ITEM: 12.5 ADMINISTRATION - Joe Huss, Finance Director
Title
ADOPTING THE 2013 WATER AND SEWER UTILITY ENTERPRISE FUND BUDGETS
Background
Council has reviewed the 2013 proposed budgets for the Water and Sanitary Sewer Funds and per the following summaries, has given conceptual approval to the 2013 Budgets:
· Water Utility Fund
o Operations - With an exceptional year in water sales, the fund is expected to generate positive net operating income of $730,000 for 2012. 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 needed until the 2016-17 budget cycle.
§ Revenues
· Revenue from water sales are 7% above the 2012 budget and closely align with actual revenues in a typical year with typical rainfall and water usage.
· Other operating revenues have increased $35,000 and reflect trends over the last three years.
§ Expenditures
· 2013 operating expenditures, other than depreciation, are budgeted to increase by $61,000 (2.5%) in 2013.
o Capital Activity
§ Debt service payments of nearly $541,000 are scheduled for 2013
§ Major capital activity includes:
· $1 million for the first phase of construction of two new wells (18, 19).
· $300,000 to recondition Tower #3
§ The Water Access Charge (WAC) will increase from $1,567 to $1,598 for residential property and from $$3,958 per acre to $4,037 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, $6 million for a new treatment plant in 2014, and $2 million for two new wells to be constructed in 2015-16.
· Sewer Utility Fund
o Operations - The operation is expected to end 2012 with an operating loss of just under $200,000. However, with a significant increase in disposal charges from MCES of nearly $320,000, the 2012 operating gain is expected to be offset by a similar operating loss for 2013. As with the Water Utility, a recommendation for a rate adjustment within the next two years is unlikely.
o Capital Activity
§ About $2.4 million is budgeted for 2013, as the fund's slip lining project is expected to continue through 2013.
5-year Outlook - As with the Water Utility, the Sewer utility Fund's outlook is stable, with no immediate need for a rate increase likely. For capital improvements, $1.7 million for trunk extensions has been targeted for 2014 and 2015.
Schedule of Actions
12/06/2012 - Workshop Review
12/20/2012 - Council Adoption
Recommendation
By motion, adopt the following resolution approving the 2013 Water and Sanitary Sewer Utilities Funds budgets.
Body
WHEREAS, the proposed Utility Enterprise Funds Budgets for the fiscal year commencing January 1, 2013 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 2013 appropriations attached hereto are approved.
3. That the 2013 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 20th day of December, 2012.