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<br />Design drawings will be prepared early next year for review by the SEO and CWCB <br />staffs. Construction is expected to start in September of 2002 and should be completed in <br />November of 2002. <br /> <br />Impacts and Permittin2 <br /> <br />A Corps of Engineers (COE) 404 Permit will be required before construction can begin. <br />Consultation by the City with the COE indicates that a Nationwide Permit may be <br />adequate for the project. The COE will consult with the U.S. Fish and Wildlife Service <br />regarding threatened and endangered species in the project area. The project is not <br />expected to result in any significant impacts to the natural or man-made environment. <br /> <br />Loan Request <br /> <br />The City is requesting a loan of $420,000, which represents about 90 percent of the <br />planning, design and construction costs of the proposed project. The City will pay the <br />remaining ten- percent ofproject costs. Since the City is proposing a loan term often <br />years, the 30-year lending rate would be reduced by one-half of one percent. The 1990 <br />Median Household Income figure for Fountain is $23,733 indicating a Municipal Low- <br />Income lending rate. <br /> <br />Financial Analvsis <br /> <br />The City's Water Fund is an enterprise fund with revenues derived mainly from service <br />charges and tap fees. For the last several years, operating expenses have exceeded <br />operating revenues. The City therefore adopted a new schedule of service charges and tap <br />fees in June of this year. The new fee schedule will eliminate operating deficits in future <br />years. <br /> <br />Staffhas analyzed the City's financial condition from audit reports for the year 2000 and <br />for previous years. The ratios were calculated per Board Lending Policy No.4 and the <br />figures for the year 2000 are displayed in Table 2. The table indicates that the operating <br />ratio (operating revenues to operating costs) was too low <br /> <br />Table 2. <br />City of Fountain Water Enterprise Fund <br />Financial Analysis <br /> <br />Indicator <br />Ioperating Ratio <br />lDebt Service Coverage Ratio <br />Cash Reserves to Current Expense <br />lDebt per Tap <br /> <br />Weak <br /><100% <br /><100% <br /><50% <br />>$5,000 <br /> <br />A verae:e <br />100-120 % <br />100-125% <br />50-100% <br />$2,500-$5,000 <br /> <br />Strone: <br />> 120% <br />>125% <br />> 100% <br /><$2,500 <br /> <br />Year 2000 Future Year <br />81% 113% <br />NA 600% <br />100% 63% <br />$0 $85 <br /> <br />As mentioned above, the City recently adopted a new water rate schedule. Table 2 <br />includes a future year with the new rate schedule and a time when CWCB loan repayment <br /> <br />3 <br />