Loading...
Water & Sewer Condition & Operations 1983-1986 I I I , I I I I, I 'I Ii ii I, 'I I ' I : I I I i i1 ~t I , II I ,I I I .! I I I I I I i ! i I I i I I i i I i I , j i , i I I I I i I i i I I 1 'j I I iJ i Ii 1 I I i i I [) I ~ I I P i i i I I I I i I I I I I i I I ! i I i I i i I I SALINA, KANSAS I Sewerage System IONS REPORT 1983 - 1985 WI LS 0 N ~ COMPANY I ENGINEERS , ARCHITECTS I I I I I I I I I I I I I I I I I I I JUNE 1987 86-332 SALINA, KANSAS WATER AND SEWERAGE SYSTEM CONDITION AND OPERATIONS REPORT FOR THE YEARS 1983, 1984, 1985 & 1986 WITH RECOMMENDATIONS FOR 1987 & 1988 * * * * * * Stephen Ryan, Mayor Commissioners Vi Justus Sydney Soderberg Bob Frank Joseph Warner Rufus L. Nye, City Manager Dean L. Boyer, Director of Engineering and Utilities 11LS 0 N COMPANY ENGINUlR5 ARC HITI!CTS t I I I I I I I I I I I I I I I I I I I TABLE OF CONTENTS Purpose of Report 1984 Bond Issue 1961 Bond Issue Expenditures 1977 Bond Issue Expenditures Future Bond Issues Proposed 1987 Bond Issue Expenditures Proposed 1988 Bond Issue Expenditures System Improvements Revenue Cash Fund Accounts Plate 1 - Population and Number of Accounts Plate 2 - Annual Revenues and Expenses Capital Improvement Program Review of Earlier Recommendations New Recommendations Operation and Maintenance Conclusions Page No. 1 2 2 3 4 4 4 5 7 8 10 11 12 13 14 A I I PURPOSE OF REPORT I City of Salina Ordinance Number 9025, dated 15 June 1984, provides for the issuance of revenue bonds for the refunding of three earlier bond issues for the purpose of altering, improving, extending and enlarging the munici- pal waterworks and sewerage systems, contains, in part, the following requirements: I I Section 18(g): "At least once in every two years the City's consulting engineers hereinafter referred to in Section 22(d) of this ordinance, after making their examination and report on the condition, operation and needs of the City's combined water and sewage system as provided in said Section 22(d), shall, by written instrument filed in the office of the City Clerk, . . . , certify whether or not, in their opinion, the moneys in the 'Combined Water and Sewage System Extension and Bond Retirement Account' are in excess of the amount reasonably required to be maintained in such account for extending, improving or enlarging the City's combined water and sewage system, and, if so, the amount of such excess..." I I I Section 22(d). "At least once in every two years the City will employ an independent consulting engineer or firm of consulting engineers having a reputation for knowledge, skill and experience in the operation of municipal water and sewage systems and will cause such consulting engineer or engineers to make an examination and report on the condition and opera- tion of the City's Water and Sewage Utility, such report to include recom- mendations as to any changes in such operation deemed desirable. Such report shall also make reference to any unusual or extraordinary items of maintenance and repair and any extensions or improvements that may be needed in the ensuing year..." I I I The 1961 bond ordinance required condition and operations reports which were prepared in 1964, 1966, 1968 and 1970. The information required for the 1972 report, covering the years 1970 and 1971, was included in the Engineering report entitled "Water Distribution Study", dated August 1972. Condition and Operations reports were prepared in 1974 and 1978. In 1978 an ordinance was issued to refund the 1961 and 1977 ordinance. Projection of revenue requirements for the period 1980-1981 were included in "Water Rate Study", dated July 1980. This rate study was the basis for new rate schedules implemented in 1981, 1982 and 1983. A condition and operations report was prepared in 1983 covering the years 1978-1982 with recommen- dations for 1983 and 1984. This report is the first one covered by the 1984 bond ordinance and covers the years 1983, 1984, 1985 and 1986 with the recommendations for 1987 and 1988. I I I I I I I 1 I I I 1984 BOND ISSUE I On 15 June 1984, the City of Salina, Kansas, authorized the issuance of $2,770,000 in Revenue Bonds, the proceeds to be used to refund the prin- cipal amounts of three previous outstanding bond issues and "...providing for the collection, segregation and application of the revenues of said system for the purposes authorized by law, including paying the cost of operation, improvement and maintenance of said utility, paying the prin- cipal of and interest on the refunding revenue bonds of said City issued against said system and providing adequate reserve funds, making certain covenants with respect to said bond, authorizing an escrow trust agreement relating to certain outstanding bonds, authorizing an agreement between the City and the bond registrar and paying agent, authorizing a bond purchase agreement with the purchasers of said bonds, approving a preliminary offi- cial statement and official statement relating to said bonds and amending Ordinance No. 8635 adopted and approved on May 15, 1978..." I I I I The 1984 refunding bond issue was authorized to refund the following bond issues: I Series 1961 1977 *1978 Bond Ordinance No. 6546 8546 9025 Effective Date July 1, 1961 April 1, 1977 May 1, 1978 Original $3,600,000 3,000,000 4,394,000 Principal Outstanding $ 630,000 2,970,000 4,388,000 I I *The 1978 bond issue refunded the 1961 and 1977 bond issues. The 1978 bond was refunded by the 1984 bond and revised certain covenants to permit the City greater flexibility to issue additional bonds. I 1961 BOND ISSUE EXPENDITURES I The following tabulation summarizes the expenditures for improvements to the combined water and sewerage system, such expenditures being solely from the original bond issue (as refunded in 1978 and 1984), Federal Grant and investment income. All improvements are in accordance with recommendations of the City's Consulting Engineers and of the City Engineer's Office. I I I I I I 2 I I I Project Cost I Key Acres Elevated Water Tower North Front Street Water Main South Fourth Street Water Main Water Treatment Plant Improvements Sanitary Sewer Trunk Mains Sewage Treatment Plant Improvements Purchase of System Materials and Minor System Improvements Planning and Engineering Water Main to Westinghouse Water Main to Schilling City-County Building, Water and Sewer Services South Industrial Area (Roberts Mfg.) East North Street (Wyatt Mfg.) Miscellaneous Extensions and Improvements $ 120,005.00 38,390.00 23,060.00 566,956.00 573,018.00 859,092.00 I I 237,602.00 51,450.00 75,000.00 49,603.00 36,028.42 15,702.29 19,589.68 2,497.09 I I TOTAL EXPENDITURES $2,847,993.48** I **Includes investment income. issue have been completed. All improvements included in this bond I 1977 BOND ISSUE EXPENDITURES I The following tabulation summarizes the expenditures for improvements to the combined water and sewerage utility, such expenditures being solely from the original bond issue (as refunded in 1978 and 1984) and investment income. All improvements are in accordance with recommendations of the City's Consulting Engineers and of the City Engineer's office. I Project Cost $ 270,538 586,736 528,422 385,000 324,500 904,804 $ 3,000,000* I I WTP Sludge Disposal Facilities Water Main, 30-inch, WTP to Ohio and Crawford Water Main, 20-inch, Ohio, Crawford to Magnolia, and on Magnolia, Ohio to Ninth Street Northwest Water Main, 12-inch Northwest Elevated Water Tank, 0.5 mg North Fourth Street Water Main, 20-inch, Water Plant to Santa Fe and Lincoln, and Water Main, 20-inch, West Crawford, Santa Fe to Broadway I I TOTAL I *AII improvements included in this bond issue have been completed. I I 3 I I I FUTURE BOND ISSUES I In 1984 Wilson & Company, Engineers & Architects, was retained to prepare a water supply study for the City. That study made long-range recommend- ations for water supply and treatment needs of the City. The City has developed a plan for initiating several of the recommended improvements with a series of bond issued starting in 1987. I PROPOSED 1987 BOND ISSUE EXPENDITURES I The water treatment plant filters are in need of immediate repair. The north plant has not undergone a major rehabilitation for over 30 years. The south plant has not been rehabilitated since its construction over 20 years ago. I I The project includes replacing all control valves, filter control equip- ment, backwash pump and control system, replacing the filter media in the north eight filters, replacing all backwash troughs, the addition of a sur- face wash system in all sixteen filters, piping modifications and related appurtenant modifications and replacement. Also included is the design services for a new river intake structure and accompanying pipeline. I I Project Cost Filter Plant Improvements Construction River Intake and Supply Main, Design I TOTAL $ 2,400,000 250,000 $ 2,650,000 I PROPOSED 1988 BOND ISSUE EXPENDITURES I Project includes construction of a new river intake structure equipped with two 10 MGD pumps, construction of a 24-inch pipeline from the intake structure to the treatment plant, removal of existing intake structure and pump station, replace equipment and appurtenances in the existing flash mix basin, installation of new clarifier mechanisms in existing pre- sedimentation basin, replace weirs and troughs and other appurtenant items. Also included is the design services for additional new treatment units and appurtenances to increase daily production capacity to 20 MGD at the existing plant. I I Project Cost I River Intake and Supply Main, Construction Plant Improvements & Expansion to 20 MGD, Design $ 2,050,000 500,000 I I TOTAL $ 2,550,000 I 4 I I I SYSTEM IMPROVEMENTS I The Condition and Operations report prepared in 1982 contained recommen- dations and budget estimates of costs for system improvements deemed necessary during the ensuing two-year period. These recommendations per- tained principally to short-range improvements or to the planning or first phase construction of long-range improvements. I I Long-range water system improvements were studied in the Engineering Reports prepared in 1968, 1970, 1972 and 1984. I The 1968 report dealt principally with potential sources of water supply over a 40-year period and included recommendations regarding future water supply, treatment, transmission and distribution facilities. I The 1970 report was limited to recommendations regarding the expansion of the present water treatment plant and the collection and disposal of all plant wastes. I The 1972 and 1984 reports included a very comprehensive study and analysis of the water distribution system, water supply facilities and a recommended capital improvements program for the water system and a financial study. I As a result of the refunding bond issue of 1978, adjustments to water and sewer rates schedules were programmed for adjustments on an annual basis through 1983 to assure maintenance of proper debt service coverage. Water and Sewer rate schedules have not been adjusted since 1984. I The following table lists the major capital improvement projects financed by current Water and Sewerage Department revenues for the years 1978 through 1986, and describes and estimates the cost of other capital improvement projects planned for 1987, which likewise, will be financed through current revenues. Major capital improvement projects for 1988 have been established. I I I Projects Constructed Year Project I 1978 New Water Utility Vehicles Water Meters Water and Sewer Improvements in Dow Addition Parshall Flume, WWTP #2 Water Meters Calcining Plant Improvements Water Mete"rs Motor Vehicles Vacuum Rail Car Unloader, WTP Calcining Plant Improvements Other Capital Improvements I 1979 1980 1981 I I I 5 I Cost $ 36,290 17,200 65,530 7,680 19,100 458,070 8,780 30,070 31,770 36,410 41,550 I I I I I I I I I I I I I I I I I I I Year 1982 1983 1984 1985 1986 Project Boiler @ WWTP It! Backhoe Water Meters Office Equipment Motor Vehicles Trickling Filter Mechanism @ WWTP #2 Calcining Plant Improvement Other Capital Improvements Sewer Improvements in Eastridge Addition Sewer Improvements in Country Hills and Lakewood Addition Sewer Improvement in Fairway and VanHorne Addition Sewer Improvements in Mayfair Addition 6" Watermain 3 Sewage Pumps and Motors at WWTP #2 Sewer Lift Station #48 and Force Main Water Meters Spectrophotometer Valves and Hydrants Other Capital Improvements C02 Feeders, Tanks and Equipment 2 Ammoniators, Tanks and Equipment Sludge Pump at Pump Station #3 WTP Improvements Gate Valve for Lift Station #19 Water and Sewer Improvement on South Ninth Water and Sewer Improvement on Faith Drive Water Meters Utility Software Systems Other Capital Improvements Office Equipment Vehicles Meters Computer Equipment Rehabilitate Pump in Well #15 Mower Valves and Hydrants 20" Watermain Other Capital Improvements TOTAL 9-year average 6 Cost 31,770 25,000 7,320 2,000 5,490 25,480 19,600 40,500 $ 10 , 600 38,700 9,000 40,800 64,150 23,400 60 , 100 38,400 1,000 39,000 19,000 -162,650 39,320 9,660 31,000 5,615 38,560 83,200 44,967 78,000 79,700 13,254 53,512 62,189 22,268 12,313 21,243 14,540 40,386 36,351 $ 2,102,488 $ 233,610 I I Projects Proposed 1987 Project Estimated Cost I Control center No. 8 high service pump Varidrive for softening basins Flash mixer 2 refrigerated sequential wastewater samplers Atomic absorption spectrophotometer Replacement of one complete trickling filter unit 1 set cutting shells for 4", 6", 8", 10" and 12" resilient tapping sleeves 1 pump (large pump standby) Replacement of 2 primary digester covers at Sewer Plant No. 1 Other capital improvements $ 10,800.00 3,000.00 3,500.00 5,600.00 22,000.00 50,000.00 I I 8,300.00 10,800.00 I 360,000.00 157,095.00 I Total Capital Improvements $ 631,095.00 I REVENUE I Revenue is derived principally from a water rate schedule and a sewer ser- vice charge schedule. Both schedules are based on customer water usage. The sewer service charge schedule was established at the time the water and sewerage departments were combined, there having been no previous direct charge for this service. The sewer service charge schedule has been revised, on occasion, primarily to establish equitable rates for special cases. New water rate schedules have been placed in effect on 1 January 1973, 1 January 1977, 1 January 1981, 1 January 1982, 1 January 1983 and 1 January 1984. I I The water and sewer departments are now operating under Ordinance No. 9025, d~ted 15 June 1984. City Ordinance No. 9025 requires that the City "will fix, establish and maintain rates, fees and other charges for the sale of water and sewage services and commodities of the Water and Sewage Utility as shall be required to provide revenues of at least sufficient in each fiscal year to pay an amount equal to at least 125 percent of the aggregate debt service for the fiscal year." I I I The following table indicates the Water and Sewer Department income posi- tion as compared to the requirement of the ordinance. I I I I 7 I I I I Year 1981 1982 1983 1984 1985 I I 1986 1987 1988 I I Sold (MG). Gross Income Total Expenses 2,145,384 2,464,927 2,548,842 2,831,615 2,958,751 3,214,900 3,304,850 3,582,890 Operating Income 693,057 627,232 999,615 762,063 621,199 634,268 414,750 117,110 Deprec- iation 608,880 580,973 572,091 609,964 597,084 583,324 600,000 600,000 Princ ipal & Interest Payments 391,165 404,575 409,651 265,746 725,058 500,900 389,600 853,500 Ratio (%) 333 299 384 516 168 243 260 84 The required ratio of 130 percent as required by the 1978 refunding bond issue was maintained through 1983. The 1984 refunding bond issue requires a ratio of 125 percent be maintained. The required ratio has been maintained through the historical years. Gross income does not include miscellaneous income. 1777.3 1931 2073.5 1937 1889 2,838,441 3,092,159 3,548,457 3,593,678 3,579,950 Projections for 1987 and 1988 indicate that the required ratio of 125 per- cent as required by the ordinance will not be maintained in 1988. New rate schedules should be implemented immediately to maintain the required ratio. I I I I I I I I I I I I 2115.6 3,849,168 2054.8 3,719,600 2077.42 3,700,000 Plates 1 and 2 indicate graphically the population, number of accounts and the Water and Sewer Department revenues, operating expenses and debt ser- vice on an annual basis since 1970. CASH FUND ACCOUNTS As of 31 December 1985, all bond accounts are at or above the levels required by the current Bond Ordinance, and as required by good management practices. Until 31 December 1978, no funds had been maintained in the Extension and Bond Retirement Fund. Moneys for extending, improving or enlarging the City's combined water and sewer system have been obtained from surpluses in Operating Income and from the Depreciation and Emergency Fund where appli- cable. From 1968 through 1976, no new Revenue Bond Issues were required for capi- tal improvements to the water and sewer system. The major capital improvements projects completed since 1978 were financed by the 1977 Revenue Bond Issue, as described earlier in this report. A summary of the Cash Fund Accounts follows: 8 -------------------. I~ .- 20 10 ! I ! 60 ! I , I i I f------. - --_ I I ! I ~ ------l I I -L ~I -- -- -------f------ +- POPULATlOIiJ --~ -- ----f--. --- ~ ........... --- '-- -- I ~SEWER At; OUNTS ~: ~:~ ':: : : : : : .' : : I-WATER ACCOUNTS ~, '1\ : : ~ : : ~-- : : : -- -- : : : : * : : r{ \ _n_ -- -- n : : : : : : : : : : : : : : : \ : : : : : : .' : : : : : : : : : : : : : '8 : : : - - -- ~_..- -- -- ---~ -- - 0- 1968 1970 1975 1980 17,500 Sewer Accounts '-- fi-'-- >- " ,'" , 17,750 Water Accou nt s 1985 1990 PLA TE I WATER AND SEWER DEPARTMENT POPULATION AND NUMBER OF ACCOUNTS OCTOBER 1986 WCEA FILE: 86-332 ------------------- !S,ooo .. AN~UAL Amt SkRVICE . SEWER DEPT. ANNUAL OPERATING EXPENSE - m WATER DEPT. ANNUAL OPERATING EXPENSE I'f' I I I I I ACTJAL EST. FROM CITY BUDGET _ 4,000 -- .~ II=~.;:; ~Ioo"""" ~.., , ; , U) o z ct U) 2,000 ::) o :E: ... GRO~~UAL /{~. REtl EMJES I ~.' .~. ~---;~ 1.':( I ,J:'f ~/ /10- / ..... / - ;~~ r:;: ".'" : - . : . ~ .. U) 3,OOCY It: ct ..J ..J 8 .... ~ ... o ..r, ~. '.~. :~ ";. .~ ( t. " .~:-~! 'J " ~~ Vv 1/ ~ V II V V I;" v____ ~ I;" I;" ,,- ,,- 1;""- ,,- 1;""- ,,- ~ ~ I;" ~ ~ 1/1;" 1985 1990 {~ J.; '~ fi 1,000 / --- t ;! ;j I: :: fin ., .', :'" ~;~ ill ff :: o 1970 1975 1980 PLATE 2 WATER AND SEWER DEPARTMENT ANNUAL REVENUES AND EXPENSES OCTOBER 1986 WCEA FILE: 86-332 I I I I I I I I I I I I I I I I I I I Summary of Cash Fund Accounts Extension & Bond & * Bond Depreciation Bond Operating Interest Reserve & Emergency Retirement Income Balance 12/31/78 $313,272 $419,453 $367,934 $600,000 $668,141 Required by Ordinance 317,000 410,000 125,000 Balance 12/31/79 415,070 438,534 390,118 856,760 475,870 Required by Ordinance 397,000 410,000 125,000 Balance 12/31/80 554,647 480,750 429,405 199,040 404,827 Required by Ordinance 551,000 410,000 125,000 Balance 12/31/81 709,181 537,736 460,283 218,849 693,056 Required by Ordinance 716,000 410,000 125,000 Balance 12/31/82 884,150 618,326 528,053 250,132 627,232 Required by Ordinance 909,000 410,000 125,000 Balance 12/31/83 1,073,537 691,994 577,774 582,678 999,615 Required by Ordinance 1,121,000 410,000 125,000 Balance 12/31/84 531,483 525,744 630,807 637,097 762,063 Required by Ordinance 602,576 401,000 125,000 Balance 12/31/85 340,544 568,966 693,698 713,782 621,199 Required by Ordinance 513 ,221 401,000 125,000 Balance 12/31/86 346,614 615,315 628,353 760,632 634,268 Required by Ordinance 347,324 401,000 125,000 *Invested Sinking Fund Contributions are made to this cash fund account in February and August of each year. The 1984 bond ordinance eliminated the obliga- tion to this cash fund account and established in the Treasury of the City the "Principal and Interest Account." 9 I I I I CAPITAL IMPROVEMENT PROGRAM I I I I I I :1 I I I Following the $3,600,000 revenue bond issue in 1961, it was not necessary for the City of Salina to issue additional revenue bonds for its combined Water and Sewerage Department until early in 1977. All debt services, operating expenses, extensions and betterments during that period were financed from water revenues and sewage service charges. It was necessary, however, to increase the water rates at the beginning of 1973 and again in 1977, the latter increase being required to offset the increased debt ser- vice requirement of the 1977 revenue bond issue. Additional rate schedule adjustments have been implemented annually from 1981 through 1984 to meet debt service requirements of the 1978 and 1984 refunding bond issues. Year Funds Available for Capital Improvements 1980 1981 1982 1983 1984 1985 1986 ASSETS (CASH) Cash and Investmmts $ 410,141 $ 503,159 $ 688,238 $ 891,098 $ 730,737 $ 620,721 $ 395,128 Ext. 6. Bond Retirement Fund 199,040 218,849 250,132 582,678 637,097 713,782 760,632 'IDTAL ASSETS $ 609,181 $ 722,008 $ 938,370 $1,473,776 $1,367,834 $1,334,503 $1,155,760 UABlliTIES Accounts Payable $ 62,379 $ 66,268 $ 103,334 $ 253,563 $ 167 ,449 $ 124,498 $ 210,709 Balance $ 546,802 $ 655,740 $ 835,036 $1,220,213 $1,200,385 $1,210,005 $ 945,051 ASSETS (CASH) Projected Funds Available for Capital Improvements 1987 1988 Cash 6. Investments $ 500,000 $ 550,000 I I I I I Ext. 6. Bond Retirement Fund $ 750,000 $ 800,000 TOTAL ASSETS $1,250,000 $1,350,000 LIABILITIES Accounts Payable BALANCE $ 225,000 $ 950,000 $ 250 ,000 $1,100,000 10 I I REVIEW OF EARLIER RECOMMENDATIONS I The Conditions and Operations Report of 1983 contained recommendations regarding three items of improvements. These recommendations and the action that has been taken by the City are as follows: I 1. Water and Sewerage Systems Study. I The City authorized Wilson & Company, Engineers & Architects in 1983 to prepare an engineering report to examine the short-term and long-term improvement needs of the combined utility through the year 2020. The study was completed and recommendations presented to the City. The City is ini- tiating the recommended improvements in 1987 and possibly 1988 under bond issue. Additional recommended projects are scheduled for 1989 and 1990. I 2. Long-Range Water Study. I The City has continued participation in planning of the Central Kansas Wholesale Water Supply District. The Steering Committee has developed a report "Feasibility Study - Phase 1" which determined the feasibility of providing 15 communities, including Salina, with water supply from Milford Reservoir. I I 3. Water and Sewer Rate Increase. I Annual water rate increases have been implemented through year 1984. No rate increases have been implemented since 1984. I I I I I I I I 11 I I I NEW RECOMMENDATIONS 1. Water Rate Study. I The City has authorized Wilson & Company, Engineers and Architects to pre- pare an engineering report to review existing water rates and recommend a new rate structure based upon historical and future operation requirements. A water rate increase is necessary to provide debt ratio requirements of the 1984 bond ordinance. I I 2. Water and Sewerage Systems Improvements. I Short-term and long-term improvements should continue to be implemented as discussed in the 1984 and 1985 Water and Sewerage Systems Studies. I A new river intake structure and accompanying pipeline to the treatment plant are needed and should be considered as a proposed bond issue as discussed earlier in this report. I Filter modifications to the water treatment plant are needed and should be considered as a proposed bond issue as discussed earlier in this report. I The City is approaching existing capacity limits at the water treatment plant. Expansion of the plant will become necessary for long range requirements. I Sewer plant #2 has implemented permit effluent requirements. hydraulically and improvements next 5 years. a different chemical feed system to meet The plant continues to be overloaded to the plant should be considered in the I I I I I I I I 12 I I I OPERATIONS AND MAINTENANCE I An examination of records and reports, and interviews with department per- sonnel was conducted of the operations of the combined water and sewerage department. I The combined water and sewerage department is well equipped to perform the required services to the community. Maintenance, in general, is routine in nature and is accomplished according to schedule and with reasonable dispatch. I The combined water and sewerage department is exceptionally well managed and operated. Administrative personnel are knowledgeable and operate a business-like, efficient, public utility. I I The following are several matters which need immediate action and others which appear to merit consideration for further study and appropriate action. WASTEWATER TREATMENT PtANT #1: I I Replace magnetic flow meter Grit removal rehabilitation New mechanisms in primary clarifiers 3 & 4 Install two recirculating pumps at intermediate pump house Mechanisms and effluent launders should be sand- blasted and painted on intermediate clarifiers No. 1 & 2, and secondary clarifiers No. 1 & 2 Re-roof control house for primary digesters Sandblast digester walls and apply protective coating Relocate sludge flow indicators from lab building I I I Total Estimated Cost I I I I I I 13 I Estimated Cost $ 20,000 132,500 80,000 40,000 110,000 50,000 50,000 10,000 $ 492,500 I I CONCLUSIONS I The results of this study and examination indicate that as of 31 December 1986, the funds in the Extension and Bond Retirement Account as shown in the Summary of Cash Funds Account Table are not in excess of the amount reasonably required to be maintained in such account for extending, improving or enlarging the combined water and sewerage system of the City of Salina, Kansas. The reserve accounts "Bond Reserve" and "Depreciation and Emergency" have reached the minimum limit set by ordinance. I I The review of the condition and operation of the combined water and sewerage system indicates that the system is operated in a satisfactory manner and that the condition, in general, is good. I The following is a summary of recommendations in regard to the operation of the combined water and sewerage system. I It is recommended that all of the studies and improvements in this report should be initiated in the coming two-year period. I It is recommended that the current water and sewer rate schedules be reviewed and adjustments made to assure adequate debt service coverage is maintained and to provide adequate revenue for capital improvement programs. I I I I I I I I I I 14 I