Agenda - Council - 12/13/1994 - Laserfiche WebLink

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ADOPT 1995 ENTERPRISE FUND BUDGETS By: Jessie L. Hart, Finance Officer CASE # 4 Background: Enclosed for your review are the Proposed 1995 Enterprise Fund Budgets which cover the Water Utility Fund, Se, ver Utility Fund, Street Light Utility Fund and the Recycling Utility Fund. While formal budgets ~ re required to be prepared and adopted annually for the General Fund, this is not the case for Ente 3rise funds. f In order to esta flish fair rates for all of the utilities that the City operates, it is necessary to determine the ac ml cost of providing those utilities to the residents. Due to the "young age" of the City's utility sys~ ',m, it is extremely difficult to immediately realize profits, but it is important that any losses in the!first years of operation be representative of what the system actually costs. An important factor in these costs is the recovery of depreciation through the rate structures. We are required to kee} the accounting for these funds on the full accrual method which means recognizing total~depreciation, whether on City or developer installed systems. This is what we have attempted td do in preparing the attached Proposed 1995 Enterprise Fund Budgets. General Budge~ Information Some assumption's have been made that effect the manner in which we have prepared the attached budgets. It was Dudgeted in the General Fund that 180 new residential homes would be built during 1995. Thi~; is the number of additions that was utilized in preparing the attached budgets. Costs that can be ]ittributable to both the Water and Sewer Utility Funds are being split 80% to the Water Utility Fu~qd and 20% to the Sewer Utility Fund, with all other costs charged to the identifiable funds.~ Water Utility F~nd Utilizing 180 new!additions to the system for 1995, it is estimated that total revenues for 1995 will be approximatel~ $173,550 which includes interest earnings of $30,000. These revenue projections also i~corporate the rate increases that were adopted November 22, 1994 and become effective Januaryi 1, 1995. Expenditures are estimated to be at $166,226 which includes depreciation (non[cash) of $88,964. This results in a budgeted operating income for 1995 of $7,324, which is bleak even, and decreases the deficit in retained earnings to a projected $48,426 from $55,750. ~ It should also be noted that during 1992 the C~ty incorporated the Water Access Charge !WAC) for future demand on t~e system for expansion and modification. T.__he ~~sT.m~'~~ital account at Decemb~ r 3_3~1 ~15~9_4Js_pmj_e_cledqo-t:m~55:2;4430mnd~is_e_~ated t_oAncrease-to$786,400-~ X, q' ~du-7~n~---l'9957 TlS~isXms_e odd,the 180 additions as well an__4_igc_nr.ru:n'ating-the-r-a-te · inerea~t-h-at goes i~to effect on January 1, 'capital items dutlined on the notes are all items that were approved during the normal 1995 dgeting process. !No additional items are being requested for 1995. / 53