Background:
In 2001 staff and a rate consultant reviewed the Wastewater Fund's rate model to evaluate the need for adjustments. The model indicated that an increase could be deferred several years in favor of other enterprise fund increases but should be reviewed annually. A small increase was proposed in FY 2002-03 and none in FY 2003-04 but a 5% adjustment was approved for FY 2004-05.
As part of the budget process staff has done the annual review and is proposing a 3% increase as part of the budget for FY 2005-06.
Operational cost increases for the Wastewater Fund are budgeted to be 17% in FY 2005-06. Increased costs relate to personal services including added benefit costs, power and chemical costs, internal charges and debt service on the DEQ loan not covered by the portion of the Food & Beverage Tax revenue allocated here. Revenues are budgeted to increase $186,280 including this rate change whereas operational expenses budgeted are $422,400 higher than the preceding year.
A significant portion of the fund's debt service is the loan for treatment plant improvements paid for by the Food & Beverage Tax. Approximately $1.4 million is generated by the tax to go toward the $1.7 million annual debt service. The tax ends in FY 2010-11 and there would be considerable impact on monthly rates to make the debt service payments.
A review of the rate model is anticipated in FY 2005-06 to allow monitoring of resources and requirements and the impact of the tax ending as of December 2010. | 
