12-10-2018 Council Packet - Laserfiche WebLink

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AGENDA ITEM Debt Service Levies The 2019 levy for debt service is $711,000. This levy is used to pay the debt service on the City's outstanding bonds. Enterprise Funds The Water, Sewer, Stormwater, and Recycling Funds are designed to account for the business type activities of the City. These funds do not receive any property tax revenue. The goal for the Enterprise funds is to be fully funded by rates without depending on special assessments for infrastructure improvements. While there is no formal adoption of the expenditure budgets, the information is included in the budget book. On the revenue side of the budget, the utility rates are approved annually as part of the fee schedule. The utility rate increases being recommended are Water 11 %; Sewer 4%, Stormwater 10%, and Recycling by 11%. With the exception of the water rate increase, the utility rates will be approved tonight as part of the 2019 Fee Schedule. For water, the overall rate increase will be 11%, however, staff is still working on developing a new rate structure to more accurately charge customers based on the water system that they are connected to (North, South, Wayzata, or Long Lake). Water The water fund has historically been operating at a loss. Because depreciation is a non-cash expenditure, the fund has had a positive operating cash flow since 2009. In previous years, the operating loss has been covered by the revenue received from antenna leases on the water towers. The revenue from the antenna leases has been moved out of the Water budget and this revenue decrease will be recovered through water rates. As presented, the operating budget for 2019 will have an operating loss of $181,120. The expenditure budget is increasing by $217,732 (34.29%). $86,660 of the increase is due to an increase in Administrative Charge. The operating transfer of $55,000 is to the debt service fund supporting the Casco Point Bonds ($55,000). The non-operating interest expense is for the interest on the 2014 Water Bonds. 2019 capital expenditures as identified in the draft CIP include painting the north and south water plant, well #3 screening, a water main replacement at CSAH 15/19, water valve replacements and water meter replacements. The 2019 capital expenditures total $474,855. The Water Fund's current cash balance is $528,892.81. Sewer In recent years, the sewer fund has mostly operated at a loss. Non-operating revenues however, have consistently offset the operating losses. This has resulted in a positive operating cash flow for the fund. The single largest expense for the sewer fund is the Met Council disposal charges. The three years have seen increases in the amounts of $37,410 (9.5%), $41,277 (9.6%) and $123,425 (28.6) respectively. This is a 40% increase in three years. As has been discussed with the Council during previous budget processes, heavy rains and high water tables increase the flow through the MCES lift stations and increase our disposal charges. The total operating expenditure budget is increasing by $213,675 (15.2%) The major increases are the previously mentioned MCES charges ($123,425), repairs and maintenance for sewer lines ($57,280) and the Administrative Charge ($70,660). The operating transfer is to cover the sewer improvements that were part of the Casco Point project and will continue for another five years. Prepared By: J*JU Reviewed By: 51V Approved By: JIV