Staff says 5% annual increases likely minimum to stabilize days-of-cash; lower options risk future catch-up

Consultants presented model runs showing how different first-two-year rate recommendations affect the utility's projected days of operating cash and long-term stability. The presentation emphasized benchmarks lenders consider and the city policy objective of a stable or improving ending fund balance.

Deb Gellard, the consultant, said the model starts with the adopted budget and a five-year capital plan, then projects forward to identify revenue gaps and what revenue slope (series of rate adjustments) is required. "The producing the revenue slope and and evaluating the options is basically a cash flow exercise where we're projecting costs, looking at the revenues and identifying where the gap is," she said. Staff highlighted a "red line" in scenario charts where year-three revenue needs no longer exceed what the task force would recommend for years one and two; staff said roughly a 5% per-year path hits the 150-day benchmark but may not be stable long term.

Task force members asked for specific customer examples and the fiscal impact of 0.5 percentage-point changes. Staff will return with tables showing example bills, days-of-cash trajectories and sensitivity to emergency-assistance funding so members can weigh trade-offs ahead of the Oct. 9 meeting.