12-07-2020 Council Packet - Laserfiche WebLink

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AGENDA ITEM Prepared By: MLU Reviewed By: MLU Approved By: DJR Debt Service Levies The 2021 levy for debt service is $579,480. 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 10%; Sewer 10%, Stormwater 1%, and Recycling by 8%. Additionally, based on the area (North, South, Wayzata, or Long Lake), the sewer and water will be charged accordingly. Due to transition to monthly billing, the tiers have also been rounded to the nearest hundredth gallons. The utility rates will be approved December 7th as part of the 2021 Fee Schedule. 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 since 2018 and this revenue decrease has been recovered through water rates. As presented, the operating budget for 2021 will have an operating loss of $112,765. The expenditure budget is increasing by $55,350 (5.6%). $15,300 is due to Wages and Benefits. 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. 2021 capital expenditures as identified in the 2021 CIP include a water main replacement at Walters Port and water valve replacements. The 2021 capital expenditures total $420,500. The Water Fund’s anticipated cash balance for the fund at the end of 2020 is 267,887. 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 five years have seen increases in the amounts of $37,410 (9.5%), $41,276 (9.6%), $82,147 (17.4%), $64,035 (11.5%) and $81,200 (13.1%) respectively. This is a 77.6% increase in five 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 $112,700 (5.91%) The major increases are the previously mentioned MCES charges ($81,200). The operating transfer of $115,000 is to cover the sewer improvements that were part of the Casco Point project and will continue for another four years.