12-11-2017 Council Packet - Laserfiche WebLink

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AGENDA ITEM the fund has had a positive operating cash flow since 2009. In most years, the operating loss has been covered by the revenue received from antenna leases on the water towers. Due to consolidations in the cellular industry and changing technologies, the lease revenue is not guaranteed to continue indefinitely. For the last four years, water rates have been increased by 11 % annually. The 2018 budget is being presented with a 6% rate increase with future increases to be determined to be based on a utility rate study that is being performed in 2018. As presented, the operating budget for 2018 will break even. The expenditure budget is increasing by $25,310 (2.1%). $9,000 of the increase is in maintenance supplies and maintenance. As a result of recently completed water system improvements, the depreciation expense is also increasing by $10,000. 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. The non-operating revenue of $100,000 has been removed from the Water Fund budget. The Water Fund's current cash balance is $977,699.82. Sewer Fund 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 2018 budget is being presented with a rate increase of 6%. The single largest expense for the sewer fund is the Met Council disposal charges. The past two years have seen increases in the amounts of $37,410 (9.5%) and 41,277 (9.6%) respectively. 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 $78,881 (5.8%) The major increases are the previously mentioned MCES charges ($41,277), repairs and maintenance for sewer lines ($13,220) and the non-cash expense of depreciation ($15,000). The revenues are calculated with a 4% increase in the sewer rates as called for in the 2014 rate study. Future increases will be based on the 2018 rate study The operating transfer is to cover the sewer improvements that were part of the Casco Point project and will continue for another six years. Upcoming capital expenditures can be covered by the fund's current cash balances. Projects identified in the draft CIP for 2018 include: Annual sewer rehabilitation ($273,182), Sewer televising ($47,272), additional generators ($75,000), lift station updates ($112,000); lift station monitoring improvements ($26,000), sewer main replacements ($353,740), and a generator rehabilitation ($10,000), for a total of $972,194. The current cash balance for the fund is $2,800,000. Storm Water The Stormwater Fund is for the most part project based. Operating expenditures are mainly limited to engineering associated with NPDES, SWPPP and other state and federal requirements. Public Works time and materials spent on culvert cleaning/replacement are also charged to this fund. The purpose of this fund is to collect money for the larger Stormwater projects that will be required in the future. The revenue in the attached budget is calculated with a 10% increase in the rates. This is the annual increase required to avoid future special assessments for stormwater projects. Potential CIP projects in 2018 include: Long Lake Ravine Stabilization (SWMP 7); System improvements performed with road projects; TMDL Updates. The capital expenditures total $308,080. The funds current cash balance is $1,700,000. Recyctin� The recycling fund was newly created in 2013. Its major expenditure line is for contracted recycling charges. The current contract with Waste Management is capped at a 2.8% increase. In November of Prepared By: RIC Reviewed By: 1b)X1 Approved By: �bV