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City of <br />~~ <br />ver <br />MEMORANDUM <br />~~~~ issi <br />Ti s~ n, Fin n it t <br />° ~l, <br />T: r utility ~ t ~~ ®u <br />~.,. <br />'~~~;,, <br />,,-~., <br />,~~ <br />~,, <br />r <br />At the last commission meeting, the follow-up on water rates was delayed until the reserve <br />policy could be drafted and reviewed. At the March meeting, we reviewed the 14 year cash <br />flow analysis and capital improvement plan, At which time, based on the current reserve <br />policy and 2409 budget numbers, a 3 percent tiered rate increase was projected, <br />Pr® ®sed ~a~e claa~~e~ <br />Based on the new reserve policy being considered and the 2049 audited numbers showing <br />the cash balance going from ~ 1.9 million to $2.5 million, a zero percent tiered rate change is <br />being proposed for 2010. <br />1t is anticipated that tiered rate increases will be anticipated to start in 2014. The crater fund <br />has considerable capital improvements projected over the next 10 years and as we update the <br />model every year we will strive to find the balance between projects funded with cash and <br />those funded with bonds. <br />we are recommending no increase in the monthly meter charges for 2410 thxough 2413. <br />Beginning i.n 2414, we are anticipating a 3% annual increase to the meter charge to beep pace <br />with increases in administrative costs if the goal is to have the monthly meter charges equal <br />or come close to the actual administrative costs. <br />1 have attached the 14 year capital improvement plan for the water utility for your records <br />and below is the chart showing the Mater Fund operating Cash Reserve with the new <br />reserve policy based upon future estimates. <br />