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<br />Sewer Rate Increase
<br />City Council Meeting 5/5/98
<br />The Utilities Commission requested a change in the consultant's schedule of the proposed projects.
<br />Upon review of the Sewer Master Plan, the Utilities Commission recommended to advance the sewer
<br />main replacement program indicated in the plan. To do so, they realigned the CIP to more aggressively
<br />address the deteriorating mains in the older part of the City. As a result, the rate recommended by Staff
<br />was increased by approximately $1.00 per month. This would allow for the systematic replacement of
<br />about 31,000 feet of old sewer mains over the period of seven years. This modification to the plan
<br />changes the timing and expenditure level in the early years. Therefore, Staffs revised recommendation
<br />can be summarized as follows:
<br />Also included in the plan is the funding of the debt service reserve for the State loan so that funds will be
<br />available when the first payment comes due.
<br />ALTERNATIVES
<br />Few alternatives are available to ensure the long-term operational efficiency of the wastewater collection
<br />system. In order to complete the upgrades and expansion at the treatment plant, a rate increase of some
<br />proportion will be required. What has been added to this version noted above that was viewed 24
<br />months ago, is the results of the Wastewater Master Plan. These are recommendations that will keep
<br />the system running in a reliable and safe manner. The Utilities Commission reviewed the various capital
<br />improvement projects depicted in the Master Plan. It was the consensus of the Commission to
<br />aggressively pursue a sewer line replacement program in addition to the plant improvements. At their
<br />regular meeting of April 13, 1998, the Commission passed this structure of the sewer rate increase.
<br />FINANCIAL
<br />The financial plan, with the inclusions for the CIP, the State Revolving Fund loan and debt service, and
<br />normal anticipated cost increases, results in a proposed rate increase of 14.2 percent for all service
<br />classes. A typical residential customer would have a rate increase from $16.20 per month for sewer
<br />service to $18.50 per month. The additional revenue would fund a three-year CIP of $2,065,000 for
<br />existing system improvements, the debt service reserve for the loan payment, and cover the normal
<br />inflationary costs with operating the Division.
<br />As was the case in the study adopted two years ago, this one has another rate increase proposed in
<br />Fiscal Year 2000-2001. In order to cavy out additional improvements on the system and expand into
<br />areas in the City that do not presently have service, an additional increase of around 20 percent will be
<br />necessary. Staff is not requesting that this second phase be adopted now, but rather that it be noted and
<br />you are cognizant that a refined number will be forthcoming in about two years.
<br />FY 97-98
<br />FY98-99
<br />FY99-00 FY00-01
<br />Collection Rehabilitation
<br />$120,000
<br />$280,000
<br />$480,000 $480,000
<br />Mt. Vernon Pump Station
<br />281,000
<br />Lake Cadena Pump Station
<br />30,000
<br />324,000
<br />TV Inspection Program
<br />45,000
<br />100,000
<br />Pump Station Improvements
<br />120,000
<br />Total
<br />$195,000
<br />$985,000
<br />$480,000 $600,000
<br />Also included in the plan is the funding of the debt service reserve for the State loan so that funds will be
<br />available when the first payment comes due.
<br />ALTERNATIVES
<br />Few alternatives are available to ensure the long-term operational efficiency of the wastewater collection
<br />system. In order to complete the upgrades and expansion at the treatment plant, a rate increase of some
<br />proportion will be required. What has been added to this version noted above that was viewed 24
<br />months ago, is the results of the Wastewater Master Plan. These are recommendations that will keep
<br />the system running in a reliable and safe manner. The Utilities Commission reviewed the various capital
<br />improvement projects depicted in the Master Plan. It was the consensus of the Commission to
<br />aggressively pursue a sewer line replacement program in addition to the plant improvements. At their
<br />regular meeting of April 13, 1998, the Commission passed this structure of the sewer rate increase.
<br />FINANCIAL
<br />The financial plan, with the inclusions for the CIP, the State Revolving Fund loan and debt service, and
<br />normal anticipated cost increases, results in a proposed rate increase of 14.2 percent for all service
<br />classes. A typical residential customer would have a rate increase from $16.20 per month for sewer
<br />service to $18.50 per month. The additional revenue would fund a three-year CIP of $2,065,000 for
<br />existing system improvements, the debt service reserve for the loan payment, and cover the normal
<br />inflationary costs with operating the Division.
<br />As was the case in the study adopted two years ago, this one has another rate increase proposed in
<br />Fiscal Year 2000-2001. In order to cavy out additional improvements on the system and expand into
<br />areas in the City that do not presently have service, an additional increase of around 20 percent will be
<br />necessary. Staff is not requesting that this second phase be adopted now, but rather that it be noted and
<br />you are cognizant that a refined number will be forthcoming in about two years.
<br />
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