AgdaPkt 2007-06-04 - Laserfiche WebLink

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6.2A Rate for the preceding calendar quarter. The Sewer Fund payment date will be on the page 2 same date that the interest is calculated. ALTERNATIVES An alternative that City Council may consider is to forego the inter-fund loan and increasing sewer rates in the coming fiscal year to a level that would allow the City to meet this financial obligation. This altemative is not recommended because SBSA capital costs will increase substantially over the next several years, as SBSA plans for major capital replacement projects. The new sewer rates would have to spike significantly to accommodate this need and meet the City's continuing financial obligation to the SBSA capital replacement program for the coming year. Further, the City's sewer rate study and 10-Year Financial Plan will a11ow the Sewer Fund to meet its financial obligations while minimizing the hardship on customers by setting moderate, constant rate increases of between 8% and 9% each year for the next several years. FISCAL {MPACT The Water Fund rate stabilization account will experience a temporary decrease in funds of $2,500,000, which will be loaned to the Sewer Fund. Currently the Water Fund rate stabilization account contains sufficient cash - in the amount of $8,300,000 - to make this loan without jeopardizing the readiness of the Water Fund to respond to potential emergency needs. The Sewer Fund will increase by $2,500,000, The three year repayment schedule for the loan including interest is incorporated in future sewer rate adjustments and the 10-Year Financial Plan for the Sewer Fund, prepared by the independent auditing firm, Bartle Wells of Berkeley, California. ~~ Marilyn Harang Public Work uperintendent Ed Everett City Manager Larry wacz Public Works Services hector ATTACtfMENTS Resolution: Inter-Fund Loan Agreement (Sewer) RELATED DOCUMENTS IN CITY CLERK'S OFFICE None