12-12-2016 Council Packet - Laserfiche WebLink

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As presented, the operating budget for 2017 will have a small operating loss of $4,628. The expenditure budget is increasing by $15,253 (2.37%). $10,000 of the increase is in maintenance supplies and maintenance. 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. 2017 capital expenditures as identified in the draft CIP include a monitoring software upgrades, the north water system extension, a mixer for the north water tower, well number one maintenance, and the replacement of a 1992 Generator. The 2017 capital expenditures total $423,000. The costs associated with the northern expansion ($120,000) will eventually be recovered as the properties being served are developed. The Water Fund's current cash balance is $1,730,000. Sewer In recent years, including 2015, 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. In 2016, the fund is budgeted to break even. In 2016, the fund benefitted by a 19% ($92,777) decreases in wastewater disposal charges from the Metropolitan Council. In 2017, the disposal charges are increasing by 9.5% (37,410). This budget line is the single largest expense for the fund. The presence of a high level of inflow and infiltration (I&I) in our system is responsible for the large variations in the charges. 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 $124,460 (9.8%) The major increases are the MCES charges ($37,410), wages due to step increases, a 2% COLA, and an increase in workers' comp insurance costs ($22,550), and the non-cash expense of depreciation ($20,000). The revenues are calculated with a 4% increase in the sewer rates as called for in the 2014 as approved in the 2017 fee schedule. The operating transfer is to cover the sewer improvements that were part of the Casco Point project and will continue for another six years. Upcoming capital expenditures can be covered by the fund's current cash balances. Projects identified in the CIP for 2017 include: lift station updates; lift station monitoring improvements, replacement of the Forest Arms main, and residing the garage at the Navarre water plant. The CIP also includes expansion of the northern collection system, these cost will be recovered as the properties served are developed. Total anticipated capital expenditures are $1,140,520. The current cash balance for the fund is $2,265,325. Stormwater The Stormwater Fund is for the most part project based. Operating expenditures are mainly limited to engineering associated with NPDES, SWPPP and other state and federal requirements. Public Works time and materials spent on culvert cleaning/replacement are also charged to this fund. The purpose of this fund is to collect money for the larger Stormwater projects that will be required in the future. The revenue in the attached budget is calculated with a 10% increase in the rates. This is the annual increase required to avoid future special assessments for stormwater projects.