CC WORKSESSION 02041997 - Laserfiche WebLink

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MEMORANDUM DATE: January 27, 1997 TO: Mike Mornson, City Manager FROM: Roger Larson, Finance Director ITEM: 1997 WATER/SEWER RATES The Public Works Director has submitted a 1997 water budget of $369,950 and a sewer budget of $675,500. Based on the approval of those budgets, I have completed an analysis to determine if a rate increase is necessary to balance these operating budgets. The results are as follows: Water: In 1997, it is anticipated that St. Anthony will sell 41,000,000 cubic feet of water. Calculating the estimated 1997 water revenue (41,000,000 X $.90 divided by 100) shows a total income of $369,000. Expenditures of $369,950 plus the water filtration levy transfer of $15,200 requires revenues to total $385,150. Based on the fact that estimated water sales of $369,000, a deficit of ($16,150) exists and a moderate increase is necessary to balance the water operating budget. Recommendation: The present rate of $.90 per 100 cubic feet is not sufficient to balance the 1997 water operating budget. Projected expenditures exceed revenues by ($16,150), therefore, a rate increase of $ .04 cents per 100cf is necessary to fund the 1997 water operating budget. (41,000,000 X .94 divided by 100 = $ 385,400) Sewer: Currently, sanitary sewer disposal costs the residents $1.65 per 100 cubic feet. Based on Metro Waste's estimate of flowage, disposal for '97 is approximately 40,000,000 cubic feet. Using the current sewer rate when calculating the estimated '97 sewer revenue (40,000,000 X $1.65 divided by 100) shows a projected income of $660,000. This produces a deficit and indicates a rate increase is necessary to offset the 1997 sewer operating budget.