4.b 1 Discussion on Uptown Sewer system 2018 budget
Staff Report
Date of Meeting: November 1, 2017
To: City Council
From: Neil Soltis, Administrator
Re: 2018 Uptown Sewer budget
Background:
The Wastewater Advisory Committee discussed amending the charge structure for the Uptown sewer
system noting that the current rate structure relies primarily on a fixed charge of 12,331 per year spread
equally over the 9 users. The variable portion of the charge is based on metered flow ($15.28/1,000
gallons) and generates about $5,000 per year. The current formula results in the cost per gallon of flow
billed varying from around $0.035 for the large users and to around $0.35 for the smaller users.
The committee recommended reducing the fixed component to $3,000 per year spread equally over the
9 users with the remaining charges based on metered ($47.00 / 1,000 gallons). This reduces the
disparity to roughly $0.05 / gallon for large users and $0.11 / gallon for small users. The Committee also
recommended that fees be increased by the amount of depreciation on the system to provide for a
replacement reserve noting that without an increase there will not be sufficient funds available for the
planned replacement of the drainfield blower in 2018 or the lift station and drainfield pumps in 2022.
The Committee was in agreement that the proposed changes be included in the budget when presented
to the Council and that the users be notified of the proposed changes.
Issue:
Should the rate structure be changed for billings beginning on January 1, 2018?
Should the rate be changed to provide for an equipment replacement reserve?
Proposal Details:
The current ordinance provides for a quarterly charge of $342.54 with a volume charge of $15.28 /
1,000 gallons of metered flow. The recommendation would be to reduce the quarterly charge to
$83.33 with a volume charge of $47.00 / 1,000 gallons of mete red flow. This change to having most
of the charge be based on usage would also have the benefit of encouraging water conservation. A
history of the charges and alternatives follows this report.
Fiscal Impact:
Below are summaries of the projected cash flow comparing the current rates and the new rates
which provide for a reserve for replacement. It is important to note that based on the projected
cash flow, there will not be sufficient funds to replace the drainfield blower in 2018 in accordance
with the Capital Improvement committee recommendation. It should also be recognized that the
CIP provides for the replacement of the lift station and drainfield pumps in 2022, which is 10 years
after installation. If all of the pumps needed to be replaced by the end of 2022, there would not be
sufficient funds available.
5-year projection based on the current rates
5-year projection based on the increased charge for equipment replacement.
Uptown Water Meter Readings
Year Café & StoreSchmitt MallEdward JonesLandmarkRepair GarageElim ChurchGammelgardenWarming HouseCommunity BuildingTotal Water Use2015 240 99 13 12 8 277 56 26 194 923
2016 188 166 12 2 18 310 44 7 470 1217
2017 180 159 11 1 20 281 42 23 210 927
average 203 141 12 5 15 289 47 19 291 1022
2015 0.031$ 0.053$ 0.305$ 0.328$ 0.484$ 0.029$ 0.082$ 0.160$ 0.035$ 0.052$
2016 0.035$ 0.038$ 0.328$ 1.889$ 0.224$ 0.027$ 0.100$ 0.552$ 0.023$ 0.043$
2017 0.036$ 0.039$ 0.357$ 3.781$ 0.203$ 0.029$ 0.105$ 0.179$ 0.033$ 0.052$
average 0.034$ 0.043$ 0.330$ 1.999$ 0.304$ 0.028$ 0.096$ 0.297$ 0.030$ 0.049$
2015 2,707$ 1,920$ 1,445$ 1,436$ 1,413$ 2,913$ 1,681$ 1,515$ 2,451$ 17,481$
2016 2,421$ 2,293$ 1,436$ 1,379$ 1,471$ 3,100$ 1,614$ 1,409$ 3,993$ 19,117$
2017 1,779$ 1,691$ 1,072$ 1,032$ 1,110$ 2,201$ 1,204$ 1,125$ 1,902$ 13,117$
2015 4,292$ 1,771$ 233$ 215$ 143$ 4,954$ 1,002$ 465$ 3,470$ 16,544$
2016 3,362$ 2,969$ 215$ 36$ 322$ 5,544$ 787$ 125$ 8,406$ 21,766$
2017 3,219$ 2,844$ 197$ 18$ 358$ 5,026$ 751$ 411$ 3,756$ 16,579$
2015 4,818$ 1,987$ 261$ 241$ 161$ 5,561$ 1,124$ 522$ 3,895$ 18,569$
2016 3,774$ 3,332$ 241$ 40$ 361$ 6,223$ 883$ 141$ 9,435$ 24,431$
2017 3,614$ 3,192$ 221$ 20$ 402$ 5,641$ 843$ 462$ 4,216$ 18,610$
333$ 333$ 333$ 333$ 333$ 333$ 333$ 333$ 333$ 3,000$ fixed
3,509$ 2,447$ 208$ 87$ 265$ 5,009$ 819$ 323$ 5,044$ 17,700$ variable
3,842$ 2,780$ 541$ 420$ 599$ 5,343$ 1,153$ 657$ 5,377$ 0.047$ variable rate
0.052$ 0.054$ 0.124$ 0.230$ 0.107$ 0.051$ 0.067$ 0.096$ 0.051$ $ / gallon billed
2015 1,135$ 861$ (904)$ (1,016)$ (814)$ 2,429$ (528)$ (859)$ 2,926$
2016 1,421$ 487$ (895)$ (959)$ (872)$ 2,243$ (461)$ (753)$ 1,384$
2017 142$ (300)$ (801)$ (822)$ (811)$ 470$ (628)$ (797)$ 787$
average daily flow
Current cost per gallon of flow billed
annual charge if billed based on usage at average cost of $0.049 / gallon
annual charge if billed on usage at a cost of $0.055 / gallon (includes depreciation)
Charges billed (2017 3 quarters)
charge if a $3,000 fixed component was used
different from current
\\HPSERVER17\SharedDocs\Departments\Wastewater\sewer systems\Uptown Sewer and water\Meter Readings\Uptown Water Meter Reads Consolidated.xlsx
$- $0.010 $0.020 $0.030 $0.040 $0.050 $0.060 $0.070 $0.080 $0.090 $0.100 $0.110 $0.120 $0.130 $0.140 $0.150 $0.160 $0.170 $0.180 $0.190 $0.200 $0.210 $0.220 $0.230
COST PER GALLON OF BILLED FLOWFIXED COST CHARGE
UPTOWN SEWER SYSTEM - FIXED CHARGE OPTIONS
High Medium Low
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
ANNUAL COST TO USERFIXED COST CHARGE
UPTOWN SEWER - FIXED CHARGE OPTIONS
High Medium Low
UPTOWN SEWER SYSTEM (FUND 612)
2016 2017 2017 2018
Actual Projected Adopted Proposed BUDGET NOTES AND HIGHLIGHTS
Revenue 19,161$ 18,000$ 18,000$ 20,800$
Expenditures 21,781$ 20,500$ 20,400$ 20,800$
Net Revenues (Expenditures)(2,619)$ (2,500)$ (2,400)$ -$
Add Depreciation 4,877$ 5,000$ 5,000$ 5,000$
Less Loan repayment to Capital Imp Fund (2,639)$ (2,639)$ (2,639)$ (2,639)$
Less Capitalized expenditures -$ -$ -$ (3,000)$
Cash Flow (382)$ (139)$ (39)$ (639)$
Balance January 1 163,572$ 168,799$ 162,809$ 162,731$
Balance December 31 162,809$ 168,521$ 162,731$ 161,453$
Cash balance 2,782$ 2,643$ 2,743$ 2,004$
Intergovernmental Revenues
33422 Other State grants 39$
Total Charges for Services -$ -$ -$ -$
36100 Special Assessments
Other Income
36210 Interest Income 5$
36250 Misc. Refunds
Total Other Income 5$ -$ -$ -$
Proprietary Fund Revenues
34401 Sewer Charges & Connection Fees 19,117$ 18,000$ 18,000$ 20,800$ change in rate structure and rate increase proposed
Total Proprietary Fund 19,117$ 18,000$ 18,000$ 20,800$
Total Uptown Sewer Fund 612 19,161$ 18,000$ 18,000$ 20,800$
FUND BALANCE SUMMARY
REVENUES
UPTOWN SEWER SYSTEM (FUND 612)
2016 2017 2017 2018
Actual Projected Adopted Proposed BUDGET NOTES AND HIGHLIGHTS
FUND BALANCE SUMMARY
Personnel Services
101 Regular Wages & Salaries 7,331$ 7,200$ 7,000$ 7,200$ PW director - 104 hours, PW staff - 156 hours
102 OT Reg. Wages -$ -$ -$ -$
120 Pension expense 2,912$ -$ -$ -$
121 PERA Coord. Employer Contribution 544$ 500$ 500$ 500$
122 FICA Employer Contribution 436$ 400$ 500$ 400$
126 MEDICARE Employer Contribution 101$ 100$ 100$ 100$
131 Health Insurance Employer Contribution -$ -$ -$ -$ Paid by Public Works General Fund budget
133 Life Insurance Employer Paid -$ -$ -$ -$ Paid by Public Works General Fund budget
151 Workers Comp Insurance Premium 181$ 200$ 200$ 200$ 8% increase
Total Personnel Services 11,505$ 8,400$ 8,300$ 8,400$
Materials & Supplies
200 Office Supplies 15$ 100$ 100$ 100$
210 Operating Supplies & Equipment -$ 200$ 300$ 200$
240 Small Tools & Minor Equipment 100$
Total Materials & Supplies 15$ 400$ 400$ 300$
Contractual Services
303 Engineering Services 204$ 300$ -$
309 Software Support & Maintenance -$ 100$ 100$ 100$
317 Employee Training 752$ 500$ 700$ 700$
322 Postage 15$ 100$ 100$ 100$
334 Licenses & Permits 200$ 200$ 200$ 200$
361 Liability/Property Insurance 218$ 200$ 200$ 300$ 4% increase
381 Utilities 1,756$ 1,900$ 1,900$ 2,000$ 2.0% increase
385 Sewer (Pumping)486$ 1,600$ 1,000$ 1,500$ Vacuum Excavation - pumping
386 Operation & Maintenance 950$ 1,000$ 1,500$ 1,200$ Pace analytical quarterly testing
404 Machinery & Equipment Repair 803$ 500$ 500$ 500$ aeration blower motor & installation
420 Depreciation Expense 4,877$ 5,000$ 5,000$ 5,000$
438 Misc Contractual -$ 300$ 500$ 500$
Total Contractual Services 10,260$ 11,700$ 11,700$ 12,100$
Total Uptown Sewer (612)21,781$ 20,500$ 20,400$ 20,800$
Drainfield blower 3,000$ replacement scheduled for 2017, 2020, and 2022
Replace Uptown pump 1 replacement scheduled for 2022
Replace Uptown pump 2 replacement scheduled for 2022
Replace Drainfield pump 1 replacement scheduled for 2022
Replace Drainfield pump 2 replacement scheduled for 2022
-$ -$ -$ 3,000$
EXPENDITURES
CAPITAL EXPENDITURES