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