ITEM: 12.3 ADMINISTRATION - Joe Huss, Finance Director
Title
ADOPTING THE 2014 WATER AND SEWER UTILITY ENTERPRISE FUND BUDGETS
Background
Council has reviewed the 2014 proposed budgets for the Water and Sanitary Sewer Funds and per the following summaries, has given conceptual approval to the 2014 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 $300,000 for 2013. 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 2% above the 2013 budget and closely align with actual revenues in a typical year with typical rainfall and water usage.
· Other operating revenues are projected to increase $65,000 and reflect a continuation of trends over the last three years.
§ Expenditures
· 2014 operating expenditures, not including depreciation, are budgeted to increase by $145,000 (5.7%) in 2014.
o Capital Activity
§ Debt service payments of nearly $543,000 are scheduled for 2014
§ Major capital activity includes:
· $500,000 for the first phase of construction of four new wells (18-21).
· $140,000 maintenance of wells 12, 13
§ The Water Access Charge (WAC) will increase from $1,598 to $1,630 for residential property and from $4,037 per acre to $4,118 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 2013 with an operating loss of just over $200,000. An operating loss of $500,000 is expected again in 2014 as an increase in MCES charges of nearly $244,000 is set for 2014. Unlike the Water Utility, a recommendation for a rate adjustment in 2015 is highly likely.
o Capital Activity
§ About $2.5 million is budgeted for 2014, 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 likely for 2015. For capital improvements, $1.7 million for trunk extensions has been targeted for 2015 and 2016.
Schedule of Actions
12/05/2013 - Workshop Review
12/19/2013 - Council Adoption
Recommendation
By motion, adopt the following resolution approving the 2014 Water and Sanitary Sewer Utilities Funds budgets.
Body
WHEREAS, the proposed Utility Enterprise Funds Budgets for the fiscal year commencing January 1, 2014 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 2014 appropriations attached hereto are approved.
3. That the 2014 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 19th day of December, 2013.