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Utilities Infrastructure Fund – Proposed The Water Filtration Fund exists as the predecessor improvement fund dealing with water containments sourced to the former TCAAP site. This fund appears to have completed its task in that the GAC plant was built and carbon treatment costs have been subsidized for many years. Given the fund has not operated as capital improvement fund for quite some time it is currently combined with the Utility operating fund for the Financial Statements purposes. Currently the fund’s remaining principal is not sufficient to generate enough interest to cover both carbon treatment costs and the long standing transfers to the General Fund and Capital Equipment Fund. Additionally eight years of historically low interest rates has helped in hastening principal’s rate of depletion. The establishment of a Utilities Infrastructure Fund is being proposed to be the single fund to manage all the capital needs associated with the water, sewer and fiber utility operations. The following steps would be taken to create this proposed fund: • Close the existing Water Filtration Fund and transfer its assets to the Water/Sewer Utility Fund, Capital Equipment Fund, Building Improvement Fund and the newly created Utilities Infrastructure Fund. • Designate Army settlement funds for plant construction to the newly created Utilities Infrastructure Fund. • Reassign the Utility equipment needs within the Capital Equipment Fund to the newly created Utilities Infrastructure Fund. • Reassign the Plant and Lift Station’s building needs within the Building Improvement Fund to the newly created Utilities Infrastructure Fund. Provided funding to the Building Improvement Fund for the housing of the utility’s fleet and heavy equipment at the Public Works building. • Include the Utility infrastructure needs identified in prior budgets (previously supported by the Water Filtration Fund or Utility fund) in the newly created Utilities Infrastructure Fund. • The revenue sources to sustain the utility capital needs prospectively will be Utility Fund transfers of annual depreciation, water and sewer connection fees, interest income, grant proceeds and bond proceeds as needed. The Water Filtration Fund proposed closing: The main theme in closing the Water Filtration Fund is to move assets to actively managed funds. This change will retire the annual draw down approach. Also the subsidy of carbon treatment costs (excluding costs from water rates) has effectively benefited the accounts with higher than average water consumption. In other words the subsidy is a reduction of the true costs, prior to setting the water rates. If these costs were included in the rates established, the higher user would bear their proportionate share of the cost of carbon depletion. With costs subsidized the customers effectively share the benefit equally. Therefore the phasing-out of this subsidy will align with sustainability goals. The redistribution of existing assets does not mean expenditures will be made more rapidly or used for lesser priorities. The budgeted needs and timing have remained largely unchanged from the prior year’s