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l <br />ed" i i e,ery nv�i�o sx, +, t Ana , �tCf, as w ssrr,ax <br />NVOIf'� 6 i 1424- 3 r 2 n I uX h 11 J 2 9,d,S29 <br />Memorandum <br />Date: January 17, 2020 <br />To: Honorable Mayor and City Council Members <br />Through: Mark R. Statz, City Administrator/City Engineer <br />From: Bruce DeJong, Finance Director <br />Item: Storm Water Fund Capital Improvement Plan CIP Discussion <br />City staff would like to discuss the Storm Water Fund cash flow with the City Council on <br />a similar basis as our discussion of the Water Fund and Sewer Fund. <br />Staff has included two large sheets listing all revenues and expenditures for cash flow <br />purposes. There are significant assumptions included in the documents, so we will lay <br />them out for discussion purposes. <br />• Storm Water charges are held steady in Scenario 1. Storm Water Charges <br />increase by 4% per year in Scenario 2. Storm Water Charges increase by 4% per <br />year in Scenario 2. Storm Water Charges increase by 5% per year in Scenario 3. <br />• Interest is projected at 1% of the previous year ending balance. <br />• All other items are estimated for 2019 and inflated by 3% for each year after. <br />• CIP Cash Outlay is included in the cash flow since it is actual cash outlay. It <br />doesn't show on the annual financial statements. In accrual accounting, the <br />purchase of a new capital item is the exchange of one asset (cash) for another <br />asset (infrastructure). The expense is recognized on the financial statements <br />through the depreciation calculated over the projected life of the asset.. <br />• Pension Expense and Depreciation are moved to the bottom of the sheet since <br />they are not cash expenditures. <br />• Depreciation is currently just under $105,000 annually and is adjusted in the <br />future calculations to reflect new capital outlays depreciated over 20-40 years. <br />This fund has a lot of assets that are difficult to determine a maintenance schedule. We <br />have little information on which to determine an average level of pond sedimentation. <br />The speed at which city ditches fill up is not clear and can be easily disrupted by <br />neighborhood actions such as leaf or yard waste dumping. Rain gardens have not worked <br />