WORKSHOP ITEM - Joe Huss, Finance Director
Title
PROPOSED 2021 STORM DRAINAGE FUND BUDGET
Background
The City’s Storm Sewer Utility Enterprise Fund accounts for the operations of the City’s storm drainage system. The fund was created in 2006 as staff began separately accounting for storm drainage activity. Prior to that, storm sewer operations were accounted for in the Sanitary Sewer budget. A storm water utility fee was approved by Council in 2007, and implemented in January 2008.
As an enterprise fund, the utility is designed to recover the cost of maintaining the City’s storm drainage system, which includes over 100 miles of storm sewer pipes, and almost 80 miles of ditches as well as numerous catch basins, outfalls, manholes, weirs, culverts, and ponds. The system serves roughly 23,000 parcels throughout Blaine. The storm sewer operation functions as a division of the City’s Public Works Department under the direction of the Water Resources Manager and Public Works Director.
The division has an authorized staffing level of 6.5 fulltime equivalent (FTE) positions, which in addition to the WR Manager includes ½ FTE for supervision, 1 Working Foreman, and 4 Public Service Workers. For 2021 a request to add the position of Assistant Public Works Director (APWD) has been discussed with the council. The proposal is to charge 25% of that position to the General Fund and each of the three utility funds. If approved, that would bring to 6.75 the number of FTE in the Storm Sewer Utility Fund.
2020 Projections
Revenue collections are projected to reach $1.7 million; about $81,000 more than budgeted. Operating expenditures are projected to come in under budget by about $315,000. Capital project expenses are expected to be under budget by approximately $315,000 as well, as shutdowns/slowdowns from the Covid-19 pandemic caused some staffing shortages which resulted in a large portion of the capital projects to be deferred to future years.
2021 BUDGET
Revenues
Total revenues are expected to increase in the 2021 fiscal year. Charges for service revenues are expected to increase $166,000 from 2020 projected levels as a result of a recommended $4 annual rate increase. All other revenues are expected to remain the same for 2021.
Expenditures
Budgeted operating expenses (less depreciation) in 2021 will increase by $62,000 over 2020 appropriations.
• Personal services allocation are expected to decrease by $11,700 compared to 2020 budgeted values. Most of the difference can be attributed to reduced overtime to match historical costs.
• Supplies are expected to remain similar to what was budgeted in 2020, which represents full activity. For 2020, supplies are projected to be $66,600 below budget due to storm maintenance not being completed as a result of the COVID-19 pandemic.
• Contractual services appropriation totals $174,450, which includes ditch maintenance/inspections, pond maintenance/inspections, raingarden maintenance, and the annual system assessment program (10 miles per year).
• The budget for capital equipment is set at $143,000 and consists of $60,000 for a new truck (replacing a 2003 vehicle), $55,000 for a CAT Forestry Tool which provides safe access for ditch maintenance, $24,000 for Skid-Loader upgrade (trade-in program), and $4,000 for a plate compactor used in catch basin and sinkhole repairs.
• Capital projects totaling $1,070,000 consists of $500,000 for the city hall parking lot slip line. Initially, $50,000 was budgeted in 2020 to conduct a study as to the cause of storm drainage issues in the parking lot. It is expected that the study would be completed in 2021 and a course of action will then be known. Other capital appropriation requests include $370,000 for construction of a regional pond in Aurelia Park; $75,000 for Larson site wash-down containment; $75,000 for work on the Lexington Ave ditch (Erskine pond); and $50,000 for a City-wide Park Volume Reduction study.
Long-term Outlook
The attached budget model outlines the resources required to operate and maintain the city’s storm drainage system over the next five years under the proposed 2021 budget and five-year outlook. The five-year model in general, and the capital plan in particular, is based on recommendations from the surface water management plan. The five-year plan has been modified for 2021 and revenues as modeled reflect a $4 annual rate increase on residential properties for 2021 and a $1/year increase from 2022-2025.
Recommendation
Staff is seeking Council direction on proceeding with the 2021 Storm Water Utility Fund Budget.