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<br />One should note that if we have not achieved that expense recovery in the past, we are many years and <br />millions of dollars behind in funding those future capital improvements. For instance, in the Water Fund <br />we have approximately $15 million in accumulated depreciation and $5 million in cash, resulting in a <br />$10 million insufficiency. In the 10% model, with the addition of the water treatment plants and new <br />development, by 2034, we would have approximately $53M in accumulated depreciation and $12M in <br />cash, a $41M gap (see red bar in chart below). That gap would continue increasing in future years. <br /> <br /> <br /> <br />Proposed Increase <br /> <br />The third option shown is a 20% increase over 5 years for water, followed by inflationary increases of 3% <br />thereafter The Sanitary Sewer Fund follows a similar model with a 20% increase then a 10% increase in <br />year 5 and 3% increases thereafter. This allows us to reach the goal of 100% expense recovery in five <br />years. Again, expense recovery means that we are charging enough to cover operations and depreciation, <br />thereby setting aside money for future capital improvements. <br />