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Attachment A 34 regulations regarding conservation rates, and gets the water fund on track to cover all operating and 35 capital costs and builds towards a minimum working capital threshold. There are best practices regarding 36 the minimum thresholds and if the City can maintain these minimums levels, the City should be in a good 37 position to be able to pay for future capital infrastructure needs without issuing debt after the fund 38 recovers. 39 40 The Storm Drainage fund showed a declining cash balance over the past four years which is why this 41 fund was included in the utility rate study. The utility rate study for the Storm Drainage fund shows that 42 the City's current structure is equitable and the proposed increase is consistent with the City's prior year 43 increases of 4%. The utility rate study identified a targeted minimum working capital level which the 44 City can meet at the end of four years, if expense and revenue projections stay on track. 45 POLICY OBJECTIVE 46 To provide a sustainable funding model for our Water and Storm Drainage Funds. 47 48 FINANCIAL IMPACTS 49 See Attachment A. 50 STAFF RECOMMENDATION 51 Staff recommends the City Council agree to issue revenue bonds in the amount of $2.5 million to finance 52 the Water Fund capital infrastructure needs for the next three years. 53 54 Staff recommends the City Council adopt one of the two proposed utiltiy rate models for the Water Fund. 55 REQUESTED COUNCIL ACTION 56 Motion to begin the process to issue a revenue bond in the amount of $2.5 million to finance the Water 57 Fund capital infrastructure needs for the next three years 58 -and- 59 Discuss the two options for water rates and provide direction to staff on next steps. 60 -and- s1 Discuss the option for storm drainage rates and provide direction to staff on next steps. 62 Prepared by: Michelle Pietrick, Finance Director Attachments: A: Executive Summary from Ehlers & Associates Page 2 of 2