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<br />Honorable Mayor and Councilmembers <br /> <br />May 4, 1988 <br /> <br />Water and Sewer Utility Fund Operations <br /> <br />Since its inception the Water and Sewer Utility Fund has experienced the <br />following financial trend: <br /> <br />Operating <br />Year Loss <br /> <br />Net Income (Loss) <br />Including Non- <br />operating Items <br />and Transfers <br /> <br />Accumulated Retained <br />Earnings (Deficit) <br />Reserved <br />for Future <br />Construction Unreserved <br /> <br />1985 <br />1986 <br />1987 <br /> <br />$ (7,035) <br />(39,143) <br />(55,939) <br /> <br />$ (7,035) <br />194,489 <br />(36,563) <br /> <br />$ <br />233,458 <br />233,458 <br /> <br />$ (7,053) <br />(46,022) <br />(82,585) <br /> <br />The negative operating trend is attributed to the infancy stage of the <br />utility operations. I It would be unreasonable to adjust utility rates to <br />cover the costs and related overhead of the operations at this stage. As <br />the utility operatt'ons expand, utility rates should be reviewed to prop- <br />erly charge for operating costs and to eventually absorb start-up costs <br />(deficits) which are currently being incurred at this stage. <br />, <br /> <br />Graphic Information! <br /> <br />, <br />Micro computers are utilized extensively while performing audits of City <br />records. A beneficial result is that certain trend analysis and analyti- <br />cal relationship information can be obtained. The following pages contain <br />certain generalized graphs produced from our electronic workpapers which <br />may be of interestl to you. Some of this information does appear in the <br />various schedules of the City's financial statements while some infor- <br />mation is from other sources which may not have been subject to our audit <br />procedures. i <br />