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Phare explained that there was a modification in <br />the amount presented to Council in their packets. <br />This was a reduction of $28,000 in the original <br />amount presented. The City is also holding $7,000 <br />for contingencies plus another $6,000 to cover an <br />apparent lien ur.~til it has been resolved. The <br />motion was passed. unanimously. <br />SEWER PLANT Russ Caldwell, Kirchner Moore, presented expansion <br />options and the financing of each option for a <br />wastewater treatment plant expansion. Staff is <br />recommending that Council approve the 2.1 mgd <br />expansion. Caldwell outlined the revenue effect <br />of increasing rates by less than two dollars and <br />that rates are somewhat subsidized by tap revenues <br />in this community. In Louisville, the rates would <br />be approximately $13 as opposed to the current $8 <br />for the average user. When the City issues fewer <br />bonds, there is a better fund balance because of <br />this subsidy each year. Caldwell stressed that <br />both plans were developed as a results of the <br />assumptions that: Council directed him to work <br />with, e.g., keeping rates at a reasonable level, <br />keeping growth projections within the current plan <br />guidelines. Also, the bond structure used was <br />selected by Council in that instead of having <br />annual payments ithe same, there is an increasing <br />principle at thE, end of the bond issue. This <br />means that future residents and businesses that <br />come in will pay a fair share and not shift the <br />debt burden to current residents. Both plans work <br />and will allow ithe City to finance the 2.1 mgd <br />expansion by issuing revenue bonds, and both plans <br />can be accomplished within the revenue assumptions <br />of keeping rates lower than a $2 increase for the <br />average user, Caldwell explained. <br />Caldwell further explained that in both plans <br />presented it is assumed that Homart users are not <br />making a monthly payment for additional debt, the <br />$1.90 per average user, as they have reserved and <br />purchased their capacity. Illustrated in Plan A <br />Homart is not providing $700,000 to write-down the <br />size of the bond issue by buying additional <br />capacity which they have the right to under <br />current contract. In Plan B, Homart is providing <br />$700,000 to purchase their additional capacity. <br />In both cases, Homart users are not paying the <br />$1.09 in additional monthly billings. <br />Caldwell recommended to Council to go per staff <br />recommendation for the 2.1 mgd plant. Then <br />present Homart with the two options and have them <br />choose which option prior to sizing the bond <br />issue. The agreement with Homart requires the <br />5 <br />