Minutes 12/23/1980 - Laserfiche WebLink

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SOl TUESDAY DECEMBER 23, 1980 is estimated to increase to $550,000 by June 30, 1981. This amount includes all funds considered to have been set aside for depreciation purposes. FINANCING OF PROPOSED WASTEWATER TREATMENT PLANT IMPROVEMENTS Interim Improvements Subject to appropriative action by Council, transfers could be made from the Sewer Fund surplus to the Sewer Bond Fund to cover the immediate requirements of the City's share of the costs of the interim improvements, as proposed by Wiley & Wilson. If the interim improvements are to be paid for entirely from current resources, however, an additional increase in the sewer rate should be adopted by July 1, 1981. An increase of 15~ per thousand (from the present 6s~ to 80~) would produce an approximate additional $245,000 next year. Ultimate Expansion of Plant to 12 MGD Capacity Considering the possibility of a $1.8 million capital requirement for the City's share of substantially expanding the plant, we see no real alternative to a new bond program. The Wiley & Wilson proposed schedule to study and construct an expanded plant would seem to require a bond referendum in November, 1981. If approved by the voters, sale of the bonds would then occur, perhaps in increments, as market conditions and construction progress require. Amortization of these bonds would necessitate yet another sewer rate increase or increases in the future. It is impossible to predict the new rate(s) that would be required because of unknowns about the ultimate amount of bonds issued, future interest rates, the actual amortization schedule, and other complicating factors. UNRESOLVED ISSUES Our current contract with PSA sets out certain principles under which future project costs will be shared and financed between the City and PSA. For many reasons, it is felt that an addendum to the current contract or a correlated agreement should be developed, (a) to more exactly establish the share of the cost to be assumed by PSA, first of the interim improvements and then of the overall expansion; and (b) to establish the method by which PSA will contribute its share of the cost. CONCLUSIONS AND RECOMMENDATIONS This analysis by the administrative staff leads to the following conclusions and recommendations: I. That it is financially possible to proceed with the interim improvements and to pay for these improvements out of current revenues during this and through the next fiscal year, assuming a sewer rate increase at July I, 1981.