2000 JT CUA AGN JUL 18 I01 - Laserfiche WebLink

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CITY OF COLTON AGENDA REPORT FOR THE JOINT MEETING OF THE CITY COUNCIL OF THE CITY OF COLTON AND THE REDEVELOPMENT AGENCY FOR THE CITY OF COLTON AND THE COLTON PUBLIC FINANCING AUTHORITY AND THE COLTON UTILITY AUTHORITY JULY 18, 2000 TO: Honorable Mayor and Coun 4ilMembers APPROVAL: Henry Garcia, City Manager FROM: Al Holliman, Finance Directo Tom Clarke, Utility Director SUBJECT: Approval of Issuance of Wastewater Treatment Bonds for Mandated Capital Improvements and Approval of Formation of the Colton Public Utility Authority. DATE: July 12, 2000 BACKGROUND: On May 30, 2000 a public hearing was held regarding the formation of the Colton Utility Authority (the Authority) and proposed changes in customer rates for wastewater treatment services. The proposed formation of the Authority was in response to the City Council's direction to staff to explore all available options to make the necessary wastewater customer rate increase as low as possible. The rate increase is necessary to fund mandated capital improvements. On March 21, 2000 the City Council approved an emergency change order to Americon Constructors for a mandated capacity increase at the Wastewater Treatment Facility. The estimated amount of emergency improvements was $4 million. Other related capital improvements include rebuilding a lift station and line replacements, estimated at a combined cost of $1 million. Originally staff was estimating $450,000 per year in expense for routine capital outlay items. However, as discussed later in this report, it is more cost effective and beneficial for the ratepayers to bond finance $1,000,000 of these items, lowering the annual outlay expense to $150,000. As a result, total project needs now equal $5 million. It was disclosed during the March 21st meeting that the necessary monthly residential rate increase would be $2 to help pay the new debt service costs as a result of the emergency improvements. This is an addition to the previous disclosed $4 monthly increase as a result of debt service costs for other mandated capital improvements already underway. Essentially, Colton's residential customers were faced with a $6 monthly increase in Wastewater Treatment rates, to take effect on July 1, 2001.