(A) The proposed wastewater system improvements will be funded (in whole or in part) by a loan from the Federally Assisted Wastewater Revolving Fund at an anticipated 0.7% interest rate and a 20-year payback period. An administrative fee of 0.2% of the unpaid loan balance is required.
Example IX
Debt Service | |
Administrative fee (0.002 of loan amount) | $3,000 |
Annual debt service (20 years @ 0.7%) | $90,000 |
Existing debt | $39,000 |
Interest | 0.7% |
Proposed loan | $1,668,563 |
Required total annual revenue | $129,000 |
(B) The debt service is considered a fixed cost, independent of the amount of wastewater treated. The debt service for the 1996 infrastructure loan may need to be: increased when a final amortization schedule has been prepared.
(C) Example X assesses all debt service cost into the minimum bill and is based solely on the number of sewer bills issued each month.
Example X
|
Estimated Annual Cost = $129,000 |
Average cost/customer/month: $129,000/1,876 customers/12 month per year = $5.75/customer |
(D) Example XI distributes the debt service based on actual usage the same as OM&R.
Example XI
|
Estimated annual cost = $129,000 |
Average cost/gallons per year: $129,000/108,000 = $1.19/1,000 gallons |
(E) Both of these options are acceptable, however Example XI will be used to determine wastewater rates for the city wastewater system.
(Prior Code, § 54.26) (Ord. passed - -)