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(3 Stantec <br />To: Centerville City Council From: Mark Statz <br />1880 Main St 2335 Highway 36 West <br />Centerville, MN 55038 St. Paul, Minnesota 55113 <br />File: City of Centerville - General Date: February 28, 2017 <br />Engineering <br />Reference: 2017 Storm Water Fund Analysis <br />Memo <br />At the direction of the City Council, we have performed a brief analysis of the city's Storm Water <br />Fund. In reviewing the annual budget, we focused on the amount being set aside for depreciation, <br />pond dredging and other capital outlay. We did not review other budgetary line items such as <br />wages, benefits and other department expenses. <br />Current Budget <br />The 2017 budget includes $25,000 for pond dredging and $33,000 in depreciation. No money is <br />budgeted for capital projects. Below is a summary of the previous budgets <br />Year Revenues Expenses Difference <br />2014 $97,538 $103,828 ($6,290) <br />2015 $105,167 <br />2016* $104,000 <br />2017* $106,000** <br />*Budgeted figures <br />**Based on current rates <br />$83,248 $21,919 <br />$108,200 ($4,200) <br />$106,000 ($0) <br />Our analysis of the depreciation schedule considered ponds as a depreciable asset, thus combining <br />the two line items (pond dredging and depreciation). The total, annualized depreciation (or <br />replacement cost), of all storm water infrastructure, we estimate to be $148,000. This compares to <br />the $58,000 currently in the budget for similar items. If the city were to fully fund depreciation, based <br />on our estimate, the necessary, resulting budget would be $196,000 (a $90,000 or 85% increase). <br />Clearly, an increase of this magnitude is not economically viable in one year, or even over the <br />course of a few short years. Our recommendation would be to endeavor to raise the storm water <br />utility rates incrementally, while reviewing the city's policy on funding depreciation in their utility <br />funds. <br />Attachment: Storm Water Fund Budget Sheet <br />Storm Water Utility Depreciation Schedule <br />C. Mike Ericson, Paul Palzer, Elie Paulseth, Jonathan Simmons <br />Design with conwnunity in mind <br />tb c:\users\tbender\appdata\local\microsoft\windows\temporary Internet files\content.outlook\yl npno7e\2017 stone water fund analysis (2).d— <br />