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5.d) Staff Report-Designate Uptown Sewer Fund 612 as an Enterprise Fund � 11 � �v�\ � �� SCANDIA Staff Report Date of Meeting: June 18, 2013 To: City Council From: Colleen Firkus, Treasurer Re: Designate Uptown Sewer Fund 612 as an Enterprise Fund Agenda Item #: S.d) Background: The Uptown Sewer Fund 612 was created as a Special Revenue Fund in the 2012 budget. The purpose of creating a separate fund was to segregate the revenues and expenses for the operation of the Uptown Sewer System from the General Fund budget with the goal being to make this fund a self-supporting Enterprise Fund similar to the 201 Sewer Project Fund, and to accumulate funds needed for future repairs and eventual replacement of the system. The Uptown Sewer and Water department within the General Fund was eliminated and any remaining revenue and expenses connected with supplying water to Elim Church and Gammelgarden was moved to the Public Works Department budget. Upgrades to the Uptown Sewer System were completed in 2012 paid by an inter-fund loan from the Capital Improvement Fund. A rate structure was adopted for the Uptown users that included a 25%repayment of the loan over 15 years. Issue: Should the Council change the fund Uptown Sewer Fund designation from Special Revenue to Enterprise effective January 1, 2013? Proposal Details: Changing the fund designation allows the City to treat the Uptown Sewer System as a self- supporting proprietary fund. Both the 201 and Uptown Sewer funds were represented as Proprietary Funds in the 2012 Audit Report (p. 5). This type of fund is used to account for the City's business-type activities with financial information provided separately from the City's other major funds (p. 21-22). Fiscal Impact: All expenses and revenues related to the Uptown Sewer System will be recorded in Fund 612 as a self-supporting Enterprise Fund starting in 2013. Options: 1) Change Uptown Sewer Fun 612 designation from Special Revenue to Enterprise Fund. 2) Make no change to the fund. Recommendation: Option 1