2020-02-26 CC Packet - Laserfiche WebLink

Home Browse Search

Memorandum Date: February 26, 2020 To: Honorable Mayor and City Council Members Through: Mark R. Statz, City Administrator/City Engineer From: Bruce DeJong, Finance Director Item: Storm Water Fund Capital Improvement Plan CIP Discussion City staff would like to continue the discussion regarding the Storm Water Fund cash flow with the City Council. Staff has included two large sheets listing all revenues and expenditures for cash flow purposes. There are significant assumptions included in the documents, so we will lay them out for discussion purposes. Storm Water charges are held steady in Scenario 1. Storm Water Charges increase by 4% per year in Scenario 2. Storm Water Charges increase by 5% per year in Scenario 3. Interest income is projected at 1% of the previous year ending balance. All other expenses are estimated for 2019 and inflated by 3% for each year after. CIP Cash Outlay is included in the cash flow since it is actual cash outlay. It statements. In accrual accounting, the purchase of a new capital item is the exchange of one asset (cash) for another asset (infrastructure). The expense is recognized on the financial statements through the depreciation calculated over the projected life of the asset. Pension Expense and Depreciation are excluded from the cash flow analysis since they are non-cash expenses. Depreciation is currently just under $105,000 annually and is adjusted in the future calculations to reflect new capital outlays depreciated over 20-40 years. This fund has a lot of assets that are difficult to determine a maintenance schedule. We have little information on which to determine an average level of pond sedimentation. The speed at which city ditches fill up is not clear and can be easily disrupted by neighborhood actions such as leaf or yard waste dumping.