HomeMy WebLinkAboutA001 - Email correspondence to Legal Water Revenue Categories are Metered Sales,which equated to$8,915,000 in FY 2014/15;All
Other Revenues, $518,000 in FY 2014/15; and ISU Contract Sales, $894,000 in FY 2014/15.
Mr. Dunn explained the Annual Fund Projections and Projected Water Fund Balance graphs.
Based on prior direction given by the City Council, 10% is dedicated for operating reserve
(approximately five weeks of expenses). For FY 2014/15, the Operating Reserve would be
$649,000 in the Water Fund and $534,000 in the Sewer Fund. The purpose of an Operati
Reserve is "to mitigate against current and future risks...and to ensure stable services and fe h
Mr. Dunn noted that the Government Finance Officers Association Best Practices recommen
that the operating reserve equate to 45 days worth of annual operating expenses; the City has a
little less than that. He noted the risk of unanticipated expenses and the approximate cost of
those repairs. Council Member Orazem asked if the City should have more operating reserve.
Mr. Dunn indicated that he was somewhat uncomfortable with only 10%. He noted that he
surveyed nine other Iowa cities, and none of them had less than 25% in Operating Reserve. It
was the recommendation of Director Dunn that the Operating Reserve remain at 10% of
operating expenses through FY 2017/18 and begin to increase at 2%per year beginning in FY
2018/19 until it reaches 25%. He showed what impact that recommendation would have on
water rates and the projection for the Water Fund balance.
The connection with Council Member Goodman was lost at 9:40 p.m.
Sewer Fund. The five categories for sewer revenue were shown as: Metered Sales, $6,647,000;
ISU Contract,$1,132,000;NADC Contract,$216,000;NVSL Contract,$23,000;and All Other
Revenues, $384,000. It was noted that the minimum bill for sewer charges is
$10.20/month/customer. Staff is recommending a 5% across-the-board rate increase in sewer
rates for bills mailed on or after July 1,2015.The comparative impact on sewer rates was given.
The Projected Sewer Fund Balance chart was explained.Mr.Dunn showed the combined pattern
of water and sewer rate adjustments as it would impact customers.Again,staff is recommending
that the Operating Reserve remain at 10%of operating expenses through FY 2017/18 and begin
to increase at 2%per year beginning in FY 2018/19 until it reaches 25%.
Director Dunn explained the time line: the first reading of the ordinance would occur on April
14; the second, on April 28, and the third reading and adoption would occur on May 12, 2015.
This would allow for the rates to be effective for the meter reads beginning in June 2015 for the
utility bills mailed on or after July 1, 2015.
Moved by Orazem, seconded by Nelson, to set April 14,2015, as the date of public hearin or.
the first reading of the Water and Sewer Rate Ordinance. � V
Vote on Motion: 5-0. Motion declared carried unanimously.
ONE COMMUNITY: As requested by the City Council at its 2014 Goal-Setting Session,
Management Analyst Brian Phillips gave a summary of actions taken to date from the "One
Community" report. According to Mr. Phillips, the summary fulfills the second task of the
objective to review the report to identify action steps to improve community involvement and
integration.The third and final task is for the City Council to hold a discussion to give direction
if further actions are desired.
Mr.Phillips pointed out that several of the One Community Implementation Committee's report
elements were completed, although some were not pursued upon the report's completion, but
were instead independently accomplished at a later time.
7
Subject Need for Legal Advice on Water and Sewer Rate Ordinance
From: Diane R Voss
To: Dept Legal, (bcc: Diane R Voss)
Date: 03/26/2015 03:14 PM
I am seeking confirmation that no Notice is required when the City adopts a new utility rate ordinance; in
this case, it is a Water and Sewer Rate Ordinance. I have notes from when Doug Marek was the City
Attorney that he could not find any requirement for publication of a notice of hearing. In addition, I have
checked the past rate increase ordinances and found no Proofs of Publication. I just want to make sure.
Thank you.
Diane Voss, City Clerk/Records Manager
P. O. Box 811
Ames, Iowa 50010
(515) 239-5105