HomeMy WebLinkAbout5.F.7. 2011 Sewer and Storm Utility Budgets and RatesCITY OF SHAKOPEE
Memorandum
TO: Mayor and Council
Mark McNeill, City Administrator
FROM: Gregg Voxland, Finance Director
SUBJ: 2011 Sewer and Storm Utility Budgets and Rates
DATE: October 22, 2010
Proposed for inclusion in the 2011 Fee Schedule are rate changes for the Sewer Fund and the
Surface Water Fund. Council has reviewed the operational budget for the two funds which is
similar to this year with increasing costs to maintain the storm drainage system. The capital
expenditures for the funds were reviewed with the Capital Improvement Plan.
Financial position (cash and investments) of the utility funds are measured against the
accumulated depreciation of the assets in those funds. This excludes the trunk account portion
of monies in the funds. Council was advised by former auditors Delloitte and Touche to have at
least as much cash saved as accumulated depreciation to pay for at least part of the
replacement cost of depreciating assets.
Sewer Fund
It is proposed that the base fee of $7.00 per billing cycle be decreased to $5.00. This would be a
decrease in revenue of about $210,000. Decreasing this part of the rate structure has a greater
relative benefit to small users (residential accounts) than larger users. This supports
conservation efforts by relying more on the flow fee. The Sewer Fund has a healthy cash
balance.
It is recommended to increase the flow charge for sewer. The 2010 flow charge is $1.98 per
thousand gallons and it is recommended to increase it to match the charge the city pays to treat
the sewage, which is $2.03 per thousand gallons. Metropolitan Council (MCES) is raising the
treatment charge from $1.98 per thousand gallons to $2.03 per thousand gallons for an
increase of 2.5 %. The treatment cost for 2011 is budgeted at $2,478,713 compared to
$2,318,450 for 2010.
With the proposed flat rate decrease, an average residential user's bill would go from $20.86
per month to $19.21 total for both flat fee and flow fee based on 7,000 gallons per month (8%
decrease). The rate for Whispering Oaks subdivision is higher because it flows to the City of
Savage collection system and pays City of Savage rates.
Metro SAC credits for Rahr coming off line are shown in the budget. An estimated $500,000 is
shown. The city will be /has been receiving this money ($3,000,000) over a number of years as
SAC charges are collected with building permits but because of the credit, the city keeps the
money instead of sending it to the Met Council. The money is included in the Sewer Fund. By
statute, the money needs to be used for sewer purposes.
j
Sewer Fund Alternatives
1. Maintain same base rate as 2010.
2. Decrease base rate $2.00.
3. Maintain same flow rate as 2010.
4. Charge same flow rate as MCES ($2.03).
5. Adopt different rates.
Surface Water (Storm) Fund
A decrease in the rate is recommended at this time. The current rate per month is $2.69 for a
residence. A 15% decrease from $2.69 to $2.29 is recommended based on the cash position of
the fund at this time. A single family house is one third of an REF (residential equivalence
factor).
This fund also has a healthy cash balance .
Surface Water (Storm) Alternatives
1. Maintain rates the same as 2010.
2. Decrease Storm rates 15 %.
3. Adopt different rates.
Recommendations
1. Reduce the flat rate for sewer by $2.00 and increase the flow rate $0.05.
2. Reduce storm rate by 15 %.
Action requested
Move to accept the Sewer and Surface Water Funds budgets and direct staff to include in the
2011 Fee Schedule the rates of:
$5.00 for the Sewer base rate. Sewer flow fee of $2.03 per 1,000 gallons of water
use /flow and $3.63 for those accounts served by City of Savage sewer system. A flat
fee for unmetered residential accounts of $19.21.
$6.87 per residential equivalent factor per acre per billing cycle for the Surface Water
Fund.
J
rf gg Voxland
Finance Director
TRUNK:
Cash Balance January 1
Revenue - City SAC
Revenue - Trunk Charges
Expenditures per List - SEWER -T
Excess (Deficiency)
Balance Available 12131
BASE:
Cash Balance January 1
Revenue - Monthly Flat Fee
Revenue - Flow charges
Metro SAC Credits
Revenue - Interest
Operation Expenses
Treatment Costs
Capital Equipment
Transfer to General Fund
Expenditures per List - SEWER -B
Excess (Deficiency)
Balance Available 12131
Total Balance 12/31
Sanitary Sewer Fund
Projected Cash Levels
2011 -2015 Capital Improvement Program
City of Shakopee, Minnesota
2011 2012 2013
$ 1,014,200 $
100,000
20,000
120,000
1,134,200
13,541,400
598,000
1,928,000
500,000
363,890
(669,090)
(2,478,710)
(55,000)
(50,000)
(980,000)
(842,910)
12,698,490
$ 13,832,690 $
1,134,200 $
80,000
20,000
(180,000)
(80,000)
1,054,200
12,698,490
598,000
1,985,840
500,000
345,820
(679,340)
(2,553,000)
(250, 000)
(50,000)
(390,000)
(492,680)
12,205,810
13,260,010 $
1,054,200 $
80,000
20,000
(170,000)
(70,000)
984,200
12,205,810
598,000
2,045,415
300,000
331,500
(713,307)
(2,629,590)
(50,000)
(240, 000)
(357,982)
11,847,828
12,832,028 $
Accumulated Depreciation $ 9,912,418 $ 10,662,418 $ 11,412,418
2014
984,200 $
80,000
20,000
(200,000)
(100,000)
884,200
11,847,828
598,000
2,106,778
320,800
(748,972)
(2,708,478)
(50,000)
(20, 000)
(501,872)
11,345,956
12,230,156 $
2015
884,200
80,000
20,000
100,000
984,200
11,345,956
598,000
2,169,981
305,750
(786,421)
(2,789,732)
(50,000)
(275,000)
(827,422)
10,518,534
11,502,734
R5509BUD SHOO1PV CITY OF SHAKOPEE
By Company (pb), Object (2 Yr Bdgt) - Portrait Budget Report
Fiscal Period: 9 / 10
Level Of Rollup 5
2008 2009 9/30/2010 2010 2011 2012
Actual Actual YTD Final Proposed Proposed
Object Code / Description Amount Amount Actual Budget Budget Budget
07100 SEWER FUND
4000 REVENUES AND EXPENDITURES
4001 REVENUES
4100 SPECIAL ASSESSMENT 22,579- 19,358- 25,330- 15,000- 10,000- 8,000-
4500 CHARGES FOR SERVICE 2,556,259- 3,466,524- 2,181,087- 2,716,000- 3,146,000- 3,183,840-
4830 MISCELLANEOUS 777,230- 544,252- 187,365 600,000- 353,890- 339,920-
4970 CAPITAL CONTRIBUTIONS 603,716- 176,647-
4001 REVENUES 3,959,785- 4.206.781 2,019,053- 3,331,000- 3,509,890- 3,531,760-
6000 EXPENDITURES
6001 WAGES & BENEFITS 232,208 259,670 200,484 272,730 274,410 292,550
6200 SUPPLIES AND SERVICES 2,365,161 2,415,223 1,987,667 2,669,870 2,873,390 2,939,790
6500 DEPRECIATION 707,395 718,027 750,000 750,000 750,000
6600 MISCELLANEOUS 5,200 2,500
6700 CAPITAL OUTLAY 184,952 55,000 55,000 250,000
6000 EXPENDITURES 3,304,764 3,398,120 2,375,603 3,747,600 3,952,800 4,232,340
8005 TOTAL TRANSFERS IN
8050 TOTAL TRANSFERS OUT
8052 TRANSFERS OUT
8050 TOTAL TRANSFERS OUT
8100 GAIN /LOSS ON DISPOSAL OF ASSET
8101 PROCEEDS FROM SALE (GAIN /LOSS)
8100 GAIN /LOSS ON DISPOSAL OF ASSET
4000 REVENUES AND EXPENDITURES
07100 SEWER FUND
39,819 204,782
39,819 204,782
4,000
4,000
50,000
50,000
11/4/2010 9:22:35
Page - 1
50,000 50,000
50,000 50,000
611,202- 603,878- 356,550 466,600 492,910 750,580
611,202- 603,878- 356,550 466,600 492,910 750,580
TRUNK:
Cash Balance January 1
Revenue - Trunk Charges
Expenditures per List - Storm -T
Excess (Deficiency)
Balance 12/31
BASE:
Cash Balance January 1
Revenue - User Fees
Revenue - Grant
Revenue - Interest
Operation Expenses
Capital Equipment
MDOT Payment
Transfer to General Fund
Expenditures per List
Expenditures per List - Grant
Excess (Deficiency)
Balance 12/31
Total Balance 12/31
Accumulated Depreciation
Surface Water Fund
Projected Cash Levels
2011 -2015 Capital Improvement Program
City of Shakopee, Minnesota
2011
$ 5,143,510
20,000
20,000
5,163,510
12,211,420
1,091,000
433,870
(759,900)
(120,000)
(50,000)
(525,000)
69,970
12,281,390
$ 17,444,900 $
$ 10,121, 760 $
2012
$ 5,163,510 $
20,000
(410,000)
(390,000)
4,773,510
12,281,390
981,900
436,120
(780,610)
(50,000)
587,410
12,868,800
17,642,310
10,801,760
2013
4,773,510 $
20,000
20,000
4,793,510
12,868,800
981,900
441,060
(819,641)
(275,000)
(50, 000)
(50,000)
228,320
13,097,120
$ 17,890,630 $
$ 11,481,760
2014 2015
4,793,510 $ 4,813,510
20,000 20,000
20,000 20,000
4,813,510 4,833,510
13,097,120 12,485, 667
981,900 981,900
500,000
447,270 432,480
(860,623) (903,654)
(50,000) (50,000)
(1,630,000) (310,000)
(611,453) 150,726
12,485,667 12,636,393
17,299,177 $ 17,469,903
R55098UD SH001PV CITY OF SHAKOPEE
By Company (pb), Object (2 Yr Bdgt) - Portrait Budget Report
Fiscal Period: 9 / 10
Level Of Rollup 5
8005 TOTAL TRANSFERS IN
8050 TOTAL TRANSFERS OUT
8052 TRANSFERS OUT 72,333 149,340
8050 TOTAL TRANSFERS OUT 72,333 149,340
50,000
50,000
11/4/2010 10:46:55
Page - 1
2008 2009 9/30/2010 2010 2011 2012
Actual Actual YTD Final Proposed Proposed
Object Code / Description Amount Amount Actual Budget Budget Budget
07300 SURFACE WATER FUND
4000 REVENUES AND EXPENDITURES
4001 REVENUES
4500 CHARGES FOR SERVICE 1,379,821- 1,405,560- 797,765- 1,239,000- 1,111,000- 1,111,000-
4830 MISCELLANEOUS 820,293- 537,239- 218,439 600,000- 386,000 380,000-
4970 CAPITAL CONTRIBUTIONS 13,800- 144,420-
4001 REVENUES 2,213,915- 2,087,220- 579,326- 1,839,000- 1,497,000- 1,491,000-
6000 EXPENDITURES
6001 WAGES & BENEFITS 308,800 363,122 232,665 342.850 336,520 363,920
6200 SUPPLIES AND SERVICES 478,939 248,099 374.944 361,220 423,380 416,690
6500 DEPRECIATION 647,637 653,041 680,000 680,000 680,000
6600 MISCELLANEOUS 80
6700 CAPITAL OUTLAY 250,000
6000 EXPENDITURES 1,435,376 1,264,263 607,689 1,384,070 1,689,900 1,460,610
50,000 50,000
50,000 50,000
8100 GAIN /LOSS ON DISPOSAL OF ASSET
4000 REVENUES AND EXPENDITURES 706,205- 673,617- 28,363 404,930- 242,900 19,610
07300 SURFACE WATER FUND 706,205- 673,617- 28,363 404,930- 242,900 19,610