11-13-2017 Council Work Session Packet

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consistently offset the operating losses. This has resulted in a positive operating cash flow for the fund. The 2018 budget is being presented with a rate increase of 4%. The single largest expense for the sewer fund is the Met Council disposal charges. The past two years have seen increases in the amounts of $37,410 (9.5%) and 41,277 (9.6%) respectively. 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 $78,881 (5.8%) The major increases are the previously mentioned MCES charges ($41,277), repairs and maintenance for sewer lines ($13,220) and the non-cash expense of depreciation ($15,000). The revenues are calculated with a 4% increase in the sewer rates as called for in the 2014 rate study. 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 2018 include: Annual sewer rehabilitation ($273,182), Sewer televising ($47,272), additional generators ($75,000), lift station updates ($112,000); lift station monitoring improvements ($26,000), sewer main replacements ($353,740), and a generator rehabilitation ($10,000), for a total of $972,194. The current cash balance for the fund is $2,800,000. Ctarm Water 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. Potential CIP projects in 2018 include: Long Lake Ravine Stabilization (SWMP 7); System improvements performed with road projects; TMDL Updates. The capital expenditures total $308,080. The funds current cash balance is $1,700,000. Recycling The recycling fund was newly created in 2013. Its major expenditure line is for contracted recycling charges. The current contract with Waste Management is capped at a 2.8% increase. In November of 2016 and continuing through 2017, the City has been receiving a Recycling Materials Offset. In previous years, this offset had not been paid because there was no market for the recycled materials. With the return of the offset, the budget has been prepared with no increase in recycling rates. The full time wages that are charged to the fund represent 10% of the City Clerks wages. The current cash balance is $49,673. Cable The Cable fund was new for the 2015 budget. The projected revenues are based on current subscriber information and rates. The line item for Internet/Other communications covers the costs associated with streaming and online access of council meetings. It has been increased to pay for the increased cost of our fiber internet connection.