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APPROPRIATION COMMITTEE-2018 ATM
<br /> Growth in Water Fund Debt Service Costs
<br /> Fiscal Water Debt Ser- Total Budg- Debt Service Ra-
<br /> Year vice et do
<br /> 2006 $213,150 $6,237,235 3.4%
<br /> 2007 $358,301 $6,514,502 5.5%
<br /> 2008 $425,565 $6,469,388 6.6%
<br /> 2009 $757,247 $7,190,800 10.5%
<br /> 2010 $1,074,551 $7,241,304 14.8%
<br /> 2011 $1,137,075 $7,619,919 14.9%
<br /> 2012 $1,258,968 $8,039,413 15.7%
<br /> 2013 $1,299,091 $8,124,846 16.0%
<br /> 2014 $1,260,655 $8,707,219 14.5%
<br /> 2015 $1,379,622 $9,270,880 14.9%
<br /> 2016 $1,307,938 $9,895,640 13.2%
<br /> 2017 $1,374,696 $10,663,218 12.9%
<br /> 2018 $1,470,783 $10,722,659 13.7%
<br /> 2019 $1,476,402 $10,800,973 13.7%
<br /> In the last several years,judicious use of some of the fund's accumulated retained earnings as cash capital
<br /> has helped to defray the impact of these growing debt service costs and maintain long-term rate stability.
<br /> Since "surplus" retained earnings are not available this year to apply toward the system's long-term capi-
<br /> tal needs,the complete improvement costs are proposed to be funded again exclusively by debt. Given the
<br /> ongoing and consistent nature of the water system's upkeep and improvement program, an alternative
<br /> would be to return to at least a partial cash capital program and raise part or all of the funds needed for
<br /> each year's capital program needs in the rates, while continuing to include excess retained earnings in the
<br /> mix if, as and when they are available. However, since making such a changeover in a single year would
<br /> result in a significant one-time rate boost, the all-debt proposal is a reasonable one for this year. For a
<br /> more complete discussion of the status and use of water and sewer enterprise fund retained earnings, see
<br /> the discussion of enterprise funds under Article 5.
<br /> Note that in addition to the water main improvements discussed above, under Article 16(f), an appropria-
<br /> tion of$375,000 in Water Fund debt will be requested to fund half the cost of installing an automated me-
<br /> ter reading system, shared 50-50 with the Wastewater Enterprise Fund. This would be the first of three
<br /> phases, with similar appropriations requested in FY2020 and FY2021. The automated meter reading sys-
<br /> tem would provide greater accuracy, facilitate closer monitoring of usage and improve leak detection.
<br /> Also, under Article 16(a), an appropriation of$75,000 in water retained earnings (matched by $75,000
<br /> from the General Fund)is requested for an ongoing program of replacing faulty hydrants; and under Arti-
<br /> cle 16(h), $30,000 in Water Fund retained earnings is requested for the purchase of a water valve turner.
<br /> The Committee recommends approval of this request(9-0).
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