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Annual Service Contract - page 39 / 43





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Similar to the First Review the City Staff presently at the Municipal Utility is not looking at the Contract for compliance, but rather is diverting their eyes as if they had blinders, still and again.

In summary, this review revealed

Contract variance – the Service Contract was created to protect the investments the residents have made in their utility over the past decades of municipal operation. The Service Contract had a series of checks and balances to protect the City, the residents, and OMI. As illustrated in the section on Contract Administrative Memoranda,

FIND THE CAMs and finish

Water Related Rates – have continued to increased. The idea that water related rates would remain at present levels, without increases, is not possible. The Municipal Utility system is in need of modification for modernization, efficiency, and state mandated regulations. But the then sitting City Council used a report from their consultant and publicly stated, many times, that under private operation rates would remain low. The Service Contract did not raise utility rates. The City Council did, as a consequence of the Service Contract.

The City derives revenue from its municipal utility, both for the General Fund and City wide capital improvement projects. The Service Contract has an annual fee increase component. The fees paid by residents flows into enterprise funds, funds designed to keep revenue received dedicated to utility purposes. The City then TRANSFERS funds from the enterprise funds into the General Fund and a specific capital improvement fund 307, the Infrastructure Improvement Fund. In order that these transfers continue AND that there be funds left for specific utility improvements, rates must increase.

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