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Item No: 1 020 M0L--T1-MtSVVfE-W Meeting Date: October 5, sion 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: Review Special Revenue, Debt Service, Capital Projects and Enterprise Funds Draft Budgets for 2021 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 City adopted a base water charge or water availability charge in 2016. Staff is recommending that the base charge increase by $1 per quarter per connection. Variable rates would increase by a dime for the lowest tier in 2021. Overall water rates would increase $0.95 per month or $11.44 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 implementing major improvements to the water treatment plants and well control equipment with completion in 2021, 6 million in bonds will be issued in January of 2021 to pay for the project. The Sewer fund anticipates a 4% increase in user charges which will add $1.23 per month or $14.78 annually to a residential utility bill. Met Council Environmental Services (MCES) waste charges increased by only 0.15% for 2021 the smallest increase in years. We had increased volume but it was a lower percentage increase then other cities, some of our mitigation efforts are paying off. (CIPP) Future increases of 4% for 2022, and 4% for 2023 will help stabilize the sewer fund. The Storm Water fund will have a proposed $1 per quarter or $4 per year increase in 2021. This will continue to build a fund for 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 2021. Capital Projects Funds There are a number of capital projects that are anticipated to occur in 2021, the most prominent are Community Center upgrades including restrooms in the locker rooms, City Hall dais and conference room updates, and the design phase of Pleasant View and Spring Lake Road street improvements. There is a $75,000 transfer budgeted in the General Fund for 2021 to the Special Projects Fund.