Minutes 04/19/1994 - Laserfiche WebLink

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A~ril 19, 1994 Even wi~h._the prop_o~sed water rate increase, Portsmouth's rate s lower than those in place or proposed in the surrounding cities. Portsmouth $1.9~/1,000 gals Norfolk 2.74/1,000 gals Chesapeake 2.75/1,000 gals (Note: $9.00 minimum) Suffolk 2.73/1,000 gals VA Beach 3~65/1,000 gals WASTE MANAGEMENT In 1992, the Department of General Services began the implementation of a total waste management plan which ensures waste will be collected in the most cost efficient and labor productive means possible. This plan includes the automated refuse collection system, recycling, collection of yard waste and other bulk material, as well as the City's compliance with numerous State and Federal mandates. During the last year, another 6,000 homes were added to the automated refuse collection system for a total of 18,000 or 57% of the City. While the automated system and yard waste collection allows the City to stabilize waste collection costs, the City continues to face increased costs brought about by the regulating agencies. These costs include the implementation of a freon removal system from used appliances and the expansion of the curbside recycling program. In order to keep pace with these rising costs, I am recommending an increase from $10 to $11 per month for refuse collection. DEBT SERVICE The amount of funding required to service the principal and interest on the City's debt continues to escalate. This growth in the amount of annual<payments has been somewhat minimized over the last several years due to the lower interest rates achieved through our refundings. However, disturbingly, growth in our outstanding debt continues. Presently we are paying back about $7.1 million annually an principal and incurring an additional $10 million annually in obligations through the Capital Improvement progra~ (CIP) process. This trend of increasing debt service payments will necessitate seeking additional funding for the payment of the debt, the lowering of the amounts we borrow, or a combination of the two. The long term solution to this problem will need to be more carefully and fully addressed in future CIPs. FUND BALANCE The fund balance acts as a source of working capital. Without adequate resources to fall back on we would have to borrow money at certain times of the year in order to pay our bills. Further, the fund balance is looked on by the bond rating agencies as a strong indicator of the financial capability of the City. It is therefore necessary to have an adequate fund balance.