11-30-2020 Special Council Work Session Packet

Home Search

Along with the General Fund, the City Council adopts annual budgets for the Water and Sewer Funds. The Water and Sewer Funds are enterprise funds. Enterprise funds are funded by user fees instead of an ad valorem tax levy. User fees fund operating expenses (personal services, supplies, other services and charges, contractual services) depreciation, and capital outlay. The proposed 2021 Water and Sewer fund budgets are $1,523,918 and $2,227,698, respectively. There is no proposed increase to user rates in 2021. Any increase in water and sewer sales is the result of additional users. City staff is currently working on a request for utility rate study services. The study is anticipated to take place in 2021. The last study occurred in 2012 and rates have not increased since 2015. Capital Improvement Plan The Capital Improvement Plan was introduced and reviewed at the November 2, 2020 City Council work session. The plan is a forecast of capital equipment to be financed with a capital tax levy through fiscal year 2030. The plan incorporates many strategic goals including: • Flat tax rate • Decreased debt • Interest savings • Financial and budgetary flexibility • Efficient use of cash reserves • Maintaining bond rating The plan is a new document in the City’s budgetary process, but allows the City to evaluate potential opportunities and risks and operate more proactively. As financial conditions change so can the plan. Staff has provided responses to inquiries regarding the public safety fleet from the November 2, 2020 work session as attachments to this memo. If the Council is supportive of the Capital Equipment Plan and requested 2021 capital equipment purchases, staff will incorporate it into the 2021 annual budget. General Fund Contingency The General Fund contingency is currently budgeted for $141,170. Typically, $75,000 is kept for unforeseen expenses, leaving $66,170 of extra contingency that could be budgeted elsewhere. In addition to the $66,170, the proposed budgeted still includes $12,500 for warming house attendants and $10,000 for Blue Heron Days. If the Council chooses to not continue recreation and special event programming in 2021, these dollars could also be budgeted elsewhere.