Department ofFinance and TaxesWhy Use a Multiplier?At the time of its adoption, the Board of Commissioners desired to have the Sanitary Sewer Fund Act as a "business entity." To accomplish this, in 1985 they established an Enterprise Fund. An Enterprise Fund is used to account for a government's business-type activity (e.g. activities that receive a significant portion of their funding through user charges.) This type of fund is used when it is the intent of the government to recover the full cost of the service provided. The philosophy behind the multiplier is that sewer users pay for their own incurred use. What Does the Multiplier Cover?The multiplier is used to cover three main types of expenditures:
In prior years, the multiplier was also used to establish a reserve balance for emergency situations. The range of the reserve was set at $500,000 to $600,000. Since the reserve balance was reached in 1995, a break even policy was instituted in 1996 to have the multiplier cover only current expenditures. |