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3.b) 201 Sewer System 2013 Budget � � � l, •� Fr. SCANDIA StaffRenort Date of Meeting: October 23, 2012 To: City Council From: Kristina Handt, City Administrator Re: 201 Sewer System Budget for 2013 Agenda Item#: 3.b.) Background: A meeting of the Wastewater Advisory Committee was scheduled for September 20, 2012. Unfortunately, only four of the ten members were showed up so there was not a quorum present to take formal action. The group did continue to meet and discuss the items on the agenda. They reviewed the draft of the 2013 budget for the 201 system. Three members present supported increasing the rates by 5%, one member did not. The rates have been stable at $658.72 per year since 2009. The rate is paid in quarterly installments of$164.68. Issue: Review and make changes to, if necessary, the proposed 2013 budget for the 201 sewer system. Proposal Details: Revenues: Option 1-$66,429: This is the revenue projection for the current rates. Option 2-$70,663 Although there wasn't a quorum present at the Wastewater Advisory Committee meeting, staff has updated the budget numbers to reflect a 5%increase in rates. The new rate would be $691.68 per year or$17292 per quarter, an increase of$8.24 per quarter. 2013 proposed revenues from sewer charges are approximately$65,100. Expenses: Option 1- $57,101: This is the version of the expense budget that was originally presented to the council and appears in the budget books. Option 2-$57,101: I also adjusted items on the expense side because of some of the conversation on September 20th. Depreciation is budgeted to be $30,000, consistent with previous years; however there is a note that this is a non-cash item. Rather than lowering depreciation to $5,500 and having a note at the bottom that these funds will go to the reserves, the Council should know that any unspent funds at the end of the year will be added to the fund balance. If the 201 system performs to budget, approximately$19,062 will be added to the fund balance at the end of 2013. This number is arrived at by subtracting depreciation from expenses and then subtracting that number from the proposed revenues. Keeping depreciation in the budget allows for more accurate comparisons from year to year since the auditor will include depreciation in budget reports. However, an alternative would be to take the depreciation line out of the budget worksheet and just budget for a contingency/sundry line item, which if not spent would be added to the fund balance at the end of the year. Option 3-$Sl,601: A third alternative would be to not include a depreciation or contingency/sundry line item. This may be the easiest way to reflect the actual cash expenses on a yearly basis. However, it would be important for the Council to remember that it is acceptable and sometimes necessary,to have revenues exceed expenses in order to build up the fund balance. Fiscal Impact: The projected fund balance for the 201 sewer system as of 12/31/12 is $193,628.05. This is a decrease of$11,231 from 1/1/12. If rates remain the same the projected fund balance on 12/31/13 is $208,456.05. If rates are increased 5%, the projected fund balance on 12/31/13 is $212,690.05. Options: The budget for the 201 sewer system will be finalized and adopted on December 18�' along with the rest of the budget funds. The Council should provide direction to staff on whether a rate increase should be included and if so how much? Recommendation: At this time, staff recommends that rates be increased by 5%. 'There will likely be a number of updates needed in the near future such as pumps, control panels, and lift stations so increasing the fund balance is necessary. 2012 Draft Budget �w}��.�,�� 201 PROJECT SEWER FUND 602 REVENUE 2009 2010 2011 2012 08/31/12 2012 2073 Actual Actual Actual Adopted Year-to-Date Estimated Proposed Account Description Revenue Revenue Revenue Revenue Revenue Revenue Revenue 36100 Special Assessments 3 763 5 475 4 258 5,000 1,904 3,704 5,000 Other Income 36210 Interestlncome 1,441 1,358 1,205 725 725 563 36250 Misc.Refunds 17 Total Other Income 1,458 1,358 1,205 725 0 725 563 Proprietary Fund Revenues 34401 SewerCharges 59,652 61,236 61,945 62,000 38,882 62,000 65,100 37250 Sewer Connection/Reconnection Fees 0 Total Proprietary Fund 59 652 61 236 61,945 62,000 38,882 62,000 65,100 Total 201 Project Sewer Fund 602 64,873 68,069 67,407 67,725 40,786 _ _ 66,429 70,663 1 of 1 201 SEWER REV 4:36 PM 10I17I2012 2013 Draft Budget O�v�r1 ' 201 SEWER PROJECT(FUND 602)EXPENSE 2009 2010 2011 2012 08/31/12 2012 2013 Change Actual Actual Actual Adopted Year-to-Date Estimated Proposed '12-'13 Account Description Expenses Expenses Expenses Budqet Expdtrs Expdtrs Budget Budget Notes: Materials 8 Supplies 200 Office Suppiies 29 100 75 203 Printed Forms 8 Papers 71 #DIV/0! 210 Operating Supplies&Equipment 853 853 200 221 Equipment Parts 240 Small Tools 8 Minor Equipment 4,445 4,445 Total Materials 8 Supplies 71 5,327 5,398 275 Contractual Services 303 Engineering Services 17,486 17,486 #DIV/0! 304 Legal Services 528 1,056 #DIV/0! 311 Permit Fees 855 505 680 855 505 680 1,316 53.92% 321 Telephone 962 814 962 900 518 888 824 -8.44°/a 322 Postage 176 -100.00°/a 361 Liability/Property Insurance 1,938 1,299 2,756 2,839 1,638 1,638 1,719 -39.44% 381 Utilities 1,625 1,446 1,757 3,500 1,071 1,800 1,800 -48.57% 385 Sewer Pumping 20,236 4,510 10,000 13,700 -32.30% 1 386 Operation&Maintenance 24,650 32,418 54,091 21,661 18,403 21,661 13,376 -38.25% 2 404 Machinery&Equipment Repair 1,449 5,000 #DIVIO! 3 414 Equipment Rental 135 #DIV/0! 420 Depreciation Expense 30,000 30,000 30,000 5,500 30,000 5,500 4 438 Misc Contractual 938 742 360 360 6,325 #DIV/0! 5 Total Contractual Services 60,030 67,420 90,987 55,667 46,468 91,069 49,695 -10.73% Capital Outlays 570 Office Equipment 2868 2,868 2,868 #DIVIO! Total Capital Outlays 2,868 2,868 2,868 #DIVIO! Transfers 720 Operatinq Transfers 3,600 3,645 3,645 2,825 2,825 2,825 7,131 152.42% 6 Total Transfers 3,600 3,645 3,645 2,825 2,825 2,825 7,131 152.42% Tota1201 Sewer Project(602) 63,630 71,065 94,703 61,360 57,488 102,160 57,101 -6.94°/a Notes: 1.Pumping 2.EcoCheck contract, 3.Replace 3 pumps 4.Depreciation amount as determined by auditor in previous years 5.Locater calls,Electricians,Well Testing 6.Transfer to General Fund for staff time,postage&supplies �of� 201 SEWER 434 PM 10/17/2012 , 2013 Draft Budget 0 p��'�"� 201 SEWER PROJECT(FUND 602)EXPENSE 2009 2010 2011 2012 08/31/12 2012 2013 Change Actual Actual Actual Adopted Year-to-Date Estimated Proposed '12-'13 Account Description Expenses Expenses Expenses Budqet Expdtrs Expdtrs Budqet Budget Notes: Materials&Supplies 200 Office Supplies 29 100 75 203 Printed Forms&Papers 71 #DIV/0! 210 Operating Supplies&Equipment 853 853 200 221 Equipment Parts 240 Small Tools&Minor Equipment 4,445 4,445 Continqencies/Sundry 5,500 Total Materials&Supplies 71 5 327 5,398 5,775 Contractual Services 303 Engineering Services 17,486 17,486 #DIV/0! 304 Legal Services 528 1,056 #DIV/0! 311 Permit Fees 855 505 680 855 505 680 1,316 53.92% 321 Telephone 962 814 962 900 518 888 824 -8.44% 322 Postage 176 -100.00°/ 361 Liability/Property Insurance 1,938 1,299 2,756 2,839 1,638 1,638 1,719 -39.44% 381 Utilities 1,625 1,446 1,757 3,500 1,071 1,800 1,800 -48.57% 385 Sewer Pumping 20,236 4,510 10,000 13,700 32.30% 1 386 Operation&Maintenance 24,650 32,418 54,091 21,661 18,403 21,661 13,376 -38.25% 2 404 Machinery&Equipment Repair 1,449 5,000 #DIV/0! 3 414 Equipment Rental 135 #DIVIO! 438 Misc Contractual 938 742 360 360 6,325 #DIV/0! 5 Total Contractual Services 30,030 37,420 60,987 50,167 46,468 61,069 44,195 -11.90% Capital Outlays 570 Office Equipment 2868 2 868 2,868 #DIV/0! Total Capital Outlays 2,868 2,868 2,868 #DIV/0! Transfers 720 Operatinq Transfers 3 600 3 645 3 645 2 825 2 825 2 825 7 131 152.42% 6 Total Transfers 3,600 3,645 3,645 2,825 2,825 2,825 7,131 152.42% Total 201 Sewer Project(602) 33,630 41,065 64,703 55,860 57,488 72,160 57,101 2.22% Notes: 1.Pumping 2.EcoCheck contract, 3.Replace 3 pumps 5.Locater calls,Electricians,Well Testing 6.Transfer to General Fund for staff time,postage&supplies 1 of 1 201 SEWER(2) 434 PM 10/17/2012 2013 Draft Budget (��h �"�� 201 SEWER PROJECT(FUND 602)EXPENSE 2009 2010 2011 2012 OS/31/12 2012 2013 Change Actual Actual Actual Adopted Year-to-Date Estimated Proposed '12-'13 Account Description Expenses Expenses Expenses Budget Expdtrs Expdtrs Budget Budget Notes: Materials&Supplies 200 Office Supplies 29 100 75 203 Printed Forms 8 Papers 71 #DIV/0! 210 Operating Suppiies&Equipment 853 853 200 22� Equipment Parts 240 Small Tools&Minor Equipment 4,445 4,445 Total Materials 8 Supplies 71 5,327 5,398 275 Contractual Services 303 Engineering Services 17,486 17,486 #DIV/0! 304 Legal Services 528 1,056 #DIV/0! 311 Permit Fees 855 505 680 855 505 680 1,316 53.92% 321 Telephone 962 814 962 900 518 888 824 -8.44% 322 Postage 176 -100.00% 361 Liability/PropeAy Insurance 1,938 1,299 2,756 2,839 1,638 1,638 1,719 -39.44% 381 Utilities 1,625 1,446 1,757 3,500 1,071 1,800 1,800 -48.57% 385 Sewer Pumping 20,236 4,5�0 10,000 13,700 -32.30°/ 1 386 Operation&Maintenance 24,650 32,418 54,091 21,661 18,403 21,661 13,376 -38.25% 2 404 Machinery R Equipment Repair 1,449 5,000 #DIV/0! 3 414 Equipment Rental 135 #DIV/0! 438 Misc Contractual 938 742 360 360 6,325 #DIV/0! 5 Total Contractual Services 30,030 37,420 60,987 50,167 46,468 61,069 44,195 -11.90% Capital Outlays 570 Office Equipment 2868 2,868 2,868 #DIV/0! Total Capital Outlays 2,868 2,868 2,868 #DIVlO! Transfers 720 Operatinq Transfers 3,600 3,645 3,645 2,825 2,825 2,825 7,131 152.42% 6 TotalTransfers 3,600 3,645 3,645 2,825 2,825 2,825 7,131 152.42% Total 201 Sewer Project(602) 33,630 41,065 64,703 55,860 57,488 72,160 51,601 -7.62% Notes: 1.Pumping 2.EcoCheck contract, 3.Replace 3 pumps 5.Locater calls,Electricians,Well Testing 6.Transfer to General Fund for staff time,postage&supplies 1 of 1 201 SEWER(3) 4:34 PM 10/17/2012