The increase in the first year is necessary to meet past and current capital funding costs and to meet the required bonded debt coverage. The overall adjustments in the first year provides funding for several capital funding components. First, the additional revenue is needed to meet existing long-term borrowing annual payments. Second, with the regulatory required improvements, additional long-term borrowing is planned to implement the required infrastructure. Finally, with long-term borrowing, the City has a policy, and is required, to maintain sufficient revenues for debt service coverage ratios. The sum of these three components, necessitate the overall increases in the first year for water and sewer. Unfortunately, these increases cannot be spread out over time as the City would not meet the financial requirements to fund the necessary infrastructure improvements.