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4. Franchise Fees. The AT&T fees have historically been kept separated but in this budget <br />those fees are being included in Municipal ROW Use Fees which is what they actually <br />are. Atmos Gas fees have returned to the level they were in 2009-10. This will be the first <br />full year of Suddenlink paying a 5% franchise fee as established by the State of Texas. <br />That increase is reflected in the budget projection for 2011-12. <br />5. Building Permits. Historically a single revenue line item, this budget is projected based <br />on what type of building permit is being issued. <br />6. Sanitation Fees. It is recommended that sanitation charges be left at current levels in <br />spite of decreased landfill costs. The City needs the predictability of this revenue stream <br />to finance operations of the City in the face of lower property values. <br />7. Water and Sewer Charges - The annual water and wastewater cost of service study <br />recommended a 2.7% increase in residential water rates, a 5.4% increase in commercial <br />water rates, and a 13.0% increase in retail wastewater rates. These rates have been <br />adopted by the City. This is the first rate increase since 2008 and was necessary to meet <br />the City's Rate Maintenance Policy established to help maintain the City bond rating with <br />Moody's and Standard & Poors rating agencies. It was also necessary to offset the <br />closure of Sesame Solutions and the reduced sewer treatment demand by Sara Lee. <br />Expenditures <br />1. Fuel. Vehicle and equipment fuel is a significant component of operations. Fuel <br />expenditures projections were based on department actual consumption in the last 12 <br />months and a per gallon rate $3.65. The City is currently exploring the feasibility of using <br />compressed natural gas to run its fleet. <br />2. Electrical. The City of Paris participates with approximately 120 other municipalities in <br />the Texas Coalition for Affordable Power (TCAP). TCAP aggregates the anticipated <br />annual demand of its membership to leverage volume pricing for electrical service. Since <br />joining TCAP in 2002, Paris has benefitted from lower electrical prices that it could <br />otherwise contract for. The City's cunent rate is .06884 per kWh. <br />3. Personnel. The City has a lean operation for a service organization, where 75 % of <br />expenses would not be unusual for personnel costs. In the General Fund personnel costs <br />account for 66.05 % of expenditures and 24.03 % in the water and sewer fund (these <br />percentages do not factor in most of the capital requests, which would drive the <br />percentages even lower). The City already provides bookkeeping services for PEDC in <br />accordance with its bylaws. Beginning October 1, 2011, the City will begin processing <br />payroll for PEDC as well. The PEDC employees will remain PEDC employees (and not <br />become City employees) and will not participate in the City's retirement plan, medical <br />insurance plan, follow any City policies or procedures, or receive any other City benefit <br />with the possible exception of workers compensation which is still being examined at this <br />time. This budget also formalizes the hybrid system of plan reviews and inspections that <br />the City has been using on a trial basis for the last year. In a nut shell, this hybrid system <br />uses a combination of City employees and outsourcing to more efficiently carry on this <br />work. The system is a major step in making the City more business friendly for those <br />- - - 7 <br />