Agenda Packets - 2017/10/02 - Laserfiche WebLink

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Item No: 2 M00 Meeting = 9�a - _ Meeting Date: October 2, 2017 V �w Type of Business: Work Session Administrator Review: k� City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Review Special Revenue, Debt Service, Capital Projects and Enterprise Funds Draft Budgets for 2018 Attached are the budgets for the Other Funds (Special Revenue, Debt Service, Capital Projects, and Enterprise) for your consideration. The Council has reviewed the General Fund and will again in November or December. The Special Revenue, Debt Service, Capital Projects, and Enterprise funds have not been reviewed. Enterprise Funds The City has and will continue to perform long term capital maintenance on the various utility systems. Many of the systems are aging and have received or will need attention in the next few years. This has driven the need for rate increases. The Water fund has experienced a steady decline in water use since 2007 as more residents and businesses conserve water. This has made it more difficult to generate enough revenue to support the water utility infrastructure. The City adopted a base water charge or water availability charge in 2016. Staff is recommending that the base charge increase by $4 per quarter per connection. Variable rates would increase by a dime for 2018. Overall water rates would increase $1.93 per month or $23 annually. Future base charges would increase by smaller amounts until the base charge is approximately 65% of revenue. This may mean that variable rates won't increase for several years but the base rate will. The City is planning major improvements to the water treatment plants and well control equipment beginning with design activities in 2018. Build out would occur in 2019 and 2020 with approximately 4.5 million in bonds to be issued to pay for the project. The Sewer fund anticipates a 6% increase in user charges which will add $1.50 per month or $18 annually to a residential utility bill. Met Council Environmental Services (MCES) waste charges increased by 6.59% for 2018. Future increases of 5% for 2019, and 4% for 2020 will help stabilize the sewer fund. The Storm Water fund will have a proposed $1 per quarter or $4 per year increase in 2018. This will begin to fund the sediment removal from Silver View pond that will occur in approximately 2026 or later. The cost estimate by the testing firm was $1 —2 million depending on the condition of the sediment. The City will be slip lining some of the storm sewers to extend their lives in the coming years and that could impact future rates also. The Street Light Fund will have no increase in 2018.