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Bonne Terre,Missouri,December 21,2006,Page 5 of 5 <br /> Discussion of the Bonne Terre, MO Current Sewer Rates Scenario <br /> A current rates scenario depicts what would happen if you did not change your rates or anything <br /> else over which you can exert control. Many call this the"do-nothing"scenario. <br /> Chart 8 shows your fund balances and other financial health indicators.Note that near the <br /> bottom of the chart there are several fund balances.Most of these balances,which were <br /> discussed above,will go negative soon under your current rates. Simply put, not adjusting your <br /> rates is not a viable option. <br /> Conclusion <br /> You should raise tap fees to recover more of the costs that new taps cause the system to incur. <br /> You should also increase your rates.You now should do those things I listed in the Action Item <br /> section above. <br /> This letter and the report are long and detailed. However,there are still issues you will need to <br /> deal with that are not covered here.As you discover those issues I will help you resolve them. <br /> Don't hesitate to call me if you are not certain of how to proceed on anything. <br /> I now look forward to presenting the analysis results at a public meeting of the city council.Just <br /> let me know date and time. <br /> This analysis was restricted to the sewer system.After the experience of this analysis you should <br /> reflect on the financial condition of the water system,as well. It is very likely those rates need to <br /> be examined, adjusted and raised, as well. If I can help you with an analysis of that system, <br /> simply tell me so by January 31, 2007, and I will proceed with Option 1 of the attached proposal <br /> for services. <br /> Thank you for using the services of Carl Brown Consulting, LLC for this rate analysis. I have <br /> enjoyed working with you and your capable staff.As you and your staff chance upon staff from <br /> other cities in need of my services, I hope you will tell them about me.And,be sure to call me at <br /> (573) 619-3411 or e-mail me at carlbrown(@mchsi.com if you have any questions or desire <br /> follow-up services. <br /> Best regards, <br /> Carl Brown Consulting, LLC <br /> Carl E. Brown <br /> President <br /> Enclosures: Rate analysis scenarios <br /> Rate analysis service proposal <br />