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<br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />II <br />I <br /> <br />Chapter VII <br />FINANCIAL PROGRAM <br /> <br />A proposed financial program is presented in Table 10. Although the <br />table is set up for a repayment period of 40 years at an interest rate of <br />5 percent, it also very c~0sely represents the financial program for a 30- <br />year repayment period at 4 percent. The financial program indicated assumes <br />an average tap income of $35 per month for the first 11 years with no mill <br />levy. The Board of Directors of the new water district may wish to make <br />a small mill levy during the initial years to insure sufficient income and <br />to reduce the cost of water to low-income consumers. <br /> <br />The tap fee income shown in Table 10 is derived from an assumed gradu- <br />ated tap fee schedu'e designed to encourage early corrunitments. The fees <br />used in the calculation are: $250 per SIB-inch tap for those signing up <br />before beginning of construction, $500 per 5/8-inch tap for those signing <br />up during construction, and $750 per 5/8-inch tap thereafter. Approximately <br />3 to 5 percent of the total taps will be larger than 5/8 inch and will be <br />charged at a higher rate, but Table 10 is based on equivalent 5/8-inch tap <br />hookups. <br /> <br />As can be noted from Table 10, rate increases will be required during <br /> <br /> <br />the 40-year repayment period in order to compensate for the projected <br /> <br /> <br />increase in operation and maintenance costs. If unexpected situations occur <br /> <br /> <br />which require use of a part or all of the emergency fund, additional rate <br /> <br /> <br />increases andlor mill levies will be required to re-establish the fund. <br /> <br />- 20 - <br /> <br />M. W. BITTINGER AND ASSOCIATES, INC. <br />