HomeMy WebLinkAboutME&A - WW rate increase ME&A
MONTANa ENqiNEEeiNq ANd AdMiNlS1RRI~ON, P.C.
Serv~ces,for Munlcl~alt~es Across Montana
Voico 406 652 - 5000; Fax 406 248 - 1363
Mayor Olson and City Council
115 W. First Street
P.O. Box 10
Laurel, MT 59044
C~llular Phoao: 406 855 - 3575
MAR 2 4 2004
115 N. Broadway, SuR~ 202
Billh~, MT 59101-~045
Elnail:pmurlagla~nmatmu~ea. com
March 23, 2004
RE.. Wastewater Rate Inc~eii~d-t6 trF6vide 3;Iittching Funds for TSEP/DNRC Grants
Dear Mayor and Council,
I have had several discussions with Larry McCann about the rate increase that would be needed in order
to come up with the matching funds required for the TSEP and DNRC grants. Based on the project cost
estimates given to us by Morrison-Maierle, the total project cost is $1,033,000 and the required match
from the City is $433,000. A copy of the project budget is attached.
On March 1, 2004, I met with Mayor Olson, Larry McCann, and Mary Emblet0n to discuss where the
matching funds for the project would come from. At the meeting, I presented a rate increase analysis for
an SRF Loan of 20 years that showed a minimum rate increase of $1.18 would he needed (ifa loan were
used to provide the funds). A copy of the rate increase analysis is also attached.
In further discussions with Larry, it was indicated that the Council was proposing to raise the rates $2.00.
However, it was also indicated to me that the City did not want to take out a loan. Raising the rates only
$2.00 and not taking out a loan would provide approximately $61,000 in a year (approximately 15% of
the total needed). If the City does not wish to take out a loan, the rates would have to raised
approximately $14~25 to provide a full $433,000 in a year.
Lm't3r also indicated that there is $480,000 in cash; including reserves~ ofwhich $268,000 is already
comrmtted to the project being completed this year. That leaves $212,000 of cash remaining, although,
all financial information should be verified with the City Clerk/TreasUrer and note the amount of cash in
restricted accounts.
Enclosed please find a bill for our services on the grant applications to date. We would like to provide the
Council with two options at this point: 1. Proceed with the grant applications as stated in our contract
agreement; or 2. If the Council wishes to drop the project we would request payment for services to date
but not object to canceling the grant writing portion of the contract.
The deadline for the grants is quickly approaching. ME&A needs to know the Council's decision as soon
as possible. We advise proceeding with the loan as matching funds to avoid such a high rate increase.
Thank you for your cooperation.
If you have any questions, would like more information, or need clarifications of any of the information
presented, please don't hesitate to contact me.
Sincerely,
Ensloures (3)
cc. Mary Embleton, Clerk/Treasurer
Laffy McCann, Director 6UPubli~'Utilities
RATE INCREASE AND
TARGET RATE ANALYSIS FOR LAUREL
$433,000 SRF LOAN
interest rate: 4.00% (SRF)
term in years 20
Base Loan Amount
Bond Council/Fees
Origination Fee
Interim Financing
Total Loan Request
$433,000.00
$6,000.00
$6,495.00
$o.oo
$445,495.00
Reserves
Total
Net Yearly Charge for Debt Service
EDUs
increase in cost/month per user for debt
Additional cost per user for O&M
Total Existing monthly Sewer Rate/user (6,000 gal/user)
Total Required with Project
Sewer Target Rate
% of Sewer Target Rate:
Water Rates (assuming '10,000 gal/user)
total Combined Rates
Combined Target Rate
% of Combined Target Rate:
Calculating water costs:
Base at $24.14 + $1.28/100 cf of water
100 cf of water = 748 gallons
Cost/1,000 gal = $1.71
Base + 10,000 gal $41.25
Calculating Sewer Costs with 6,000 gallons ave for winter months
Base at $9.57 + $2.56/100 cf, based on water used during winter months
Cost = $30.10
$43,300.00
$488,795.00
$35,966.39
2533
$1.18
$0.00
$30.10
$31.29
$22.06/user per mo.
'141.83%
$41.25
$72.54
56.37
128.69%
Montana Engineering & Administration,
115 N. Broadway
Suite 202
Billings, MT 59101
Bill To
City of Laurel
Mary Embleton, Clerk-Trsr
P O Box 10
Laurel, MT 59044
Invoice
Date Invoice #
266
,,:,,n 2 4 2004
,- ,,." [ rl
Date Hours ~ Description
2/24/2004
3/9/2004
3/11/2004
3/11/2004
3/11/2004
3/11/2004
22 Staff Grant Writing Services
3 Senior Grant Writing Services
9 Staff Grant Writing Services
Mileage
Mileage
Mileage
Total Reimbursable
Terms Due Date
Net 30 3/31/2004
Rate Amount
55.00 I 1,210.00
65.00 i 195.00
55.00 495.00
11.52 11.52
12.24 12.24
11.52 11.52
35.28
Total $1,935.28
Payments/Credits $o.0o
Balance Due $1,935.28
Phone # Fax #
406-652-5000 406-248-1363