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<br />. <br /> <br />. <br /> <br />. <br /> <br />1)r~ - ~DK- <br /> <br />the financing of water system needs would not really involve <br />the City and our involvement with Utilities on this issue would <br />only relate to future growth needs within the system. This is <br />the third reason the City is involved; to ensure that the City <br />and Utilities remain partners in the City growth and that <br />municipal services are available in our urban zone for urban <br />growth. <br /> <br />At the 2/17/93 joint meeting (see attachment), staffs were <br />directed to analyze the system needs and review available <br />revenues and come up.with a preferred option to address the <br />issue of financing needed water system improvements. My <br />background in addressing this issue comes from finances <br />associated with the Wastewater Treatment System (WWTS). This <br />is appropriate as there are many similarities between the needs <br />and financing mechanisms for both the WWTS and the water <br />system. As noted above, it is believed that water system <br />improvements can be financed. However, it should be noted that <br />the Water Superintendent, Bill Birrenkott and myself prefer <br />different solutions to the financing question. This preference <br />for different solutions gets to the point where the solution is <br />a policy issue for the Utilities Commission and the City <br />Council. <br /> <br />WWTS EXPERIENCE <br /> <br />As I have indicated, my approach to financing water system <br />improvements is based on my experience with the WWTS. When I <br />came to the City in 1986, the Sewer Availability Charge (SAC) <br />money was being used to pay for an interceptor pipe. A need on <br />the horizon for plant repairs and a plant expansion led the <br />City Council to increase the SAC fee to $1,300. At the <br />minimum, this allowed the City to reserve $300 per SAC for <br />plant expansion or repairs, but the remaining $1,000 went for <br />interceptor debt. (This debt ended in 1991.) At this time, <br />sewer fees were also adjusted in order to help meet future <br />needs. From 1/86 until 1/92 the sewer fund balance went from <br />$175,000 to $960,000, excluding financing $250,000 for the <br />sludge land. <br /> <br />With plant repairs now taking place and a plant expansion <br />planned in the next few years, the City will need to use the <br />monies accumulated from rates and SAC charges to invest in the <br />system. Additionally, a bond will have to be issued based on <br />future revenues from SAC charges and operating profits from the <br />rates. There is no real distinction from the source of funds <br />as all of the SAC fees and operating profits go back into the <br />system for repairs and improvements. <br /> <br />The WWTS, like the water system, are enterprise funds that are <br />not set up to make a permanent profit, but do need to establish <br />a fee schedule to meet existing and future system expenses. <br />This is the City/Utility responsibility in order to accommodate <br />development according to the comprehensive plan. It is <br />somewhat surprising, but in analyzing the water system activity <br />