07-26-1999 Council Packet - Laserfiche WebLink

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To the City Council and Citizens of the City of Orono May 14, 1999 The operating income for 1998 does not include nonoperating revenues of $541,293 or nonoperating expenses of $22,706. The operating income for 1997 also does not include nonoperating revenue of $ 130,458 or nonoperating expenses of $27,412. Retained earnings as of December 31, 1998 were $1,026,274 which represents an increase of $576,371 from 1997, net of the effects of depreciation on contributed assets and nonoperating items. Sewer Operating Fund The Sewer Operating Fund accounts for the provision of sewer services to the residents of the City who have sanitary sewer service available. All activities necessary to provide such services are accounted for in this fund, including administration, operations, maintenance, billing, and collection. The summary of operations for 1998 and 1997 is as follows: December 31 Operating revenue Operating expenses 1998 1997 $ 686,119 $ 638,280 637,884 688,989 $ 48,235 $ (50,709) The operating revenue in 1998 increased $47,839, or 7.5%. The operating revenue increase was the result of a 3.5% increase in the number of sewer connections and a rate increase of 3.2%. The operating expenses in 1998 decreased $51,105, or 7.4%. The continued efforts to reduce groundwater inflow and infiltration into the sanitary sewer system resulted in lower measured flows and decreased treatment costs from the Metropolitan Council Environmental Services (MCES) in the amount of $42,606. In addition, the depreciation expense decreased $49,052 as a result of extending the useful life of the sewer mains from 50 years to 75 years, and extending the useful life of the lift stations from 25 years to 30 years to more accurately reflect the useful life of those assets. The maintenance and repairs to the sewer lines and lift stations increased $25,072, as part of the continued efforts to reduce groundwater inflow and infiltration, while personal service costs increased $16,823. The operating income for 1998 does not include nonoperating revenues of $ 179,269 or nonoperating expenses of $22,177. The operating loss for 1997 does not include nonoperating revenues of $ 137,008 or nonoperating expenses of $26,772. Retained earnings as of December 31,1998 were $2,273,696, which represents an increase of $306,171 from 1997, net of the effects of depreciation on contributed assets and nonoperating items. Golf Course Operating Fund The Golf Course Operating Fund accounts for the operation of the City-owned and operated golf course facility. All activities necessary for operations are accounted for in this fund, including administration, operations, and maintenance. -11- i