06/02/1987 Meeting - Laserfiche WebLink

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- Answering questions from Mayor Obie and Ms. Bascom, Mr. Wong said the working capital in the sewer fund finances the reserve for capital projects. Mr. Gleason said the reserve fund for sewer capital projects has never been separate from the working capital in the sewer fund. Mr. Wong said the working capital was deliberately spent for projects in the Capital Improvement Program (CIP) and the capital budget. He said $102,744 is too low for the fund. He said an adequate working capital will be accumulated in two years if the council approves the proposed increase in sewer rates. Mr. Wong reviewed four proposals for monthly sewer rates for single-family homes. The rates were $6.35, $6.13, $5.85, and the existing $5.65. He said the $6.35 rate would correct the flow estimates, transfer portions of four positions that deal with the sewer fund from the General Fund to the sewer fund, provide a pipe sealing program, and provide for inflation in 1988 and 1989. The level of service would remain the same as now. Answering questions from Ms. Wooten, Ms. Andersen said one of the positions to be transferred is a person in the Public Works Department who has been spending half-time working on public information about sewers. The other positions to be transferred are half-time of a financial coordinator, half- time of a person who works at the counter in the Engineering Division, and half-time of a person maintaining the local pump stations. e Ms. Wooten said she asked for information about ,the flow correction. Ms. Andersen said it is difficult to pinpoint the errors that led to an underestimation of the flow; however, current projections are based on actual pata since conversion to flow-based rates. Mr. Gleason said the council instructed the staff to do the best it could when flow-based rates were initiated. George Jessie of the Public Works Department said about 35~ of the proposed rate increase is for flow correction. Mr. Wong said the $6.13 rate would correct the flow estimates, transfer the four half-time positions from the General Fund to the sewer fund, and provide for inflation in 1989. He said services would be reduced about 3 percent and capital projects costing about $20Q,000 would be eliminated. The $5.85 rate would correct the flow estimate and provide for inflation in 1989. He discussed various ways of reducing the expenditures between $200,000 and $330,000 if the council approves that rate. He said the $5.65 rate would result in eliminating some capital projects and reducing services $100,000 to $330,000. Mr. Wong said the staff recommends the $6.35 rate. He reviewed an analysis of that rate for the next two years. The analysis was on page 7 of the packet he had distributed. Answering questions from Ms. Ehrman, Mr. Wong discussed the sewer projects in the CIP for FY88 and FY89. He said the CIP contains $580,000 for sewer projects in FY89 and a sewer rehabilitation project might be eliminated if the council adopts the lower sewer rates in FY88. Replying to questions from Ms. Wooten, Mr. Wong said the projected revenue in the analysis of the $6.35 rate includes revenue from commercial and industrial e MINUTES--Eugene City Council Dinner/Work Session June 2, 1987 Page 3