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Regular City Council Meeting Monday,December 12,2011 Page 17 property tax-supported programs; and in the amount of $43,353,999 for 2013 of which $19,829,431 is designated for the property tax-supported programs. Roll Call Ayes: Johnson; Willmus; Pust; and Roe. Nays: McGehee. Motion carried. c. Consider a Resolution Adopting the 2012 Utility Rate Adjustments At the request of Mayor Roe, Finance Director Miller summarized the recom- mendations for 2012 Utility Rate Adjustments as detailed in RCA dated Decem- ber 12, 2011; and based on CIP Task Force recommendations for a 60% base rate increase to facilitate previously-deferred and anticipated CIP needs over the next twenty (20) years. At the request of Councilmember McGehee, Mr. Miller reviewed calculations on depreciation of the City's assets based on their initial cost and life expectancy; and clarified that the CIP Plan addresses immediate needs, those long-deferred, as well as those projected over the next twenty (20) years, with adjustments made accordingly over that time period. Mr. Miller noted that a number of the City's assets had been deferred for at least a decade; and advised that extending the life and depreciation was considered on a case by case basis. At the request of Councilmember McGehee, Mr. Miller further reviewed the pro- posed increase to utility base rates to fund those CIP needs, and the current CIP funds at $1.1 million and proposed increase by $2.2 million annually to fully bridge the current funding gap. At the request of Councilmember McGehee, Mr. Miller advised that some of the infrastructure and other CIP items were handled by staff, while others, depending on the required expertise, were contracted out. At the request of Councilmember McGehee, Mr. Miller reviewed the rationale in the base rate for residential versus commercial entities with higher water con- sumptions, with those commercial entities also using more water proportionately than an average single-family home, with residential users having a tiered system for consumption, but not applicable or a commercial entity due to varying uses and activities specific to a business but addressed in usage rates rather than base rates. As a member of the CIP Task Force, Mayor Roe advised that he had prepared a DRAFT resolution for City Council consideration; attached hereto and made a part hereto, that provided for a two (2) year versus a one (1) year implementation period. Mayor Roe clarified that this resolution was not intended to address any 2013 usage rates. Mayor Roe advised that his intent was that 2013 base rates, not usage rates, be considered; and that the original intent of the CIP Task Force was to implement rate adjustments under the management of one sitting City Council, rather than