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<br />.. <br />; <br /> <br />. <br /> <br />. <br /> <br />. <br /> <br />. <br /> <br />~ <br />~HILLS <br /> <br />MEMORANDUM <br /> <br />DATE: <br /> <br />Agenda Item 2.C <br /> <br />October 13, 2004 <br /> <br />TO: Honorable Mayor and City Council <br /> <br />FROM: Murtuza Siddiqui, Finance DirectorlTreasurer "'""~ <br /> <br />SUBJECT: Revised CIP/Pavement Management 2005 - 2009/Utility Rate Study <br /> <br />BACKGROUND: <br /> <br />At the July 19, 2004 and September 20,2004 Work Session meetings, the Council discussed the <br />preliminary CIP/Pavement Management projects for 2005 - 2009 period. A number of issues <br />were discussed at these meeting, including the merits of specific projects. At these meetings, <br />staff also provided a cash flow analysis of under taking these projects and the impact it has on <br />various city funds. Two action items or outcomes resulted from these meetings. <br /> <br />One of the outeomes of these meetings was to conduct a Utility Rates Study. The city proceeded <br />to hire Abdo, Eick, and Meyers (eonsultant) to conduct the study. The study took a multi <br />pronged approach. First it reviewed the city's rate structure and comparedit with a number of <br />surrounding communities of comparable size. The next approach was to determine the future <br />cash flow requirements in order to have adequate funds to support the undertaking ofthe <br />proposed projects, as well as maintaining a desirable fund balanee in the enterprise (utility) <br />funds. A draft Utility Rate Study document was presented at the September 20,2004 Work <br />Session. The Council was not comfortable with the proposed rate increase and expressed a <br />eomfort level with a residential rate inerease of $18 per quarter for a residential aceount that uses <br />an average of 15,000 gallon per quarter. Based on this directive, staff worked with the <br />consultant to modify the rates and adjust the cash flow data accordingly. (Please refer to the <br />attached Utility Rate Study document). <br /> <br />The second outcome of these meetings was to review the feasibility of the future projects based <br />on the direction provided by the Council. The City staff has worked with the Greg Brown, URS <br />to layout a proposed five year CIP plan, while taking into aceount the direction provided by the <br />Council. <br />