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Carl grown Consulting, LLC <br /> December 21, 2006 <br /> Tirenna Mann,Treasurer <br /> City of Bonne Terre <br /> #iA Northwood Drive <br /> Bonne Terre, MO 63628 <br /> Subject: Sewer User Charge Analysis <br /> Dear Ms. Mann: <br /> I am pleased to submit to you the results of the user charge analysis I recently completed for the <br /> Bonne Terre sewer system. Before covering the analysis I want you to know that I have <br /> thoroughly enjoyed working with you.Your institutional knowledge has been invaluable for <br /> generating information that the city's records systems were not designed to retain.And,you <br /> were very responsive and wonderful as a collaborator on this project.With your help I have <br /> assembled an analysis that I am confident will serve Bonne Terre well for several years. <br /> This package includes the following: <br /> This letter,which summarizes your situation and details my recommendations and some <br /> of the specific considerations in your analysis, and <br /> The analysis itself. I investigated numerous scenarios for you and I am submitting the <br /> most practical proposed rates scenario for you to consider. <br /> In this letter I start by giving you a summary of your situation. Next, I list actions you should <br /> take to assure you reach the financial goals set for your system. Finally, I describe the current <br /> and proposed rate scenarios themselves. <br /> Summary <br /> My analysis determined that your system is moderately under-funded considering that you plan <br /> to initiate a capital improvement project next year.At your growth rate in new connections, <br /> most of these additional costs will have to be paid by existing customers. I have modeled your <br /> tap fees to recover a small percentage of the costs that new taps will cause the city to incur. Most <br /> of those tap fees are allocated to capital improvements. <br /> My analysis is largely based upon financial data and information generated by city staff.Not all <br /> data I needed for this analysis exists in your records so I made several assumptions and <br /> estimates where necessary to fill in the information gaps. Using sensitivity tests and my <br /> experience in performing over loo rate analyses,I am confident these assumptions and <br /> estimates are adequate for your rate setting purposes at this time. <br /> 1014 Carousel Drive,Jefferson City,Missouri 65101 www.carlbrownconsulting.com <br /> carlbrown @carlbrownconsulting.com (573)619-3411 <br />