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MEMORANDUM <br />Date: October 5, 2009 <br />To City Council <br />From: Jessie Hart, Treasurer <br />Re: 2010.Proposed Sewer Operating Fund Budget <br />The annual budget process includes the review of the Sewer Operating Fund to <br />determine whether the rates that charged to customers are sufficient to cover expenses <br />and build for replacement of the aging sewer system. <br />The current charge to sewer customers is $43.00 per residential equivalent per quarter. <br />The total number of sewer customers is 87 and is made up of 52 residential customers <br />and 35 commercial customers. Total residential equivalents charged each quarter are <br />261 for quarterly sewer billing of $11,223.00 or $44,892.00 per year. <br />I have attached two spread sheets for the Sewer Operating Fund as follows: <br />Sewer Operating Budget — Actual 2005 to Proposed 2010: <br />This budget includes the final transfer of $125,000 from the General Fund in 2009 and <br />anticipates the same number of customers and residential equivalents in 2010 as in <br />2009..The costs for collection and treatment of sewage by the Metropolitan. Council <br />Environmental Services (MCES) include the increase for 2010 as provided by the. <br />MCES last week. Also included in the costs for 2010 is costs associated with billing <br />(WBT time and costs of billing supplies and postage), locates, audit services, repairs <br />and maintenance of lines and sewer flushing. I have also included the annual <br />depreciation of approximately $12,000 for 2009 and 2010..This budge DOES NOT <br />include the transfer amount for the sewer lining project currently being done on <br />Scheuneman Road. <br />Based on these estimates, the 2010.Proposed Sewer Operating Budget shows an <br />excess of expenditures over revenues of approximately $11,000. This is a direct result <br />of including depreciation in the costs and while it is a non -cash item it is advisable to <br />include depreciation so that a replacement fund is established and cash is available <br />when repairs to the system become necessary. <br />Sewer Operating Budget — Actual 2005 to Projected 2014: <br />This budget includes all of the same assumptions as the previous page BUT pro1ects <br />that out to 2014. <br />Page 1 <br />