08-28-2023 Council Work Session Packet

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2024 Budget – Page 1 MEMORANDUM To: Mayor Walsh & the City Council From: Ron Olson, Finance Director Subject: 2024 Enterprise Budget Date: August 24, 2023 Attachments: 2024 Budget Preliminary drafts of the Enterprise Budgets have been prepared for your review. Union wages are increasing by 3% in 2024 and the budget have been prepared with that in mind. Because some longer-term employees have left, we do realize some savings on wages that keep the wage category increases below 3%. Staff is recommending continuing with the minor rate increases that were identified as part of the 2019 rate study. They are 2% for Water and Sewer, 1% for Stormwater, and 4% for Recycling. Looking to the future (2026 and beyond), the utility rates may need be tied more closely to annual increase in operating costs. 2024 is the final year for our recycling contract with Waste Management. Other important information: • Water – Water revenues far exceeded budget in 2022 and will again in 2023. This is the result of the drought and not a reflection of rate increases. We budget using historical gallons used information, and the weather can create large variances compared to budget. The cash balance of the water fund on 6/30/2023 is $1,712,775.40 • Sewer – MCES wastewater charges stayed basically flat for 2024. This relieves a lot of pressure on rates and helps to keep the expenditure budget increase to 2%. The current sewer fund cash balance is $2,777,450. • Storm – The Stormwater fund is designed to accumulate funds for capital projects. Stormwater projects like the North Shore Ravine Stabilization and those in conjunction with roads often exceed $100,000 or more and do not reflect in the operating budget. The current stormwater fund cash balance is $2,333,011.84. • Cable – Revenues from a franchise fee are the main source of funds for the Cable Fund. This fund covers expenses related to streaming city meetings. The cash balance of the water fund on 6/30/2023 is $57,589.11.