Establishing a New Schedule of Rates and Charges for the Wastewater Treatment Plant

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'Kayor-..Roger 0. Parent -2- August 5 ? , :..198:. Projections prepared from information supplied by management of the utilities indicates that there will not be an appreciable increase in revenues, while increases in expenditures may be expected. As a result, there would not be expected to be an improvement in the cash and operating status of the utilities under the present revenue structure. Based on the apparent deteriorating financial condition of the utilities, it is imperative that relief be sought by means of a rate increase. The present rate structure for the Waterworks was established by Ordinance No. 5608, dated November.26, 1973, and the Wastewater rates were established by Ordinance No. 5298, dated May 25, 1971. As you know, approval of the Common Council is required to change municipal utility rates. Further, the Public Service Commission of Indiana must approve the.rates of the .Waterworks•. IC 8-1-2-96 (Amended by House Act No. 1019) requires that the municipal utility must be maintained in sound physical and financial condition. Reasonable and just charges are to be made for services and should produce sufficient revenues to pay maintenance costs, operating costs, depreciation, debt service, applicable taxes, extensions and replacements, provide adequate working capital and an adequate return on the invest- ment in the utility plant. "Any rate too low to meet.the foregoing requirements is unlawful." Therefore, because of the operating and cash deficiencies, it appears that the utilities may be in violation of this statute. .At the present time there are several ordinances in effect which govern the financial requirements of the utilities: Ordinance No. Waterworks: Commentary 4321 Dated May 23, 1960 - Authorized the issuance of $1,90,000 revenue bonds, which expire in 1980. The ordinance requires the maintenance of, and allocation of revenues to, an Operating and Maintenance Fund, Depreciation Fund and Bond and Interest Fund. Funds allocated to the Depreciation and Bond and Interest Funds are restricted as to use of funds. Also required is maintenance of facilities, financial records and adequate balances to retire bonded debt. Wastewater: 3959 Dated February 8, 195+ - Authorized the issuance of $8,500,000 revenue bonds, which expire in 1984. Requirements are similar to ordinance No. 4321 for allocation of revenues and funding of reserves.