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The utility rate increases being recommended
<br />are Water 35%; Sewer 20%, Stormwater
<br />90%, and Recycling by 60%. Additionally,
<br />based on the area (North, South, Wayzata, or
<br />Long Lake), the sewer and water will be
<br />charged accordingly. Staff has also looked
<br />into multi -residential and commercial
<br />properties and are recommending charging
<br />Billing and Ready -to -Serve charges per SAC
<br />Unit. The utility rates will be approved
<br />tonight as part of the 2020 Fee Schedule.
<br />Water
<br />The water fund has historically been
<br />operating at a loss. Because depreciation is a
<br />non-cash expenditure, the fund has had a
<br />positive operating cash flow since 2009. In
<br />previous years, the operating loss has been
<br />covered by the revenue received from
<br />antenna leases on the water towers. The
<br />revenue from the antenna leases has been
<br />moved out of the Water budget since 2018
<br />and this revenue decrease has been recovered
<br />through water rates.
<br />As presented, the operating budget for 2020
<br />will have an operating loss of $157,481. The
<br />expenditure budget is increasing by $58,540
<br />(6.3%). $18,400 of the increase is due to an
<br />increase in depreciation and $6,000 of the
<br />increase is due the information technology
<br />(IT) being centrally managed going forward.
<br />The operating transfer of $55,000 is to the
<br />debt service fund supporting the Casco Point
<br />Bonds ($55,000). The non-operating interest
<br />expense is for the interest on the 2014 Water
<br />Bonds.
<br />2020 capital expenditures as identified in the
<br />2020 CIP include a water main replacement
<br />at CSAH 15/19 and water valve
<br />replacements. The 2020 capital expenditures
<br />total $233,855. The Water Fund's anticipated
<br />cash balance for the fund at the end of 2019
<br />is $182,900.
<br />CPXx7Pr
<br />In recent years, the sewer fund has mostly
<br />operated at a loss. Non-operating revenues
<br />however, have consistently offset the
<br />operating losses. This has resulted in a
<br />positive operating cash flow for the fund.
<br />The single largest expense for the sewer fund
<br />is the Met Council disposal charges. The four
<br />years have seen increases in the amounts of
<br />$37,410 (9.5%), $41,276 (9.6%), $82,147
<br />(17.4%) and $64,035 (11.5%) respectively.
<br />This is a 57% increase in four years. As has
<br />been discussed with the Council during
<br />previous budget processes, heavy rains and
<br />high water tables increase the flow through
<br />the MCES lift stations and increase our
<br />disposal charges.
<br />The total operating expenditure budget is
<br />increasing by $172,025 (9.92%) The major
<br />increases are the previously mentioned
<br />MCES charges ($64,035), repairs and
<br />maintenance for I&I reduction ($50,000), the
<br />Fleet Service Charge ($16,500), and
<br />Intergovernmental Services ($20,700). The
<br />operating transfer of $115,000 is to cover the
<br />sewer improvements that were part of the
<br />Casco Point project and will continue for
<br />another four years.
<br />Upcoming capital expenditures can be
<br />covered by the fund's current cash balances.
<br />Projects identified in the CIP for 2020
<br />include: Annual sewer rehabilitation
<br />($290,000), additional generators
<br />($150,000), grinder station ($20,000), lift
<br />station updates ($120,000), additional road
<br />project adjustments ($55,000), and force
<br />main replacement for CSAH 15/19
<br />($180,000), for a total of $815,000. The
<br />anticipated cash balance for the fund at the
<br />end of 2019 is $1,387,422.
<br />Stormwater
<br />The Stormwater Fund is for the most part
<br />project based. Operating expenditures are
<br />mainly limited to engineering associated with
<br />NPDES, SWPPP and other state and federal
<br />City of Orono - 2020 Budget Page 5
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