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REGULAR MEETING NOVEMBER 11,2013
<br /> focused on water and sewer, but ACCRA does report the cost of living index for all utilities and
<br /> so I want to share that as well,just to show that we currently are competitive and we share the
<br /> Council's you have made it clear that you want us to be in a position where we continue to be
<br /> competitive with our rates. We got this huge consent decree that we are going to have to do
<br /> something about and the issue in front of us. We are going to do our best to do it in a way that
<br /> we continue to be competitive on utility rates the best we can. (Referring to the power point)
<br /> This is where we currently line up,these are 2013 rates and for all cities and towns in the State of
<br /> Indiana with a population over 25,000 you can see in the left column the ones that are above us
<br /> and then you get down on the right one there a couple down how we are currently$55.38, so
<br /> there is where we line up with the other cities and towns in the State of Indiana of populations
<br /> over 25,000.
<br /> Chairperson White: Before John comes up, Eric, I am going to ask Council, I think that a couple
<br /> of them have some questions, so we don't lose the questions and then we will come right back.
<br /> Councilmember Oliver Davis: Was there any discussion in 2007 when these numbers were
<br /> created didn't that give some understanding with the sense that it was going to be a 20 year plan
<br /> that inflation would already be included in it, so the fact that was already a given?
<br /> Eric Horvath: It was not included, that's all I can say. Everywhere you look at a plan they
<br /> usually have a master that says 2007 dollars, so I'm not sure why that was, but you know, it's
<br /> something that has been bothering me, because I don't want to get to a point where I've got a ten
<br /> million dollar project as 2007 dollars and I go to build it in 2017 and everyone still expects it to
<br /> still be a$10 million dollar project. Now, it may very well be, and it may be less than that based
<br /> on you know improvements that we see to the industry. But you know if it's something like a
<br /> large diameter sewer pipe there haven't been significant improvements in the way that we do that
<br /> over the last number of years. So, I don't see those things changing drastically.
<br /> Councilmember Oliver Davis: Ok, the only reason that I say that is like this is every four years
<br /> and so in 2017, we will come back to the Council and say those numbers were based on the 2013
<br /> numbers and they need to continue to raise it and raise it and this thing can continually go out of
<br /> whack, without having any kind of ceiling or something on it. So what they did then is adjust it,
<br /> and keep on adjusting it, and keeps on going up, and up, and up.
<br /> Eric Horvath: (Referring to the power point) I hear what you are saying, if you go back a slide,
<br /> if you look, and I apologize it is really difficult to read here,but if you look at the 2007 dollars
<br /> column which is the top column and you see 2014/2015 all the way to 2029, that matches up
<br /> with the sheet that John gave you and he is going to talk about essentially set our capital plan,
<br /> which sets our rates,but those are all based upon on 2007 dollars. So when you add all those up
<br /> you get to $432 million and so we are basing rates on that$432 million. So, the reason that I
<br /> wanted to show you this is because if I move those forward from '07 to let's say 2019 that$38
<br /> million becomes $55 million with inflation, I think if I am reading that correctly, my eyes aren't
<br /> that good. And so at the end of 2029, you have a plan of$667 million, so what we are funding is
<br /> $431
<br /> Councilmember Oliver Davis: But when John did, I'm sure when he created those numbers back
<br /> in 2007, that weren't taken into consideration, when he created the $431.
<br /> Eric Horvath: It was not.
<br /> Councilmember Oliver Davis: Why not?
<br /> Eric Horvath: It wasn't, and I can't answer why not, I'm not sure.
<br /> Chairperson White: When he comes up for his presentation, you can ask him that question.
<br /> Councilmember Dr. David Varner: The comment I wanted to make was on the slide before this
<br /> one(referring to the power point presentation), the one that had the rates, subsequent rates.
<br /> Unfortunately, I have been doing this long enough that what you are seeing here is a game of
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