2004 Performance Based Budget - Laserfiche WebLink

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The South Bend Water Works received approval from the Indiana Utility Regulatory Commission to increase its water utility rates and chazges effective December 2001. The average water rate increase was approximately 18% over the prior rate. Although this sounds significant, the City of South Bend remained in the lower percentile in regards to water rates charged by other municipalities throughout Indiana. A$er the rate increase, South Bend's water rates ranked sixth lowest out of the twenty largest cities in Indiana. It had previously ranked fourth lowest prior to this 18% increase. The City is in the very early stages of determining if a future rate increase will be needed to cover the growing operations and maintenance costs anticipated in the years 2005 and beyond. In January 2003, a Sewer rate increase was enacted for 2003 and 2004, the first in 15 years. The overall revenue enhancement with the rate increase is 24 percent. The City engaged 'independent consultants in 2002 to perform a Cost of Service Study which adjusted fixed vs variable costs and other allocations. These rates aze intended to be revised with new rates effective in 2005 to assure that the municipal sewer system has sufficient revenue. The City's sewer rates ranked right in the middle of the nineteen largest cities in Indiana as of yeaz-end 2000, while its combined sewer and water rates ranked fourth lowest in the state. With this rate increase, the City's sewer rates remain in the middle of the nineteen largest cities. This increase in rates was requested in light of the need to issue Sewer revenue bonds totaling $20.5 million for capital improvements over five years. The purpose of issuing this debt is to finance the cost of necessary capital additions, improvements and extensions to the City's municipal sewer and wastewater infrastructure. These capital expenditures are necessary to enhance present and future needs and to maintain the highest level of quality and quantity acceptable for the community. The bond that will be issued aze for capital needs only -not for operations or maintenance. In late 1998, the County's Solid Waste Management District enacted a mandatory recycling program for all county residents. This program is expected to have a significantly positive impact on the City's future landfill costs. As a resuh of the anticipated cost savings resulting from City residents' participation in this countywide recycling program, a rate increase may now be delayed for an undetermined amount of time. Results of the recycling program will be reviewed prior to any final determination of future solid waste pick-up fees. As mentioned earlier, the City is always looking for other sources of revenue that would reduce its reliance on property taxes. A viable source of revenue is from user fees and/or chazges for services currently being performed. The City has included in its 2004 budget $12.3 million of revenue from user fees that aze currently in place. It is the City's desire to establish all user chazges and fees at a level closely related to the full cost of providing the services while taking into consideration similar chazges/fees being levied by other public and private providers. The City recalculates, on an annual basis, the full costs of activities supported by user fees (including the Parks Department, EMS ambulance services, Building Department and the Century Center among others) to identify the impact of inflation and other cost increases. It then revises user fees accordingly. As a result, overall chazges for services and user fee revenues aze anticipated to increase in line with annual operating and capital budgets. Intergovernmental revenue of $6.4 million budgeted in 2004 mainly consists of pension relief distributions received from the State of Indiana for city-funded police and firefighters' pension plans ($4.7 million) plus grants received from local, state or federal agencies ($1.7 million). The State's pension relief funds aze supported by a variety of revenue sources including cigazette taxes B-7