02/12/02 - Laserfiche WebLink

Home

utilities to the residents. Due to the relatively "young age" of the City's utility system, 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 those costs is the recovery of depreciation through the rate structures. The City is required to keep the accounting for those funds on the full accrual method, which means recognizing total depreciation, whether the City or developer installed systems. That is what staff has attempted to do in preparing the Proposed 2002 Enterprise Funds Budgets. Water Utility Fund It was estimated that total revenues for 2002 would be approximately $746,712, which includes interest earnings of $120,000. Residents will be charged $22.95/quarter for water sales in 2002, a 4.8 percent increase over the 2001 rate of $21.90. The rate increase will offset the additional expenditures for the operation of a second water tower, which is in its first full year of operation. Expenditures are estimated to be at $521,227, which includes depreciation (non-cash) of $260,000. This results in a budgeted operating income for 2002, of $225,485 and would increase the retained earnings accordingly. Sewer Utility Fund It was estimated that total revenues for 2002 would be $639,324, which includes interest earnings of $40,000. These revenue projections incorporate a rate increase effective January 1, 2002, of 4.2 percent with rates increasing from $58.07/quarter per residential account to $60.50 per quarter. Expenditures are estimated to be at $581,664, which includes depreciation (non-cash) of $220,000. This results in a budgeted operating profit of $57,660. Street Light Utility Fund The Street Light Utility Fund was established late in 1992, and was meant to account for billings to property owners and payment of electrical service charges for subdivision street lights that are required in all new urban subdivisions. During 1997, the City Council approved the installation of additional priority lights. The amount incorporated into this budget is based on $5.16 per year for each residential property. The associated costs include the cost of operation and maintenance as well as depreciation. It was anticipated that total revenues for 2002 would be approximately $88,442, which includes interest earnings of $4,500. Expenditures are estimated to be at $63,340, which includes depreciation (non-cash) of $14,990. Recycling Utility Fund With the closure of the landfill in 1993, the primary funding source for the curbside recycling program was lost. It was anticipated that total revenues would be approximately $176,105 and include County grants of $42,100 and estimated interest earnings of $500. Those revenue projections incorporate a rate of $5.34/quarter that was adopted on December 14, 1999, and charged to residents for the periods of 2000-2002. Expenditures are estimated to be $176,060 and include the costs to administer the curbside recycling program and two clean-up days during 2002. Finance Committee/February 12, 2002 Page 2 of 7