2015_Approved Budget and CIP.pdf

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City of Roseville — 2015 Budget Enterprise Operations The City's enterprise or business-type operations include the City's water, sanitary sewer, storm sewer, solid waste recycling, and golf course operations. They are categorized as enterprise operations because they are run much like a private, stand-alone business that is sustained solely by the direct revenues they receive. These operations do not receive any property tax monies. Enterprise operations are funded by user fees, a portion of which is set aside for future capital replacements. The remaining is used for day-to-day operations. For financial planning purposes, the City looks at operations and capital investments separately. The financial plan for each of these categories is discussed in greater detail below. Operations Over the next 10 years, the City's enterprise operations are projected to collectively grow 3% per year, from $15.4 million in estimated expenditures in 2015 to $20.1 million in 2024. This assumes that the City will continue providing the same services and levels of services as it currently does. The projections incorporate increases in personnel, supplies & materials, and other operating costs including the purchase of water from the City of St. Pau1 and wastewater treatment costs paid to the Metropolitan Council. Projected cost increases by major category for the enterprise functions are as follows: ❖ Personnel costs: 3% ❖ Supplies and materials: 3% ❖ Other services and charges: 3.0-3.5% The projected cost increases through 2024 are comparable to actual increases realized in prior years. To accommodate these additional costs, operating revenues rates will need to increase by a corresponding amount. User fee increases will fluctuate greatly depending on the enterprise function, with golf course and recycling fees rising at 3% annually. Water, sewer, and stormwater fees will need to rise at 3.0- 3.5% annually to offset projected cost increases and to equate current revenues with current expenditures. Cash reserves held in the enterprise funds are expected to generate an investment return of 3% annually which can be used to partially offset operational costs. Additional user fee increases will be needed to offset capital investment needs. These increases are discussed in greater detail below. :