers Utility, Inc.

Comparable Sales Analysis - Development of Time-Adjusted Acquisition Prices

Clay County

City of Sunrise

JEA (Duval County)

Charlotte County

Martin County

DRAFT




Footnotes:[1] Adjustment to reflect inflationary effects upon purchase price less an allowance for depreciation of fixed assets. Inflation was based on construction cost index

as published by the Engineering News Record (ENR). Index factors assume the change from June 1st of each year (midyear convention) and were determinedas follows:

ENR Less AdjustedConstruction Percent Depreciation Percent

Fiscal Year Cost Index Change Allowance [*] Change1991 4835 67.71% 56.67% 11.04%1992 4985 62.67% 53.33% 9.34%1993 5210 55.64% 50.00% 5.64%1994 5408 49.94% 46.67% 3.27%1995 5471 48.22% 43.33% 4.89%1996 5620 44.29% 40.00% 4.29%1997 5826 39.19% 36.67% 2.52%1998 5920 36.98% 33.33% 3.65%1999 6059 33.83% 30.00% 3.83%2000 6221 30.35% 26.67% 3.68%2001 6343 27.84% 23.33% 4.51%2002 6538 24.03% 20.00% 4.03% `2003 6694 21.14% 16.67% 4.47%2004 7115 13.97% 13.33% 0.64%2005 7443 8.95% 10.00% -1.05%2006 7751 4.62% 6.67% -2.05%2007 7967 1.78% 3.33% -1.55%2008 8109 0.00% 0.00% 0.00%

[*] Assumptions For Depreciation:Fixed Asset Lifespan (years): 30

Annual Deprecation (%): 3.33%

[2] Purchase Price includes $11,500,000.00 of future Payments agreed to be paid in full upon addition of 525 ERCs from time of sale.

[3] Purchase price included the requirement of the Seller to construct an interconnect to connect the purchased assets to the County system. Net purchase pricedetermined as follows:

AmountCash at Closing 873,670$Cost of Interconnect Required of Seller (178,670)

Net Purchase Price 695,000$

[4] Purchase price included: i) cash payment at closing; ii) future payments for growth through 2005; and iii) a cash payment once a certain number of ERCs have beenconnected. Estimated purchase price determined as follows:

Amount Notes

Cash at Closing 5,500,480$Present Value of Futures Payments 1,263,709 Assume 200 ERCs at $1500 per ERC, discounted at 6%Present Value of Future Cash Payment 557,047 At 200 ERCs per year, reach 3,300 ERCs in year 17

Assumed Purchase Price of Utility 7,321,236$

[5] Marion County ("the County") entered into agreement with Decca to make future payments past closing based on each new additional ERC that is connected to the Utility System.The County is required to pay Decca $500 per ERC (for all system ERCs) and make subsequent reimbursement payments of no less than $300,000.00 per annum to an aggregatemaximum of $3,000,000.00.


Amount Notes

Cash at Closing 18,950,000$Present Value of Futures Payments 2,212,796 Assume 300 ERCs at $1500 per ERC for 6 years, discounted at 6%Present Value of Final Futures Payment 3,192,274 Difference between $7,500,000 and payments to date, discounted at 6%


[7] Acquisition price does not include amount due from buyer to seller for accounts receivables. Calculation is as follows:

AmountCash at Closing 86,613,143$Accounts Receivable (1,300,000)

Net Purchase Price 85,313,143$


AmountCash at Closing 35,433,538$Accounts Receivable (836,699)


[9] $21,206,091.90 of the Acquisition Price went to retiring the LSU Bonds. Also LSU deposited $2,160,794.88 to the construction fund when the Series 2003 Bonds were issued.

### The acquisition price is comprised of three components as follows:Utility System 318,380$Stabilization of Certain Roadways for Infrastructure 1,400,000Reliquishment of Existing and Future Service Area Rights 3,156,620Total 4,875,000$

DRAFTTable 14


Comparable Sales Analysis - Allocation of Adjusted Purchase Price

AdjustedLine System Purchase Net Utility Plant in Service [2] Percent of Total Allocated Purchase PriceNo. Name of Utility (Seller) Name of Purchaser Type Price [1] Water Wastewater Total Water Wastewater Water Wastewater

1 Kingsley Service Company Clay County W/S 24,338,342$ 10,409,627$ 16,511,793$ 26,921,420$ 38.67% 61.33% $9,411,637 $14,926,705

2 Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise W/S 12,610,370 5,628,142 7,118,556 12,746,698 44.15% 55.85% 5,567,478 7,042,892

3 Ortega Utility Company JEA (Duval County) W/S 7,441,831 1,841,216 2,514,599 4,355,815 42.27% 57.73% 3,145,662 4,296,169

4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County W/S 21,040,273 6,040,697 4,292,015 10,332,712 58.46% 41.54% 12,300,144 8,740,130

5 IBSCO, Inc. Martin County W/S 720,344 147,743 205,102 352,845 41.87% 58.13% 301,608 418,736

6 Gulf Utility Company Gulf Environmental Services Inc. W/S 44,568,067 14,582,973 12,201,473 26,784,446 54.45% 45.55% 24,267,312 20,300,754

7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority W/S 26,182,538 11,487,925 25,698,063 37,185,988 30.89% 69.11% 8,087,786 18,094,752

8 Florida Cities Water Company - Sarasota System Florida Governmental Utility Authority W/S 12,972,072 3,564,464 9,010,844 12,575,308 28.34% 71.66% 3,676,285 9,295,787

9 Florida Cities Water Company - North/South Ft. Myers Lee County W/S 133,794,490 48,937,496 29,237,735 78,175,231 62.60% 37.40% 83,755,351 50,039,139

10 Jillington Creek Platation (JCP) Utilities JEA W/S 19,578,353 2,889,354 10,946,421 13,835,775 20.88% 79.12% 4,087,960 15,490,393

11 Fisherman's Cove Utilities Martin County W/S 1,038,300 205,766 206,428 412,194 49.92% 50.08% 518,319 519,981

12 Spruce Creek South Utilities, Inc. Florida Water Services, Inc. W/S 7,590,901 3,803,821 3,776,259 7,580,080 50.18% 49.82% 3,809,114 3,781,787

13 Pinelake Village [3] Martin County W/S 165,893 126,013 246,966 372,979 33.79% 66.21% 56,055 109,838

14 United Water of Florida, Inc. JEA (Duval County) W/S 228,869,600 65,472,778 92,902,565 158,375,343 41.34% 58.66% 94,614,693 134,254,907

15 Regency Utilities Inc. JEA W/S 8,065,825 1,578,757 1,002,248 2,581,005 61.17% 38.83% 4,933,865 3,131,960

16 Decca Utilities Marion County W/S 12,451,969 3,028,934 3,664,160 6,693,094 45.25% 54.75% 5,634,516 6,817,453

17 Florida Public Utilities Company City of Fernandina Beach W/ 25,444,554 12,628,461 - 12,628,461 100.00% 0.00% 25,444,554 -

18Florida Water Services, Inc. - Fox Run, Leliani Heights, and Fisherman'sHaven (bundled purchase) Martin County W/S 2,455,123 808,012 744,117 1,552,129 52.06% 47.94% 1,278,137 1,176,986

19Florida Water Services, Inc. - Beacon Hills, Woodmere, Palm Valley,Remington Forest (bundled purchase) JEA (Duval County) W/S 26,118,333 8,328,753 7,324,916 15,653,669 53.21% 46.79% 13,897,565 12,220,768

20 Florida Water Services Corporation - Palm Coast System City of Palm Coast W/S 86,475,643 40,183,812 42,285,349 82,469,161 48.73% 51.27% 42,139,581 44,336,062

21 Florida Water Services Corporation - Spring Hill System Hernando County W/S 37,165,370 16,266,695 12,752,212 29,018,907 56.06% 43.94% 20,834,906 16,330,463

22Florida Water Services - Marco Island and Marco Shores Systems (bundled

purchase) City of Marco Island W/S 89,129,484 55,824,637 19,636,613 75,461,250 73.98% 26.02% 65,937,992 23,191,492

23 Florida Water Services Corporation - Citrus Florida Governmental Utility Authority W/S 17,288,599 18,562,596 8,715,866 27,278,462 68.05% 31.95% 11,764,892 5,523,707

24 Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority W/S 36,144,470 16,912,279 22,103,854 39,016,133 43.35% 56.65% 15,668,628 20,475,843

25 Realnor Hallandale Inc. City of Bonita Springs S 522,402 - 922,772 922,772 0.00% 100.00% - 522,402

26 Florida Water Services Corporation Nassau County W/S 17,969,413 3,406,231 5,205,212 8,611,443 39.55% 60.45% 7,106,903 10,862,510

27 Florida Water Services Corporation City of Groveland W/S 3,134,200 558,429 775,712 1,334,141 41.86% 58.14% 1,311,976 1,822,224

28 Florida Water Services Corporation Tohopekaliga Water Authority W/S 39,773,870 7,981,329 11,151,305 19,132,634 41.72% 58.28% 16,593,659 23,180,212

29 Florida Water Services Corporation Deltona W/S 62,139,435 18,023,008 10,516,040 28,539,048 63.15% 36.85% 39,241,053 22,898,382

30 Little Sumter Utility Company [4]Village Center Community DevelopmentDistrict W/S 84,453,114 13,715,781 18,338,027 32,053,808 42.79% 57.21% 36,137,488 48,315,627

31 Florida Water Services Corporation Marion County W/S 23,349,790 16,702,713 8,655,941 25,358,654 65.87% 34.13% 15,380,507 7,969,283

32 Ocean City Utilities, Inc. Flagler County W/S 1,134,761 425,998 122,772 548,770 77.63% 22.37% 880,915 253,846

33 Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County W/S 1,578,253 302,850 97,548 400,398 75.64% 24.36% 1,193,790 384,462

34 St. Johns Service Company St. Johns County W/S 26,251,493 6,660,860 10,536,450 17,197,310 38.73% 61.27% 10,167,203 16,084,290

35 Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County S 10,403 - 6,357 6,357 0.00% 100.00% - 10,403

36 East Pasco Utilities Pasco County W/S 2,977,490 346,811 166,587 513,398 67.55% 32.45% 2,011,294 966,196

37 Forest Hills Utilities Pasco County W/S 3,768,843 259,550 329,910 589,460 44.03% 55.97% 1,659,422 2,109,422

38 Intercoastal Utilities, Inc. St. Johns County W/S 24,119,433 7,233,854 10,102,309 17,336,163 41.73% 58.27% 10,065,040 14,054,394

39 Hudson Utilities Inc. Ni America Operating LLC S 5,513,013 - 4,683,677 4,683,677 0.00% 100.00% - 5,513,013

Footnotes:[1] Amounts shown derived from Table 13.

[2] Based on information published by the respective utilities in the Annual Reports submitted to the regulatory agency and other available financial information.

[3] Net Plant Utility calculated based on depreciated replacement cost.


Comparable Sales Analysis of Florida Utilities

DRAFTTable 15


Comparable Sales Analysis - Development of Purchase Price Per ERC

Water System Wastewater SystemLine Allocated AllocatedNo. Name of Utility (Seller) Name of Purchaser Price [1] ERCs [2] Price/ERC Price [1] ERCs [2] Price/ERC

Implied Price Based on ERCs (Meter Equivalents) Served

1 Kingsley Service Company Clay County 9,411,637$ 16,266 $579 $14,926,705 15,463 965

2 Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise 5,567,478 2,924 1,904 7,042,892 2,330 3,023

3 Ortega Utility Company JEA (Duval County) 3,145,662 2,465 1,276 4,296,169 2,166 1,983

4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County 12,300,144 3,685 3,338 8,740,130 3,246 2,693

5 IBSCO, Inc. Martin County 301,608 352 857 418,736 354 1,185

6 Gulf Utility Company Gulf Environmental Services Inc. 24,267,312 8,382 2,895 20,300,754 3,826 5,306

7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority 8,087,786 6,461 1,252 18,094,752 6,206 2,916

8 Florida Cities Water Company - Sarasota System [3] Florida Governmental Utility Authority 3,676,285 7,582 485 9,295,787 11,992 775

9 Florida Cities Water Company - North/South Ft. Myers Lee County 83,755,351 26,737 3,133 50,039,139 13,303 3,761

10 Jillington Creek Platation (JCP) Utilities JEA 4,087,960 1,591 2,569 15,490,393 1,382 11,209

11 Fisherman's Cove Utilities Martin County 518,319 524 989 519,981 524 992

12 Spruce Creek South Utilities, Inc. Florida Water Services, Inc. 3,809,114 4,246 897 3,781,787 3,307 1,144

13 Pinelake Village Martin County 56,055 471 119 109,838 471 233

14 United Water of Florida, Inc. JEA (Duval County) 94,614,693 53,929 1,754 134,254,907 38,820 3,458

15 Regency Utilities Inc. JEA 4,933,865 1,627 3,032 3,131,960 1,352 2,317

16 Decca Utilities Marion County 5,634,516 3,571 1,578 6,817,453 3,822 1,784

17 Florida Public Utilities Company City of Fernandina Beach 25,444,554 8,117 3,135 - - -

18Florida Water Services, Inc. - Fox Run, Leliani Heights, and Fisherman's Haven

(bundled purchase) Martin County 1,278,137 660 1,937 1,176,986 630 1,868

19 Forest (bundled purchase) JEA (Duval County) 13,897,565 6,426 2,163 12,220,768 5,832 2,095

20 Florida Water Services Corporation - Palm Coast System City of Palm Coast 42,139,581 27,464 1,534 44,336,062 20,147 2,201

21 Florida Water Services Corporation - Spring Hill System Hernando County 20,834,906 34,622 602 16,330,463 8,021 2,036


purchase) City of Marco Island 65,937,992 16,160 4,080 23,191,492 6,109 3,796

23 Florida Water Services Corporation - Citrus Florida Governmental Utility Authority 11,764,892 11,648 1,010 5,523,707 6,382 866

24 Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority 15,668,628 11,460 1,367 20,475,843 8,427 2,430

25 Realnor Hallandale Inc. City of Bonita Springs - - - 522,402 806 648

26 Florida Water Services Corporation Nassau County 7,106,903 2,319 3,065 10,862,510 2,142 5,071

27 Florida Water Services Corporation City of Groveland 1,311,976 809 1,622 1,822,224 226 8,063

28 Florida Water Services Corporation Tohopekaliga Water Authority 16,593,659 13,149 1,262 23,180,212 8,422 2,752

29 Florida Water Services Corporation Deltona 39,241,053 32,614 1,203 22,898,382 5,975 3,832

30 Little Sumter Utility Company [4] Village Center Community Development District 36,137,488 10,755 3,360 48,315,627 8,854 5,457

31 Florida Water Services Corporation Marion County 15,380,507 9,706 1,585 7,969,283 6,561 1,215

32 Ocean City Utilities, Inc. Flagler County 880,915 571 1,543 253,846 341 746

33 Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County 1,193,790 483 2,472 384,462 483 796

34 St. Johns Service Company St. Johns County 10,167,203 8,337 1,220 16,084,290 7,623 2,110

35 Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County - - - 10,403 173 60

36 East Pasco Utilities Pasco County 2,011,294 1,727 1,165 966,196 1,091 886

37 Forest Hills Utilities Pasco County 1,659,422 2,394 693 2,109,422 1,204 1,752

38 Intercoastal Utilities, Inc. St. Johns County 10,065,040 6,849 1,470 14,054,394 5,482 2,564

39 Hudson Utilities Inc. Ni America Operating LLC - - - 5,513,013 2,978 1,851

40 Weighted Average Price per ERC 1,737 2,658

41 North Fort Myers Utility, Inc. - ERC (meter equivelents) 1,894 12,938

42 Implied Purchase Price per Utility System Component 3,289,893$ 34,394,112$

43 Total Implied Purchase Price - Combined Utility System Component 37,684,005$

Footnotes:[1] Amounts derived from Table 14.

[2]

[3] The ERC calculations basis was derived by dividing base charge revenues by the base charge rate for each respective class.


Based on information published by the respective utilities in the Annual Reports submitted to the regulatory agency and other available financial information.


DRAFTTable 16


Comparable Sales Analysis - Development of Implied Purchase Price - Net Investment Basis

Water System Wastewater SystemLine Net Net Invest. to Net Net Invest. toNo. Name of Utility (Seller) Name of Purchaser Alloc. Price Investment (1) Price Ratio Alloc. Price Investment (1) Price Ratio

Implied Price Based on Net Investment

1 Kingsley Service Company Clay County 9,411,637$ 10,409,627$ 90.41% 14,926,705$ 16,511,793$ 90.40%

2 Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise 5,567,478 5,628,142 98.92% 7,042,892 7,118,556 98.94%

3 Ortega Utility Company JEA (Duval County) 3,145,662 1,841,216 170.85% 4,296,169 2,514,599 170.85%

4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County 12,300,144 6,040,697 203.62% 8,740,130 4,292,015 203.64%

5 IBSCO, Inc. Martin County 301,608 147,743 204.14% 418,736 205,102 204.16%

6 Gulf Utility Company Gulf Environmental Services Inc. 24,267,312 14,582,973 166.41% 20,300,754 12,201,473 166.38%

7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority 8,087,786 11,487,925 70.40% 18,094,752 25,698,063 70.41%

8 Florida Cities Water Company - Sarasota System [2] Florida Governmental Utility Authority 3,676,285 3,564,464 103.14% 9,295,787 9,010,844 103.16%

9 Florida Cities Water Company - North/South Ft. Myers Lee County 83,755,351 48,937,496 171.15% 50,039,139 29,237,735 171.15%

10 Jillington Creek Platation (JCP) Utilities JEA 4,087,960 2,889,354 141.48% 15,490,393 10,946,421 141.51%

11 Fisherman's Cove Utilities Martin County 518,319 205,766 251.90% 519,981 206,428 251.89%

12 Spruce Creek South Utilities, Inc. Florida Water Services, Inc. 3,809,114 3,803,821 100.14% 3,781,787 3,776,259 100.15%

13 Pinelake Village Martin County 56,055 126,013 44.48% 109,838 246,966 44.47%

14 United Water of Florida, Inc. JEA (Duval County) 94,614,693 65,472,778 144.51% 134,254,907 92,902,565 144.51%

15 Regency Utilities Inc. JEA 4,933,865 1,578,757 312.52% 3,131,960 1,002,248 312.49%

16 Decca Utilities Marion County 5,634,516 3,028,934 186.02% 6,817,453 3,664,160 186.06%

17 Florida Public Utilities Company City of Fernandina Beach 25,444,554 12,628,461 201.49% - - N/A

18Florida Water Services, Inc. - Fox Run, Leliani Heights, andFisherman's Haven (bundled purchase) Martin County 1,278,137 808,012 158.18% 1,176,986 744,117 158.17%

19Florida Water Services, Inc. - Beacon Hills, Woodmere, PalmValley, Remington Forest (bundled purchase) JEA (Duval County) 13,897,565 8,328,753 166.86% 12,220,768 7,324,916 166.84%

20 Florida Water Services Corporation - Palm Coast System City of Palm Coast 42,139,581 40,183,812 104.87% 44,336,062 42,285,349 104.85%

21 Florida Water Services Corporation - Spring Hill System Hernando County 20,834,906 16,266,695 128.08% 16,330,463 12,752,212 128.06%

22Florida Water Services - Marco Island and Marco Shores

Systems (bundled purchase) City of Marco Island 65,937,992 55,824,637 118.12% 23,191,492 19,636,613 118.10%

23 Florida Water Services Corporation - Citrus Florida Governmental Utility Authority 11,764,892 18,562,596 63.38% 5,523,707 8,715,866 63.38%

24 Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority 15,668,628 16,912,279 92.65% 20,475,843 22,103,854 92.63%

25 Realnor Hallandale Inc. City of Bonita Springs - - N/A 522,402 922,772 56.61%

26 Florida Water Services Corporation Nassau County 7,106,903 3,406,231 208.64% 10,862,510 5,205,212 208.69%

27 Florida Water Services Corporation City of Groveland 1,311,976 558,429 234.94% 1,822,224 775,712 234.91%

28 Florida Water Services Corporation Tohopekaliga Water Authority 16,593,659 7,981,329 207.91% 23,180,212 11,151,305 207.87%

29 Florida Water Services Corporation Deltona 39,241,053 18,023,008 217.73% 22,898,382 10,516,040 217.75%

30 Little Sumter Utility Company Village Center Community Development District 36,137,488 13,715,781 263.47% 48,315,627 18,338,027 263.47%

31 Florida Water Services Corporation Marion County 15,380,507 16,702,713 92.08% 7,969,283 8,655,941 92.07%

32 Ocean City Utilities, Inc. Flagler County 880,915 425,998 206.79% 253,846 122,772 206.76%

33 Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County 1,193,790 302,850 394.19% 384,462 97,548 394.13%

34 St. Johns Service Company St. Johns County 10,167,203 6,660,860 152.64% 16,084,290 10,536,450 152.65%

35 Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County - - N/A 10,403 6,357 163.65%

36 East Pasco Utilities Pasco County 2,011,294 346,811 579.94% 966,196 166,587 579.99%

37 Forest Hills Utilities Pasco County 1,659,422 259,550 639.35% 2,109,422 329,910 639.39%

38 Intercoastal Utilities, Inc. St. Johns County 10,065,040 7,233,854 139.14% 14,054,394 10,102,309 139.12%

39 Hudson Utilities Inc. Ni America Operating LLC - - N/A 5,513,013 4,683,677 117.71%

40 Average Net Investment to Price Ratio 141.90% 138.76%

41 North Fort Myers Utility, Inc. - Net Investment 836,241$ 39,856,536$

42 Implied Purchase Price per Utility System Component $1,186,588 $55,306,224

43 Total Implied Price - Combined Utility System Component 56,492,813$




DRAFT

Time AdjustedLine Year Acquisition Adjustment PurchaseNo. Name of Utility (Seller) Name of Utility (Buyer) Purchased Price Factor [1] Price

1 Kingsley Service Company 1992 22,260,000$ [2] 9.34% $24,338,342

2 Clay Utilities Co., d/b/a South Broward Utility, Inc. 1997 12,300,000 2.52% 12,610,370

3 Ortega Utility Company 1998 7,180,000 3.65% 7,441,831

4 AquaSource Utilities, Inc. (Rotonda System) 1998 20,300,000 3.65% 21,040,273

5 IBSCO, Inc. 1998 695,000 [3] 3.65% 720,344

6 Gulf Utility Company 1998 43,000,000 3.65% 44,568,067

7 Florida Cities Water Company - Poinciana Utilities, Inc. 1999 25,216,737 3.83% 26,182,538

8 Florida Cities Water Company - Sarasota System 1999 12,493,568 3.83% 12,972,072

9 Florida Cities Water Company - North/South Ft. Myers 1999 128,859,183 3.83% 133,794,490

10 Jillington Creek Platation (JCP) Utilities 1999 18,856,162 3.83% 19,578,353

11 Fisherman's Cove Utilities 1999 1,000,000 3.83% 1,038,300

12 Spruce Creek South Utilities, Inc. 2000 7,321,236 [4] 3.68% 7,590,901

13 Pinelake Village 2000 160,000 3.68% 165,893

14 United Water of Florida, Inc. 2001 219,000,000 4.51% 228,869,600

15 Regency Utilities Inc. 2001 7,718,000 4.51% 8,065,825

16 Decca Utilities 2001 11,915,000 [5] 4.51% 12,451,969

17 Florida Public Utilities Company 2003 24,355,070 [6] 4.47% 25,444,554

18Florida Water Services, Inc. - Fox Run, Leliani Heights, andFisherman's Haven (bundled purchase) 2003 2,350,000 4.47% 2,455,123

19Florida Water Services, Inc. - Beacon Hills, Woodmere, PalmValley, Remington Forest (bundled purchase) 2003 25,000,000 4.47% 26,118,333

20 Florida Water Services Corporation - Palm Coast System 2003 82,772,934 4.47% 86,475,643

21 Florida Water Services Corporation - Spring Hill System 2003 35,574,025 4.47% 37,165,370

22Florida Water Services - Marco Island and Marco Shores Systems

(bundled purchase) 2003 85,313,143 [7] 4.47% 89,129,484

23 Florida Water Services Corporation - Citrus 2003 16,548,337 4.47% 17,288,599

24 Florida Water Services Corporation - Lehigh 2003 34,596,839 [8] 4.47% 36,144,470

25 Realnor Hallandale Inc. 2003 500,034 4.47% 522,402





30 Little Sumter Utility Company 2003 80,837,006 [9] 4.47% 84,453,114


32 Ocean City Utilities, Inc. 2004 1,127,582 0.64% 1,134,761

33 Burkim Enterprises, Inc. System Serving Snug Harbor 2005 1,595,000 -1.05% 1,578,253

34 St. Johns Service Company 2006 26,800,000 -2.05% 26,251,493

35 Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures 2002 10,000 4.03% 10,403

36 East Pasco Utilities 2003 2,850,000 4.47% 2,977,490

37 Forest Hills Utilities 2004 3,745,000 0.64% 3,768,843

38 Intercoastal Utilities, Inc. 2007 24,500,000 -1.55% 24,119,433

39 Hudson Utilities Inc. 2007 5,600,000 -1.55% 5,513,013

Footnotes on Following Page

Marion County




Clay County

City of Sunrise

JEA (Duval County)

Charlotte County

Martin County

Gulf Environmental Services Inc.



Lee County

JEA

Martin County

Florida Water Services, Inc.

Martin County

JEA (Duval County)

JEA

Marion County

City of Fernandina Beach

Tohopekaliga Water Authority

Martin County

JEA (Duval County)

City of Palm Coast

Hernando County

Brevard County

Flagler County

City of Marco Island



Village Center Community Development District

Deltona

City of Bonita Springs

Nassau County

City of Groveland

Ni America Operating LLC

St. Johns County

Pasco County

Pasco County

Pasco County

St. Johns County

DRAFT




Footnotes:[1] Adjustment to reflect inflationary effects upon purchase price less an allowance for depreciation of fixed assets. Inflation was based on construction cost index

as published by the Engineering News Record (ENR). Index factors assume the change from June 1st of each year (midyear convention) and were determinedas follows:

ENR Less AdjustedConstruction Percent Depreciation Percent

Fiscal Year Cost Index Change Allowance [*] Change1991 4835 67.71% 56.67% 11.04%1992 4985 62.67% 53.33% 9.34%1993 5210 55.64% 50.00% 5.64%1994 5408 49.94% 46.67% 3.27%1995 5471 48.22% 43.33% 4.89%1996 5620 44.29% 40.00% 4.29%1997 5826 39.19% 36.67% 2.52%1998 5920 36.98% 33.33% 3.65%1999 6059 33.83% 30.00% 3.83%2000 6221 30.35% 26.67% 3.68%2001 6343 27.84% 23.33% 4.51%2002 6538 24.03% 20.00% 4.03% `2003 6694 21.14% 16.67% 4.47%2004 7115 13.97% 13.33% 0.64%2005 7443 8.95% 10.00% -1.05%2006 7751 4.62% 6.67% -2.05%2007 7967 1.78% 3.33% -1.55%2008 8109 0.00% 0.00% 0.00%

[*] Assumptions For Depreciation:Fixed Asset Lifespan (years): 30

Annual Deprecation (%): 3.33%

[2] Purchase Price includes $11,500,000.00 of future Payments agreed to be paid in full upon addition of 525 ERCs from time of sale.

[3] Purchase price included the requirement of the Seller to construct an interconnect to connect the purchased assets to the County system. Net purchase pricedetermined as follows:

AmountCash at Closing 873,670$Cost of Interconnect Required of Seller (178,670)

Net Purchase Price 695,000$


Amount Notes

Cash at Closing 5,500,480$Present Value of Futures Payments 1,263,709 Assume 200 ERCs at $1500 per ERC, discounted at 6%Present Value of Future Cash Payment 557,047 At 200 ERCs per year, reach 3,300 ERCs in year 17


[5] Marion County ("the County") entered into agreement with Decca to make future payments past closing based on each new additional ERC that is connected to the Utility System.The County is required to pay Decca $500 per ERC (for all system ERCs) and make subsequent reimbursement payments of no less than $300,000.00 per annum to an aggregatemaximum of $3,000,000.00.


Amount Notes

Cash at Closing 18,950,000$Present Value of Futures Payments 2,212,796 Assume 300 ERCs at $1500 per ERC for 6 years, discounted at 6%Present Value of Final Futures Payment 3,192,274 Difference between $7,500,000 and payments to date, discounted at 6%



AmountCash at Closing 86,613,143$Accounts Receivable (1,300,000)



AmountCash at Closing 35,433,538$Accounts Receivable (836,699)



### The acquisition price is comprised of three components as follows:Utility System 318,380$Stabilization of Certain Roadways for Infrastructure 1,400,000Reliquishment of Existing and Future Service Area Rights 3,156,620Total 4,875,000$

DRAFTTable 18


Comparable Sales Analysis - Allocation of Adjusted Purchase Price

AdjustedLine System Purchase Net Utility Plant in Service [2] Percent of Total Allocated Purchase PriceNo. Name of Utility (Seller) Name of Purchaser Type Price [1] Water Wastewater Total Water Wastewater Water Wastewater

1 Kingsley Service Company Clay County W/S 24,338,342$ 10,409,627$ 16,511,793$ 26,921,420$ 38.67% 61.33% $9,411,637 $14,926,705

2 Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise W/S 12,610,370 5,628,142 7,118,556 12,746,698 44.15% 55.85% 5,567,478 7,042,892

3 Ortega Utility Company JEA (Duval County) W/S 7,441,831 1,841,216 2,514,599 4,355,815 42.27% 57.73% 3,145,662 4,296,169

4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County W/S 21,040,273 6,040,697 4,292,015 10,332,712 58.46% 41.54% 12,300,144 8,740,130

5 IBSCO, Inc. Martin County W/S 720,344 147,743 205,102 352,845 41.87% 58.13% 301,608 418,736

6 Gulf Utility Company Gulf Environmental Services Inc. W/S 44,568,067 14,582,973 12,201,473 26,784,446 54.45% 45.55% 24,267,312 20,300,754

7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority W/S 26,182,538 11,487,925 25,698,063 37,185,988 30.89% 69.11% 8,087,786 18,094,752

8 Florida Cities Water Company - Sarasota System Florida Governmental Utility Authority W/S 12,972,072 3,564,464 9,010,844 12,575,308 28.34% 71.66% 3,676,285 9,295,787

9 Florida Cities Water Company - North/South Ft. Myers Lee County W/S 133,794,490 48,937,496 29,237,735 78,175,231 62.60% 37.40% 83,755,351 50,039,139

10 Jillington Creek Platation (JCP) Utilities JEA W/S 19,578,353 2,889,354 10,946,421 13,835,775 20.88% 79.12% 4,087,960 15,490,393

11 Fisherman's Cove Utilities Martin County W/S 1,038,300 205,766 206,428 412,194 49.92% 50.08% 518,319 519,981

12 Spruce Creek South Utilities, Inc. Florida Water Services, Inc. W/S 7,590,901 3,803,821 3,776,259 7,580,080 50.18% 49.82% 3,809,114 3,781,787

13 Pinelake Village [3] Martin County W/S 165,893 126,013 246,966 372,979 33.79% 66.21% 56,055 109,838

14 United Water of Florida, Inc. JEA (Duval County) W/S 228,869,600 65,472,778 92,902,565 158,375,343 41.34% 58.66% 94,614,693 134,254,907

15 Regency Utilities Inc. JEA W/S 8,065,825 1,578,757 1,002,248 2,581,005 61.17% 38.83% 4,933,865 3,131,960

16 Decca Utilities Marion County W/S 12,451,969 3,028,934 3,664,160 6,693,094 45.25% 54.75% 5,634,516 6,817,453

17 Florida Public Utilities Company City of Fernandina Beach W/ 25,444,554 12,628,461 - 12,628,461 100.00% 0.00% 25,444,554 -

18Florida Water Services, Inc. - Fox Run, Leliani Heights, and Fisherman'sHaven (bundled purchase) Martin County W/S 2,455,123 808,012 744,117 1,552,129 52.06% 47.94% 1,278,137 1,176,986

19Florida Water Services, Inc. - Beacon Hills, Woodmere, Palm Valley,Remington Forest (bundled purchase) JEA (Duval County) W/S 26,118,333 8,328,753 7,324,916 15,653,669 53.21% 46.79% 13,897,565 12,220,768

20 Florida Water Services Corporation - Palm Coast System City of Palm Coast W/S 86,475,643 40,183,812 42,285,349 82,469,161 48.73% 51.27% 42,139,581 44,336,062

21 Florida Water Services Corporation - Spring Hill System Hernando County W/S 37,165,370 16,266,695 12,752,212 29,018,907 56.06% 43.94% 20,834,906 16,330,463


purchase) City of Marco Island W/S 89,129,484 55,824,637 19,636,613 75,461,250 73.98% 26.02% 65,937,992 23,191,492

23 Florida Water Services Corporation - Citrus Florida Governmental Utility Authority W/S 17,288,599 18,562,596 8,715,866 27,278,462 68.05% 31.95% 11,764,892 5,523,707

24 Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority W/S 36,144,470 16,912,279 22,103,854 39,016,133 43.35% 56.65% 15,668,628 20,475,843

25 Realnor Hallandale Inc. City of Bonita Springs S 522,402 - 922,772 922,772 0.00% 100.00% - 522,402

26 Florida Water Services Corporation Nassau County W/S 17,969,413 3,406,231 5,205,212 8,611,443 39.55% 60.45% 7,106,903 10,862,510

27 Florida Water Services Corporation City of Groveland W/S 3,134,200 558,429 775,712 1,334,141 41.86% 58.14% 1,311,976 1,822,224

28 Florida Water Services Corporation Tohopekaliga Water Authority W/S 39,773,870 7,981,329 11,151,305 19,132,634 41.72% 58.28% 16,593,659 23,180,212

29 Florida Water Services Corporation Deltona W/S 62,139,435 18,023,008 10,516,040 28,539,048 63.15% 36.85% 39,241,053 22,898,382

30 Little Sumter Utility Company [4]Village Center Community DevelopmentDistrict W/S 84,453,114 13,715,781 18,338,027 32,053,808 42.79% 57.21% 36,137,488 48,315,627

31 Florida Water Services Corporation Marion County W/S 23,349,790 16,702,713 8,655,941 25,358,654 65.87% 34.13% 15,380,507 7,969,283

32 Ocean City Utilities, Inc. Flagler County W/S 1,134,761 425,998 122,772 548,770 77.63% 22.37% 880,915 253,846

33 Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County W/S 1,578,253 302,850 97,548 400,398 75.64% 24.36% 1,193,790 384,462

34 St. Johns Service Company St. Johns County W/S 26,251,493 6,660,860 10,536,450 17,197,310 38.73% 61.27% 10,167,203 16,084,290

35 Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County S 10,403 - 6,357 6,357 0.00% 100.00% - 10,403

36 East Pasco Utilities Pasco County W/S 2,977,490 346,811 166,587 513,398 67.55% 32.45% 2,011,294 966,196

37 Forest Hills Utilities Pasco County W/S 3,768,843 259,550 329,910 589,460 44.03% 55.97% 1,659,422 2,109,422

38 Intercoastal Utilities, Inc. St. Johns County W/S 24,119,433 7,233,854 10,102,309 17,336,163 41.73% 58.27% 10,065,040 14,054,394

39 Hudson Utilities Inc. Ni America Operating LLC S 5,513,013 - 4,683,677 4,683,677 0.00% 100.00% - 5,513,013

Footnotes:[1] Amounts shown derived from Table 17.

[2] Based on information published by the respective utilities in the Annual Reports submitted to the regulatory agency and other available financial information.

[3] Net Plant Utility calculated based on depreciated replacement cost.



DRAFTTable 19


Comparable Sales Analysis - Development of Purchase Price Per ERC

Water System Wastewater SystemLine Allocated AllocatedNo. Name of Utility (Seller) Name of Purchaser Price [1] ERCs [2] Price/ERC Price [1] ERCs [2] Price/ERC

Implied Price Based on ERCs (Meter Equivalents) Served

1 Kingsley Service Company Clay County 9,411,637$ 16,266 $579 $14,926,705 15,463 965

2 Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise 5,567,478 2,924 1,904 7,042,892 2,330 3,023

3 Ortega Utility Company JEA (Duval County) 3,145,662 2,465 1,276 4,296,169 2,166 1,983

4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County 12,300,144 3,685 3,338 8,740,130 3,246 2,693

5 IBSCO, Inc. Martin County 301,608 352 857 418,736 354 1,185

6 Gulf Utility Company Gulf Environmental Services Inc. 24,267,312 8,382 2,895 20,300,754 3,826 5,306

7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority 8,087,786 6,461 1,252 18,094,752 6,206 2,916

8 Florida Cities Water Company - Sarasota System [3] Florida Governmental Utility Authority 3,676,285 7,582 485 9,295,787 11,992 775

9 Florida Cities Water Company - North/South Ft. Myers Lee County 83,755,351 26,737 3,133 50,039,139 13,303 3,761

10 Jillington Creek Platation (JCP) Utilities JEA 4,087,960 1,591 2,569 15,490,393 1,382 11,209

11 Fisherman's Cove Utilities Martin County 518,319 524 989 519,981 524 992

12 Spruce Creek South Utilities, Inc. Florida Water Services, Inc. 3,809,114 4,246 897 3,781,787 3,307 1,144

13 Pinelake Village Martin County 56,055 471 119 109,838 471 233

14 United Water of Florida, Inc. JEA (Duval County) 94,614,693 53,929 1,754 134,254,907 38,820 3,458

15 Regency Utilities Inc. JEA 4,933,865 1,627 3,032 3,131,960 1,352 2,317

16 Decca Utilities Marion County 5,634,516 3,571 1,578 6,817,453 3,822 1,784

17 Florida Public Utilities Company City of Fernandina Beach 25,444,554 8,117 3,135 - - -

18Florida Water Services, Inc. - Fox Run, Leliani Heights, and Fisherman's Haven

(bundled purchase) Martin County 1,278,137 660 1,937 1,176,986 630 1,868

19 Forest (bundled purchase) JEA (Duval County) 13,897,565 6,426 2,163 12,220,768 5,832 2,095

20 Florida Water Services Corporation - Palm Coast System City of Palm Coast 42,139,581 27,464 1,534 44,336,062 20,147 2,201

21 Florida Water Services Corporation - Spring Hill System Hernando County 20,834,906 34,622 602 16,330,463 8,021 2,036


purchase) City of Marco Island 65,937,992 16,160 4,080 23,191,492 6,109 3,796

23 Florida Water Services Corporation - Citrus Florida Governmental Utility Authority 11,764,892 11,648 1,010 5,523,707 6,382 866

24 Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority 15,668,628 11,460 1,367 20,475,843 8,427 2,430

25 Realnor Hallandale Inc. City of Bonita Springs - - - 522,402 806 648

26 Florida Water Services Corporation Nassau County 7,106,903 2,319 3,065 10,862,510 2,142 5,071

27 Florida Water Services Corporation City of Groveland 1,311,976 809 1,622 1,822,224 226 8,063

28 Florida Water Services Corporation Tohopekaliga Water Authority 16,593,659 13,149 1,262 23,180,212 8,422 2,752

29 Florida Water Services Corporation Deltona 39,241,053 32,614 1,203 22,898,382 5,975 3,832

30 Little Sumter Utility Company [4] Village Center Community Development District 36,137,488 10,755 3,360 48,315,627 8,854 5,457

31 Florida Water Services Corporation Marion County 15,380,507 9,706 1,585 7,969,283 6,561 1,215

32 Ocean City Utilities, Inc. Flagler County 880,915 571 1,543 253,846 341 746

33 Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County 1,193,790 483 2,472 384,462 483 796

34 St. Johns Service Company St. Johns County 10,167,203 8,337 1,220 16,084,290 7,623 2,110

35 Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County - - - 10,403 173 60

36 East Pasco Utilities Pasco County 2,011,294 1,727 1,165 966,196 1,091 886

37 Forest Hills Utilities Pasco County 1,659,422 2,394 693 2,109,422 1,204 1,752

38 Intercoastal Utilities, Inc. St. Johns County 10,065,040 6,849 1,470 14,054,394 5,482 2,564

39 Hudson Utilities Inc. Ni America Operating LLC - - - 5,513,013 2,978 1,851

40 Weighted Average Price per ERC 1,737 2,658

41 North Fort Myers Utility, Inc. - ERC (meter equivelents) 1,894 26,503

42 Implied Purchase Price per Utility System Component 3,289,893$ 70,455,028$

43 Total Implied Purchase Price - Combined Utility System Component 73,744,921$


[2]



Based on information published by the respective utilities in the Annual Reports submitted to the regulatory agency and other available financial information.


DRAFTTable 20


Comparable Sales Analysis - Development of Implied Purchase Price - Net Investment Basis

Water System Wastewater SystemLine Net Net Invest. to Net Net Invest. toNo. Name of Utility (Seller) Name of Purchaser Alloc. Price Investment (1) Price Ratio Alloc. Price Investment (1) Price Ratio

Implied Price Based on Net Investment

1 Kingsley Service Company Clay County 9,411,637$ 10,409,627$ 90.41% 14,926,705$ 16,511,793$ 90.40%

2 Clay Utilities Co., d/b/a South Broward Utility, Inc. City of Sunrise 5,567,478 5,628,142 98.92% 7,042,892 7,118,556 98.94%

3 Ortega Utility Company JEA (Duval County) 3,145,662 1,841,216 170.85% 4,296,169 2,514,599 170.85%

4 AquaSource Utilities, Inc. (Rotonda System) Charlotte County 12,300,144 6,040,697 203.62% 8,740,130 4,292,015 203.64%

5 IBSCO, Inc. Martin County 301,608 147,743 204.14% 418,736 205,102 204.16%

6 Gulf Utility Company Gulf Environmental Services Inc. 24,267,312 14,582,973 166.41% 20,300,754 12,201,473 166.38%

7 Florida Cities Water Company - Poinciana Utilities, Inc. Florida Governmental Utility Authority 8,087,786 11,487,925 70.40% 18,094,752 25,698,063 70.41%

8 Florida Cities Water Company - Sarasota System [2] Florida Governmental Utility Authority 3,676,285 3,564,464 103.14% 9,295,787 9,010,844 103.16%

9 Florida Cities Water Company - North/South Ft. Myers Lee County 83,755,351 48,937,496 171.15% 50,039,139 29,237,735 171.15%

10 Jillington Creek Platation (JCP) Utilities JEA 4,087,960 2,889,354 141.48% 15,490,393 10,946,421 141.51%

11 Fisherman's Cove Utilities Martin County 518,319 205,766 251.90% 519,981 206,428 251.89%

12 Spruce Creek South Utilities, Inc. Florida Water Services, Inc. 3,809,114 3,803,821 100.14% 3,781,787 3,776,259 100.15%

13 Pinelake Village Martin County 56,055 126,013 44.48% 109,838 246,966 44.47%

14 United Water of Florida, Inc. JEA (Duval County) 94,614,693 65,472,778 144.51% 134,254,907 92,902,565 144.51%

15 Regency Utilities Inc. JEA 4,933,865 1,578,757 312.52% 3,131,960 1,002,248 312.49%

16 Decca Utilities Marion County 5,634,516 3,028,934 186.02% 6,817,453 3,664,160 186.06%

17 Florida Public Utilities Company City of Fernandina Beach 25,444,554 12,628,461 201.49% - - N/A

18Florida Water Services, Inc. - Fox Run, Leliani Heights, andFisherman's Haven (bundled purchase) Martin County 1,278,137 808,012 158.18% 1,176,986 744,117 158.17%

19Florida Water Services, Inc. - Beacon Hills, Woodmere, PalmValley, Remington Forest (bundled purchase) JEA (Duval County) 13,897,565 8,328,753 166.86% 12,220,768 7,324,916 166.84%

20 Florida Water Services Corporation - Palm Coast System City of Palm Coast 42,139,581 40,183,812 104.87% 44,336,062 42,285,349 104.85%

21 Florida Water Services Corporation - Spring Hill System Hernando County 20,834,906 16,266,695 128.08% 16,330,463 12,752,212 128.06%

22Florida Water Services - Marco Island and Marco Shores

Systems (bundled purchase) City of Marco Island 65,937,992 55,824,637 118.12% 23,191,492 19,636,613 118.10%

23 Florida Water Services Corporation - Citrus Florida Governmental Utility Authority 11,764,892 18,562,596 63.38% 5,523,707 8,715,866 63.38%

24 Florida Water Services Corporation - Lehigh Florida Governmental Utility Authority 15,668,628 16,912,279 92.65% 20,475,843 22,103,854 92.63%

25 Realnor Hallandale Inc. City of Bonita Springs - - N/A 522,402 922,772 56.61%

26 Florida Water Services Corporation Nassau County 7,106,903 3,406,231 208.64% 10,862,510 5,205,212 208.69%

27 Florida Water Services Corporation City of Groveland 1,311,976 558,429 234.94% 1,822,224 775,712 234.91%

28 Florida Water Services Corporation Tohopekaliga Water Authority 16,593,659 7,981,329 207.91% 23,180,212 11,151,305 207.87%

29 Florida Water Services Corporation Deltona 39,241,053 18,023,008 217.73% 22,898,382 10,516,040 217.75%

30 Little Sumter Utility Company Village Center Community Development District 36,137,488 13,715,781 263.47% 48,315,627 18,338,027 263.47%

31 Florida Water Services Corporation Marion County 15,380,507 16,702,713 92.08% 7,969,283 8,655,941 92.07%

32 Ocean City Utilities, Inc. Flagler County 880,915 425,998 206.79% 253,846 122,772 206.76%

33 Burkim Enterprises, Inc. System Serving Snug Harbor Brevard County 1,193,790 302,850 394.19% 384,462 97,548 394.13%

34 St. Johns Service Company St. Johns County 10,167,203 6,660,860 152.64% 16,084,290 10,536,450 152.65%

35 Sky Acres Enterprises, Inc. / D.B.A Terrace Park Ventures Pasco County - - N/A 10,403 6,357 163.65%

36 East Pasco Utilities Pasco County 2,011,294 346,811 579.94% 966,196 166,587 579.99%

37 Forest Hills Utilities Pasco County 1,659,422 259,550 639.35% 2,109,422 329,910 639.39%

38 Intercoastal Utilities, Inc. St. Johns County 10,065,040 7,233,854 139.14% 14,054,394 10,102,309 139.12%

39 Hudson Utilities Inc. Ni America Operating LLC - - N/A 5,513,013 4,683,677 117.71%

40 Average Net Investment to Price Ratio 141.90% 138.76%

41 North Fort Myers Utility, Inc. - Net Investment 213,112$ 39,734,143$

42 Implied Purchase Price per Utility System Component $302,396 $55,136,388

43 Total Implied Price - Combined Utility System Component 55,438,785$




Contents

Section 1 Introduction 1.1 Authority ...................................................................................................................1-1 1.2 Purpose and Scope ...................................................................................................1-1 1.3 Description of Existing NFMU System..................................................................1-4

1.3.1 Wastewater System ...................................................................................1-4 1.3.2 Water System .............................................................................................1-4

Section 2 Facilities Inspections 2.1 North Fort Myers Utility, Del Prado Wastewater Treatment Plant ..................2-1 2.2 North Fort Myers Utility, Lake Fairways Wastewater Treatment Plant ..........2-2 2.3 Lake Fairways/Pine Lakes Water Treatment Plant.............................................2-2 2.4 Master Pump Station Number 1.............................................................................2-3 2.5 Duplex Pump Stations .............................................................................................2-4

Section 3 Estimated Replacement Costs and Financial Evaluation 3.1 General .......................................................................................................................3-1 3.2 Replacement Cost Methodology ............................................................................3-1 3.3 Depreciation Costs....................................................................................................3-1 3.4 Adjustment for Items Not in Service .....................................................................3-4 3.5 Adjustment for Improvements ...............................................................................3-4 3.6 Pump Stations ...........................................................................................................3-6 3.7 Lake Fairways Wastewater Treatment Plant and Wastewater System ............3-6 3.8 Lake Fairways Water Treatment Plant and Water System.................................3-6 3.9 Land and Miscellaneous Items ...............................................................................3-6 3.10 Summary of Wastewater and Water System Replacement Value.....................3-6

Section 4 Transition from Private to Public Ownership of the North Fort Myers Utility

4.1 Transition Plan ..........................................................................................................4-1 4.2 North Fort Myers Del Prado WWTP Staffing.......................................................4-1

4.2.1 Permit Requirements ................................................................................4-1 4.2.2 Recommendations.....................................................................................4-2

4.3 Solids Disposal Process............................................................................................4-2 4.3.1 Current Solids Disposal Process..............................................................4-2 4.3.2 Recommendations.....................................................................................4-2 4.4 Effluent Disposal Process ........................................................................................4-2 4.4.1 Current Effluent Disposal Process ..........................................................4-2 4.4.2 Future Effluent Disposal Process ............................................................4-2 4.5 Proposed Management Systems During Transition Period ...............................4-2 4.6 Deferred Operation and Maintenance Program ..................................................4-4

A i C:\Documents and Settings\stonehousemc\Desktop\New Folder (2)\Contents.doc

Table of Contents (Continued)

A ii C:\Documents and Settings\stonehousemc\Desktop\New Folder (2)\Contents.doc

Section 5 Evaluation of Interconnection Alternatives 5.1 General .......................................................................................................................5-1 5.2 Lake Fairways WWTP Interconnection to Del Prado WWTP............................5-1 5.2.1 Lake Fairways Interconnect Capital Costs.............................................5-1 5.2.2 Lake Fairways WWTP Differential Operating Costs ...........................5-3 5.2.3 Lake Fairways Capital Cost Payback .....................................................5-3 5.3 Pine Lakes WTP Interconnection to North Lee County WTP ............................5-4 5.3.1 Pine Lakes Interconnect Capital Costs ...................................................5-4 5.3.2 Pine Lakes WTP Differential Operating Costs ......................................5-4 5.3.3 Pine Lakes Capital Cost Payback ............................................................5-5 5.4 Waterway Estates WWTP Interconnection to Del Prado WWTP......................5-6 5.4.1 Waterway Estates Interconnect Capital Costs.......................................5-6 5.4.2 Waterway Estates WWTP Differential Operating Costs .....................5-7 5.4.3 Waterway Estates Capital Cost Payback................................................5-9

Appendices Appendix A – Facilities Inspections Appendix B - North Fort Myers Utility, Del Prado Wastewater Treatment Plant, Color Photos Appendix C - North Fort Myers Utility, Lake Fairways Wastewater Treatment Plant, Color Photos Appendix D - North Fort Myers Utility, Lake Fairways Water Treatment Plant, Color Photos Appendix E - North Fort Myers Utility, Pump Stations 1 through 105, Color Photos

Tables

3-1 Del Prado Wastewater System Original and Replacement Asset Costs ..........3-2 3-2 Del Prado Wastewater System Original and Replacement Cumulative Depreciation..............................................................................................................3-3 3-3 Del Prado Original and Replacement Costs for Items No Longer in Use........3-4 3-4 Del Prado and Lake Fairways Pump Station Improvements Required ...........3-5 3-5 Del Prado Pump Station Original and Replacement Costs................................3-7 3-6 Lake Fairways/Pine Lakes Wastewater System Original and Replacement Asset Costs ..............................................................................................................3-11 3-7 Pine Lakes Water System Original and Replacement Assest Costs................3-12 3-8 Del Prado and Lake Fairways Wastewater Systems and Pine Lakes Water System Replacement Value – Land & Miscellaneous Items ............................3-13 3-9 Del Prado and Lake Fairways Wastewater Systems and Pine Lakes Water System Replacement Value Net of Improvements................................3-14 4-1 Current Staffing Levels at the NFMU Del Prado WWTP...................................4-1 4-2 Pump Station Operation & Maintenance Work Required .................................4-5 4-3 Del Prado Gravity Pipeline Estimate for CCTV and Light Cleaning ...............4-7 5-1 Cost of Interconnect from Lake Fairways WWTP to Del Prado WWTP..........5-1 5-2 Calculation of Differential Costs of Treatment from Lake Fairways WWTP to Del Prado WWTP...................................................................................5-3 5-3 Lake Fairways WWTP Interconnect – Comparison of Operating and Capital Costs .............................................................................................................5-3 5-4 Cost of Interconnect from Pine Lakes WTP to North Lee County WTP ..........5-4 5-5 Calculation of Differential Costs of Treated Water from North Lee County WTP vs. Pine Lakes WTP..........................................................................5-5 5-6 Pine Lakes WTP Interconnect – Comparison of Operating and Capital Costs...........................................................................................................................5-5 5-7 Cost of Interconnect from Waterway Estates WWTP to Del Prado WWTP....5-6 5-8 Waterway Estates WWTP Interconnect with Expansion to Del Prado WWTP........................................................................................................................5-7 5-9 Calculation of Differential Costs of Treatment from Waterway Estates WWTP to Del Prado WWTP...................................................................................5-7 5-10 Calculation of Variable Costs of Treatment for Waterway Estates WWTP with MBR Process ....................................................................................................5-8 5-11 Waterway Estates Wastewater Treated at Del Prado WWTP ...........................5-8 5-12 Waterway Estates WWTP Interconnect – Comparison of Operating and Capital Costs .....................................................................................................5-9 5-13 Waterway Estates WWTP Replacement Costs Compared to Del Prado

WWTP Expansion ....................................................................................................5-9

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Executive Summary ES.1 Authority The Lee County Board of County Commissioners (The County) desires to explore the possibility of acquiring the water and wastewater systems of the North Fort Myers Utility (NFMU). In April 2008 the County authorized Camp Dresser & McKee Inc. (CDM) to prepare portions of an Acquisition Feasibility Study for the (NFMU) as part of the due diligence process to evaluate this purchase.

ES.2 Purpose and Scope The purpose of the acquisition feasibility study is to assess the condition of the NFMU existing water and wastewater facilities, identify the general scope and costs for improvements necessary to upgrade these facilities and integrate them into the County’s systems, and perform a preliminary evaluation of financial issues related to consolidation.

The scope of work that was provided by CDM included the following tasks:

• Task 1 – Data Collection and Review • Task 2 – Inspection of the Physical Assets of the NFMU • Task 3 – Estimation of Needed Investments in Facilities and Planned Use

of Facilities • Task 4 – Estimation of Replacement Cost New Less Accumulated Depreciation • Task 5 – Unaccounted-For Water and Infiltration/Inflow Quantities • Task 6 – Draft Report • Task 7 – Final Report • Task 8 – Attendance at Meetings and Presentations

ES.3 Facilities Inspections Currently, the NFMU wastewater system serves an estimated 11,342 residential and 399 business customers. NFMU owns, operates, and maintains the following:

• 2 wastewater treatment plants (Del Prado and Lake Fairways) • 1 triplex master pump station • 104 duplex pump stations • an estimated 385,653 linear feet of gravity sewer pipeline • an estimated 307,359 linear feet of wastewater force mains • an estimated 94,694 linear feet of reclaimed water distribution force mains • 1 deep injection well

The NFMU water system serves an estimated 1,832 residential customers and 15 commercial customers. NFMU owns, operates, and maintains the following:

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Executive Summary

• 1 water treatment plant (Lake Fairways) • 2 potable water wells • 10 groundwater monitoring wells • an estimated 128,215 lineal feet of water mains • 79 fire hydrants • 1,847 services and meters

CDM collected and reviewed data regarding current treatment capacities, projected growth, future demand, equipment history and other miscellaneous records for evaluating plant value. In addition, during the months of April and May 2008, CDM inspected the condition of the two wastewater treatment plants, one triplex master wastewater pumping station, 104 duplex wastewater pumping stations, one water treatment plant, two potable water wells, and ten groundwater monitoring wells. Each of the above referenced sites is located in Lee County, Florida. CDM staff was accompanied by Mr. Jon Meyer, Lee County Utilities; Mr. Hank Barroso, Lee County Utilities; Mr. Michael Currier, Lee County Utilities; and Mr. Kyle James of the North Fort Myers Utility. The Del Prado WWTP provides advanced secondary wastewater treatment for public access reuse. Its permit allows capacity of 3.5 mgd AADF (annual average daily flow) through 2013. Based on inspection, the plant appears to be in overall good operating condition, but requires replacement and/or rehabilitation of the headworks mechanical bar screens and the mechanical screening compactor. The Lake Fairways WWTP provides high level disinfected secondary wastewater treatment for public access reuse for the irrigation of the Pine Lakes Golf Course and landscape areas. However, based upon the inspection, CDM recommends the demolition of this plant due to the age, severe disrepair, and numerous safety issues observed at this facility. CDM recommends that this plant be replaced with a new force main and on-site pump station to bring flows to Del Prado WWTP. In addition a new reclaimed interconnect would be needed to provide the Pine Lakes Golf Course with irrigation water. The Lake Fairways WTP was placed into operation to provide the golf course and mobile home communities of Pine Lakes Country Club and Lake Fairways Mobile Home Park with potable water services. Based on the inspection, CDM recommends the demolition of this plant and the existing well field due to the age and condition of this facility. CDM also recommends that an interconnection be made between NFMU and the existing Lee County Utilities force main. The NFMU Master Pump Station Number 1 is a triplex submersible pump station. Based up inspection, the wetwells need a new “T-Lock” liner. The remainder of the equipment at this pump station was found to be in good condition with no other improvements required. Based on inspection, some of the 104 duplex pump stations need some degree of capital improvement beyond normal wear-and-tear. The total cost for these

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improvements is estimated as $443,750. In addition to this, routine maintenance issues identified as currently needed are estimated as $1,014,000. ES.4 Estimated Replacement Costs and Financial Evaluation The methodology used in the financial analysis was to estimate the replacement cost by increasing the value of the existing assets by the increase in the Engineering News Record Construction Cost Index (ENRCCI) since the date of the acquisition, then update the cumulative depreciation based on that value. Given the level of detail in the Book Asset Detail records, the ENRCCI evaluation was used to provide objective criteria. This methodology is commonly used in the evaluation of asset values. The depreciation that was shown in the “Book Asset Detail” records was evaluated to confirm that the average service life from the North Fort Myers Utility Annual Report 2007 (Annual Report) was used. There were some adjustments made to correspond to the Annual Report service life.

There were certain pieces of equipment that were removed when the Del Prado WWTP was expanded in the period from 1999 to 2001. The values of these items are deducted from the asset values.

In addition, the improvements identified as part of the inspections that are required for the pump stations to remain in service were deducted from the asset values. There was also a recent (May 2008) improvement made to the Reuse Distribution System that was added to the total asset amounts.

Based on the inspections and recommended costs to demolish the Lake Fairways WWTP and WTP, both of these plants were given no value. However, there are portions of the water system that have value and are included in the asset values. There are miscellaneous items as well as the value of the land that enter into estimating the value of the system assets. The land has been valued per Lee County’s property appraiser taxable value. Once North Fort Myers completes an independent land appraisal, these values will be updated in the final analysis.

Table ES-1 shows the net value summary of the costs for the North Fort Myers Utility systems. Based on the financial analysis, the total net replacement cost through May 2008 for the North Fort Myers Utility system is $45,197,908.

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Table ES-1 Del Prado and Lake Fairways Wastewater Systems and

Pine Lakes Water System Replacement Value Net of Improvements

Replacement

Cost

Replacement Cost Depreciation

Through May 2008

Net Replacement Cost Through May

2008 Del Prado Wastewater System Wastewater System as of May 2008 (Tables 3.1 & 3.2) $61,804,965 ($20,518,417) $41,286,547 Land Other Items (Table 3.8) 2,031,735 (247,379) 1,784,356 Less: Items No Longer There or Working (Table 3.3) (218,402) Del Prado Pump Station Improvements (Table 3.4) (263,250) Subtotal - Del Prado Wastewater System $63,836,700 ($20,765,797) $42,589,251 Lake Fairways WWTP Wastewater System as of May 2008 (Table 3.6) $5,364,384 ($3,466,133) $1,898,251 Lake Fairways Pump Station Improvements (Table 3.4) (180,500) Land Other Items (Table 3.8) 267,254 (12,254) 255,000 Subtotal - Lake Fairways WWTP $5,631,638 ($3,478,387) $1,972,751 Lake Fairways WTP and Related Items Water System as of May 2008 (Table 3.7) $3,372,156 ($2,317,173) $1,054,982

Land Other Items (Table 3.8) 247,994

(177,586) 70,408 Subtotal - Pine Lakes WTP $3,620,150 ($2,494,759) $1,125,390 Grand Totals $73,088,488 ($26,738,943) $45,687,393

ES.5 Transition from Private to Public Ownership of the North Fort Myers Utility In accordance with the requirements of Task 3, CDM also developed a plan to provide a smooth transition of a private utility to a public utility. The goal is to have no adverse impact on the North Fort Myers Utility’s ability to provide safe potable drinking water and highly treated reclaimed water to all customers within its service area at all times without interruption in accordance with local, state, and federal guidelines. This plan makes recommendations involving employment of the plants, process coordination adjustments, and transitional management systems. Where appropriate, estimated costs are provided. These costs are not included in the asset values.

ES.6 Evaluation of Interconnection Alternatives Through acquisition of these private utilities there are several interconnection strategies that could be implemented to reduce long term operating costs. In acquiring the NFMU Waste and Water Treatment Plants, three particular interconnection alternatives were analyzed as follows:

• Lake Fairways WWTP Interconnection to the Del Prado WWTP • Pine Lakes WTP Interconnection to the North Lee County WTP • Waterway Estates WWTP Interconnection to the Del Prado WWTP

Figure ES-1 shows the locations of these plants.

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Table ES-2 presents the net annual decrease in operating costs compared to the capital costs for the Lake Fairways WWTP interconnect. This includes demolition of the Lake Fairways WWTP. The payback period would be approximately five years.

Table ES-2 Lake Fairways WWTP Interconnect -

Comparison of Operating and Capital Costs Decrease in Annual Operating Costs $175,768

Interconnect Costs (904,000)

Net Annual (Increase) Decrease in Costs - Year 1 ($728,232)

Table ES-3 presents the net annual decrease in operating costs compared to the capital costs for the Lake Fairways WTP interconnect. This includes demolition of the Lake Fairways WTP and abandonment of the two exiting wells at that location. The payback period would occur in year 1.

Table ES-3 Lake Fairways WTP Interconnect -

Comparison of Operating and Capital Costs Decrease in Annual Operating Costs $396,100 Interconnect Costs (283,280) Net Annual Decrease in Costs - Year 1 $112,820

Table ES-4 presents an analysis of the financial impact of interconnecting the Waterway Estates wastewater to treatment to the Del Prado WWTP. The present value calculated is greater than the cost of making the interconnection, providing a favorable result offered by the interconnection.

Table ES-4 Waterway Estates Wastewater Treated at Del Prado WWTP Comparison of Present Value of Operating Costs vs. Interconnect Costs

Present Value of Operating Cost Decrease (2007 - 2030) (Table 5.11) ($9,256,778) Interconnect Costs (Table 5.7) 5,549,250 Decrease in Costs from Interconnect ($3,707,528)

The other capital comparison to be made involves the cost of replacing the Waterway Estates WWTP versus expanding the Del Prado WWTP. Table ES-5 presents a comparison of these costs, with both based on costs for 2.5 mgd treatment capacity.

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Table ES-5 Waterway Estates WWTP Replacement Costs Compared to Del Prado WWTP Expansion

Waterway Estates WWTP Replacement Costsa Construction Costs Subtotal - Option 1 $35,100,000 Engineering/Administration (15%) 5,265,000 Land for WWTP 6,800,000

Waterway Estates WWTP Replacement Costs 2.5 mgd capacity $47,165,000

Del Prado WWTP Expansion (Table 5.8) 2.5 mgd capacity $22,500,000

a These are Option 1 costs from Table 5-1 of the Hazen Sawyer, Lee County Utilities Waterway Estates Wastewater

Treatment Capacity Alternative Review, December 2007 report.

Table ES-5 indicates that the Del Prado WWTP expansion would cost less than replacing the Waterway Estates WWTP, which was Option 1 in the Hazen and Sawyer report. The Del Prado WWTP expansion costs are also less than each of the options from this report, other than Options 8A and 8B, which only provided a diversion of any additional flow to either the City of Cape Coral or to the Del Prado WWTP.

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Figure ES-1. Site Location of Plants

Section 1 Introduction

e County) ition, Feasibility

s to explore the the NFMU. Accordingly,

ave requested CDM to perform portions of an acquisition chase.

existing water and wastewater facilities, identify the general scope and costs for integrate them into the

rm a preliminary evaluation of financial issues related to consolidation.

DM is presented as follows:

1.1 Authority In April 2008 the Lee County Board of County Commissioners (Thauthorized Camp Dresser & McKee Inc. (CDM) to prepare an AcquisStudy for the North Fort Myers Utility (NFMU). Lee County desirepossibility of acquiring the water and wastewater systems of the County and NFMU hstudy (Study) as part of the due diligence process to evaluate this pur

1.2 Purpose and Scope The purpose of the acquisition feasibility study is to assess the condition of the NFMU

improvements necessary to upgrade these facilities and County’s systems, and perfo

The scope of work that was provided by C

Task 1 – Data Collection and Review

CDM provided the County and NFMU with a list of data requirements to perform this Study. The request included the following items:

ty of plants, costs and depreciation

future connections to the NFMU over the next 10 to 20 years.

Treatment Plant ning with January 2005.

thly water quantities billed for water and wastewater service, beginning with January 2005 to present. CDM used this information to calculate water unaccounted for in the system.

Equipment history and maintenance records including installation dates, routine maintenance, and renewal and replacement.

Water meter information including installation dates and sizes for all metered services.

The most current asset listing with the capacishown.

Growth projections of

Monthly Operating Reports (MORs) for the NFMU Wastewater and Water Treatment Plant, begin

Mon

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Task 2 – Inspect the Physical Assets of the NFMU

CDM conducted an inspection of the following fixed assets of the NFM Utility:

mping and lift stations

Effluent disposal facilities

e condition of the , and enable the

and replacements to maintain the facilities in service. FDEP records were reviewed for existing or potential regulatory

iewed. roved

Wastewater treatment facilities

All wastewater pu

Water treatment facilities

The purpose of the inspection was to form a general opinion as to thfacilities, document the inspection with digital photographsestimation of any needed investments in renewals

violations. Equipment history and maintenance records were revImprovements required to address the regulatory violations and impmaintenance were identified and a cost estimate was provided.

Task 3 – Estimate Needed Investments in Facilities and Planned Use of Facilities

isting water and d consolidations to the existing facilities

ents was reviewed, ction Cost Index

ment ter treatment plant flows

uations covered both the P. The possibility

. CDM also reviewed WTP off-line and

trunk line on U.S. 41. s resulting from these conversions.

Any change in operating costs would be conveyed to the Public Resources Management Group (PRMG) for inclusion in the financial element.

CDM evaluated operational practices and cost control measurements and identified opportunities for cost savings and/or improved efficiency that may be realized through modified procedures and practices, and quantified the potential savings associated with the same. CDM interviewed key staff members and reviewed pertinent records to identify current practices and procedures.

CDM estimated the value of investments needed in regards to the exwastewater facilities. Potential expansions anwere reviewed with regard to the estimated costs.

Master plan information that relates to any required improvemwith the costs updated using the Engineering News-Record Construfrom the date of the original estimate.

For the purpose of computing operating expenses and capital investrequirements, CDM evaluated combining existing wastewaand conversions to master pump stations. These evalWaterway Estates WWTP and the Lake Fairways/Pine Lakes WWTof sending these flows to the NFMU WWTP was also evaluatedand evaluated the possibility of taking the NFMU Lake Fairwaysconstructing an interconnect with the County’s existing waterCDM estimated the changes in operating expense


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to public transitional

without consolidation of treatment for both water and wastewater

ation

CDM provided assistance in the planning for transition from privateownership and operations. It also identified issues and solutions for scenarios with and systems.

Task 4 – Estimate Replacement Cost New Less Accumulated Depreci

estimated current replacement cost less accumulated depreciation. CDM adjusted this ion and renewals to

e for their design lives.

the conversion of the

Based on the preceding tasks, CDM computed the fixed assets of the NFMU and the

RCNLD value by additional investment required for rehabilitatmaintain the assets in servic

The asset value was adjusted by any changes pertinent to treatment facilities to pump stations.

Task 5 – Unaccounted-For Water and Infiltration/Inflow Quantities

ater conveyance

indication as to the y of the facilities. For the water system, the quantity of water produced also

ion of the integrity of the water facilities. CDM computed the and unaccounted-for-water percentages for calendar years

was compared to o perform the

culations.

Task 6 – Draft Report

Because it can be difficult to assess the condition of water and wastewlines, proxy values were used.

For the wastewater system, infiltration/inflow quantities gave an integritgave an indicatinfiltration percentages 2005 through 2007. The total billed water and wastewater volumethe treatment plant influent or effluent flows and water production tcal

s, findings and FMU with five copies of the draft

CDM prepared a draft report setting forth all analyses, calculationrecommendations. CDM is providing County and Nreport.

Task 7 – Final Report

After the County and NFMU review the draft report and provide CDM with questions and comments, CDM will prepare the final report. CDM will provide 10 copies of the final report to the Lee County Utilities Department.

Task 8 – Attend Meetings and Presentations

CDM participated in three meetings with the County and NFMU. In addition, CDM will make one formal presentation of the final report.


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f the Existing NFMU System

dential and 399 astewater

p stations, an sewer pipelines, an estimated 307,359 linear

claimed water

rado Boulevard d annual average

flow is 1.5 mgd, the peak daily flow is 2.58 mgd view of the Del ntly operating at

side 000 gallons per

day (gpd) annual average daily flow. The current average daily flow is 180,000 pd), the peak daily flow is 230,000 gpd, and the three-month

Fairways rating at

1.3.2 Water System potable water

ply serves 252 acres site. It includes

es and meters ers.

TP) is a 200,000 gpd

currently operates under the South Florida Water Management District (SFWMD) Water Use General Permit Number 36-0081-W for public water supply for the Pine Lakes/Lake Fairways Country Club and Mobile Home Park. Withdrawals are from the Mid-Hawthorn Aquifer via two existing wells, each located on the Lake Fairways Golf Course. Wells 1 and 2 are both considered by the SFWMD as primary facilities. These two identical 150-gallon per minute (gpm) wells supply water to the aeration/chlorination type water treatment facility. The well field has a permitted total withdrawal capacity of 0.43 mgd.

1.3 Description o1.3.1 Wastewater System The NFMU wastewater system serves an estimated 11,342 resibusiness customers. The NFMU owns, operates, and maintains 2 wtreatment plants, 1 triplex master pump station, 104 duplex pumestimated 385,653 linear feet of gravity feet of wastewater force mains, an estimated 94,694 linear feet of redistribution force mains and 1 deep injection well.

The Del Prado Wastewater Treatment Plant is located at 4100 Del PNorth, North Fort Myers. It currently has a design capacity of 3.5 mgdaily flow. The current average dailyand the three-month average daily flow is 1.87 mgd. Based on the rePrado Wastewater Treatment Plant’s flow records, the plant is curreapproximately 49 percent of the design capacity.

The Lake Fairways Wastewater Treatment Plant is located at U.S. Highway 41 inthe Lake Fairways Mobile Home Park. It has a design capacity of 300,

gallons per day (gaverage daily flow is 134,000 gpd. Based on the review of the Lake Wastewater Treatment Plants flow records, the plant is currently opeapproximately 60 percent of the design capacity.

The NFMU owns, operates, and maintains 1 water treatment plant, 2 wells and 10 groundwater monitoring wells. The public water supof the Pine Lake Country Club/Lake Fairways Mobile Home Park128,215 linear feet of water mains, 79 fire hydrants, and 1,847 servicwhich include 1,832 residential customers and 15 commercial custom

The Pine Lakes/Lake Fairway Groundwater Treatment Plant (GWfacility, with a storage capacity of 150,000 gallons of potable water. This facility

Section 2 Facilities Inspections

ition of 2 NFMU station, 104 table water wells,

d sites are located Lee County

, Lee County and Mr. Kyle James of the North Fort Myers Utility.

llowing is a summary of

ewater

It provides condary wastewater treatment for public access reuse. The WWTP was

nual average daily ida Department of

s February 4,

ed upon the inspection of the Del Prado WWTP and the observation of the ongoing operations, the NFMU Del Prado WWTP appears to be in overall good

all, the plant site t and/or rehabilitation of the

ening compactor o items are to be repaired at once by

There are also items that were removed from the original plant upon the expansion in 1999 that need to be subtracted from the net replacement cost:

Boat Clarifier – Estimated original cost of $300,000 adjusted to current Replacement Cost of $538,526 less depreciation of 333,774 = 204,752

Chlorinators – Estimated original cost of 2 at $10,000 each adjusted to current Replacement Cost of $35,902 less depreciation of $22,252 = $13,650

During the months of April and May 2008, CDM inspected the condwastewater treatment plants, 1 triplex master wastewater pumping duplex wastewater pumping stations, 1 water treatment plant, 2 poand 10 groundwater monitoring wells. Each of the above referencein Lee County, Florida. CDM staff was accompanied by Mr. Jon Meyer, Utilities; Mr. Hank Barroso, Lee County Utilities; Mr. Michael CurrierUtilities;

Details of the inspections are provided in Appendix A. The fokey findings.

2.1 North Fort Myers Utility, Del Prado WastTreatment Plant The NFMU Del Prado WWTP is located in Northern Lee County.advanced sere-permitted in 1999 to increase capacity to 3.5 mgd AADF (anflow). The NFMU Del Prado WWTP is permitted under the FlorEnvironmental Protection Permit Number FLA014548, which expire2013.

Bas

operating condition. Effluent water quality appears to be good. Overhas been maintained well. However, replacemenheadworks mechanical bar screens is needed and the mechanical screwas noted to be non-functional. These last twNFMU.

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Section 2 Facilities Inspection

rt Myers Utility, Lake Fairways Wastewater

It provides high use for the

. The original facility was 00,000 gpd AADF.

Lake Fairways WWTP is permitted to operate under the Florida 63, which expires

servation of the e to the age,

CDM recommends that this plant be replaced with an on-site pump station and new eter wastewater force

g flows to the

WTP. This val of the demolition

at $75,000.00.

WTP, CDM constructed

at the site for an estimated cost of $250,000. In addition to the new duplex pump 5,280 linear feet of

irectional drill rce main that

ated cost of the new 10-

further recommends the construction of approximately 5,280 linear feet of 8-oximate 150 linear feet nch reclaimed water

lew. The 8-inch ater for the

estimated cost of the new 8-inch reclaimed water force main and directional drill is $288,600.

2.3 Lake Fairways/Pine Lakes Water Treatment Plant The Lake Fairways/Pine Lakes WTP was placed into operation in the 1980s to provide the golf course and mobile home communities of Pine Lakes Country Club and Lake Fairway’s Mobile Home Park with potable water services. The Lake Fairways/Pine Lakes WTP is located in northern Lee County, within the Lake

2.2 North FoTreatment Plant The NFMU Lake Fairways WWTP is located in northern Lee County.level disinfected secondary wastewater treatment for public access reirrigation of the Pine Lakes Golf Course and landscape areasconstructed in the early 1980s, and was permitted for a capacity of 3The NFMUDepartment of Environmental Protection Permit Number FLA0144October 18, 2012.

Based upon the assessment of the Lake Fairways WWTP and the obongoing operation, CDM recommends the demolition of this plant dusevere disrepair, and numerous safety issues observed at this facility. Furthermore,

force main to be connected into the existing NFMU 10-inch diammain located adjacent to the Lake Fairways WWTP site. This will brinDel Prado WWTP.

CDM has recommended a zero dollar value for the Lake Fairways Wincludes a deduction for the costs of the demolition and the remodebris of this facility. The demolition and removal cost is estimated

Prior to the demolition of the 300,000-mgd package Lake Fairways Wrecommends that a new 600,000-gallon per day duplex pump station be

station, CDM also recommends the construction of approximately10-inch force main. This will include an approximate 150 linear feet dbeneath Gator Slew and tie into the existing 10-inch wastewater foNFMU has located on the south side on Gator Slew. The estiminch force main is $290,400.

CDMinch reclaimed water force main. This will also include an apprdirectional drill beneath Gator Slew and tie into the existing 8-iforce main that NFMU has also located on the south side of Gator Sreclaimed water force main would be used to provide reclaimed wirrigation of the Lake Fairways Golf Course and the Pine Lakes Country Club. The

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arden Boulevard, e daily potable

flow of 104,400 rrently permitted to operate under the

South Florida Water Management District (SWFWMD) Water Use General Permit

akes WTP and the ition of this plant

.

and the existing located on the south side of U.S.

to the Lake feet from the existing

ut).

Pine Lakes WTP. oval of the

is estimated at

, including the ther recommends

moval of potable water wells Numbers stimated cost of

ll demolition debris, and electrical components, and includes the services of a certified abandonment and closer report of

d Well Driller.

ble pump station rt Myers.

1 condition ined that the

iner at an estimated e replacement

process. The remainder of the equipment at this pump station was found to be in good condition with no other improvements required.

2.5 Duplex Pump Stations There are 104 duplex pump stations throughout the NFMU wastewater collection system. Each was inspected regarding their condition. Of this total, 30 did not need improvement and the balance needed some degree of capital improvement and/or routine maintenance. A description of issues by pump station is given in Appendix A.

Fairways Mobile Home Park at the corner of Duran Pathway and Gand west of U.S. Highway 41 North. It is permitted to treat an averagwater flow of 200,000 gpd and is currently treating an average daily gpd. The Lake Fairways/Pine Lakes WTP is cu

Number 36-00081-W, which expires on November 28, 2025.

Based upon the assessment of the Lake Fairways/Pine Lobservation of the ongoing operation, CDM recommends the demoland the existing well field due to the age and condition of this facility

CDM recommends that an interconnection be made between NFMULee County Utilities 12-inch potable water force main Highway 41, at the intersection of U.S. Highway 41 and the entranceFairways Mobile Home Park. This is approximately 3,696 linearNFMU owned 10-inch potable water line interconnection (stub-o

CDM has recommended a zero dollar value for the Lake Fairways/This includes a deduction for the costs of the demolition and the remdemolition debris of this facility. The demolition and removal cost$75,000.

The estimated cost of installing 3,696 linear feet of 10-inch water maininterconnection and disinfection procedures is $203,280. CDM furabandonment, demolition, plugging, and re45641 and 45692 located on the Lake Fairways Golf Course. The e$2,500 per well includes the removal of a

each well to be submitted to the FDOH by a State of Florida Certifie

2.4 Master Pump Station Number 1 The NFMU Master Pump Station Number 1 is a triplex submersilocated at 4850 Dora Lee Lane in North Fo

B sea e NFMU Master Pump Station Number and the observation of the pump station’s operations, it was determstation would need replacement of the station wetwells “T-Lock” lcost of $17,000. This estimate includes costs to bypass pump during th

d upon the assessment of th

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for the pump estimated as nd-tear

t replacement cost.

ntified as needed in the immediate future. The total cost for these improvements is estimated as $1,014,000. No adjustment is made for these items in the net replacement cost.

Table 3-4 in Section 3 presents the capital improvements requiredstations to remain in service. The total cost for these improvements is$443,750. These items are considered to be beyond the normal wear-aaccounted for by depreciation, and should be adjusted for in the ne

In addition, Table 4-2 in Section 4 lists the routine maintenance issues ide

Section 3 Estimated Replacement Costs and Financial Evaluation

ent costs for the sis for

estimating the cost for items that have been taken out of service is also provided as that are required to maintain the assets

The methodology used was to estimate the replacement cost by increasing the value ing News Record Construction Cost

the date of the acquisition, then updating the cumulative n August 1988:

n the Book Asset Detail records, the ENRCCI evaluation was only used in the e corresponding

Costs The depreciation that w records was evaluated to

t ity Annual Report ort) w

Structure & Impro ed 35 year service life 2 years

Manholes d 40 year service life - Annual Report (Sheet S-5) shows 30 years

Pine Lakes Water System Detail records used 43 year service life

- Annual Report (Sheet W-5) shows 38 years Customer Services - Book Asset Detail records used 43 year service life

- Annual Report (Sheet W-5) shows 38 years Hydrants - Book Asset Detail records used 45 year service life

- Annual Report (Sheet W-5) shows 40 years

3.1 General This section explains the rationale used in developing the replacemassets and provides more detail regarding the costs per asset type. The ba

well as an explanation for improvements through their service life.

3.2 Replacement Cost Methodology

of the existing assets by the increase in the EngineerIndex (ENRCCI) since depreciation based on that value. For example, for an asset acquired i

Original Cost x (April 2008 ENRCCI/August 1988 ENRCCI) or Original Cost x (8112/4519)

Given the level of detail iused in order to provide objective criteria. This methodology is commevaluation of asset value. Table 3-1 presents the original costs and threplacement costs for the various asset components as of April 2008.

3.3 Depreciationas shown in the “Book Asset Detail”

confirm tha the average service life from the North Fort Myers Util2007 (Annual RepAnnual Report ser

as used. There were adjustments made to correspond to the vice life as follows:

Del Prado Wastewater System vements - Book Asset Detail records us

- Annual Report (Sheet S-5) shows 3 - Book Asset Detail records use

Transmission & Distribution - Book Asset

A 3-1



st only in order the Annual Report.

iation with isted as being retired, as well as

showing April and May 2008 depreciation. The replacement value depreciation is also show bove.

Del Prado Wastewater System Original and Replacement Asset Costs

Original CReplacement Cost

May 2008

Adjustments were made to the depreciation based on replacement coto keep the depreciation based on the original cost consistent withTable 3-2 presents the Del Prado wastewater system’s original deprecadjustments to the depreciation for items already l

n, both before and after the adjustments identified a

Table 3-1

ost Del Prado WWTPa Structure & Imp.(354-04) $7,627,822 $12,525,856 Treatment & Disposal Equip (380-04) 6,556 8,265,149 ,080 Outfall Sewer Lines (382-04) - - Subtotal - Del Prado WW $14,183 $20,791,006 TP ,902 Del Prado Main Lift Stationb Wet Well (370-03) $ $57,112 53,284 Pumping Equipment (371-03) 112,207 80,839 Odor Control (362-02) 39,392 53,205 Subtotal - Del Prado Main Lift Station $173,515 $222,524 Del Prado Other Pump Stationsb Wet Well (370-03) $3,4 $4,594,253 58,218 Pumping Equipment (371-03) 1 2,253,675 ,923,372 Subtotal - Del Prado Other Pump Stations $5,3 $6,847,928 81,590 Customer Servicesc Customer Services (363-02) $1,2 $1,850,312 88,550 S bu total - Del Prado Customer Se $1 $1,850,312 rvices ,288,550 Del Prado Pipelinesd Collecti 02) $15,86 $17,939,679 on Systems - Force Main (360- 4,080 Collection System - Gravity (361-02) 6 10,404,039 ,474,636 Manholes (361-00) 390,470 429,924 Reuse Distribution Mains (375-06) 2,961,029 3,147,947 Subtotal - Del Prado Pipelines $25,690,215 $31,921,588 Del Prado Plant Sewere Plant Sewer - Royal Coach $123,480 $171,607 Subtotal - Del Prado Plant Sewer $123,480 $171,607 Grand Totals - Unadjusted Costs $46,841,252 $61,804,965

a The Del Prado WWTP original costs are from the Annual Report. b The Del Prado Main Lift Station and the Other Pump Station original costs are from the Annual Report, with adjustments made for addition of 1) CVS pump station to Wet Well costs ($132,316), 2) addition of Bioxide Feed at Walmart pump station to Pumping Equipment ($14,845). cThe Del Prado Customer Service original costs are from the Annual Report, with an adjustment made for CVS of

d The Del Prado Pipelines original costs are from the Annual Report, with adjustments made for addition of 1) CVS force main costs ($60,952), 2) CVS gravity line costs ($44,769), and 3) CVS manholes ($5,943). e The Del Prado Plant Sewer original cost is from the Annual Report.

$7,000.

A 3-2



Table 3-2 Del Prad water System Original and Rep nt Dep

iginaDepre

Th gh rch 3

a

Origi t Depreciation

April aMay 2008

Ad ent r Retired or RA

al t

DepreciationT y

ement ost

eciation Through May

iginal e

Replacement Cost

Depreciation Through May

2008 - Adjusted

Basisf

o Waste

Or

laceme

justm

Cumulative

Total OriginCos

reciation

ReplacC

Depr

l Cost ciation

rouMa 1,

2008

nal Cos

nd b

foemoved

cssets

hrough Ma

d2008 2008 - Or

BasisDel Prado WWTP S 3,503 $3 0 09,531 $6,593,980 tructure & Imp.(354-04) $ ,312 6,290 $9,918 $3,549,52 $6,1 Treatment & Disp. Equip (380-04) 2,240,087 58,611 2,298,698 3,309,297 3,309,297 0 Outfall Sewer Lines (382-04) (24,274 - - - ) - 24,274 Subtotal - Del Prado WWTP 5,719,12 $94,901 $34,192 $5,848,218 18,828 $9,903,277 $ 5 $9,4Del P rado Main Lift Station Wet Well (370-03) ($6,191) $296 $9,639 $3,744 $4,686 $4,686 Pumping Equipment (371-03) 45 74 8 63,683 63,683 ,100 8 0 45,84 Odor Control (362-02) 8 16 81 11,860 11,860 ,617 4 0 8,7 Subtotal - Main Lift Station $47,526 $1,208 80,229 $80,229 $9,639 $58,373 $Del Prado Other Pump Stations $949, $18,47 2 85,397 $1,485,397 Wet Well (370-03) 356 6 $0 $967,83 $1,4 Pumping Equipment (371-03) 710,239 16,690 726,929 28,167 928,167 0 9 Subtotal - Other Pump Statio 1,659 $ 1 13,564 $2,413,564 ns $ ,595 35,166 $0 $1,694,76 $2,4Customer Services Customer Services (363-02) $392,3 $5,625 6 83,193 $683,193 21 $0 $397,94 $6 Subtotal - Customer Services $392, $5 6 83,193 $683,193 321 ,625 $0 $397,94 $6D el Prado Pipelines

(360-02) Collection Systems - Force Main

$87,792 $ 7 77,146 $2,777,146 $1,572,432 $253,943 1,914,16 $2,7

02) Collec 61-

2,168,869 1 69,909 4,269,909 tion System - Gravity (3

24,198 5,514 2,198,58 4,2 Manholes (361-00) 30,652 2,104 32,756 39,477 47,301 Reuse Distribution Mains (375-06) 206,446 16,443 5,523 228,412 289,661 289,661 Subtotal - Del Prado Pipelines $3,978,399 $130,537 $264,980 $4,373,916 $7,376,192 $7,384,017 Del Prado Plant Sewer Plant Sewer - Royal Coach $38,367 $588 $0 $38,955 $54,138 $54,138 Subtotal - Plant Sewer $38,367 $588 $0 $38,955 $54,138 $54,138 Grand Totals - Unadjusted Costs $11,835,333 $268,025 $308,811 $12,412,169 $20,026,144 $20,518,417

a The original cost depreciation is from the Annual Report. b The depreciation for April and May was calculated by taking the original costs and dividing by the [book period (useful life) times 12 months] times 2

months. c There were items that were removed from service, however, due to accounting regulations the assets were not fully depreciated to reduce the value

of the asset to zero. These adjustments reflect an adjustment to zero value. d The original cost depreciation total through May 2008 is a sum of the previous three columns. e The replacement cost depreciation was calculated as original cost depreciation times (replacement cost/ original cost). f T on was adjusted for the WWTP Structure & Improvements using 35 year service life rather than 32 years and

manholes using 40 year service life rather than 30 years.

he replacement cost depreciati

A 3-3



el Prado from 1999 to 2001. These items were identified as

estimated costs presented:

Boat Clarifier - $300,000 Chlorinators – 2 at $1 ch

rig

the asset values as follows:

8,526 less depreciation of 333,774 = 204,752 2,252 = $13,650

riginal and

p Station). Each their condition. Of this total, 30 did not need

improvement and the balance needed some degree of rehabilitation. Table 3-4 presents the improvements that are required for the pump stations to remain in service.

There was also a recent (May 2008) improvement made to the Reuse Distribution System. Four 6-inch check valves were added at a total cost of $18,334. This amount was added to the total asset amounts.

able 3-3 Orig r Items No er in

Estimated rigiCost

Original Cost Depreciation

ough M2008

EstimOriginal Cost Net of Depreciation

rou2008

Estimated nt

Cost Depreciation Thr y

2008

Estimated Replacement Cost

Net of Depreciation

Through May 2008

3.4 Adjustment for Items Not in Service There were certain pieces of equipment that were removed when the DWWTP was expanded in the periodfollows, with their

0,000 ea

Tplacement Costs foinal and Re Long Usea

Replacement

O nal Thr ay Th

ated

gh May ReplacemeCost

ough Ma

Del Prado WWTP Boat Clarifier - No Longer

There $300,000 ($172,693) $127,307 $538,526 ($333,774) $204,752

Chlorinators - There 20,000 (11,513) 8,487 35,902 (22,252) 13,650

No Longer

a The o i l costs were provided by CDM cost estimators. Subt 6,026) $218,402 otal - Del Prado WWTP $320,000 ($184,206) $135,794 $574,428 ($35

na

The value of these items is being deducted from

Boat Clarifier – Replacement Cost $53 Chlorinators – Replacement Cost $35,902 less depreciation of $2

Table 3-3 presents the schedule of the above items, with both oreplacement costs and the depreciation based on both costs.

3.5 Adjustment for Improvements There are a large number of pump stations (104 plus 1 Master Pumone was inspected regarding

A 3-4



o and L mp Station Improvements Requireda

tation #

plac-Loc

Wet Well t W

Well

plac& V

Valve VaReplace

Cont l Panel MiscellaneouEmergency Disconnect

Table 3-4 Del Prad

Re

ake Fairways Pu

Re

Pump S

e "T k" Recoa et Piping

e Discharge alves in

ult ro s Cost $17,000 $12,000 $5,000 $20,000 $1,500 1 Main LS X Other Pump Stations 2 X X 3 X X X X 4 4 - Relocate Contro anel $3,00 X l P 0 8 X 10 X X 16 X18 X 19 X X 20 X X 31 X + 31 - Replace Wet Well Access Door & Hatches $750 36 X X 39 X 41 X X X 49 X + 49 - Install Backflow Preventer $500 50 X X X 52 X X + 52 - Replace Fence $2000 55 X 57 X + 57 - Reseal FRP Wet Well at Joints $2000 61 PL X 62 LF X X X X 63 LF X X X X 64 PL X 65 PL X X + 65 - Install Backflow Preventer $50 0 67 PL X X X X 68 PL 69 PL X X 70 PL X 73 X + 73 - Install Backflow Preventer $500 98 X Total Count 2 11 15 9 0 9 Total Cost $34,000 $132,000 $70,000 $180,000 $9,250 $13,500 $438,750 Del Prado $34,000 $96,000 $55,000 $60,000 $8,750 $4,500 $258,250 Pine Lakes/Lk. Fairways $36,000 $15,000 $120,000 $500 $9,000 $180,500

a The cost were provided by CDM estimators.

A 3-5



A 3-6


iginal costs and d the improvements

ced in the

ter treatment plant of action is to

and interconnect the system to the Del Prado acility itself. The ions does have value.

3-6 presents a summary of this value.

Water

combined with the cost of correcting these issues, the prudent course of action is to ment Plant and construct an interconnect to

plied to the water t have value, as

land that enter into estimating the value of the system assets. Table 3-8 summarizes these items. The land has been valued per Lee County’s property appraiser taxable value.

3.10 Summary of Wastewater and Water System Replacement Value Table 3-9 summarizes the replacement cost from the previous portions of this section

3.6 Pump Stations Due to the large number of pump stations, the detail regarding the orassociated depreciation, the replacement cost and depreciation anneeded, Table 3-5 presents this information per pump station, as referenindividual pump station information in Appendix A.

3.7 Lake Fairways Wastewater Treatment Plant and Wastewater System As mentioned in Section 2, due to the condition of this wastewaand the number of operating permit violations, the prudent course discontinue the use of this facilityWWTP. Therefore, there has not been a value assigned to this fremainder of the system consisting of pipelines and pump statTable

3.8 Lake Fairways Water Treatment Plant andSystem As there have been frequent occurrences of operating permit reported incidents,

abandon the Lake Fairways Water Treatthe North Lee County water system. Therefore, there is no value aptreatment plant. However, there are portions of the water system thapresented in Table 3-7.

3.9 Land and Miscellaneous Items There are a variety of miscellaneous items as well as the value of the

Pump Station Original and Repla

nal oh

stmtireed Assets

Original ugh May Cost

RDep

Through Ma

cement gh May Required

Improvements

Table 3-5 cement Costs

ReplacemPump Station #

OrigiCost

Original CDepr

st rough

Adjueciation T

May 2008

ent for d or Re

RemovNet

ThroCost 2008

ent eplacement Cost

reciation y 2008

Net ReplaCost Throu

2008 1 Main LS $173,515 $48,7 ($ $142,295 ($17,000) ( 34) 9,639) $115,142 $222,524 ($80,229)

Other Pump St ations 2 ,092 (12,8 14,283 (22,000) 21 65) - 8,227 36,628 (22,346) 3 - (18,500) - - - - - -4 ,366 (3,7 ) 27,832 (3,000) 28 04) - 24,662 32,012 (4,180 5 ,739 (2,3 8,175 - 9 27) - 7,412 9,756 (1,581) 6 ,921 (37,7 17,842 - 52 33) - 15,188 87,600 (69,759) 7 - - - - - - - - 8 ,595 (37,6 64,352 (5,000) 82 32) - 44,963 135,144 (70,792) 9 75,179 (37,6 0 - 15) - 37,565 115,897 (57,987) 57,9110 179 37,6 57,910 (17,000) 75, ( 15) - 37,565 115,897 (57,987) 11 ,274 (15,1 23,320 - 30 47) - 15,127 46,671 (23,351) 12 ,274 (15,1 23,320 - 30 47) - 15,127 46,671 (23,351) 13 - - - - - - - - 14 ,899 (21,5 15,857 - 31 19) - 10,380 48,732 (32,874) 15 ,853 (34,3 13,020 - 42 30) - 8,523 65,466 (52,445) 16 ,426 (8,3 13,782 (20,000) 17 01) - 9,125 26,319 (12,537) 17 ,041 (34,912) ) 38,464 - 60 - 25,129 98,213 (59,749 18 ,041 (34,912) 38,464 (5,000) 60 - 25,129 98,213 (59,749) 19 ,200 (25,220) 17,475 (17,000) 31 - 5,980 91,172 (73,698) 20 ,942 (25,548) 46,823 (17,000) 56 - 31,394 84,926 (38,104) 21 9,099) 35,589 - 42,983 (1 23,884 64,048 (28,459) 22 53,172 (23,856) 29,316 79,303 (35,580) 43,723 - 23 75,305 (20,442) 54,863 96,694 (28,948) 67,747 - 24 75,305 (20,442) 54,863 96,694 (28,948) 67,747 - 25 42,240 (18,304) 23,936 63,080 (27,335) 35,745 - 26 51,426 (22,285) 29,141 76,784 (33,274) 43,510 -

A 3-7


ts (continued)

ump Station

nal t

o

8

stmired As

rigingh M

Rep eprec cement

h May Required Improvements

Table 3-5 Pump Station Original and Replacement Cos

P#

OrigiCos

Original CDeprecia

st hrough

AdjuRtion T

May 200

ent for ed or Neet

Remov sets t O

Throual ay 2008

Cost lacement Cost

DReplacement Cost

tion Tia hroughMay 2008

Net ReplaCost Throug

2008 27 - - - - - - - - 28 ,97 (22,953) ) 44,827 - 52 0 30,017 79,104 (34,277 29 ,00 (20,369) ) 39,780 - 47 7 26,638 70,199 (30,419 30 ,22 (10,088) ) 15,785 - 22 3 12,135 30,570 (14,785 31 22,223 0,088) 15,785 (750) (1 12,135 30,570 (14,785) 32 569 29,5 58,265 - 68, ( 53) 39,016 102,398 (44,134) 33 ,51 (30,186) ) 63,868 - 74 7 44,331 108,669 (44,801 34 - - - - - - - - 35 ,71 (16,845) ) 51,275 - 56 3 39,868 75,799 (24,524 36 ,45 (26,255) ) 55,966 (17,000) 64 5 38,201 94,430 (38,464 37 ,45 (26,255) ) 55,966 - 64 5 38,201 94,430 (38,464 38 45,770 7,481) 39,951 - (1 28,289 64,639 (24,688) 39 ,45 (21,025) ) 48,443 (5,000) 55 2 34,427 78,027 (29,585 40 ,34 (38,184) ) 33,612 - 58 6 20,162 108,512 (74,900 41 185 11,5 33,276 (37,000) 35, ( 20) 23,665 49,475 (16,199) 42 ,75 (13,697) ) 13,415 - 20 0 7,053 40,125 (26,710 43 ,75 (13,697) ) 13,415 - 20 0 7,053 40,125 (26,710 44 ,89 (18,040) ) 49,454 - 53 3 35,853 74,338 (24,884 45 - - - - - - - - 46 4,6 (36,057) 5) 39,419 - 6 35 28,578 89,155 (49,73 47 450 20,8 22,838 - 37, ( 93) 16,557 51,657 (28,819) 48 74,137 (27,867) 46,270 100,468 (37,764) 62,703 - 49 97,951 (29,113) - 68,838 131,575 (39,107) 92,467 (500) 50 97,951 (29,113) 68,838 131,575 (39,107) 92,467 (33,500) 51 24,330 (6,522) 17,808 32,850 (8,806) 24,044 - 52 - - - - - - - (7,000)

A 3-8


Table 3-5 Pump Station Original and Replacement Costs (continued)

Pump Station

iginal st

ost tion T

008

djustmtir

Removed Oug Re

t Depreci hrough

lacement h May Required

Improvements #Or

Co May 2

Original CDeprecia hrough

ARe

ent for ed or Net

Assets Throriginal Cost h May 2008 placement Cost

Replacement Cosation T

May 2008

Net RepCost Throug

2008 53 9,628) 33 - 110,528 (2 80,900 149,783 (40,151) 109,654 ,42 (13,142) 64,627 - 73 0 60,278 79,367 (14,740) 55 ,90 (2,356) 741 (1,500) 2 3 547 3,934 (3,192) 56 ,90 (2,356) 741 - 2 3 547 3,934 (3,192) 57 80 7,50 27,754 (2,000) 27,9 ( 0) 20,480 37,917 (10,164) 58 ,65 (11,435) ) 41,941 - 42 8 31,223 57,301 (15,360 59 - - - - - - - -60 75,30 (20,442) ) 7,747 - 5 54,863 96,694 (28,948 661 PL ,96 (32,962) ) - (20,000) 32 2 - 46,381 (46,381 62 LF ,96 (32,962) ) - (38,500) 32 2 - 46,381 (46,381 63 LF ,96 (32,962) ) - (38,500) 32 2 - 46,381 (46,381 64 PL ,96 (32,962) ) - (1,500) 32 2 - 46,381 (46,381 65 PL 32,962 (32,962) (2,000) - 46,381 (46,381) - 66 PL ,96 (32,962) ) - - 32 2 - 46,381 (46,381 67 PL 96 2,96 - (38,500) 32, 2 (3 2) - 46,381 (46,381) 68 PL 96 2,9 - - 32, 2 (3 62) - 46,381 (46,381) 69 PL ,96 (32,962) ) - (21,500) 32 2 - 46,381 (46,381 70 PL ,96 (32,962) ) - (20,000) 32 2 - 46,381 (46,381 71 - - - - - - - - 72 ,43 (20,738) ) 5,667 - 106 6 85,698 131,237 (25,570 1073 37,000 014) 27,9 60) 8 (500) (9, 86 44,578 (10,8 33,7174 377) ) 0 - 26,887 (5, 21,510 32,212 (6,442 25,7775 103,045 (10,018) 93,027 113,651 (11,049) 102,602 - 76 73,904 (3,763) 70,141 76,080 (3,874) 72,206 - 77 48,641 (40,197) 8,444 77,855 (67,264) 10,590 -

78 48,641 (40,197) 8,444 77,855 (67,264) 10,590 -

A 3-9


A 3-10


ts (continued)

Pump Station

iginal t

otion T

08

justmtir

Rem ved Assets Ough May 20 Replacement

t Deprecia Through

May 20

lacement gh May

2008 Required

Improvements

Table 3-5 Pump Station Original and Replacement Cos

#Or

Cos

Original CDeprecia

st hrough

AdRe

May 20

ent for ed or Net

original Cost

Thro 08 Cost

Replacement Costion

08

Net RepCost Throu

79 ,053 (17,716 49, 9 9) 66,143 - 67 ) 337 1,232 (25,0880 19,763 (7,502) 12,261 25,236 ) 14,556 - (10,68081 ,107 (37,606 60 12 2) 76,494 - 98 ) ,501 5,826 (49,3382 ,688 (34,755 55, 11 2) 70,629 - 90 ) 933 6,300 (45,6783 1,989 (19,375 62 94 9) 71,134 - 8 ) ,614 ,813 (23,6784 ,763 (14,973 46 7 6) 53,077 - 61 ) ,790 1,733 (18,6585 ,969 (6,415) 203 21 4) 209,547 - 209 ,554 6,151 (6,6086 ,951 (29,113 68, 13 7) 92,467 - 97 ) 838 1,575 (39,1087 ,997 (38,248 83 12 7) 84,809 - 121 ) ,749 5,166 (40,3588 ,865 (34,116 13 5 0) 13,867 - 47 ) ,749 0,417 (36,5589 ,192 (36,873 65 10 9) 65,857 - 102 ) ,318 5,196 (39,3390 ,988 (37,898 84, 12 6) 84,801 - 121 ) 090 5,157 (40,3591 ,193 (36,956 65,237 105, 9) 65,858 - 102 ) 197 (39,3392 ,865 (34,116 13 50, 0) 13,867 - 47 ) ,749 417 (36,5593 ,730 (34,040 11 48, 1) 11,823 - 45 ) ,689 264 (36,4494 ,246 (5,692) 119,554 128, 4) 122,338 - 125 172 (5,8395 5,246 (5,692) 119,554 128,1 4) 122,338 - 12 72 (5,8396 ,246 (5,692) 119,554 128,1 4) 122,338 - 125 72 (5,8397 ,253 (2,299) 72,954 76,240 9) 73,911 - 75 (2,3298 ,974 (457) 8 9, 1) 8,583 (12,000) 8 ,517 043 (4699 ,974 (457) 8 9,0 1) 8,583 - 8 ,517 43 (46100 ,948 (858) 0) 99,310 - 99 99,090 100,170 (86101 132,316 132,316 - - 132,316 132,316 - 103 125,246 (5,692) 119,554 128,172 (5,834) 122,338 - 104 107,764 (779) 10 107,804 9) 107,025 - 6,985 (77105 97,900 (707) 97,193 97,936 (707) 97,229 - Totals $5,665,265 ($1,978,553) $0 $3,686,712 $7,268,733 ($2,843,259) $4,425,474 ($438,750) Del Prado $5,335,650 ($1,648,938) $0 $3,686,712 $6,804,928 ($2,379,454) $4,425,474 ($258,250) Pine Lakes/Lk. Fairways $329,615 ($329,615) $0 $0 $463,805 ($463,805) $0 ($180,500)

Lake Fairways/Pine La a Original and Re ment As Costs

O nal Co

Or DepreciaT ough May

2

a

Through c

Replacem t

ement st

tion Through May

8d

Net Replacement Cost Through

May 2008e

Table 3-6 kes Wastew ter System

iginal Costtion

place

l

set Replac

CoDeprecia

rigi

sta hr

008b

Net OriginCost

May 2008en

Cost 200Lake Fairways WWTP Structure & Imp.(354-09) $494,728 ($261,033) ($956,671) $0 $233,695 $956,671 Miscellaneous Equip (389-09) 53 (510,5 0 - 8,754 84) 28,17 WW 1,03 ($771,6 5 671 6,671) $0 Subtotal - Del Prado TP $ 3,482 17) $261,86 $956, ($95Lake Fairways/Pine Lakes Pump Stations Pumping Equipment (371-09) $32 ($ 805 3,805) $0 9,615 329,615) $0 $463, ($46 Subtotal - Pump Stations $329,615 ($ ) $0 329,615) $0 $463,805 ($463,805Customer Services $354,397 ($218,971) ) $264,972 Customer Services (363-09) $135,426 $693,408 ($428,435 Subtotal - Customer Servic $354 ($ 6 408 8,435) $264,972 es ,397 218,971) $135,42 $693, ($42Lake Fairways/P s ine Lakes Pipeline

09) $176,Collection Systems - Force Main (3

) ) $87,034 60-

531 ($130,450 $46,081 $333,415 ($246,382 Collection System - Gravity (361-09) 1,546,953 (721,630) $825,323 2,848,135 (1,328,612) 1,519,523 Manholes (361-19) 37,450 (22,936) $14,514 68,950 2,228) 26,722 (4 Subtotal - Pipelines $1,760,934 ($875,016) $885,918 $3,250,501 ($1,617,222) $1,633,279 Grand Totals - Unadjusted Costs $3,478,428 ($2,195,219) $1,283,209 $5,364,384 ($3,466,133) $1,898,251

a The Lake Fairways WWTP original costs are from the Annual Report. b The original cost depreciation is from the Annual Report with the addition of depreciation for April and May. April and May depreciation was calculated[book period (us ful life) times 12 months] times 2 months. c Net original cost equals the original cost less the depreciation. d The replaceme t cost depreciation was calculated as original cost depreciation times (replacement cost/ original cost). e Net replacement cost equals replacement cost less depreciation.

e

n

A 3-11


Lake Fairways Water System Original and Replacement Asset Costs

Or nCos

riDepreciation hr gh Ma

2008

et Original Cost Thr

MaReplace

cement ost

Depreciation Throu May

8d

Net Replacemen

t Cost Through

May 2008e

Table 3-7

igi al

ta T

O ginal Cost

ou y b

Nough

y 2008c ment

Cost

ReplaC

gh200

Lake F airways WTP Structure & Imp.(304-08) $244,84 ($188 $55,962 0 ) $0 3 ,881) $473,46 ($473,460 Wells & Springs (307-08) 82,31 (65,3 6 84,456) - 6 68) 16,948 184,45 (1 Supply Mains (309-08) 4,20 (3,2 3 (9,643) - 2 99) 903 9,64 54 7 (55,977) - Treatment Equip (320-08) ,485 (4,622) 49,863 55,97 Gate Valve (331-18) 7,481 (5,346) 13,773) - 2,135 $13,773 ($ Miscellaneous Equipment (347- 7 (3 7 (6,907) - 08) ,615 ,967) 3,648 6,90 Subtotal – Pine Lakes WWTP $400,942 ($271,483) $129,459 $744,217 ($744,217) $0 Lake Fairways Pump Equip ) $29 ($25 1 ($215) $4,476 Pumping Equipment (311-08 ,557 ,209) $4,348 $4,69 Subtotal - Pump Equip $29,557 ($25,209 ($215) $4,476 ment ) $4,348 $4,691 Customer Services Customer Services (363-09) $177,3 ($92 2 05,689) $120,853 60 ,975) $84,385 $326,54 ($2 S r $177 ($9 2 05,689) $120,853 ubtotal - Customer Se vices ,360 2,975) $84,385 $326,54 ($2Pine Lakes Pipelines Etc. Transmission & Dist. (331-08) $1,020,051 ($504,357) $515,694 $1,864,413 ($1,050,776) $813,636 Meters (334-08) 112,341 (112,341) - 206,834 (206,834) - Hydrants (335-08) 128,266 (56,807) 71,459 225,459 (109,442) 116,018 Subtotal - Pipelines Etc. $1,260,658 ($673,505) $587,153 $2,296,706 ($1,367,052) $929,654 Grand Totals - Unadjusted Costs $1,868,517 ($1,063,172) $806,345 $3,372,156 ($2,317,173) $1,054,982

a The Lake Fairways WTP original costs are from the Annual Report. b The original cost depreciation is from the Annual Report with the addition of depreciation for April and May. April and May depreciation was calculated[book period (useful life) times 12 months] times 2 months. c Net original cost equals the original cost less the depreciation. d The replaceme t cost depreciation was calculated as original cost depreciation times (replacement cost/ original cost). e Net replaceme ement cost less depreciation.

nnt cost equals replac

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Del Prado and Lake Fairways Wastewater Systems and Pine Lakes Water System Replace nd & Miscellaneous Items

Replacement Cost

Replacetion Throug

May 2008 Net Replacement Cost

Through May 2008

Table 3-8

ment Value - La

ment Cost Deprecia h

Del Prado Wastewater System Organization (351-01)a,b $14,525 $4,696 ($9,829) Franchises (352-01)a,b 40,126 (40,12 - 6) Land (353-02)c 1,455,000 1,455,000 - Office Furniture & Equip (390-05)c 3,32 (3,321) - 1 Tool Shop & Garage (393-05) 44,227 (34,585 9,642 ) Lab Equipment (394-05) 22,40 (19,933 2,471 5 ) Power Oper Equipment (395-05) 377,02 (72,820) 304,208 8 )d - Communication Equipment (396-05 912 (912) Miscellaneous Equipment (397-05) 31,600 (23,262) 8,339 Other Tangible Plant (398-05)d 5,94 (5,943) - 3 Leasehold Improvements (398-05-1)e - 36,648 (36,648) Subtotal - Del Prado Wastewater Syste $2,031,735 ($247,379) $1,784,356 m Lake Fairways WWTP $4,0 ($4 $0 Organization (351-09)a 54 ,054) Franchises (352-09)a 750 (750) - Land (353-02)c 255,000 255,000 - Lab Equipment (394-09)d 4,880 - (4,880) Miscellaneous Equipment (397-09)d 2,570 - (2,570) Subtotal - Lake Fairways WWTP $267,2 $255,000 54 ($12,254) Lake F airways WTP Organization (301-08) $4,054 a ($4,054 $0 ) Franchises (302-08)a 750 (750) - Land (303-08)c 70,000 - 70,000 Tool Shop & Garage (343-08) 1,001 (593) 408 Other Tangible Plant (348-08)d 172,189 (172,189) - Subtotal - Pine Lakes WTP $247,994 ($177,586) $70,408 Grand Totals $2,546,983 ($437,219) $2,109,764 a Organization and Franchise amounts are at original cost. b Del Prado Franchise costs were not depreciated in the Book Asset Detail report. However, this item was depreciated over 25 years for the Pine Lakes/Lake Fairways assets. The Del Prado Organization and Franchise depreciation was therefore adjusted to a 25 years useful life. c Land values (plant sites only) are per appraisal by Mike Maxwell. d Office Furniture at Del Prado WWTP had $48 net value, which was immaterial and added to depreciation. The other equipment types were fully depreciated, so only the original cost is shown. e Leashold improvements relate to the Bayshore Road office location, which would not be used by Lee County.

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Table 3-9 Del Prado and Lake Fairways Wastewater Systems and

Pine Lakes Water System Replacement Value Net of Improvements

Replacement

Cost

Replacement Cost Depreciation

Through May 2008

Net Replacement Cost Through May

2008 Del Prado Wastewater System Wastewater System as of May 2008 (Tables 3.1 & 3.2) $61,804,965 ($20,518,417) $41,286,547 Land Other Items (Table 3.8) 2,031,735 (247,379) 1,784,356 Less: Items No Longer There or Working (Table 3.3) (218,402) Del Prado Pump Station Improvements (Table 3.4) (263,250) Subtotal - Del Prado Wastewater System $63,836,700 ($20,765,797) $42,589,251 Lake Fairways WWTP Wastewater System as of May 2008 (Table 3.6) $5,364,384 ($3,466,133) $1,898,251 Lake Fairways Pump Station Improvements (Table 3.4) (180,500) Land Other Items (Table 3.8) 267,254 (12,254) 255,000 Subtotal - Lake Fairways WWTP $5,631,638 ($3,478,387) $1,972,751 Lake Fairways WTP and Related Items Water System as of May 2008 (Table 3.7) $3,372,156 ($2,317,173) $1,054,982 Land Other Items (Table 3.8) 247,994 (177,586) 70,408 Subtotal - Pine Lakes WTP $3,620,150 ($2,494,759) $1,125,390 Grand Totals $73,088,488 ($26,738,943) $45,687,393

3.11 Additional Asset Value Considerations Original costs for assets were provided by NFMU from their accounting records. After reviewing the draft report however, NFMU identified a number of assets for which the original cost data they provided was inaccurate. Therefore the resulting net replacement costs for some items may be undervalued. Using alternative estimation methods for those identified assets, the total net replacement costs could add up to an additional $15 million.

Section 4 Transition from Private to Public Ownership of the North Fort Myers Utility 4.1 Transition Plan In accordance with the requirements of Task 3 – Estimate Needed Investments in the NFMU Facilities and Planned Use of the Facilities, the following section of this document has been prepared in order to define objectives for a smooth transition of a private utility to a public utility, and have no adverse impact on the North Fort Myers Utility’s ability to provide safe potable drinking water and highly treated reclaimed water to all customers within its service area at all times without interruption and in accordance with local, state, and federal guidelines.

4.2 North Fort Myers Del Prado WWTP Staffing 4.2.1 Permit Requirements The North Fort Myers Del Prado WWTP is currently permitted by the FDEP as a Type 1 Oxidation Ditch Wastewater Treatment Plant and is operated and maintained as required in FDEP Permit Number FLA014548. Section V of the permit, (Operation and Maintenance Requirements, Subsection 2: Staffing Requirements for the Del Prado WWTP) states that this facility is currently classified as a Category II, Class B facility and, at a minimum, operators with the appropriate certification (Class C or higher) must be on-site 16 hours/day for 7 days/week, and the lead operator must be a Class B operator or higher. Furthermore, the FDEP Operating Permit states that the lead operator shall be employed at the plant full time. “Full Time” means at least four days per week, working a minimum of 35 hours per week, including leave time. A certified operator shall be on-site and in charge of each required shift and for periods of required staffing time when the lead operator is not on-site. An operator meeting the lead operator classification level of the plant shall be available during all periods of plant operation. “Available” means able to be contacted as needed to initiate the appropriate action in a timely manner.

Based on the above referenced operating permit requirements, CDM has determined that the current facility staffing, as shown in Table 4-1 below is adequate with respect to the above FDEP Operating Permit Requirements.

Table 4-1 Current Staffing Levels at the NFMU Del Prado WWTP

Chief/Lead Operator 1 Shift Operators 5 Maintenance Forman 1 Maintenance Works 2

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4.2.2 Recommendations In the event that the Lee County Utilities does acquire the NFMU, CDM recommends that the Lee County Utilities staff conduct interviews with the current NFMU operations and maintenance staff to retain these employees based on their knowledge and experience with the existing NFMU’s operating procedures, equipment, and equipment (pump stations) locations.

4.3 Solids Disposal Process 4.3.1 Current Solids Disposal Process Currently, the Del Prado WWTP has contracted Karle Enviro-Organic Recycling, Inc. to manage their Biosolids. The wastewater activated sludge is either pumped directly from the sludge holding tank at 1.0% solids or thickened, using the rotary drum thickener, between 2.0% to 3.0% solids and is discharged to the sludge stabilization basins. The raw or thickened sludge is then pumped to tanker trucks to be hauled off-site for dewatering by sludge belt presses. The dewatered sludge is then hauled to a solid waste landfill for final disposal.

4.3.2 Recommendations The current solids disposal process being used at the Del Prado WWTP is very similar to the solids disposal process currently being utilized at the existing Lee County WWTPs. Therefore, CDM recommends that the current solids disposal process at the Del Prado WWTP to be continued.

4.4 Effluent Disposal Process 4.4.1 Current Effluent Disposal Process The primary disposal method is with reclaimed water, irrigating primarily golf courses and open spaces.

4.4.2 Future Effluent Disposal Process CDM recommends that reclaimed water use be promoted. This would minimize the quantity of water going into the deep well. Should the County acquire the utility; the golf course in that area will continue to be irrigated with reclaimed water. With better water quality from the Del Prado WWTP, it is possible that the quantity of reclaimed water used in that area will increase. Reclaimed water also will be routed back to the Waterway Estates area, should this interconnect be made to the Del Prado WWTP. There are also expansions of the existing Del Prado WWTP area proposed, with reclaimed water needs.

4.5 Proposed Management Systems During Transition Period During the review of the treatment facilities, it was observed that there was a need for written (formalized) direction or methodology to track work needing to be done, work completed, and an effort to provide consistency with other support activities to

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assure proper operation, maintenance and other actions that need to be taken to meet the mission of the facilities. To accomplish this, it is recommended that the following management systems or plans be developed to provide that direction and/or consistency to the overall performance of the facilities and its personnel.

Supervisory Control and Data Acquisition System (SCADA) – This plan would establish a detailed approach to controlling the process of the facility, unit by unit, to accomplish the goal of effluent compliance. This plan would include the following:

Process optimization – achieving and maintaining process control;

A process control strategy including recommended methods of controlling the plant processes;

The establishment of sampling points, laboratory analysis at each point, calculations, interpretation of results of the calculations and analysis and expected unit performance ranges;

Processing unit malfunctions and troubleshooting procedures; and

Placement of responsibility and accountability by the involved employee positions for the various actions required to insure proper process control.

Maintenance Management System (MMS) – A good MMS provides extensive detail and covers all factors of a maintenance program including preventative maintenance (PM), corrective maintenance (CM) and a spare parts inventory and replacement system. The purpose of the system is to prevent unscheduled equipment downtime and overall facility deterioration. If this system is in place and the work accomplished, equipment availability and performance will be maximized.

Sampling and Analysis Plan (SAP) – The SAP establishes where, when and how samples are to be taken to support the three major needs of a wastewater treatment system:

process control sampling;

industrial user sampling; and

permit compliance sampling.

The results of these samples and the analysis performed on them provide the information necessary for the following:

effective process control;

calculation of process control parameters and costs;

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development of historical data;

monitoring of industrial contributors;

meeting regulatory permit compliance requirements; and

updating the sewer use fee structure when required.

This plan provides the foundation for the continued control of the treatment process, regulatory requirements and reporting needs.

Emergency Operating Plan (EOP) – The State of Florida stipulates that treatment facilities develop and maintain a comprehensive emergency operation and response plan. This plan is intended to ensure that, under emergency conditions, the treatment facilities continue to operate. The plan generally includes the following elements:

causes of emergencies;

effects of emergencies;

protective measures to handle the emergencies that are defined by the cause;

procedure for maintaining and updating the plan to keep it current; and

safety equipment location, use and maintenance.

It is also recommended that the process control system, the maintenance management system and the industrial pre-treatment program be computerized through the use of personal computers and networking of those systems. This would bring the facility reporting and control systems up to the present state of the art by improving response time, providing consolidated records and producing consistent standardized reports.

4.6 Deferred Operation and Maintenance Program There have been operation and maintenance (O&M) items for the pump stations that were deferred. While there were corresponding items in Section 3 that related to improvements to the pump stations, those items were of a capital nature. The items listed in Table 4-2 consist of normal O&M tasks that will need attention over time. The other item to take into consideration will be the addition of a SCADA system that is integrated into the existing Lee County system.

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Table 4-2 Pump Station Operation & Maintenance Work Requireda

Pump Station #

Recoat Wet Well

Replace Discharge Piping & Valves in

Valve Vault

Replace Control Panel

Remove Grease

from Wet Well

Replace Fence

Cost per Pump

Station

Cost $12,000 $5,000 $20,000 $500 $2,000 Other Pump Stations 2 X $20,000 3 X $500 5 X X X $37,000 6 X X X X $39,000 7 X X X $17,500 8 X X $12,500 10 X $500 11 X X X $17,500 12 X X X $17,500 13 X X $12,500 14 X X $5,500 15 X X X $17,500 16 X $12,000 17 X X $17,000 18 X $500 19 X $20,000 20 X $500 22 X X X $17,500 23 X X X $17,500 24 X X X $17,500 25 X X $17,000 30 X X X $17,500 31 X $12,000 32 X X X $17,500 33 X X X $17,500 35 X X X $17,500 36 X $500 37 X X X $17,500 38 X X $17,000 39 X $5,000 40 X X X $17,500 43 X X X $17,500 44 X $20,000 45 X X X $17,500 46 X X X X $37,500 48 X X X $17,500 49 X X $5,500 52 X $500

a Costs provided by CDM estimators.

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Table 4-2 Pump Station Improvements Required (continued)a

Pump Station #

Recoat Wet Well

Replace Discharge

Piping & Valves in Valve Vault

Replace Control Panel

Remove Grease

from Wet Well

Replace Fence

Cost per Pump

Station

Cost $12,000 $5,000 $20,000 $500 53 X X X $17,500 55 X X $17,000 56 X X X $17,500 57 X $500 58 X $5,000 59 X X X $17,500 65 PL X $500 66 PL X X X $17,500 68 PL X X X $17,500 69 PL X X $17,000 70 PL X X $17,000 71 X X X $17,500 73 X X X $17,500 76 X X X $17,500 77 X X X $17,500 78 X X X $17,500 79 X X X $17,500 80 X X X $17,500 86 X X X $17,500 88 X X X $17,500 89 X X X $17,500 90 X X X $17,500 91 X X X $17,500 93 X X X $17,500 98 X $20,000 99 X X $32,000 105 X X X $17,500 Total Count 49 48 8 48 1

Total Cost $588,000 $240,000 $160,000 $24,000 $2,000 $1,014,000 Del Prado $504,000 $205,000 $40,000 $22,500 $2,000 $773,500 Pine Lakes/Lk. Fairways $84,000 $35,000 $120,000 $1,500 $0 $240,500


Another potential O&M item is the computerized televising and minimal cleaning of the gravity pipelines. NFMU did this work in the older areas of the system. However, to prevent any future problems, CDM recommends performing this task on the gravity pipeline that is more than ten years old. Table 4-3 presents an estimate of contracting this work, although it is possible that the County may want to do the work in-house.

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Table 4-3 Del Prado Gravity Pipeline .

Estimate for CCTV and Light Cleaninga .

Year Linear Ft. of 6 &

8" Linear Ft. of

10" Linear Ft. of

18" 1971 2,462 45 1972 35,016 1973 30,552 40 1975 15,120 1978 20,370 1980 25,848 1983 17,158 1985 76,213 1986 6,828 1988 2,515 1991 27,662 1994 48 1995 1,692 1996 7,387 1997 266 1998 6,406 Totals 273,028 85 2,515 Cost/L.F. $2.50 $3.00 $4.50 Total Costs $682,570 $255 $11,318 $694,143


Section 5 Evaluation of Interconnection Alternatives 5.1 General This section of the report evaluates the interconnection alternatives as follow:

Lake Fairways WWTP Interconnection to the Del Prado WWTP Pine Lakes WTP Interconnection to the North Lee County WTP Waterway Estates WWTP Interconnection to the Del Prado WWTP

Figure 5-1 shows the locations of these plants. The evaluation will take into consideration the capital and operating costs, with the payback period estimated for recovery of the capital costs. 5.2 Lake Fairways WWTP Interconnection to Del Prado WWTP 5.2.1 Lake Fairways Interconnect Capital Costs The capital costs for an interconnect from the existing Lake Fairways WWTP to the Del Prado WWTP include:

One mile of 10” pipeline A 300-foot directional drill under Gator Slew A 600,000-gallon/day Duplex Pump Station One mile of 8” pipeline for a reuse water main Demolition of the existing structures

The capital costs for this interconnect are estimated in Table 5-1.

Table 5-1 Cost of Interconnect from Lake Fairways WWTP to Del Prado WWTP

Demolitiona $75,000

Interconnect 1 mile of 10" = 5,280 l.f. Cost/l.f.b $55 $290,400

Directional Drill Transmission & Reuse 300 l.f. Cost/l.f.a $170 $51,000

Reuse Main 1 mile of 8" = 5,280 l.f. Cost/l.f.b $45 $237,600

Duplex Pump Station 600,000 gal/day $250,000

Total Cost of Interconnection $904,000 a The demolition and directional drill cost estimates were provided by CDM. b The pipeline cost estimates were provided by Johnson Engineering.

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C:/Lee County/NFM/Section 5.doc

Section 5 Evaluation of Interconnection Alternatives

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5.2.2 Lake Fairways WWTP Differential Operating Costs The operating costs are being calculated as the difference between the current operating costs of the Lake Fairways WWTP and the incremental costs of the flow being treated at the Del Prado WWTP. The incremental costs for treatment at Del Prado WWTP include electrical, supplies and sludge disposal, as these are the existing variable expenses. Table 5-2 presents the calculation of the difference in costs based on treating and transporting the flow from the Lake Fairways WWTP to the Del Prado WWTP.

Table 5-2 Calculation of Differential Costs of Treatment from

Lake Fairways WWTP to Del Prado WWTP Variable Treatment Costs – Del Prado WWTP Electrica $215,126 Sludge Removala $454,401 Chemicalsa 26,773

Subtotal $696,300 Treated at Del Prado WWTPa 590,300 (1,000 gal. units treated 2007)

Cost/1,000 gal. $1.18 Wastewater Treated Lk Fairways 2007a 34,175 (1,000 gal. units treated 2007) Incremental Costs $40,327 of Treating at North Lee Co. WTP Electric Costs for WW Pumped $3,500 from Lk Fairways WWTP to Del Prado WWTPb Existing Costs of Lk Fairways WWTP Treatment $219,595Incremental Electrical Costs Lk Fairways to Del Prado WWTP (3,500)Incremental Costs of Treatment at Del Prado (40,327) Decrease in Annual Costs $175,768

a These costs and treated quantities are from the North Fort Myers Utility Annual Report, 2007. b The electricity cost estimate was made by CDM.

5.2.3 Lake Fairways Capital Cost Payback Table 5-3 presents the net annual decrease in operating costs compared to the capital costs for the interconnect. The payback period would be approximately five years.

Table 5-3 Lake Fairways WWTP Interconnect -

Comparison of Operating and Capital Costs Decrease in Annual Operating Costs (Table 5-2) $175,768

Interconnect Costs (Table 5-1) (904,000)

Net Annual (Increase) Decrease in Costs - Year 1 ($728,232)



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5.3 Pine Lakes WTP Interconnection to North Lee County WTP 5.3.1 Pine Lakes Interconnect Capital Costs The capital costs for an interconnect from the existing Pine Lakes WTP to the North Lee County WTP includes:

0.7 miles of 10” pipeline Demolition of the existing structure Abandonment costs for the two existing wells


Table 5-4 Cost of Interconnect from Pine Lakes WTP to North Lee County WTP

Demolitiona $75,000 Interconnect b 0.7 miles of 10" = 3,696 l.f. Cost/l.f. $55 $203,280 Well Abandonmenta 2 $2,500 each 5,000 Total Cost of Interconnection $283,280

a The demolition and well abandonment costs were estimated by CDM. b The pipeline cost estimate was provided by Johnson Engineering.

5.3.2 Pine Lakes WTP Differential Operating Costs The operating costs are being calculated as the difference between the current operating costs of the Pine Lakes WTP and the incremental costs of providing the water from the North Lee County WTP. The incremental costs for treatment at North Lee County WTP include electrical and chemical costs, as these are the existing variable expenses. Table 5-5 presents the calculation of the difference in costs based on treating and transporting the water from the North Lee County WTP to the Pine Lakes water system.



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Table 5-5

Calculation of Differential Costs of Treated Water - from North Lee County WTP vs. Pine Lakes WTP

Variable Treatment Costs - North Lee County WTP Electrica $615,043 Chemicalsa 269,861 $884,904 Treated at North Lee County WTPa 1,616,220 (1,000 gal. units treated 2007) Cost/1,000 gal. $0.5475 Water Pumped 2007 from wells at Pine Lakesb 37,890 (1,000 gal. units pumped 2007) Incremental Costs $20,745 of Treating at North Lee Co. WTP Electric Costs for Water Pumped from $700 North Lee County WTP to Pine Lakesc Existing Costs of Pine Lakes Water Systemb $417,545 Incremental Electrical Costs from LCU (700) Incremental Costs of Treated Water - Lee County (20,745) Decrease in Annual Costs $396,100

a The electric and chemical costs were from Lee County 2007 year-end costs and the water treated from the monthly

operating reports of Lee County. b The water pumped from wells at the Pine Lakes WTP and the Pine Lakes WTP costs are from the North Fort Myers

Utility Annual Report, 2007. c The costs of pumping finished water from the North Lee County WTP to the Pine Lakes Water System was estimated

by CDM.

5.3.3 Pine Lakes Capital Cost Payback Table 5-6 presents the net annual decrease in operating costs compared to the capital costs for the interconnect. The payback period would occur in year 1.

Table 5-6 Pine Lakes WTP Interconnect -

Comparison of Operating and Capital Costs Decrease in Annual Operating Costs (Table 5.5) $396,100 Interconnect Costs (Table 5.4) (283,280) Net Annual Decrease in Costs - Year 1 $112,820



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5.4 Waterway Estates WWTP Interconnection to Del Prado WWTP 5.4.1 Waterway Estates Interconnect Capital Costs The capital costs for an interconnect from the existing Waterway Estates WWTP to the Del Prado WWTP include:

34,350 linear feet of 16” PVC pipeline 6,200 linear feet of 14” PVC pipeline 5,060 linear feet of 12” PVC pipeline 2,000 linear feet of 10” PVC pipeline 12,000 linear feet of 8” PVC pipeline 860 linear feet of 8” PVC pipeline 2 – inline booster pump stations Demolition of the existing structures


Table 5-7 Cost of Interconnect from Waterway Estates WWTP to Del Prado WWTPa

Interconnect Size Linear Ft. Cost/L.F. Extended Price

16" PVC =

34,350 $95 $3,263,250 14" PVC = 6,200 $85 527,000 12" PVC = 5,060 $65 328,900 10" PVC = 2,000 $55 110,000 8" PVC = 12,000 $45 540,000 6" PVC = 860 $35 30,100

Subtotal $4,799,250

Other Items Quantity Units Unit Cost Extended Price Repump Stations 2 $250,000 $500,000 Demolition 1 each $250,000 250,000

Subtotal $750,000 Total Construction $5,549,250

a The costs of the interconnect were provided by Johnson Engineering.

In addition to the interconnection costs, there will also be a need to expand the Del Prado WWTP from 3. 5 mgd to 5 mgd in the near future. The estimated cost for this expansion is presented in Table 5-8. There are several cost levels presented in this table, with the greatest costs used in the following sections.



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Table 5-8 Waterway Estates WWTP Interconnect with Expansion to Del Prado WWTP

Hazen & Sawyer

ENR Construction Cost Index June

2005 to April 2008

CDM - Increase Allowances - Electrical &

Contingency June 2005 8112/7415 $9.00/gallon

Phase 1& 2 - 2.5 mgd Expansion of Del Prado WWTP $17,200,000 $18,816,777 $22,500,000

Phase 3 - 2.5 mgd Expansion of Del Prado WWTP $19,400,000 $21,223,574 $22,500,000

5.4.2 Waterway Estates WWTP Differential Operating Costs The operating costs are being calculated as the difference between the variable operating costs of the Waterway Estates WWTP and the variable operating costs of the wastewter being treated at the Del Prado WWTP. The variable operating costs for treatment at Del Prado WWTP include electrical, supplies and sludge disposal. Table 5-9 presents the calculation of the variable operating costs based on treating and transporting the flow from the Waterway Estates WWTP to the Del Prado WWTP.

Table 5-9 Calculation of Differential Costs of Treatment from

Waterway Estates WWTP to Del Prado WWTP Variable Treatment Costs - Del Prado WWTPa Electric $215,126 Sludge Removal $454,401 Chemicals 26,773 $696,300 Treated at Del Prado WWTP 2007a 590,300 (1,000 gal. units treated 2007) Cost/1,000 gal. $1.18 Wastewater Treated Waterway Estates 2007b 365,000 (1,000 gal. units pumped 2007) Incremental Costs $430,700 of Treating at Del Prado WWTP Electric Costs for WW Pumped $30,800 from Waterway Estates to Del Prado WWTPc Total Variable Costs – Waterway Estates Using Del Prado WWTP $461,500

a These costs and treated quantities are from the North Fort Myers Utility Annual Report, 2007. b The wastewater treated at Waterway Estates is from the Lee County monthly operating reports. c The electricity cost estimate was made by CDM.

The variable operating costs for the continued treatment of wastewater at the Waterway Estates WWTP are presented on Table 5.10. There was an adjustment made to the electrical and chemical component of the operating costs. The Hazen and



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Sawyer, Lee County Utilities Waterway Estates Wastewater Treatment Capacity Alternative Review, December 2007, identified the preferred treatment at this facility as a membrane bio-reactor (MBR) process. CDM had identified the differential in electrical and chemical costs at $0.25 per thousand gallons ($0.77/1,000 gal. - $0.52/1,000 gal.) in an evaluation of the MBR process. Therefore, a comparison of the variable costs between the two treatment plants should include this adjustment.

Table 5.10 Calculation of Variable Costs of Treatment for Waterway Estates WWTP with MBR Process

Variable Treatment Costs - Waterway Estates WWTP 2007 Electric $143,685 Sludge Removal 187,800 Chemicals 45,358 Incremental Electric & Chemical - MBR (0.77/1,000 gal. vs. $0.52/1,000 gal.) 91,250 Variable Treatment Costs - Waterway Estates WWTP 2007 $468,093

a The treatment costs are from the end of year costs for Lee County. bThe MBR electric and chemical cost estimate was made by CDM.

Table 5.11 presents the calculation of the difference in costs between the Waterway Estates wastewater being treated at the Waterway Estates WWTP and treatment at the Del Prado WWTP. The differential in variable operating costs is calculated as well as identifying the existing Waterway Estates WWTP fixed costs as no longer needed. In order to compare the decrease in the variable operating costs to the capital costs for the interconnection, a present worth calculation was performed. The Hazen and Sawyer, Lee County Utilities Waterway Estates Wastewater Treatment Capacity Alternative Review, December 2007, identified the wastewater treatment needs as 2.5 mgd, based on a 25 year planning period from a base year of 2005. Therefore, the present worth calculation was based on the period of 2007 through 2030, using a 5 percent discount factor.

Table 5.11 Waterway Estates Wastewater Treated at Del Prado WWTP

Variable Treatment & Pumping Costs - Del Prado WWTP (Table 5.9) $461,500Varible Treatment Costs at Waterway Estates - with MBR (Table 5.10) (468,093)Decrease in Variable Costs ($6,593)Waterway Estates WWTP - Fixed Costsa (633,756) Net Annual Increase (Decrease) in Costs - Year 1 ($640,349)Present Value of Operating Cost Decrease (2007 - 2030)b ($9,256,778)5 percent Discount Rate

a aThe treatment costs are from the end of year costs for Lee County. b The present value is based on the decrease in operating costs from 2007 through 2030, using a 5 percent discount

rate.



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5.4.3 Waterway Estates Capital Cost Analysis Table 5-12 presents an analysis of the financial impact of interconnecting the Waterway Estates wastewater to treatment to the Del Prado WWTP. The present value calculated on Table 5.11 is greater than the cost of making the interconnection, providing a favorable result offered by the interconnection.

Table 5.12 Waterway Estates Wastewater Treated at Del Prado WWTP Comparison of Present Value of Operating Costs vs. Interconnect Costs

Present Value of Operating Cost Decrease (2007 - 2030) (Table 5.11) ($9,256,778)

Interconnect Costs (Table 5.7)

5,549,250 Decrease in Costs from Interconnect ($3,707,528)

The other capital comparison to be made involves the cost of replacing the Waterway Estates WWTP versus expanding the Del Prado WWTP. Table 5.13 presents a comparison of these costs, with both based on costs for 2.5 mgd treatment capacity.

Table 5.13 Waterway Estates WWTP Replacement Costs Compared to Del Prado WWTP Expansion

Waterway Estates WWTP Replacement Costsa Construction Costs Subtotal - Option 1 $35,100,000

Engineering/Administration (15%)

5,265,000

Land for WWTP

6,800,000

Waterway Estates WWTP Replacement Costs 2.5 mgd capacity $47,165,000

Del Prado WWTP Expansion (Table 5.8) 2.5 mgd capacity $22,500,000

a These are Option 1 costs from Table 5-1 of the Hazen Sawyer, Lee County Utilities Waterway Estates Wastewater

Treatment Capacity Alternative Review, December 2007 report.

Table 5.13 indicates that the Del Prado WWTP expansion would cost less than replacing the Waterway Estates WWTP, which was Option 1 in the Hazen and Sawyer report. The Del Prado WWTP expansion costs are also less than each of the options from this report, other than Options 8A and 8B, which only provided a diversion of any additional flow to either the City of Cape Coral or to the Del Prado WWTP.

Whereas, cities across America have been plagued by the numerous problems associated with alcohol, tobacco, and other drug use; and

Whereas, there is hope in winning the War on Drugs, and the hope lies in the hard work and determination of our communities to create a drug free environment; and

Whereas, local leaders, in government and in the community, know that the support of the people in the neighborhoods is the most effective tool they can have in their efforts to reduce use of alcohol, tobacco, and other drugs by Floridians, and

Whereas, success will not occur overnight, our patience and continued commitment to drug education and prevention are imperative; and

Whereas, the red ribbon was chosen as a symbol commemorating the work of Enrique “Kiki” Camarena, a Drug Enforcement Administration agent, who was murdered in the line of duty and has come to represent the belief that one person CAN make a difference; and

Whereas, the Red Ribbon Campaign was established by Congress in 1988 to promote this belief and encourage a drug-free lifestyle and involvement in drug prevention efforts; and;

Whereas, October 23 - 31, 2008, has been designated National Red Ribbon Week calling on all Americans to show their support for a drug-free state by wearing a red ribbon and participating in drug-free activities during that week:

Now, Therefore. Be It Resolved that I [Name of Public Official, Title], do hereby proclaim October 23 - 31, 2008, as Red Ribbon Week in this [City, State, etc.] and encourage all citizens, businesses, public and private agencies, media, religious and educational institutions to wear and display red ribbons and participate in drug-free activities throughout that week, joining the Lee County Coalition for a Drug-Free Southwest Florida and the rest of the state in promoting the Red Ribbon Celebration and a drug-free America.

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