HomeMy WebLinkAboutMinutes - 8/19/1997 - Finance and Personnel Committee ' FINANCE C�MMITTEE '
' AG � NDA ! SUPPLEM'ENT
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TO: Mayor and Aldermen
FROM: John A. Lobaito, Ci ministrator
FOR: August 19, 1997 eg lar City Council Meeting
1. Auditor's Management Letter
City Auditor, John Eder, will be in attendance to give a brief review of the audit
and management letter (attached).
2. Capital Develonment Fees
Enclosed is a copy of the current schedule for water and sewer capital
development fees. These fees are assessed at the time of permit issuance for
all new buildings. This includes residential, commercial, and industrial. The fee
should represent the pro rata share of the cost to reestablish the capacity of the
facility. As an example, an average home connected to the sanitary sewer
consumes approximately 500 gal./day capacity at the sewage treatment plant.
�. The monies collected through capital development fees are used to replace the
lost capacity. Similarly, water capital development fees are utilized to increase
water capacity. This increased capacity can be either in water storage (water
tower) or water production (well & water plants).
The capital cost to expand the facilities can be directly attributable to growth.
Consequently, the fees should keep pace with the rising construction costs.
With the recent construction of water plant #4 and the bid letting of the South
Wastewater Treatment Plant, the City now has an accurate picture of the cost
of expanding these facilities. The last time these fees were increased was in
1991 .
3. Water and Sewer Rates
Included in the packet is some background information on the Water and Sewer
Fund. This information will give the committee some insight into the history
and methodology of establishing the sewer and water rates. This information
is lengthy and detailed and is only intended to establish some level of
understanding of the Water and Sewer Funds for the committee to begin
discussion on the rates. The following is the current rate schedule:
Water: S 1 .10/1 ,000 gal. (minimum bill = 54.40)
� Sewer: 41 .65/1 ,000 gal. plus S6.00 debt service bi-monthly
There are approximately 650 accounts on a flat rate of 528.00 bi-monthly. These
accounts are sewer only accounts.
Finance Committee
� ' August 19, 1997
Agenda Packet
Page 2
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3. Water and Sewer Rates (continuedl
As stated previously, capital development fees are earmarked for increasing
system capacity. The water and sewer rates should be reserved for operation
and maintenance and debt service. System expansion through the use of
capital development funds causes a ripple affect on the operation and
maintenance cost.
Although the fund is supporting the current operations overall, there is concern
that future "maintenance" projects to the system combined with the talk of
annexations, will cause the fund to operate in a deficit.
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