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302 <br /> <br />THURSDAY, APRIL 5, 199o <br /> <br />however, has been prepared on the assumption that the 'current rates will not <br />change. A reduction in Electric Fund revenues is, however, forecast. Follow- <br />ing a'question by Councilman Groden, Mr. Brown confirmed that Appalachian Power <br />Co. is now seeking an'increase in retail electric rates, which could also mean <br />a possible increase in wholesale rates. Therefore, the revenue outlook is <br />still unclear. It was noted by Councilman McClain that APCO has the right to <br />put 'the new rates into effect five months after filing for an increase, and <br />therefore the increase is almost certain, However, if the increase is denied <br />or reduced from APCo's request, a rebate will be necessary. Mr..Brown con- <br />cluded by explaining that overall, the situation in the EleCtric Fund was such <br />that the transfer from the Electric Fund to the General Fund was increased in <br />the proposed Budget to $1.5 million, $100,000 more than last year. $250,000 <br />from both the Water and Sewer Funds is also recommended to be transferred to <br />the General Fund, recognizing that this will leave an acceptable balance in <br />each fund as a major contingency. It was noted that, even though the Sewer <br />Fund shows a balance of $193,000, this does not include the Sewer Bond Fund in <br />which the City has a Certificate of Deposit for approximately $4.2 million. <br />Approximately $3.2 million of this is projected to be needed for the "buy-back" <br />from P.S.A. Any balm~ce in the Bond Fund would be moved to the Sewer Fund to <br />compliment the $193,000, leaving an acceptable balance as a major contingency <br />fund. It was cautioned, however, thatlooking to the future, very shortly <br />there will be a need to look at water and sewer rate increases, not just to <br />provide for a subsidy to the General Fund, but to pay for operating expenses in <br />those two funds. The General Fund was balanced based upon transfers and use of <br />projected surplus, maintaining a very small fund balance as of June 30, 1991. <br />Mr. Brown noted that 'this balance is "nowhere near" what Administration would <br />feel comfortable with, and that he is concerned that the Budget does not <br /> <br /> <br />