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4.2. ERMUSR 05-11-2010City of ~~ ver MEMORANDUM ~~~~ issi Ti s~ n, Fin n it t ° ~l, T: r utility ~ t ~~ ®u ~.,. '~~~;,, ,,-~., ,~~ ~,, r At the last commission meeting, the follow-up on water rates was delayed until the reserve policy could be drafted and reviewed. At the March meeting, we reviewed the 14 year cash flow analysis and capital improvement plan, At which time, based on the current reserve policy and 2409 budget numbers, a 3 percent tiered rate increase was projected, Pr® ®sed ~a~e claa~~e~ Based on the new reserve policy being considered and the 2049 audited numbers showing the cash balance going from ~ 1.9 million to $2.5 million, a zero percent tiered rate change is being proposed for 2010. 1t is anticipated that tiered rate increases will be anticipated to start in 2014. The crater fund has considerable capital improvements projected over the next 10 years and as we update the model every year we will strive to find the balance between projects funded with cash and those funded with bonds. we are recommending no increase in the monthly meter charges for 2410 thxough 2413. Beginning i.n 2414, we are anticipating a 3% annual increase to the meter charge to beep pace with increases in administrative costs if the goal is to have the monthly meter charges equal or come close to the actual administrative costs. 1 have attached the 14 year capital improvement plan for the water utility for your records and below is the chart showing the Mater Fund operating Cash Reserve with the new reserve policy based upon future estimates. City ~~ Elk ~i~e~ ~lJater Fund O~erat~ng Cash Reserves j 4, 000, 000 ~, 500, ooo ~, ooo, ooa ' 2, 500, ooo 2, ooo, ooo 1, 500, 000 1, 000, 000 500, 000 4% ~ a~Q ~% 9 p/4 0 ©% 20©~ coos 200 ~o~o zo~~ 202 ~0~3 ~0~4 ~0~5 Zo~~ zo~7 Zo~~ 2a19 zoo Target cash reserve amount Actual cash amount Annual Tiered Rate increase please feel free to give me a call if you would like to review the ~.odel again prior to the meeting ~Y1 UZ"~}. I'~ext ~~e~s; incorporate and update the model wig your 2+Q11 'budget process. 1~ttach~en~s: Zo1o -?'OZO water utility capital improvement plan ~N~ ~_ ~ LPL +~ 1 W ~ f~ {./ ~ L Y ° v o ~ v ~ o o v d a o c 00 c 7 Q o o o o ~ ~ '" r ~ N ~ u7 ~ N op uj `" ctL~ N ~ 03 ~ " ~ r r- T J i _. ~ D C~7 O ~ O f~ ~' •~ '•~t ~ ri o ~ ao m tt ~ ~f a °v' °o vo ° °a v D o a ~ a u~ v r ui ai ~ T ri C oa 'f! b c~i r~ ~ ~ ~ ni oo ~ ~ a°a o ~ v ° ,.~ ~ Q f4 '~ o CO ~ u -s~ _ -r N ~ ~ r M N ~ ~ Q O 0 G d, O Q ~ h• ' o ~ cm ri ~ om ui eo ~,~ ~~ ~ ~ r a- © 0 v o , o ca a a o c3 v c~ v v v v o c~ ~ a c N ti ,~ O D UI7 d ~ v D 4 © ~ O et v a ri o rS ~ u~ N oo a ~ ,~ co '~ o0 0 r `} Q ~ C7 O , C7 ~ C~7 ~ ~ O ~ ~ ~ ~'~~ 0(3 ~ N ~ c~ ~ ~ v c~i ~ co c~i ~ T ~ T ~ ~ O O ~ d D O C3 © ~ 4 SYf -y;, o° a 'on^_ W c^^3 4J v Q oyy W oryn ~J co ~ ~v//~~ W a a~~ Y/ ~ti/~ W r N c" v ~ cD N l~ r N ~ ~Q P !'"` !' ~ ~ • y~ Q fl {Y} ® lS7 ~ v ~ C] ~. CO ~ 00 0 a af7 T I v ~ ° ~ ° ~ ° _.~ -s s P-0 -~ c r o {t} a ~ cD o OQ v N ti ~ ~j ~ ~ C'1 ! o ~~ CY T ~ ~ C C ~ C (R L ~ ~ .~ ~ .w + ~ ~ L ~ t .; ~ ~ ~.- C ~ 0 c 0 c o ~ O c 0' e Q e ,p ~ !D C ~ ~ ~ ~ m ~ ~ ,n p ~ ~ ~ ~ ~ F- j ~ -~s ~ ~ o O a o~ L L L L L L L ~ L ~L6 ~ '~ N W ~ w ' •L ~ ~} A.L ~ a U) o r~ o ~ a N o ~ 0 to 0 fA 0 ~ - ~ ~ o ~ ~ ~' ro ~ ~ ~ fA ~ .~ L w to ~ ~. ~ ~ N ~ .~ ~ VS 9 .~ m 3 U) ~ ~ ~ ~ `m ~ c~ N a l5Y a~ y Q1 ~ ,p ~ ~ ~ ~ ~a t~ ~ c~ a ~ ~ n ~ ~ a ~ u a ~ ~ a e v + ~ . ~ a ~ ~ U _ sv o ~ ° ' 0 as 3 .~ ~ ~ 3 o .~ c ~ ° ~ ~ ~ ~ ~ ~ ~ o ~ .o ~ ~ O ~` U ~ ~ ~ u% - _ ~ ~ o ~ w -. /~ / =, ry~ ~1+ / / ~ ~ / y lL Q~ / / a Q% ~ / 4'aL 'Q~ / y tl~L Q7 / y f ~ Q} ~ / 7 qt W ` ~ "- ~ LJ ~ ~ ~ ~ ~" R~ ~ ~ ~ I~ ~ o ~r fi~i} ~ L ~ aF+ N r m L-. ~ ~° ~ ~ ~ ~ w ~ ~' o ~ a ~ I a , _ N ~ M ~ d' ~ ~ ~ ~9 .d h ~ Oft ~ ~ .~ ~ ~ a~ ~ ~ .... - (} c c~ ~ ~ u~ ~ ~ ~ cn ~ ~ u~ ~ cn c y ~ L L W ~' ° ~ N ~ ~ ~_ ~~ ~ ,,ryrfy,/~ - ~ ~ - ~ ,~ ~~(.,,/U/ ._ /d~~ ~ ~ ~~G//J .~ ry~ .' ~ /~yAIJ M /-~ `r Q~ ,~ /~~~U// ~ /n~ .~' ~ ryil/I - ~ ~ ~Q/) - ~ ~ /NN/ -_ /~ C ~~r~~~{y ~ ~N Z ~ ~ +~ ~ '~' /df~~4 ~ /+~+ ryfO ~ /~/.~~ Q N ,~ /N ~ yr~J _N /S~d a /+~+ ~ .~ IG ~ ~ ~+/+~ Q~ ~ ~.+ ~ a-+ ~ L fil ~ ~ ~_ .~ U ® ~. O U7 iQ ~ lO LL LL LL CL Q. ~ 4L LL LL ', tl. ~ lL. ~ ~ LL ~ ~ LJL Q. V C ~ {d. V l /~'1y ll. std ~ I.L V / ;^_ 'Li ~e J ~ vJ ~ Q} (U ~ /~ L ~ (y ~ ~ ~ ~