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City Council Water & Sewer Subcommittee <br />Feb. 18, 2003 <br />Page 8 <br /> <br />breakdown, just as a percentage, what the budget costs were, and this <br />somewhat goes back to what Mr. Bell was asking about the debt service. Mr. <br />Anderson advised that on the water side the debt service represents 34.3% of <br />the rate and on the wastewater side the debt service represents 29.3% of the <br />rate. Mr. Anderson said to answer the question of what is driving the cost and <br />why a rate increase is needed, in 2001 the city was under an EPA <br />administrative order and the city was required to do an $800,000.00 study. The <br />City Council issued 9.5 million dollars worth of debt in 2001 to address the <br />problems that were revealed in that study. Mr. Anderson said there has not <br />been a rate increase since January of 2000, so part of this increase that is going <br />to be recommended is going to be addressing that debt that has been issued and <br />the rates that have not been adjusted to cover it. <br /> <br />Mr. Wilson stated that the impression that Mr. Campbell has given him tonight <br />is that production costs does not matter. He then stated that we have a 20% <br />cost for personnel and felt that the city could reduce personnel by two or three <br />people and cut the personnel cost by 2%. Mr. Wilson said the city needs to <br />attack this a little at a time. Mr. Bell said the debt service and personnel is 58% <br />of the total cost of production not including electricity, transfers, maintenance, <br />chemicals, etc. Mr. Wilson pointed out that nothing can be done with the debt <br />service and the only thing that can be looked at is personnel. Mr. Campbell <br />said that if your production cost is only $0.54 and you cut out 10% you are only <br />cutting a nickle off of $3.19. Mr. Campbell said he keeps the water quality up <br />and the health of the people up and that is what they are obligated to do to <br />maintain water quality and safe water. He stated that if we cut out people we <br />might be jeopardizing the citizens. Mr. Campbell pointed out that the plant has <br />doubled in size since he came to Paris and personnel has not been increased in <br />nine or ten years, and that occurred before the plant size was doubled. <br /> <br />Mr. Johns said that this situation is very similar to what they have at Campbell <br />Soup - that there is too much capacity at the Water Treatment Plant and we <br />have to work around that issue. Mr. Johns said the way they would do it is like <br />Mr. Wilson said. You cannot use the debt service because it is fixed, and they <br /> <br /> <br />