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approved annually as part of the fee schedule.
<br />The utility rate increases being recommended
<br />are Water 10%; Sewer 10%, Stormwater 1%,
<br />and Recycling by 8%. Additionally, based on
<br />the area (North, South, Wayzata, or Long
<br />Lake), the sewer and water will be charged
<br />accordingly. Due to transition to monthly
<br />billing, the tiers have also been rounded to the
<br />nearest hundredth gallons. The utility rates
<br />will be approved December 7th as part of the
<br />2021 Fee Schedule.
<br />
<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 />
<br />As presented, the operating budget for 2021
<br />will have an operating loss of $112,765. The
<br />expenditure budget is increasing by $55,350
<br />(5.6%). $15,300 is due to Wages and
<br />Benefits. The operating transfer of $55,000 is
<br />to the debt service fund supporting the Casco
<br />Point Bonds ($55,000). The non-operating
<br />interest expense is for the interest on the 2014
<br />Water Bonds.
<br />
<br />2021 capital expenditures as identified in the
<br />2021 CIP include a water main replacement
<br />at Walters Port and water valve replacements.
<br />The 2021 capital expenditures total
<br />$420,500. The Water Fund’s anticipated cash
<br />balance for the fund at the end of 2020 is
<br />267,887.
<br />
<br />Sewer
<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 />
<br />The single largest expense for the sewer fund
<br />is the Met Council disposal charges. The five
<br />years have seen increases in the amounts of
<br />$37,410 (9.5%), $41,276 (9.6%), $82,147
<br />(17.4%), $64,035 (11.5%) and $81,200
<br />(13.1%) respectively. This is a 77.6%
<br />increase in five years. As has been discussed
<br />with the Council during previous budget
<br />processes, heavy rains and high water tables
<br />increase the flow through the MCES lift
<br />stations and increase our disposal charges.
<br />
<br />The total operating expenditure budget is
<br />increasing by $112,700 (5.91%) The major
<br />increases are the previously mentioned
<br />MCES charges ($81,200). The operating
<br />transfer of $115,000 is to cover the sewer
<br />improvements that were part of the Casco
<br />Point project and will continue for another
<br />four years.
<br />
<br />Upcoming capital expenditures can be
<br />covered by the fund’s current cash balances.
<br />Projects identified in the CIP for 2021
<br />include: Annual sewer rehabilitation
<br />($290,000), additional generators ($75,000),
<br />grinder station ($20,000), lift station updates
<br />($120,000), additional road project
<br />adjustments ($63,000), sewer meter
<br />installation into Long Lake, and force main
<br />replacement for Tonkawa ($225,000), for a
<br />total of $833,000. The anticipated cash
<br />balance for the fund at the end of 2020 is
<br />$2,019,555.
<br />
<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 />requirements. Public Works time and
<br />materials spent on culvert
<br />cleaning/replacement are also charged to this
<br />fund. The purpose of this fund is to collect
<br />money for the larger Stormwater projects that
<br />City of Orono - 2021 Budget Page 5
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