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It was staff's intention to time the rate methodology change with the update of the MWMC's financial plan. That would occur in time for this coming year's budget cycle. She noted that the public works directors of the two cities had raised concerns about the sensitivity of the timing of impacts of the increases in SDCs on the development community. Responding to a question from Councilor Pap6, Ms. Smith clarified that MWMC was not collecting enough SDCs to fund an entire capital program. That was due to the fact the regional facilities were largely funded by federal grant moneys, and the MWMC could not collect a reimbursement SDC for the capital costs underwritten by those dollars. Consequently, the MWMC was "SDC poor" and to have adequate capital resources, the SDC must be supplemented by user-rate funded contributions. Councilor Pap6 expressed concern about building reserves and increasing fees to build enhancements he and other current ratepayers might not enjoy in the future. Ms. Smith noted that capacity expansions were funded by the SDC improvement component. Councilor Pap6 said that concerned him; if the money was being used for replacement, that was acceptable, but if the MWMC was using the money for future enhancements and smoothing the rates, he preferred that the enhancement be built when those who would benefit could pay. Ms. Smith said that there were three components that make up the capital programs, and the CIP is one part of that; another part was major rehabilitation and yet another was equipment replacement. Staff identified the element of each project needed for capacity expansion, and that was funded from the improvement component of the SDC. The remaining capital programs were funded by a combination of reimbursement revenues and user rate contributions that were budgeted to the capital reserve each year. Councilor Bettman agreed with Councilor Rayor about the ten-year planning horizon. Ms. Smith referred the council to Figure 9 in the MWMC's proposed budget, Capital Programs 5 Year Plan, and pointed out the spikes between the out years. She said that using the SDC in combination with the user rate contribution, the commission attempted to budget and manage using a five-year view. In addition, the commission had a "pay-as-you-go" philosophy and had no debt. To do so and manage spikes, sometimes it was necessary to build the reserves. The financial plan update, which the MWMC would review at the end of the summer and which the three local jurisdictions would be asked to adopt, would revisit the "pay-as-you-go" philosophy, which could impact the reserves accumulated in any given year. Councilor Bettman reiterated her interest in seeing the SDC revenues and expenditures tracked separately. She could not support the budget unless she saw where the $4 million in reserves would be spent and when it would be spent. She said that the ratepayers were subsidizing capital improvements that she thought should be paid for with SDCs. Ms. Smith said that the documentation requested was available and could be provided. Councilor Bettman asked if there was council support for delaying the vote on the budget. MINUTES--Eugene City Council June 10, 2002 Page 5 Regular Meeting