Agenda Packets - 2016/10/03 - Laserfiche WebLink

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Item No: 2 Meeting Date: October 3, 2016 Type of Business: Work Session Administrator Review: _____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mark Beer, Finance Director Item Title/Subject: Other Funds Budgets for 2017 Attached are the budgets for the Other Funds (Special Revenue, Capital Projects, and Enterprise) for your consideration. The Council has reviewed the General Fund and will again in November or December. The Special Revenue, 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 $2 per quarter per connection. Variable rates would stay the same for 2017. Staff is also recommending that the rate tiers for variable water use be adjusted to reflect lower average use. This would add less than $1 per quarter to the average user. Overall water rates would increase $1 per month or $12 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 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 2.19% for 2017. Future increases of 6% for 2018, 5% for 2019, and 4% foe 2020 will help stabilize the sewer fund. The Storm Water fund does not require an increase in 2017, an increase in 2018 should be considered. This will begin to fund the sediment removal from Silver View pond that will occur in approximately 2026. 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 anticipates a $.25 per quarter increase in 2017 thru 2019 to offset higher electrical costs for the approximately 275 street lights that we pay Xcel energy for. Trail lighting was converted to LED in 2015 and additional trail lights will be added in 2016 for trail segments 6, 10, and 11. Electric costs will go down but this accounts for only about 12% of the electric charges.