ADMINISTRATION - Joe Huss, Finance Director
Title
ADOPT THE 2015 WATER AND SEWER UTILITY ENTERPRISE FUND BUDGETS
Background
Council has reviewed the 2015 proposed budgets for the Water and Sanitary Sewer Funds and per the following summaries, has given conceptual approval to the 2015 Budgets:
· Water Utility Fund
o Operations - With a better than average year in water sales, the fund is expected to generate positive net operating income of nearly $700,000 for 2014. With a healthy fund reserve and positive operating results expected over the next two to three years, a recommendation for a rate adjustment is unlikely to be considered until the 2015-16 budget cycle.
§ Revenues
· Revenue from water sales are about 1.5% above the 2014 budget and closely align with actual revenues in a typical year with typical rainfall and water usage.
· Other operating revenues are projected to increase $50,000 and reflect a continuation of trends over the last three years.
§ Expenditures
· Operating expenditures, not including depreciation, are budgeted to increase by $92,300 (3.5%) in 2015, and includes one additional FTE.
o Capital Activity
§ Debt service payments of nearly $550,000 are scheduled for 2015
§ Major capital activity includes:
· $1.8 million for the next phase of construction of four new wells (18-21).
· $500,000 for a trunk main connection to Tower #4
§ The Water Access Charge (WAC) will increase from $1,630 to $1,663 for residential property and from $4,118 per acre to $4,200 per acre pursuant to the fund's 20-year capital improvement plan.
o 5-year Outlook - Stable operations, with no immediate need for a rate increase in the near term. For capital improvements, $5 million for a new treatment plant in 2017, and $4.1 million for four new wells to be constructed in 2014-16.
· Sewer Utility Fund
o Operations - The operation is expected to end 2014 with an operating loss of just over $350,000. A similar operating loss of is expected again in 2015 as MCES charges will remain stable for 2015. Unlike the Water Utility, a recommendation for a rate adjustment in 2016 is highly likely.
o Capital Activity
§ About $3.2 million is budgeted for 2015, as the fund's slip lining project is expected to continue through 2015.
o 5-year Outlook - As with the Water Utility, the Sewer utility Fund's outlook is stable, with the likely recommendation for a rate increase in 2016. For capital improvements, $1.7 million for trunk extensions has been targeted for 2015 and 2016.
Schedule of Actions
11/13/2014 - Workshop Review
12/04/2014 - Council Adoption
Recommendation
By motion, adopt the following resolution approving the 2015 Water and Sanitary Sewer Utilities Funds budgets.
Body
WHEREAS, the proposed Utility Enterprise Funds Budgets for the fiscal year commencing January 1, 2015 have been prepared by the City Manager; and
WHEREAS, the City Council has examined, studied, and reviewed said proposed Utility Enterprise Funds Budgets; and
WHEREAS, the City Council has, after due consideration and deliberation, made such amendments and adjustments in the proposed Utility Enterprise Funds Budgets as they consider necessary, desirable, or expedient.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Blaine as follows:
1. That the proposed Budgets for the Water and Sewer Utility Funds attached hereto are approved.
2. That the 2015 appropriations attached hereto are approved.
3. That the 2015 funding sources and fee adjustments identified and attached hereto are approved.
4. That the City Manager is authorized and directed to implement and to administer, within the budgetary funding limits and within adopted City policy and relevant State and City laws and regulations, said approved Utility Enterprise Fund Budgets.
PASSED by the City Council of the City of Blaine this 4th day of December, 2014.