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rp< v - <br />c <br />t <br />c <br />TO; Mayor Peterson and Council Members <br />FROM: Ron Moorse, City Administrator <br />DATE: August 20,2004 <br />'\ <br />SUBJECT: Utility Fund Budgets <br />The City ’s utility funds include the Water, Sewer, and Storm Water Funds. These funds operate <br />without tax levy support. They are supported by user fees. Attached are the proposed operating <br />expenditure budgets for these funds, as well as a six-year Capital Spending Plan that includes the three <br />utility funds, as well as the General Fund (Streets). The following is a summary of the key elements of <br />tlie budgets of each fund. <br />Water Fund <br />Operating Expenditures <br />The main expenditure increases are in utilities (elecU'icity)-$5,000. and maintenance of water mains and <br />water plant-$6,800. Also, the fees paid by the City related to the Gopher State One-Call system have <br />increased by $3,000. <br />Capital Expenditures <br />The 2005 budget includes $350,000 for the reconditioning and painting of the Navarre water tower. <br />The tower has not had any significant maintenance since its construction in 1971 . The interior of the <br />water tower was recently inspected. The report from the inspection will provide an indication of the <br />extent of repair needed, and the cost of the repair. Based on the cost of the repair and repainting <br />currently underway at the Long Lake water tower, the cost could be from $300,000 to $350,000. <br />The water fund has sufficient reserves to fund this expenditure. The annual 3H increase in water rates <br />should provide sufficient revenues to replenish the reserves over time. <br />Sewer Fund <br />Operating Expenditures <br />The two most significant changes in the operating expenditures is the elimination of the $30,000 <br />expenditure for infiltration and inflow (1/1) reduction, (this expenditure amount is now proposed to be <br />used, and accounted for, in the capital expenditure portion of the budget) and the $66,000 increase in <br />fees paid to Metropolitan Council Environmental Services for sewage treatment. The increase in Metro <br />fees expenditures reflects the actual level of fees in recent years. During periods of wet weather, and/or <br />high lake levels, the amount of I/l increases significantly, which causes increased treatment costs. <br />Capital Expenditures <br />' i