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Committeemember Davis stated, I agree.
<br />Councilmember Broden asked, So that question was addressed regarding the pay as you go
<br />versus the rate change, right? So, from the consultant's perspective, maybe if you could clarify
<br />their input in terms of recommendations and what we would be gaining, losing...
<br />Mr. Horvath responded, We do currently cap the pilot at three percent (3 %) like we do other
<br />circuit breakers, but as the A.V. goes up—as the plant value goes up, less depreciation, then
<br />obviously three percent (3 %) of a bigger value is a bigger dollar amount. So, you're right in that
<br />regard that adding assets does increase that maximum pilot. It doesn't mean that the
<br />Administration needs to go to that max, but it does increase their billing, too. The one thing I'll
<br />say about the pilot is that when you think about the fact that I've gotten no reviews —and these
<br />are outside of our city, as well, and they're paying the same rates as the people inside the city
<br />and there's actually a surcharge on it —if you use the pilot for the General Fund, you're having
<br />them pay a pro -rata share of those General Fund costs, as well, which is why some cities like
<br />using pilots specifically on water and wastewater to help support the General Fund. I'm not
<br />speaking in favor or against, I'm just letting you know that those are two (2) issues. In terms of
<br />the increase being phased in: if we're going to do ghat, there's no way to set it like wastewater; to
<br />phase it in over a period of years in the ordinance. We can only do one (1) rate change, go to
<br />IURC and get that approved or not, and if we want a second one that is years from now —six (6)
<br />months, two (2) years —you have to go back to them. So you can't do one that's even going up
<br />two percent (2 %) next year. Whatever you need, you have to make the case for that need and
<br />then go to them with the increase. What we did was looked at the five (5) year capital plan,
<br />which was in excess of-
<br />Committeemember Dr. Varner interjected, saying, It was $88,000,000.
<br />Mr. Horvath continued, stating, And we knew we couldn't get there. We're trying to look at
<br />some of the more critical pieces that we knew we really should get to in the next five (5) years —
<br />we're trying to fund those. That's where it came from. One way or another, we're rolling the
<br />dice. I'm not trying to put you on the spot, I'm just saying it is what it is. We've got some really
<br />old stuff, and we're going to do our best to maintain it, regardless of whether we have money for
<br />replacing capital or not. We have talked about this before, in that we are very blessed with good
<br />water quality and lots of groundwater. We are in a very fortunate situation, in that regard. We're
<br />also blessed with a lot of capacity out there, in terms of pumping capacity, which has diminished
<br />because of the current condition of our assets. It puts us in a better position than we would be in
<br />without that option. So, you can't necessarily, per se, do a phase -in, but we could do a twenty
<br />percent (20 %) rate increase and then go back and get an extra fifty percent (50 %) or something.
<br />That is doable. The cost of issuance for us in terms of setting the rate goes up, because they
<br />spend more money on legal and accounting fees, going back to IURC, and those are monies that
<br />we otherwise wouldn't have to spend if we did it in one (1) particular swoop as opposed to
<br />multiples ones. So, that would be the reason to do it in one (1) versus two (2). Obviously, if you
<br />phase it in, it makes it easier for people to bill it into their rate, whether it's a resident or
<br />specifically large users. For residents, it's about five dollars ($5) a month, on average. I'm not
<br />saying that people aren't in tough positions. For the most part, it will never make a huge
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