CR 91-278 Proposed Storm Sewer IncreaseL
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December 10, 1991 Council Report #91 -278
Proposed Action.
Staff recommends adoption of the following motion: "Adopt Resolution
91 -155 increasing storm sewer utility rates effective on billings
rendered from and after March 1, 1992."
Overview.
The initial storm sewer fee was established at $4.75 per REF on
October 1, 1989. The original engineering estimated revenue and the
1991 rate increase to $6.00 per REF has not covered the shortfall and
ongoing expenses of maintenance, the concrete alley programs,
construction, and the debt service. The residential charge
recommended increase is from $2.00 /month to $2.50 /month.
Primary Issues To Consider.
o Need to restore working capital balance.
o Projected construction projects will need future funding.
o This rate increase is about one -half of what is needed now and
thus some increases will occur next year and in the future.
Supporting Information.
o Resolution 91 -155.
o Background.
1
n E. Schedler, Finance Dia
PROPOSED INCREASE TO STORM SEWER FEES
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• Proposed Increase to Storm Sewer Fees
Report 91-278
Page 2
Detailed Backqround.
At the establishment of the storm sewer fund on October 1, 1989, the
revenue estimate was significantly over estimated on a REF of $4.75.
The increase of the REF to $6.00 in 1991 was suggested and adopted as
a temporary level to evaluate the needs and revenue producing ability
of the f ee .
In 1991 a thorough review of acreages being billed was conducted,
trying to determine if the acreage or rate was not correctly
established at inception of the fund. Only minor errors were detected
in acreages.
While unit and per acre rates increase at the increase percentage of
the REF change, the relationship of actual acres and class to the
number of residential units cannot be determined using the REF
percentage increase on total revenue.
A program has been established in lotus to calculate the revenue based
on actual acreage and class which is then added to the amount
generated using the number of residential units times the new flat 1/3
• REF fee. This program produces a much more accurate revenue estimate
than has been available in the past.
In addition to future needs, the rate adjustment needs to recover cash
deficits of the past. It is projected that the recommended monthly
increase of 50 cents per residence for 1992 will not provide a
positive cash balance for several years to come. However, a 1992
increase of 50 cents and smaller increases in the next couple of years
will provide some working capital by 1996.
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