Minutes 12/08/1982 - Laserfiche WebLink

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, ""}' 8 DECEMBER 8, 1982 WEDNESDAY Council concurred, too, in Vice-Mayor Oakes' request that City Manager Edmonds prepare a cost analysis of the water system's operational costs to ascertain whether these costs can be reduced or more efficient methods can be developed. As a basis for the recommended water rate schedule, the consulting engineers reported as follows: An analysis of the revenue versus expenditure history was made. An analysis of the estimated future revenue deficiencies was made, comparing the estimated future revenues at existing rates with estimated future expenses. It can be seen that the revenue shortfall in Fiscal Year 1983 ranges from 20 to 24 percent below estimated expenditures, increasing to 56 to 62 percent in Fiscal Year 1984 and 62 to 70 percent in Fiscal Year 1985. The more significant revenue increases required after Fiscal Year 1983 are necessary if the City is to continue budgeting for capital improvements at the current rate, and if the City is to undertake the additional raw water source development and its associated debt service. Plant investment and annual operating expenses have been allocated by the base/extra capacity method. In comparing the large water users, their level of consumption, and the revenues generated, it was determined that although the large users consumed between 57 and 64 percent of the water sold, they gen- erate only about 37 percent of the water sales revenue. In the development of recommended rates, an effort has been made to more properly apportion the costs of the water service to the users. The capacity of the filtration plant, and indeed, the requirement for additional raw water resources is dictated primarily by the need to serve the large users. They should, therefore, pay a higher proportion of the costs. Customer related costs based on equivalent residential units were estimated, based on minimum consumption levels of 4,000 gallons per month. phase posed phase rates A proposed incremental rate schedule has been developed, the first proposed to be implemented January 1, 1983; the second phase pro- to be implemented eighteen months later on July 1, 1984. The first would increase rates by 40 percent. The second phase would increase by 7 percent.