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2 <br /> Mr. Derek Vandelinde, 713 Palatine Avenue, said Council should not move <br />forward with the downtown transit center which will cost $6 million, but should use the <br />Trailways Bus Station as the transit center instead. <br /> <br /> A representative of the African - American Cultural Festival, thanked the City for <br />their support every July when t he Festival is held. <br /> <br /> Mr. Cox asked Mr. O'Connell to clarify the financing for the transit center, and Mr. <br />O'Connell said that the transit center and extension of the downtown mall will both be <br />funded with grants, mostly federal grants, with the City usin g land as its local match. Mr. <br />O'Connell aid that the grant for the Trailways Station is designed for regional <br />transportation. <br /> <br />PUBLIC HEARING/ORDINANCE <br />: ADJUSTMENT TO WATER RATES <br /> <br /> Ms. Rita Scott, Director of Finance, explained that the drought and wate r <br />restrictions have resulted in reduced consumption, and the water rates are based on the <br />amount estimated to be sold.. Most costs to the City and Rivanna Water and Sewer <br />Authority are fixed . Ms. Scott said that Rivanna's new rates went into effect on October <br />1. Ms. Scott said that the sewer rates are also affected, and the two rates are being <br />included in the increase. Ms. Scott explained that the utilities are self - sustaining, there is <br />no profit, and they are not subsidized by the City's general fund . Also included is an <br />additional $50,000 to extend the toilet rebate program. Ms. Scott noted that Albemarle <br />County customers will have similar increases. <br /> <br /> The public hearing was opened, but as there were no speakers, the public hearing <br />was closed. <br /> <br /> Mr . O'Connell said that we are in a "catch 22" situation: the more we conserve the <br />more it costs. Mr. O'Connell said staff will report back monthly on the rates. Mr. <br />O'Connell said that the County has reserves that allowed them to loan money to Rivanna <br />f or dredging. <br /> <br /> Ms. Scott said that the City has reserve funds for cash flow purposes only. <br /> <br /> Mr. Lynch said he is glad to hear that the County has a reserve. He expressed <br />concern that we have not lowered usage by 50%, but the increase is 124%. <br /> <br /> Mr. O'C onnell said this is why we need to review the situation every month. <br /> <br /> Mr. Lynch said that as we look toward expanding the system's infrastructure, we <br />should look at who pays for it, noting that it is unfair to have existing customers pay for <br />expansion <br /> <br /> M r. Schilling concurred with Mr. Lynch, and said that if the University of Virginia <br />was paying the market rate then the increase could be reduced to 13%. Mr. Schilling said <br />he would like to look at renegotiating that contract. Mr. Schilling asked for a su mmary of <br />the surcharge money collected and distribution of those funds. <br /> <br /> Ms. Scott said that approximately $200,000 has been collected so far from the first <br />surcharge and the funds have gone into the water fund. <br /> <br /> Responding to question from Mr. Schilling , Ms. Scott said that operational costs <br />remain the same, the amount of debt for water is approximately $6 million, and the debt <br />was refinanced last year with good rates. <br /> <br /> Ms. Richards said that she understands that the University has a central meter <br />which means less cost to deliver the water, but asked if new development will have the <br />same rate. <br /> <br /> Mr. O'Connell said that those developments owned by the Real Estate Foundation <br />pay regular rates, and he does not think the current water contract covers new <br />