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PUM20061020approved • CITY OF MUSKEGO PUBLIC UTILITIES COMMITTEE MEETING Minutes of Meeting Held Friday October 20, 2006 Chairman Eileen Madden called the meeting to order at 3:37 p.m. Also present were Aid. Tina Schaefer, Aid. Tracy Snead, Public Utilities Superintendent Scott Kloskowski, and Finance Supervisor Sharon Mueller. It was noted that the meeting was posted in accordance with the Open Meeting Law. Those present recited the Pledge of Allegiance. SEWER NEW BUSINESS Preliminary review of the 2007 Sewer Utility Budget — Finance Supervisor, Sharon Mueller, reviewed with the Committee the sewer utility budget. Supervisor Mueller explained the Town of Norway and MMSD charges are built into the user rates. MMSD will be decreasing from 2.6 million to 2.3 million, which will lower the total operating costs for 2007. The decrease is based on a credit for watercourse work not being done in Muskego's basin. Total operating • loss for 2007 is $317,623. Supervisor Mueller also explained that money from TIF 2-7 will no longer be available to subsidize the 2007 budget. User rates will need to help cover that loss. Superintendent Kloskowski added staff has been preparing for this loss over the past several years. Supervisor Mueller added there will be an increase of 1.3 million dollars for a special assessment payment by Onyx for RCA. Supervisor Mueller noted there is only $771 remaining in the construction fund. Staff has drafted two scenarios for rate increase of 0% and 3% for sewer. WATER NEW BUSINESS Preliminary review of the 2007 Water Utility Budget — Supervisor Mueller reviewed the water budget. 2007 is projected to have an operating increase of 7%. This increase is due to depreciation of utility capital assets and deflation for a net loss $220,139. Compared to 2006 the projected numbers came in $71,000 less due to 2006 projects being funded by working capital rather than borrowed funds. Staff is anticipating to borrow $1.525 million for the construction fund and use $41,316 of the reserve construction fund. Due to the decrease in working capital and the anticipated borrowing, Supervisor Mueller recommended a rate case be done by in December to go into affect in 2007. Superintendent Kloskowski suggested reviewing the capital projects and removing projects like the Hillendale booster station that will not be done this year to minimize a rate • increase. Public Utilities Committee Meeting — October 20, 2006 Page 2 Committee will review the budgets and make a final decision at the next meeting • scheduled for November 13, 2006. COMMUICATIONS AND ANY OTHER BUSINESS AS AUTHORIZED BY LAW None. ADJOURNMENT — Ald. Snead moved to adjourn the meeting at 3:54 PM. Seconded by Ald. Schaefer, motion carried 3-0. Respectfully submitted, Kellie Renk, Recording Secretary • 0