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Page 2
<br />Mr. Stowe said in looking at the investment which is net for
<br />developer's and net depreciation. In Billing & Collection we have
<br />$70,000. invested at this time; water storage, counting the future
<br />reserve capacity we have in Pat Mayse, we have $4,244,050. invested;
<br />Raw Water Transmission Lines which they had to go back into the asset
<br />base and identify what is raw water transmission and originated
<br />$752,099.; Raw Water Treatment Plant we have $5,244,910. invested;
<br />Water Distribution - one of the items they had to go back in and
<br />determine what part is transmission mains, and what part is
<br />distribution main, and explained that some of the city's contracts
<br />calls for eight inch or larger mains, it is called a transmission main;
<br />if below eight inches it is a distribution main for cost assignment,
<br />and they have applied the contractual language to come up with the
<br />investment; Transmission mains $1,569,000. invested; Distribution Mains
<br />$2,646,357.; Meters and Boxes $293,168.; Service Lines $186,903.;
<br />Hydrants & Valves $206,064.; Machinery Tools & Equipment $70,276.;
<br />Sub -Total for Water Distribution $4,998,367.
<br />Mr. Stowe pointed out that on page two, they are showing construction
<br />in process which is blank explaining they had a figure of $106,000. for
<br />construction in process, but they needed to find out what type of
<br />investment is being built so they will know how to functionalize it,
<br />and will have that figure at the next meeting.
<br />Mr. Stowe told the committee that they have gone in and regrouped the
<br />assets by moving them around, distinguishing between raw water
<br />transmission, treatment plant, distribution mains and transmission
<br />mains. The next step is based on the analysis they have made of the
<br />city's history, and the design of the plant, they have funcitionalized
<br />those costs which are made up of four components - base meaning volume;
<br />extra capacity because of the peak day and peak hour, we have to have
<br />the investments in place to meet that peak; and customer cost.
<br />Mr. Stowe advised that the next step is the revenue requirements, and
<br />what they used was the 1987 -88 budget which they listed as it is shown
<br />in the City's budget, but there were adjustments that they had to make,
<br />first reclass certain expenses, second to make adjustments that are
<br />known and measurable at this time, and pointed out that on Page one of
<br />the Water Revenue Requirements under Billing and Collecting, they have
<br />cut $141,615. from the budgeted amount, and explained that this is the
<br />amount that will be moved over to sewer. Under Raw Water Storage -
<br />Contractual 0 &M Pat Mayse, you will see $77,000. has been moved, and
<br />explained this has been reclassed - $27,174. represents 0 &M at the
<br />reservoir, the balance of $49,826. represents the debt service that we
<br />are paying; Raw Water Transmission - you will see that in the budget
<br />they did not have anything identified, but they have pulled $220,447.
<br />from Water Production Contractual and moved it to Raw Water
<br />Transmission. Under Water Distribution they have removed $234,468.
<br />from Personnel, Supplies, Contractual, Maintenance Building and
<br />Equipment, and picked up $233,718. under Transmission for treated water
<br />transmission. Mr. Stowe explained they looked at the total linear feet
<br />the city has in place and found that 43% of the physical assets are
<br />eight inch mains and above as far as the distribution system, 57% is
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