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WS Item 5 <br />WORK SESSION STAFF REPORT <br />Work Session Item 5 <br /> <br />Date: <br />November 4, 2013 <br /> <br />To: <br />City Council <br /> <br />From: <br /> Al Rolek <br /> <br /> <br />Re: <br /> 2014 Proposed Enterprise and Recreation Program Budgets <br /> <br />Background <br /> <br />Staff has prepared the attached 2014 proposals for the Water, Sewer and Recreation <br />Program funds. The proposed water fund budget, which funds the operations of the water <br />utility, is $1,214,173. This is $39,816 higher than the 2013 budget and includes $50,000 <br />for capital outlay projects. The proposed Sewer Fund budget, which funds operations of <br />the sanitary sewer utility, is $1,805,834. This is $75,437 more than the 2013 budget <br />primarily due to an increase in the MCES sewage treatment charges and an increase in <br />capital outlay needs. These budgets are entirely funded through utility fees and are <br />balanced, when needed, with utility fund reserve balances. Revenues for the water and <br />sewer funds have been projected according to the results of the utility rate study prepared <br />by Springsted, Inc. at 2% and 7%, respectively. A comparison using the current rates vs. <br />the rates recommended in the study is attached, as are the proposed 2014 budget requests. <br />If rates are not adjusted for 2014, it is projected that the water fund will need to use <br />$36,673 in reserves and the sewer fund would use $263,334, the third year in which <br />sewer fund reserves would be needed to fund operations and depreciation. A discussion <br />regarding utility rates will take place in tandem with the budget discussion. <br /> <br />The Recreation Program Special Revenue fund is established and budgeted to finance <br />recreation programs provided through the City. The activities of this fund are financed <br />entirely through recreation program fees. As directed by the City Council, the fees for <br />2014 will again generate an additional $10,000 to offset support staff expenses now <br />financed through the General fund. The Recreation Program fund budget projects a <br />$2,170 surplus after the General fund offset. <br /> <br />Requested Council Direction <br /> <br />Staff is looking for further City Council direction on the proposed 2014 budgets in <br />preparation for presenting a final budget at the December 9 Truth in Taxation hearing. <br /> <br />Attachments <br /> <br />Enterprise Fund Budget Comparison <br />2014 Proposed Water Fund budget <br />2014 Proposed Sewer Fund budget <br />2014 Proposed Recreation Program Special Revenue Fund budget <br /> <br /> <br />