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The City is proposing to increase sewer charges overall by <br />approximin effect. <br />However, they proposed incrercent ease to over the County is consirates derably greater <br />However, P P . <br />- 20 percent. <br />Charge Component Existing Rate Proposed Rate <br />Monthly Demand <br />Charge $7,925 <br />Commodity Charge $1.28 <br />Per 1000 Gallons <br />In the City's report, based on projected <br />per day of wastewater flow, this amounts <br />the County's cost of about 20 percent, or <br />year. <br />$13j140 <br />$1.28 <br />flows of 467,000 gallons <br />to an overall increase in <br />an estimattld $62,600 per <br />The report indicates that even with this rate increase# the cost of <br />treating the County's wastewater will not be fully recovered through <br />these charges, and that additional rate increases to the County may <br />be expected next year. This is alarming, inasmuch an the proposed <br />rate increase to the County for 1994 is substantial. <br />The report does not explain how costs were allocated to the County. <br />Therefore, it is not possible to determine whether or not the costs <br />were allocated appropriately. We are able to conclude only that <br />either the costs allocated to the County in the past were <br />inadequate, in the City's view, or the City has allocated an <br />inappropriate share of the system's expenses to the County. <br />The County has requested additional information from the City <br />concerning the allocation of costs and the basis for such <br />allocation. Once this information is received and reviewed, perhaps <br />it would be appropriate to meet with the City to ensure that the <br />City's proposed rates are in fact justified and that the County <br />staff fully understands the basis for the proposed rate increases. <br />We understand that the City has scheduled a rate hearing for early <br />next week. The County requests that the City defer approval of the <br />wholesale sewer rates until after the County has an opportunity to <br />review the basis for the rates. It might be best for the City to <br />postpone any action on all the rates until after the wholesale rates <br />are finalized. If it is necessary to revise the new wholesale rates <br />downward, this would affect the revenue requirements from the retail <br />sector, probably requiring an adjustment to the rates proposed for <br />those customers. <br />Please let us know how we may be of further assistance on this <br />matter. <br />Sincerel , <br />Terrance G <br />Director c <br />7 <br />1—Pint <br />I Utility Services <br />35 <br />Boor. 90 Fact 704 <br />