Rochester Hills Legistar System

Committee discussed Water & Sewer Rates - July 1, 2005, noting the following:

Julie Jenuwine, Finance Director, reviewed her March 8, 2005, handout regarding July 1

, 2005, Water & Sewer Rates noting the following:

* DWSD approved the July 1, 2005/2006 Water and Sewer Rates for Rochester Hills.

* Preliminary proposal is based on setting operating revenue to equal operating

expenditures as follows:

* Target Fund Balance: Operating Fund to equal (90) ninety days of Operating

Expenses plus Annual Depreciation.

* Capital and Lateral Revenue not offsetting the Operating Expenditure but

deposited into an Improvement Fund.

* Annual Depreciation to be transferred into the Replacement Fund.

Ms. Jenuwine explained the proposed adjustable customer rate methodology handout

noting the following:

Example A

* Reflects Operating Revenues and Operating Expenditures meeting targets in the first

year.

Example B

* Reflects not meeting targets over a three (3) year time period due to Operating

Revenues equaling Operating Expenditures.

Example C

* Reflects all capital projects from 2005 through 2010.

* Customer charges have increased due to the following:

* Postage

* Inter Fund Charges

* Meter Reading

* MXU's purchase and installation

The Ordinance current language is as follows:

Customer charge means a charge on render to each customer of the water and

sewer system to cover the cost of servicing customers with such items as Meters,

Connections, Bills, Meter Readings, Postage, etc.

Ms. Jenuwine further explained additional Ordinance language when the City's target

Fund Balance matches existing Fund Balance that any revenue is then deposited into

the Replacement Fund.

* Suggested that City increase the percentage rate to an even amount so that the

Replacement Fund increases.

* Larger projects will be paid for through Bonding and smaller projects will be paid for by

Cash from Replacement/Improvement Fund.

* As the Replacement/Improvement Fund increases, City can opt out of Bonding.

Requested a Public Hearing on water and sewer rates with amendment to the

Ordinance language to remove Receiving Fund and Surplus Fund.

It was mentioned that John Staran, City Attorney, would need to draft ordinance

amendment language.

Ms. Jenuwine will get the appropriate information to him.

Committee members discussed SOCCRA hours noting the following:

* Currently there is $6,100 budgeted.

Committee members discussed the following options:

* Open the compost site for twenty (20) weeks from 8 am until 2 pm for $305 per

Saturday totaling $6,100.

* Open the compost site for thirty four (34) weeks from 8 am to noon for $240 per

Saturday totaling $8,160.

* If City Council determines to approve the thirty four (34) week program, it would

require a budget amendment.

* Suggested that the City go back to the thirty four (34) weeks with a reduction in the

hours to allow people the opportunity to use the compost.

* It was noted that the charge drops from $80 per hour to $50 per hour after 12:00 pm.

Committee members discussed Vacant Positions noting the following:

Ms. Hill wanted clarification on vacant positions that are counted in the budget book and

stated the following:

* If there is an open position, then dollars should be budgeted whether position is

filled or not.

* By not budgeting the vacant position dollars creates confusion.

* Currently, budget book and line items cannot determine if a vacant position is

available.

* Currently the salary range is reflected in the budget book.

It was mentioned that prior discussion stated the money would not be there until the

position was approved.

* Departments requests to fill vacant positions have been denied.

Ms. Hill would like determination as follows:

* If a position is needed, then position should be funded.

* If a position is not needed, then position should be removed.

* Departments will not remove vacant positions due to a possible need for a position in

the future.

* Develop a procedure to remove or fill vacant positions.

* Departments adjust to vacant positions by setting priorities.

* Committee expressed concern with employee burnout.

* Negative affects that vacant positions create are promoting the possibility of

forthcoming resignations due to overwork, Level of service suffers and work

responsibilities have the potential to remain consistently unfinished.

* A suggestion was made to bench mark against other communities to determine need.

* It is the Director's responsibility to show initiative and look for efficiencies for

reorganization.

* The public's view is primarily focused on the total number of City employees.

* Public needs to see the actual head count of employees vs. vacant positions being

included in that count.

* A suggestion was made to distribute the available Position Control Sheet with the

Budget.

* It was requested that a end of year accounting be provided on monies saved in wages

* Typically in prior years saved wages are not adjusted down.

* Reconciliation sheet is used for position control and reflects Position Title and

Employee Name or Position Title, Vacant.

* Some Departments are using vacant position monies for over-time.

Ms. Hill reiterated a need to determine if a vacant position needs to be filled or has it

been covered through overtime and, if so, is it adequate, feasible and working

appropriately.