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CITY COUNCIL AGENDA ITEM BRIEFING SHEET <br />Submittal Date: <br />Otiginating Department: <br />Presented By: <br />Agenda Item No.: <br />06/02/09 <br />Council Date: <br />Finance <br />Gene Anderson <br />10. <br />06/08/09 <br />RECOMMENDED MOTION: <br />Not an action item - first reading. <br />POLICY ISSUE(S): <br />Fiscal Management <br />Contracts with several large industrial customers require a cost of service study to be conducted each <br />year. Rates for these industries are determined by the study and go into effect automatically per the <br />contracts. Residential and commercial rates are also examined in the study and are given to the City <br />Council for approval. The study points out that the City needs to continue with Council's phased plan to <br />replenish the Water & Sewer Fund operating reserves which are about $620,000 below the 45 day <br />minimum reserve and $1,013,400 below the more comfortable 60 day reserve. Adequate reserves are <br />critical for the City since 5 customers provide 45% of the utility's rate revenue. A loss or decline in <br />consumption of one these customers could result in a significant financial strain for the City. Also, the <br />sewer portion of the fund is not currently self-sufficient and additional funds are also needed for capital <br />improvements. The study recommends a 1% increase in residential and commercial water rates and a <br />4% increase in residential and commercial wastewater rates. A copy of the study accompanies the <br />packet, and Darrell Cline with J. Stowe & Co. will be at the meeting to review the study and answer <br />questions. <br />BOARD/ COMMISSION RECOMMENDATION: <br />NONE <br />EXHIBITS: <br />Rate Study and ordinance. <br />ACTION: <br />BUDGET INFO: <br />❑ Financial Report ❑ Minute Order <br />Expense <br />$25,000 estimated <br />❑ Department Report ❑ Resolution <br />Budgeted Amt. <br />$25,000 <br />❑ Presentation ~ Ordinance <br />y'I'D Actual <br />$22,025 <br />~ Public Hearing ❑ Other <br />Acct. Name <br />Consultants <br />Acct. Number <br />10-0318-81-00 <br />FiscAL NoTES: <br />None <br />REVIEWED AND APPROVED BY: <br />N Administration N City Clerk ❑ Community Development ❑ EMS/IT n Finance ❑ Fire <br />❑ Municipal Court E Legal ❑ Libraty ❑ Police ❑ Eng./Public Works ❑ Utilities <br />City of Paris a U0002 J` Revised 2/04/08 <br />