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e e e Mr. Wright said the $10.50 step is necessary to generate revenue by September 30 to balance the budget, Responding to a question, Mr. Corssmit said industries are all individually monttored and are billed accordingly. The proposed rate would increase by approximately 2.2 times the old rate for everyone, including commercial, residential and industrial users. The old BOD charge was $2.30 and would become $6.30 for residential users. The same rate increase would apply to commercial and industrial users. Responding to another question, Mr. Corssmit said commercial users are charged at a rate according to how much water they use rather than a flat rate. As long as water dirtiness loadings are known, commercial customer rates vary. lf the dirtiness is not known, they will be charged on the basis of the amount of water being used. III. LOCAL RATE STUDY Mr. Smith said the two components of the study are operation and maintenance, and capital. Regarding the operation and maintenance portion of the study, the local rate is designed to pay for operation of sanitary collection service, storm sewers, and drainage channels. Eugene has been funding operation main- tenance of storm sewers and drains out of the sewer user fee charge for some time. Obligations to the EPA affect the local charge and the regional charge. The section of the study on operation and maintenance charges uses the same process to arrive at a rate change, as does the regional process. Regarding capital, Mr. Smith said Public Works staff is suggesting that an additional $1 million be budgeted from existing sewer utility fund capital reserves for the West Eugene Sewer Project to keep local rates lower. Public Works staff is aSking City Council to increase development charges by a special trunk levy so the user fee does not have to be greatly increased. Staff requests a sufficient increase in sewer user fees to provide matching funds for a grant proposed for the River Road/Santa Clara interceptors. There are two important properties of the financing plan that are not apparent. They are recovery costs for capital projects, and composition of total revenues. One of the capital projects Staff is proposing to fund is the West Eugene Sewer Project with two phases funded in this program. The Department of Environmental Quality will provide grant money to fund addi- tional capital to assist Eugene development a pressure main to provide service to Santa Clara and River Road. DEQ has listed the project for fully extending services on the State Priority List, making the project eligible for $7 million in construction funds. When asked if $7 million and State priority ranking remain if Santa Clara tried to incorporate, Mr. Smith replied that they would remain. Matching funds are needed by both Santa Clara or the City to obtain the grant. The proposed financing plan provides matching funds. MlNUTES--Eugene City Council Work Session January 24, 1983 Page 3