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<br /> <br /> 5 5 <br /> <br />Council's direction, the Public Hearing notice and the Raftelis water study report <br />will be finalized. <br /> <br />19. The rate study report notes that current rates implemented February 1, <br />2023? <br /> Zone 7 pass through rates were updated and effective February 1, 2023. This <br />will be clarified in the report. <br /> <br />20. The rate study states that a decreased demand of 17.5% for FY24 is <br />expected. Since the City was requesting a 15% conservation target, and <br />now that requirement has been removed (in the full FY2024), what is the <br />context to further understand the basis for this assumption? <br />This reference will be removed from the rate study report. <br /> <br />21. The rate study report notes the City will need a $6M loan and a three-year <br />payback, while a later reference in the report notes a 5-year repayment? <br />Confirming this will be an external loan with a 5% rate? <br />Staff is looking at both internal and external borrowing options. The payback is <br />calculated over five years, but only three years in included in the rates increases <br />to align with the rate increase timeframe. <br /> <br />22. The rate study states that ‘the water utility will default on debt coverage <br />starting in FY2024 with the start of the PFAS bond repayment”. As the prior <br />section(s) stated no debt (except for recycled water), can one presume that <br />an assumption was made with this scenario that the debt would be taken <br />out/borrowed. Was there another PFAS debt assumption reflected? <br />It is for the near-term infrastructure improvements. This reference will be <br />corrected in the rate study report. <br /> <br />23. Is an inflationary assumption for salaries of 3% appropriate/realistic? <br />Yes , for this rate study as there are several projects underway including a <br />management classification study. There may be higher inflationary assumptions <br />in the next rate study when these projects are completed. Note that the health <br />benefits have a different assumption for inflation. <br /> <br />24. The Zone 7 cost allocation changes from 100% variable to 22% fixed and <br />78% variable. How were these changes determined? <br />Given the burden of fixed costs on the lower usage customer, this change was <br />recommended during the earlier review and development process. <br /> <br />