Rochester Hills Legistar System

Non-Voting Members Present: Kurt Dawson, Julie Jenuwine, Kyle Sucher (arrived at

6:47) and Alexandra Tatu (arrived at 7:30)

Non-Voting Members Absent: None.

Water and Sewer Board Members Present: George Karas, Richard Rowe, Gerard

Verschueren

Others Present:

* Roger Rousse, DPS Director

* Jim Duistermars, City Council

Chairperson Holder stated that Kyle Sucher was at the Rochester Hills Government

Youth Council meeting and would be late and that Alexandra Tatu provided previous

notice she may be late and/or unable to attend and asked to be excused.

Acceptance for First Reading - An Ordinance to amend Sections 54-741

through 54-743 of Article XII, Utilities, of Chapter 54, Fees, of the Code of

Ordinances of the City of Rochester Hills, Oakland County, Michigan, to modify

Water and Sewer Rates and Fees, Repeal Conflicting Ordinances, and

Prescribe a Penalty for Violations

Agenda Summary.pdf; First Reading Agenda Summary .pdf; Ordinance

Amendment Chapter 54.pdf; Proposed Water Rates - Schedule A.pdf;

Proposed Sewer Rates - Schedule B.pdf; Proposed Customer Charge -

Schedule D.pdf; July 1 2006 preliminary rates to FS memo.pd

Julie Jenuwine, Finance Director, discussed several different financial scenarios

regarding the July 1, 2006 Water and Sewer Rates. The consensus of the Committee

members was to recommend to City Council that the City pay cash for the DPS Facility

and postpone the construction of the Water Reservoirs. Discussion commenced noting

the following different scenarios:

* Bonding the DPS Facility at $12 million and the Water Reservoirs at $8 million

* Bonding the DPS Facility at $12 million without Water Reservoirs

* Pay cash for the DPS Facility without Water Reservoirs

* No DPS Facility and No Water Reservoirs.

Member Yalamanchi suggested paying cash for the DPS Facility and not constructing

the Water Reservoirs at this point in time. In addition, the City should start the process

for building funds in the Replacement Fund. Member Yalamanchi indicated that in the

event of an emergency, the City could bond at that time. He further stated the Water

Reservoirs could be reevaluated at a later date.

Mr. Rousse gave a brief history why Water Reservoirs are an important consideration

noting the following:

* In the year 2000 Rochester Hills customers increased by fifteen percent (15%) and

several low water pressure complaints came forward.

* Since 2000 almost 2500 new customers have been added to the system with several

large-scale developments planned in the community.

* Consequences of low water pressure could affect Fire Suppression Systems,

domestic water use and hydrants used in fire fighting.

Committee member mentioned that the initial intent of the Water Reservoirs was not

because of cost savings but was thought of as a safety precaution.

Ms. Jenuwine stated that the average resident has an average use of 21 units per bill

which would increase from $1.16 to $1.22 assuming a peak factor benefit and bonding

for both projects.

It was noted that the rates would decrease in the fourth year. Committee members

suggested keeping the rates the same through the year 2020 to increase fund balance.

Consensus of Committee to pay cash for the DPS Facility and exclude Water

Reservoirs until an educational program is put in place.

A motion was made by Yalamanchi, seconded by Rea, that this matter be

Recommended for Approval to the City Council Regular Meeting.

Resolved that an Ordinance to amend Sections 54-741 through 54-743 of Article

XII, Utilities, of Chapter 54, Fees, of the Code of Ordinances of the City of

Rochester Hills, Oakland County, Michigan, to modify Water and Sewer Rates and

Fees, Repeal Conflicting Ordinances, and Prescribe a Penalty for Violations, is