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Home My WebLink About08-28-2023 Council Work Session PacketCouncil Work Session Monday, August 28, 2023 5:00 P.M. Orono Council Chambers, 2780 Kelley Parkway, Orono, MN 55356 WORK SESSION AGENDA 1. Enterprise Budgets Update 2. UTVs on City Streets 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. 2024 Budget – Page 2 • Recycling – We are required to offer curb side recycling to all of our residents. We pay for the service even if the resident chooses not to recycle. Our current recycling contract with Waste Management ends on 9/30/2024. The last time the recycling contract was out for bid, the cities rates increased by 30%. The cash balance of the recycling fund on 6/30/2023 is $61,437.96. Detailed information can be provided if needed. Attachments: 1. Rate Increase Projections (based on prior rate study) 2. Summary Expense Budgets 3. Sample Resolution Past and Projected Utility Rate Increases 2020 2021 2022 2023 2024 2025 Water 35.0%20.0%0.0%2.0%2.0%2.0% Sewer 20.0%15.0%0.0%2.0%2.0%2.0% Stormwater 90.0%1.0%0.0%1.0%1.0%1.0% Recycling 60.0%4.0%4.0%4.0%4.0%6.0%* * Estimate only - New Contract and Organics Requirement 2021 Actual 2022 Actual 2023 Budget Y-T-D Jul 31, 2023 2024 Draft Budget Dollar Increase (Decrease) % Increase (Decrease) Personal Services 265,957 333,866 374,100 208,239 384,100 10,000 2.67% Supplies & Maintenance 261,654 171,915 191,700 275,610 197,500 5,800 3.03% Professional Services 49,266 65,557 62,100 39,751 70,600 8,500 13.69% Insurances 7,800 26,000 26,900 13,450 21,400 (5,500) -20.45% Other Expenses 528,885 533,123 526,500 284,790 551,000 24,500 4.65% Non-Operating Expenses 85,429 20,000 15,000 0 10,000 (5,000) -33.33% Total Water Operating Fund 1,198,991 1,150,461 1,196,300 821,840 1,234,600 38,300 3.20% PROGRAM DESCRIPTION & OBJECTIVES: OPERATING COST ACTIVITIES: Water *Professional Services' includes a portion of the costs related to the City's annual financial audit, IT Services, and engineering consulting costs related to water projects. *Other Expenses' include power supply costs, purchased water from the City of Wayzata, and a depreciation charge on the fixed assests. 2024 Enterprise Fund Operating Budget Departmental Summary 49400 Staff includes: Public Works Superintendent (.2 FTE), Public Works Supervisor (.5 FTE), Maintenance Workers (2.1 FTE, Administrative Assistant (.25 FTE) and a Seasonal Employee. The Water Operating Fund provides for the funding of the City's water distribution system. These funds are accounted for separately and are designed to be funded through water rates. *Included in 'Personal Services' are the wages and employment taxes for the Water Department Staff. *Supplies & Maintenance' includes the operating supplies and maintenance for the water distribution system. 2021 Actual 2022 Actual 2023 Budget Y-T-D Jul 31, 2023 2024 Draft Budget Dollar Increase (Decrease) % Increase (Decrease) Personal Services 213,384 328,140 361,800 211,919 363,500 1,700 0.47% Supplies & Maintenance 109,520 183,117 261,750 39,752 218,000 (43,750) -16.71% Professional Services 52,568 64,277 68,000 37,825 78,000 10,000 14.71% Insurances 17,500 14,715 15,540 7,770 15,540 0 0.00% Other Expenses 1,272,300 1,424,016 1,404,900 865,353 1,482,440 77,540 5.52% Non-Operating Expenses 143,750 110,000 0 0 0 0 N/A Total Sewer Operating Fund 1,809,022 2,124,265 2,111,990 1,162,620 2,157,480 45,490 2.15% PROGRAM DESCRIPTION & OBJECTIVES: OPERATING COST ACTIVITIES: *Other Expenses' includes the City's disposal charges with the MCES, and a depreciation charge on fixed assets. Staff includes: Public Works Superintendent (.2 FTE), Public Works Supervisor (.5 FTE), Maintenance Workers (2.15 FTE), Administative Support (.25 FTE), and a Seasonal Employee. *Supplies & Maintenance' includes the operating supplies and maintenance for the sewer collection system. Sewer 2024 Enterprise Fund Operating Budget Departmental Summary 49450 The Sewer Operating Fund provides for the funding of the City's sewer collection system. The funds are accounted for separately and are designedto be funded primarily through sewer unit charges. *Professional Services' includes a portion of the costs related to the City's annual financial audit, IT Services, and engineering consulting costs related to sewer projects. *Included in 'Personal Services' are the wages and employment taxes for the Sewer Department Staff. 2021 Actual 2022 Actual 2023 Budget Y-T-D Jul 31, 2023 2024 Draft Budget Dollar Increase (Decrease) % Increase (Decrease) Personal Services 22,040 11,979 11,979 7,638 18,400 6,421 53.61% Supplies & Maintenance 0 0 0 0 0 0 N/A Professional Services 192,818 211,006 211,006 127,212 228,500 17,494 8.29% Insurances 0 500 500 50 100 (400) -80.00% Other Expenses 16,497 14,930 14,930 12,399 24,100 9,170 61.42% Recycling Total 231,355 238,415 238,415 147,298 271,100 32,685 13.71% PROGRAM DESCRIPTION & OBJECTIVES: OPERATING COST ACTIVITIES: Recycling The city participates in a program to provide curbside recycling service. In addition, the city also provides a spring cleanup day for residents who have materials unsuitable for curbside recycling pickup. *Personal Services are a portion of the City Clerk's wages and the wages for City Staff whom participate in the spring cleanup. *Other Expenses includes disposal of items collected during the clean up day and materials related to organics recycling. *'Professional Services includes the costs associated with recycling collection. 49500 2024 Enterprise Fund Operating Budget Departmental Summary 2021 Actual 2022 Actual 2023 Budget Y-T-D Jul 31, 2023 2024 Draft Budget Dollar Increase (Decrease) % Increase (Decrease) Personal Services 113,270 81,899 198,400 88,954 192,900 (5,500) -2.77% Supplies & Maintenance 14,346 22,584 21,500 10,051 19,000 (2,500) -11.63% Professional Services 26,278 46,807 39,500 26,494 47,500 8,000 20.25% Insurances 4,750 4,100 4,400 2,200 4,900 500 11.36% Other Expenses 185,325 184,211 192,600 85,992 192,100 (500) -0.26% Non-Operating Expenses 0 46,427 0 0 0 0 N/A Total Stormwater Operating Fund 343,969 386,027 456,400 213,691 456,400 0 0.00% PROGRAM DESCRIPTION & OBJECTIVES: OPERATING COST ACTIVITIES: Stormwater The Stormwater Operating Fund provide sfunding to for the City's Stormwater responsibilities. The funds are accounted for separately and are designedto be funded primarily through stormwater service and trunk fees. *Included in 'Personal Services' are the wages and employment taxes for the Public Works Department Staff. Staff includes: Public Works Superintendent (.2 FTE), Public Works Supervisor (.5 FTE), Maintenance Workers (.5 FTE), Administative Support (.20 FTE), and a Seasonal Employee. * Supplies & Maintenance includes material associated with culvert maintenance. *Other Expenses includes depreciation and an administrative charge and the annual LMCD Levy. *Professional Services includes engineering and annual audit charges. 2024 Enterprise Fund Operating Budget Departmental Summary 49910 2021 Actual 2022 Actual 2023 Budget Y-T-D Jul 31, 2023 2024 Draft Budget Dollar Increase (Decrease) % Increase (Decrease) Personal Services 41,982 8,598 0 0 0 0 N/A Professional Services 15,830 14,160 18,000 7,790 27,000 9,000 50.00% Other Expenses 44,867 57,607 39,500 27,951 35,600 (3,900) -9.87% Total Sewer Operating Fund 102,679 80,365 57,500 35,741 62,600 5,100 8.87% PROGRAM DESCRIPTION & OBJECTIVES: OPERATING COST ACTIVITIES: *Professional Services includes IT Services and audit charges. * Other Expenses include webcasting/online content and an administrative charge to the General Fund Cable Franchise The Cable TV Fund was created to account for the Franchise fees that are collectected as part of the City's Franchise agreement with Mediacom. Expenditures include costs associated with recording and streaming meetings. 2024 Enterprise Fund Operating Budget Departmental Summary 49840 MCES Wastewater Charges MCES Budget Monthly Annual % Change Increase % 2009 28,448.82 341,385.84 4.9% 2010 28,446.68 341,360.16 -0.01%3.8% 2011 32,893.18 394,718.16 15.63%3.2% 2012 35,350.17 424,202.04 7.47%0.5% 2013 29,988.61 359,863.32 -15.17%3.0% 2014 33,249.29 398,991.48 10.87%3.0% 2015 40,608.92 487,307.04 22.13%3.5% 2016 32,877.48 394,529.76 -19.04%5.4% 2017 35,995.14 431,941.68 9.48%5.4% 2018 39,434.77 473,217.24 9.56%3.7% 2019 46,280.36 555,364.32 17.36%3.5% 2020 51,616.25 619,395.00 11.53%3.6% 2021 58,379.17 700,549.96 13.10%2.0% 2022 59,036.00 708,439.00 1.13%4.0% 2023 63,916.08 766,993.00 8.27%5.5% 2024 64,223.75 770,685.00 0.48%6.8% Orono Costs Prepared By: JVE Reviewed By: Approved By: CITY OF ORONO MEMORANDUM DATE: August 28, 2023 TO: City Council Members FROM: Police Chief RE: UTV’s on City Streets 1. Purpose. Discussion of UTV use on city streets and County Roads 2. Background. City staff have been receiving more calls pertaining to driving UTVs and other off road vehicles on city streets. Current city ordinances, DNR regulations, MN State Statues and city attorneys’ legal interpretation will be discussed.