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October 13, 1902 <br />Page 6 <br />Part of the reason for present rates not being adequate is <br />a loss of the Sewer Fund revenue base. Estimated sewer use charges <br />for commercial & industrial accounts is estimated to be $9,310 lower <br />than the -1982 estimate. This is due to a lower number of REC'S for <br />commercial/industrial accounts. Estimated 1983 REC'S are 95 REC'S <br />lower than 1982. <br />The other reason for present• rates not being adequate is <br />increases in costs of goods and services needed for operations. Total <br />city operating costs (excluding depreciation, debt retirement, and <br />contingency) are 10.42% higher than 1982 budgeted expenses. MWCC <br />sewerage treatment costs are 8.42€ above 1982 costs. SLaff has re- <br />viewed the Sewer Operations budget and made reductions in various <br />areas. At this point staff feels that the budget proposed provides <br />the minimum amount of maintenance necessary to properly maintain the <br />system. <br />Staff feels that in order to properly maintain thu system, <br />needed revenues must come from users in the form of an increase in <br />rates. An increase of $3.25 per REC per quarter (13.27%) would raise <br />an additional $61,641 in revenues resulting in an estimated net income <br />of $2,532. <br />Should you have any questions do not hesitate to contact me. <br />DB/ds <br />Enclosures: Budget printouts: <br />Water Administration <br />Water Operations <br />Sewer Administration <br />Sewer Operations <br />Utility Fund income Statements <br />cc: <br />Clerk -Administrator Pauley <br />Director of Public Works/Community Development Johnson <br />Director of Parks & Recreation Anderson <br />Chief of Police Grabowski <br />4 <br />