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36 the minimum thresholds and if the City can maintain these minimums levels, the City should be in a good <br />37 position to be able to pay for future capital infrastructure needs without issuingdebt after the fund <br />38 recovers. <br />39 <br />40 The Storm Drainage fund showed a declining cash balance over the past four years which is why this <br />41 fund was included in the utility rate study. The utility rate study for the Storm Drainage fund shows that <br />42 the City’s current structure is equitable and the proposed increase is consistent with the City’s prior year <br />43 increases of 4%. The utility rate study identified a targeted minimum working capital level which the <br />44 City can meet at the end of four years, if expense and revenue projections stay on track. <br />45 P OLICY O BJECTIVE <br />46 To provide a sustainable funding model for our Water and Storm Drainage Funds. <br />47 <br />48 F INANCIAL I MPACTS <br />49 See Attachment A. <br />50 S TAFF R ECOMMENDATION <br />51 Staff recommends the City Council agree to issue revenue bonds in the amount of $2.5 millionto finance <br />52 the Water Fund capital infrastructure needs for the next three years. <br />53 <br />54 Staff recommends the City Council adopt one of the two proposed utiltiy rate models for the Water Fund. <br />55 R EQUESTED C OUNCIL A CTION <br />56 Motion to begin the process to issue a revenue bond in the amount of $2.5 million to finance the Water <br />57 Fund capital infrastructure needs for the next three years <br />58 -and- <br />59 Discuss the two options for water rates and provide direction to staff on next steps. <br />60 -and- <br />61 Discuss the option for storm drainage rates and provide direction to staff on next steps. <br />62 <br />Prepared by: Michelle Pietrick, Finance Director <br />Attachments: A: Executive Summary from Ehlers & Associates <br /> <br />Page 2 of 2 <br /> <br />