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CITY COUNCIL AGENDA ITEM BRIEFING SHEET <br />Submittal Date: <br />Originating Department: <br />Presented By: <br />Agenda Item No.: <br />06-17-2009 <br />Council Date: <br />Finance <br />Gene Anderson <br />20. <br />06-22-2009 <br />RECOMMENDED MOTION: <br />Move to approve an ordinance setting the water and sewer rates on all non-contract customers of the <br />City of Paris per the latest cost of service study. <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 to replenish its Water & <br />Sewer Fund operating reserves which are about $620,000 below the 45 day minimum reserve and <br />$1,013,400 below the more comfortable 60 day reserve. Adequate reserves are critical for the City since <br />5 customers provide 45°Io of the utility's rate revenue. A loss or decline in consumption of one these <br />customers could result in a significant financial strain for the City. Also, the sewer portion of the fund is <br />not currently self-sufficient and additional funds are also needed for capital improvements. The study <br />recommends a 1% increase in residential and commercial water rates and a 4% increase in residential <br />and commercial wastewater rates, for a total increase for the average residential customer of $1.27 and <br />$1.63 for the average commercial customer. <br />BOARD/COMMISSION RECOMMENDATION: <br />NONE <br />EXHIBITS: <br />Ordinance; Rate Study Presentation <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 />Z Administration ❑ Ciry Clerk ❑ Community Development ❑ EMS/IT Z Finance ❑ Fire <br />❑ Municipal Court E Legal ❑ Library ❑ Police ❑ Eng./Public Works ❑ Utilities <br />City of Paris <br />Revised 2/04/08 <br />w U13V1.9. J <br />