10-10-11 SCCZ
CITY OF
OTSEGO
ON THE GREAT RIVER ROAD
TO: Otsego Mayor and City Council
FROM: Lori Johnson, City Administrator
DATE: October 5, 2011
RE: 2012 Budget Discussion
Since the last budget workshop with the Council, staff has thoroughly reviewed the General Fund
budget, analyzed the Community Development/Building Safety Fund to bring it to a breakeven point,
and developed proposed budgets for the Water and Sewer funds including rate adjustments. In this
memo I will review the General Fund budget adjustments and briefly highlight the Community
Development/Building Safety Fund analysis. Attached is a memo from Finance Director Gary Groen
discussing the Water and Sewer fund budgets.
General Fund Budget
The proposed tax levy adopted on September 12 was based on a proposed General Fund budget of
$3,245,800. However, additional detailed review of the budget was anticipated to ensure that the funds
were allocated accurately and that the Council's highest priorities were included and adequately funded.
Each line item in the proposed budget has now been thoroughly reviewed and documented. Based on
that review, attached is a list of recommended budget adjustments.
The adjustments fall into several categories: First, reclassification of line items. For example, all
amounts previously budgeted in a miscellaneous line item were reclassified to the accurate line item.
Second, both revenue and expenditure amounts were adjusted to reflect actual needs/expectations.
For instance, the fuel budget is now determined by using the actual usage and the estimated cost per
gallon in 2012. Third, additions and deletions were made to line items and in some cases entire
departments. An Emergency Management department was added to ensure funds were available for
emergency management training and siren maintenance, as an example. Fourth, a few minor errors
were noted and corrected.
Revenue Adjustments
There are three adjustments to revenues, all reductions totaling $19,628. Mining fees and donations
were reduced to reflect the actual amounts that will be received. The balancing line item has been
eliminated. The adjusted revenue budget is $3,226,172.
Expenditure Adjustments
The expenditure adjustments net a total expenditure decrease of $30,861. Below is a summary of the
major adjustments:
1. The cost of living adjustment and benefits totaling $13,693 were added.
2. The two new, but never filled, part time administrative clerical positions in the administration
and street maintenance departments were eliminated for a savings of $35,848. The
administration department does not need additional clerical support at this time, thus the
position is proposed to be eliminated. The future need in administration will be for a
professional with broad government specific expertise. On the other hand, while there is a need
for clerical support staff in the street department, we are exploring other options to fill that gap
on an interim basis. In the very near future, the department will need dedicated clerical staff.
Adding clerical staff will free up the maintenance employees who are currently doing clerical
work to spend their time in the functions for which they were hired such as maintaining the
City's existing infrastructure and plowing snow.
3. A $32,000 line item titled "Maps" in the Administration department was moved to Engineering.
This is actually engineering consulting time charged for utility locates. The City is billed an
average of $80 per hour for engineering staff to locate City utility lines. About 2.5 hours of time
billed is a good average per locate although the actual time billed varies depending upon the
difficulty of the locate. In addition the City is billed mileage for a total average cost per locate of
$217.
4. GIS services were reduced by $18,000 in the General Fund. Budgeted GIS services including
water, sewer, and community development for 2012 total $26,000. We are continuing to
identify ways to reduce this cost. The current contract with GIS Rangers terminates on
December 31, 2011. The contract states that the "client may renew the term for an additional
year by providing GIS Rangers at least sixty days' notice to the then -current Term's expiration."
I suggest that the City enter into a monthly contract with GIS Rangers beginning January 1, 2012.
This will allow time to further evaluate the best long term solution for the City's GIS needs.
5. The Engineering services budget was increased based on the costs incurred in 2011 and the
expectation that the demand for time from the City Engineer will continue to increase.
6. The Planning services budget was increased by $25,000 for the comprehensive plan update in
the proposed budget. The scope of that project has now been defined and the cost reduced by
$10,000 resulting in a net increase of $15,000 above the 2011 budget.
7. An Information Technology department has been added to segregate IT costs in the General
Fund. Centralizing the costs in one department provides better cost analysis data and ensures
that software updates and computer replacements are included in the budget. The 2012
proposal includes $10,000 to update outdated Microsoft Office and Windows operating system
software.
8. The Legal services budget was updated based on actual 2011 costs and anticipated 2012
expenditures.
9. Gas and Oil costs in the Street and Park departments were increased based on usage and
estimated price.
10. An Emergency Management department was added that includes training and repair and
maintenance funds. Expenditures in this department will increase in future years as the City
strengthens its emergency management program.
11. The discretionary Park and Recreation Commission funds were reclassified from other
improvements to recreation programming. The funds are still available for park and recreation
2
related activities. Technically these "discretionary" funds require Council approval as the Park
and Recreation Commission by statute does not have authority to authorize the expenditure of
City funds. Ideally, the Commission should provide input in the budget development process
and make a budget recommendation to the Council. With their input, the budget would reflect
the Commission's budget requests. In the rare occasion that the Commission identifies a
project(s) during the year that was not included in the budget, the request would be presented
to the Council for consideration.
These adjustments along with reclassifications and clerical corrections leave a surplus balance of
$11,233 in the General Fund. This surplus can be used to fund expanded programs such as recreation
and economic development; increase maintenance of parks and streets; be set aside for future storm
water projects; or used to reduce the tax levy.
Community Development and Building Safety Fund
The Council requested analysis of the Community Development and Building Safety fund. The fund
currently has a deficit of approximately $570,000. The preliminary 2012 budget has a deficit of over
$34,000. It is imperative that the City develop a plan to fund development and building safety costs
including identifying a funding source to eliminate the existing cash deficit in the future. In the short
term, expenditures need to be reduced to stop the escalation of the deficit. As you will recall, one of the
first steps was to eliminate or reduce transfers and expenditure allocations. The Council agreed and
made reductions during the August budget meetings. Since the revenues in this fund are based entirely
on building activity, the City has little control in the revenue side of the budget. In order to break even,
expenditures need to align with anticipated revenues. The demand for services is based mainly on the
volume of permits and the workload correlates for the most part. It is my understanding that the
contract with Metro West Inspection Services, Inc., was to be managed such that inspection services
were provided as needed. Currently, Metro West provides inspectors on a set schedule for a
predetermined number of hours per week. Starting November 1, 1 have directed Metro West to reduce
the set hours by eight hours per week with further reductions throughout the winter based on permit
volume. The down side of this change is the City will not be as responsive to questions as an inspector
will not always be available. Further, inspection times will be limited to a much shorter window of time
each day. Of course, if the City receives a permit for a substantial commercial building that requires
more plan review and inspection time, the schedule would be adjusted to meet the demand and timing
for inspections. This reduction in contracted inspection time will generate savings, but not enough to
solve the funding problem. At the meeting, I will present other expenditure reduction options.
In conclusion, staff is prepared to discuss all of these budgets in detail at the workshop. If you would
like to discuss any of this information prior to the meeting or have questions on an item that is not
addressed in this memo or the attached memo, please contact me.
3
2012 General Fund Budget
Proposed Adjustments October 10, 2011
Preliminary Proposed
August 22 October 10 Difference Comments
Revenues
Beginning Balance $ 3,245,800
Mining Fees 25,000 10,000 (15,000) Based on actual per City Engineer
Donations 3,000 500 (2,500) TRSA - Based on actual
Other 2,128 - (2,128) Balancing amount eliminated
Adjusted Balance 3,226,172
Expenditures
Beginning Balance
3,245,800
COLA & Benefits
-
13,693
13,693 For all departments
Administration
Part Time Position
15,600
-
(15,600) Position not needed at this time
Part Time Benefits
2,324
-
(2,324) Position not needed at this time
Office Supplies
8,000
10,000
2,000 Adjusted to actual
Miscellaneous
4,000
-
(4,000) Reclassified
Maps
32,000
-
(32,000) See "Locates" in Engineering department
Printing
10,000
5,000
(5,000) Adjusted to actual
Education & Training
6,900
4,200
(2,700) Safety 2,200
Contractual Services
18,000
4,000
(14,000) Reclassified to IT
GIS Services
28,000
10,000
(18,000) Total 2012 GIS $26,000
Elections
Part Time Pay
5,000
6,000
1,000 Estimated high voter turnout
Planning Commission
FICA
61
-
(61) Clerical correction
Engineer
Engineering Contractual
65,000
85,000
20,000 Adjusted to actual
Engineering Contract Locates
-
32,000
32,000 Reclassified from Administration dept.
Planning
-
Planning Contractual
90,000
80,000
(10,000) Reduced Comp Plan from $25,000 to $15,000
Finance
Miscellaneous
100
-
(100) Reclassified
Dues
45
200
155 Adjusted to actual
Education & Training
4,000
3,000
(1,000) Safety 2,200
Contracted Services
11,720
11,220
(500) $3,500 Misc. Reclass; $4,000 IT Reclass
Miscellaneous
3,500
-
(3,500) Reclassified
Information Technology
New Department
Contractual Services
-
22,000
22,000 Reclassification from Admin., Fin., Streets
Supplies
-
10,000
10,000 Update operating and office software
Legal
Legal Contractual
Economic Development
Marketing
Miscellaneous
Citv Hall (General Gov't. Bldas.
Other Supplies
Miscellaneous
Aminal Control
Contractual Services
Streets
Part Time Pay
Part Time Benefits
Office Supplies
Gas & Oil
Uniform Allow
Safety Supplies
Miscellaneous
Utilities
Printing
Cleaning Services
Contracted Services IT
Repair and Maint. Buildings
Parks Maintenance
Gas & Oil
Operating Supplies
Miscellaneous
Utilities
Garbage Service
Contracted Services
Repair and Maintenance Contractual
Recreation
Recreation Programming
Park Commission Discressionary
HPC
Miscellaneous
Education and Training
Emergency Management
Education and Training
Repair and Maintenance
Adjusted Expenditures
Budget Balance
Preliminary
Proposed
(15,600)
August 22
October 10
Difference Comments
65,000
70,000
5,000 Adjusted to actual
-
10,000
10,000 Reclassified
10,000
-
(10,000) Reclassified
1,600 2,100
500 -
12,000 14,400
500 Reclassified
(500) Reclassified
2,400 Based on actual
15,600
-
(15,600)
Office Assistant not filled
2,324
-
(2,324)
Office Assistant not filled
500
-
(500)
Adjusted to actual
55,000
60,000
5,000
17,143 gal. at $3.50/gal.
7,500
6,000
(1,500)
Adjusted to actual
5,000
3,000
(2,000)
Adjusted to actual
2,000
-
(2,000)
Reclassified
30,000
27,000
(3,000)
Adjusted to actual
1,000
500
(500)
Adjusted to actual
4,400
6,500
2,100
Adjusted to actual
8,000
-
(8,000)
$4,000 Reclass to IT; $4,000 Elminated
18,000
20,000
2,000
Reclassified
6,000
8,500
2,500
3,429 gal. at $3.50/gal.
12,000
12,500
500
Reclassified
500
-
(500)
Reclassified
25,000
20,000
(5,000)
Adjusted to actual
1,000
-
(1,000)
Reclassified
15,000
16,000
1,000
Reclassified
8,000
4,000
(4,000)
Adjusted to actual
46,000
61,000
15,000
Reclassified
15,000
-
(15,000)
Reclassified
600
-
(600)
Reclassified
-
600
600
Reclassified
New Department
1,500
1,500
-
1,000
1,000
$ 3,214,939
Z
CITY OF
OTSEGO
ON THE GREAT RIVER ROAD
TO: Otsego Mayor and City Council
FROM: Gary Groen, Finance Director
DATE: October 5, 2011
RE: 2012 Water and Sewer Budget
The City Council and staff review the water and sewer user rates on an annual basis. The
purpose of this review is to determine the user rates are sufficient to finance the cost of the
operations and provide sufficient cash reserves to finance major repair and maintenance items
as necessary.
Each year, Kurt Niedermeier of PeopleService, Inc. and finance department staff have reviewed
the projected schedule of the future major maintenance and repair items in both the water and
sewer operations. The project provides valuable information to determine:
• What is the appropriate level of cash reserves to maintain for future major repair and
maintenance items.
• What is the projected year that major repair and maintenance items should be
scheduled.
• What is the threshold where net revenues can be earmarked for debt service obligations.
In 2011 the cash reserve funds will achieve the requirements for future major repair and
maintenance and cash sufficient for operations. As a result, beginning in 2012 and beyond, the
water and sewer operations will generate net revenues available for debt service.
In prior years, it was believed the City's general obligation water and sewer bonds would be
entirely financed with the revenues generated by the new connections to the system. However,
with the new connections slowing dramatically the past three years, the debt service should be
discussed along with the water and sewer rates. The utility rates recommended for 2012 do not
include significant amounts for debt service, but the future net revenues from operations will be
allocated to repayment of debt as reflected in the attached Water and Sewer Debt Analysis.
WATER UTILITY RATES AND BUDGET
Beginning in 2013, the city must establish a water utility rate structure that provides incentives
for residential users to conserve water resources. Commercial and industrial water rates can be
based on cost of service and do not necessarily require the same rate structure as residential.
The conservation rate structure must be in place by January 1, 2013. To be considered a
conservation rate, increasing rates are recommended to be significant enough to encourage
conservation. The information provided suggests the steps should be increments of at least
25% and the last step should be at least 50% between the last two steps.
WATER UTILITY RATES AND BUDGET - Continued
I am recommending the implementation of the conservation rate be accomplished with a small
water rate change in 2012 and a conservation rate implemented effective January 1, 2013. The
conservation rate will have a significant impact on the water rates and I would like some
additional time to provide the City Council with a number of options.
The current water rate structure includes a base rate of $3 plus $1.50 per 1,000 gallons
thereafter. There are no steps in the current rate structure.
I am recommending the water rates beginning in 2012 include a base rate of $3 plus $1.50 for
the first 5,000 gallons and $1.60 per 1,000 gallons thereafter. The minimum monthly bill would
remain at $6. This is a small step increase but will generate approximately a 5% increase in the
overall water revenue. This 5% increase is reflected in the water revenue budget attached with
this memo. In addition to the user rate increase, the antenna revenue previously budgeted in
the General Fund is now included in the Water Utility Fund and earmarked for debt service.
With the rate increase the Water Utility Fund is projected to provide a net cash increase of
$401,612. Some of this revenue is earmarked to continue to finance the reserve requirements,
but the net cash/revenue to be applied to debt service is projected to be $396,395. That is a
cumulative number including both 2011 and 2012. Future net revenues projected to be
available for debt service beginning in 2013 is $275,000.
SEWER UTILITY RATES AND BUDGET
As mentioned previously, Kurt Niedermeier and finance department staff have also reviewed the
sewer cash requirements for major repair and maintenance issues. The ventilation issues that
have caused significant roof damage to buildings at both the east and west treatment facilities
are included. The 2012 budget includes $80,000 for building roof repairs based on very
preliminary discussions of the issue. The cost is included in the contractual repairs for buildings
number in the 2012 budget.
The current sewer rate structure includes a base rate of $5 plus $5 per 1,000 gallons. There
are no steps in the current rate structure.
I am recommending the sewer rates beginning in 2012 include a base rate of $5 plus $5 for the
first 2,000 gallons and $5.25 per 1,000 gallons thereafter. The minimum monthly bill would
remain at $15.
With the rate increase the Sewer Utility Fund is projected to provide a net cash increase of
$170,315. Some of this revenue is earmarked to continue to finance the reserve requirements,
but the net cash/revenue to be applied to debt service is projected to be $180,850. That is a
cumulative number including both 2011 and 2012. Future net revenues projected to be
available for debt service beginning in 2013 is $138,115.
DEBT SERVICE PROJECTION
The debt service projection is included with this memo also. The estimated revenue from new
connections has been reduced in 2011 through 2013 to more properly reflect the level of
building activity. The projection also includes the net operating revenues beginning in 2012 with
the net revenues available from 2011 and 2012 operations and the projection of net revenues
available each year into the future. The net revenue projection beyond 2013 has been
increased by 3% annually.
DEBT SERVICE PROJECTION — Continued
The effect of including the net revenues from operations and reducing the estimated revenue
from connections is the cash flow projection for the general obligation water and sewer bonds
now has a positive cash flow into 2018. There are many variables included in this projection
and it will be updated at least annually as the City moves forward.
GOING FORWARD
Included in this memo are specific recommendations for 2012 water and sewer rates. The
water utility rate will require an adjustment to properly reflect a water conservation rate. Beyond
the water conservation rate structure change due for 2013, 1 would recommend the water and
sewer utility user rate be adjusted annually by the same CPI rate increase used by People
Service to adjust its contract each July 1.
Please contact me with any questions regarding this memo or attachments.
City of Otsego
2012 Water Operation (Projection of 2012 operating expenses)
Actual to
2008 2009 2010 2011 June 30, 2012
Account Code Description Actual Actual Actual Projected 2011 Projected
OPERATING REVENUE
Utility Charges for Services $ 692,233 $ 719,963 $ 667,211 $ 699,900 $ 359,188 $ 731,396
Antenna Lease Revenue - earmarked for debt service - - - - 62,500
Total Revenue
OPERATING EXPENSES
601-49400-100
Wages and Salaries - Mary O - 45%
699,900
Wages and Salaries - Steve S. - PW
601-49400-121
PERA
601-49400-122
FICA/Medicare
601-49400-123
Medical
601-49400-130
Other
601-49400-131
Payroll allocation - Finance
601-49400-131
Payroll allocation - Public Works
Total Personnel Costs
692,233
719,963
667,211
699,900
359,188
793,896
1,000
44
600
601-49400-202
21,270
19,396
19,026
15,000
8,193
16,200
515
1,000
7,370
9,000
4,312
9,000
1,383
1,346
1,325
1,088
930
1,175
1,581
1,442
1,329
1,148
891
1,239
544
571
951
1,296
574
620
132
139
166
200
74
200
8,000
8,000
15,000
15,000
7,500
15,000
14,568
14,568
9,856
9,955
4,978
9,955
1,301
820
47,479
45,462
55,023
52,686
27,452
53,389
601-49400-201
Office supplies
502
581
397
1,000
44
600
601-49400-202
Gas & oil
163
89
-
2,500
515
1,000
601-49400-204
Insurance
6,624
7,359
9,494
6,750
-
10,000
601-49400-206
Postage
4,090
4,342
6,343
5,000
2,500
5,500
601-49400-220
R & M supplies
441
1,540
2,424
3,500
756
-
Total Supplies
11,819
13,911
18,658
18,750
3,815
17,100
601-49400-301
Legal services
- Utility ordinances, assessments, etc.
1,301
820
70
1,000
420
1,000
601-49400-302
Engineering services
- SCADA revisions, W&S issues
17,061
49,611
13,593
2,500
17,715
10,000
601-49400-303
Planning services
- Shut off ordinance
419
72
-
500
470
500
601-49400-310
Miscellaneous
- Bank & CC service charges
8,277
11,319
10,827
8,000
2,084
10,000
Total Professional Services
27,057
61,822
24,490
12,000
20,689
21,500
601-49400-350
Printing
- Envelopes/invoices
3,837
1,784
1,808
3,500
1,925
2,500
601-49400-360
Education & training
Software annual conference
-
-
-
500
-
250
601-49400-322
Utilities
51,168
55,483
45,964
55,000
22,028
55,000
10/4/2011
Account Code Description
601-49400-390 Contracted services
City of Otsego
2012 Water Operation (Projection of 2012 operating expenses)
Actual to
2008 2009 2010 2011 June 30, 2012
Actual Actual Actual Projected 2011 Projected
- PeopleService
- GIS
- Softronics
- Civic software support
- Lawn service
- Bear alarms
- Other
601-49400-400 Repairs & maintenance - (Portable generator maintenance,
WWTF main break & hydrant repair
Pumphouse Maintenance ($12,000)
Wellhead protection expenses
Total Operating Expenses
Net Operating Income
Other Cash Requirement/Non-Operating Expenses
601-49400-500"` SCADA replaoement/l/3 software upgrade
Projected Water Meters Purchased
Projected Water Meters Sold
601-49400-601/61C JetVac Debt Service payment (20%)
Total Other Cash Requirements
Net Addition to Cash Balance
$ 162,929
$ 181,769
$ 168,749
$ 175,214
$ 85,474
$ 178,644
2,630
3,450
1,871
4,000
1,290
-
1,567
1,800
575
4,500
697
-
4,054
700
1,276
1,400
4,182
-
3,774
4,500
2,827
5,500
6,467
-
1,539
1,400
1,667
1,700
18
-
218
-
107
-
175,584
181,769
182,531
187,064
93,797
195,744
4,934
11,016
8,437
15,000
19,824
32,000
7,550
3,672
-
5,000
-
5,000
329,428
374,919
336,911
349,500
189,530
382,483
362,805
345,044
330,300
350,401
169,658
411,412
25,129
-
24,185
5,000
-
-
35,167
24,285
25,360
15,000
14,048
15,000
-35167
-24285
-25360
(15,000)
(14,048)
(15,000)
-
-
2,000
8,000
8,000
9,800
25,130
-
26,185
13,000
8,000
9,800
$ 337,676
$ 345,044
$ 304,115
$ 337,401
$ 161,658
$ 401,612
** All expenditure items noted with two asterisks require review and approval by the Council
prior to expenditure
10/4/2011
City of Otsego
2012 Water Operation (Projection of 2012 operating expenses)
Cash Reserve Required for Future Major Maintenance per Schedule
Annual Addition to Cash Reserve
Projected Expenses from Cash Reserves Included in Operating Expenses
Projected Cash Reserve Required for Future Major Maintenance
One month billing/cash reserve
Total Minimum Water Fund Cash Reserve
Net Cash from Operations for Debt Service
$ 793,015
175,439
968,454
75,000_
1,043,454
$ 172,307
$ 968,454
175,439
(12,000)
1,131,893
75,000
1,206,893
$ 396,395
10/4/2011
Actual to
2008 2009 2010
2011
June 30,
2012
Account Code Description
Actual Actual Actual
Projected
2011
Projected
Net Addition to Cash Balance
$ 337,676 $ 345,044 $ 304,115
$ 337,401
$ 161,658
$ 401,612
X2
Actual Cash Balance, December 31, 2010
$ 878,360
Projected Cash Balances
$1,215,761
$ 1,201,676
$1,603,288
Cash Reserve Required for Future Major Maintenance per Schedule
Annual Addition to Cash Reserve
Projected Expenses from Cash Reserves Included in Operating Expenses
Projected Cash Reserve Required for Future Major Maintenance
One month billing/cash reserve
Total Minimum Water Fund Cash Reserve
Net Cash from Operations for Debt Service
$ 793,015
175,439
968,454
75,000_
1,043,454
$ 172,307
$ 968,454
175,439
(12,000)
1,131,893
75,000
1,206,893
$ 396,395
10/4/2011
City of Otsego
2012 Sewer Operation (Projection of 2012 operating expenses)
Account Code Description
OPERATING REVENUE
Utility Charges for Services - (5% projected increase for 2012)
Riverbend charges @ $880 per month
City of Dayton charges based on flow plus 4% of fixed cost
Total Revenue
OPERATING EXPENSES
602-49450-101
Wages and Salaries - Mary O. 45%
602-49450-101
Wages and Salaries - Steve S - PW
602-49450-121
PERA
602-49450-122
FICA/Medicare
602-49450-123
Medical
602-49450-130
Other
602-49450-131
Payroll allocation - Finance
Projected
Payroll allocation - Public Works OH
602-49450-131
Payroll allocation - Sewer Cleaning
Total Personnel
Costs
602-49450-201/2 Operating/Office supplies
602-49450-202 Gas & oil
60249450-204 Insurance
602-49450-206 Postage
602-49450-220 Repair & Maintenance supplies
Total Supplies
602-49450-301
Legal services
602-49450-302
Engineering services
602-49450-303
Planning fees
602-49450-310
Permit fees & bank charges
Total Professional Services
602-49450-322 Utilities
602-49450-350 Printing
602-49450-360 Education & training
10/4/2011 N
Actual to
2008
2009
2010
2011
June 30,
2012
Actual
Actual
Actual
Projected
2011
Projected
$ 826,540
$ 952,353
$ 977,827
$ 488,730
$ 1,026,718
7,634
10,120
10,560
6,160
10,560
9,600
11,232
11,000
-
11,000
774,657
843,774
973,705
999,387
494,890
1,048,278
$ 13,686
$ 19,397
$ 19,930
$ 15,000
$ 8,193
$ 16,200
6,280
4,072
-
9,000
3,658
9,000
1,298
1,304
1,536
1,088
882
1,175
1,482
1,484
1,560
1,148
841
1,239
544
571
1,564
1,296
443
620
132
139
165
200
74
200
8,000
8,000
15,000
15,000
7,500
15,000
14,568
14,568
9,856
9,955
4,978
9,955
-
-
7,510
25,330
-
25,330
45,991
49,535
57,121
78,016
26,569
78,719
175
570
397
1,000
50
600
2,243
2,708
3,188
2,500
3,738
5,500
14,635
21,657
20,780
15,000
-
22,000
4,090
4,343
6,343
5,000
2,500
5,500
4,649
11,782
7,636
15,000
17,682
20,000
25,792
41,060
38,344
38,500
23,970
53,600
1,985
805
3,059
1,000
276
1,000
12,559
3,922
14,484
5,000
16,005
10,000
419
72
-
1,000
320
500
6,416
6,501
8,153
6,500
6,097
8,500
21,378
11,300
25,696
13,500
22,698
20,000
94,402
97,601
118,477
115,000
60,704
121,408
3,335
1,784
1,808
3,500
1,610
2,500
-
-
-
500
-
250
10/4/2011 N
City of Otsego
8,361
5,000
- 5,000
Containment area (Taking debris to St. Michael)
1,000
2012 Sewer Operation (Projection of 2012 operating expenses)
Hook up Lift Station #3, Pump #3
10,000
602-49450-601/6 Jet Vac Debt Service (40%)
4,000
18,000
18000 19,600
Total Other Cash Requirements -
- 12,361
Actual to
18000 34,600
Net Addition to Cash Balance $ 161,871
2008
2009
2010
2011
June 30,
2012
Account Code Description
Actual
Actual
Actual
Projected
2011
Projected
602-49450-390 Contracted services - PeopleService
363,370
368,078
373,852
372,454
190,787
395,786
Contracted services - GIS
15,470
11,985
6,993
4,000
Contracted services - Softronics
1,290
681
4,054
1,800
600
4,500
Contracted services - Superior Lawn
4,475
3,593
3,774
4,500
2,827
5,500
Contracted services - Bear Alarms
1,350
732
699
1,400
667
700
Contracted services - Civic software support
697
4,614
1,330
700
1,276
1,400
Contracted services - lift station inspection
-
2,100
-
-
-
-
Contracted services - Other
18
-
3
-
200
-
Total Contracted Services
468,938
479,183
519,467
511,839
265,664
536,044
602-49450-395 Sign installation
947
-
-
-
-
-
602-49450-400 Contractual repairs & maintenance
33,344
41,486
10,455
10,000
3,134
25,000
602-49450-402 Contractual repairs & maintenance -buildings &
1,069
5,080
26,918
5,000
15,702
100,000
& Mechanical Air Unit contract
($80,000 for WWTF buildings)
35,361
46,566
37,373
15,000
18,836
125,000
602-49450-419 Biosolids Hauling
15,326
3,468
19,932
20,000
-
23,000
Lift station debris to St. Michael
-
-
-
-
-
7,000
Total Operating Expenses
612,786
631,112
697,933
676,855
357,737
843,363
Net Operating Income
161,871
212,662
275,772
322,532
137,153
204,915
Other Cash Requirements/Non-Operating Expenses
602-49450-500 Capital Outlay
8,361
5,000
- 5,000
Containment area (Taking debris to St. Michael)
1,000
- -
Hook up Lift Station #3, Pump #3
10,000
602-49450-601/6 Jet Vac Debt Service (40%)
4,000
18,000
18000 19,600
Total Other Cash Requirements -
- 12,361
24,000
18000 34,600
Net Addition to Cash Balance $ 161,871
$ 212,662 $ 263,411
$ 298,532 $
119,153 $ 170,315
10/4/2011
City of Otsego
2012 Sewer Operation (Projection of 2012 operating expenses)
Actual to
2008
2009 2010
2011
June 30,
2012
Actual
Actual Actual
Projected
2011
Projected
Net Addition to Cash Balance $ 161,871
$ 212,662 $ 263,411
$ 298,532
$ 119,153
$
170,315
X2
Actual Cash Balance, December 31, 2010
$ 560,137
Projected Cash Balances
$ 858,669
$ 798,443
$
968,758
Cash Reserve Required for Future Major Maintenance per Schedule
$ 547,262
$
655,710
Annual Required Addition to Cash Reserve
108,448
112,198
Projected Expenses from Cash Reserves Included in Operating Expenses
-
(80,000)
Projected Cash Reserve Required for Future Major Maintenance
655,710
687,908
One month billing/cash reserve
100,000
100,000
Total Minimum Sewer Fund Cash Reserves
755,710
787,908
Net Cash from Operation for Debt Service
102,959
$
180,850
** All expenditure items noted with two asterisks require review and approval by the
Council prior to expenditure
10/4/2011
City of Otsego
Water and Sewer Debt Analysis
Bonds Payable
Balance, January 1, 2010
Bonds issued in 2010
Updated 9/15/11
gnn9A gn1nr Tntal
$ 6,360,000 $ - $ 6,360,000
- 21,300,000 21,300,000
Balance, December 31, 2010 $ 6,360,000 $ 21,300,000 $27,660,000
Note: The 2003B ,2005A and 2006A water and sewer bonds have been completely refinanced by the 2009A and 2010C issues
Note that the 2010 hookup revenue was $639,496; 2009 was $498,189 and the 2008 revenue was $501,796.
Based on this 3 year historical information the current projections assume the same level of hookup revenue in 2014 and beyond, but 2011 has been significantly less
Total WAC and SAC hookup money received thru October 3, 2011 totals $256,300.
This schedule includes Riverbend Mobile Home Park water hook up that is active beginning in 2014. $400,000 at 4% for 15 years.
The schedule draws $577,245 (excess) net revenues thru 2012 operations. This leaves sufficient monies in the Water and Sewer Funds
for operations and major repair and maintenance issues and fully funds the maintenance reserve requirements as determined with PeopleService assistance.
W
(1.5% annually)
Actual/
Estimated
Riverbend
Net
Estimated
Projected
Hook Up
Special
Operating
Interest
Cash
Revenue
Assessments
Revenues
Earned
2009A
2010C
Total
Balance
Actual Cash
Balance Dec. 31,
2010
5,992,887
Year2011
256,300
-
-
89,893
260,610
850,116
1,110,726
5,228,354
Year 2012
300,000
-
577,245
78,425
260,610
792,849
1,053,459
5,130,566
Year2013
350,000
-
413,175
76,958
260,610
745,500
1,006,110
4,964,589
Year2014
500,000
49,078
425,570
74,469
260,610
745,500
1,006,110
5,007,596
Year2015
500,000
47,851
438,337
75,114
260,610
745,500
1,006,110
5,062,788
Year2016
500,000
46,624
451,487
75,942
260,610
2,745,500
3,006,110
3,130,732
Year2017
500,000
45,397
465,032
46,961
260,610
2,740,500
3,001,110
1,187,012
Year2018
500,000
44,170
478,983
17,805
260,610
2,754,100
3,014,710
(786,740)
Year 2019
500,000
42,943
493,353
-
260,610
2,758,900
3,019,510
(2,769,954)
Year202O
500,000
41,716
508,153
-
260,610
2,785,100
3,045,710
(4,765,795)
Year 2021
500,000
40,489
523,398
-
260,610
2,790,050
3,050,660
(6,752,568)
Year2022
500,000
39,262
539,100
-
260,610
2,809,550
3,070,160
(8,744,367)
Year 2023
500,000
38,035
555,273
-
260,610
2,831,775
3,092,385
(10,743,444)
Year2024
500,000
36,808
571,931
-
1,010,610
1,653,300
2,663,910
(12,298,615)
Year 2025
500,000
35,581
589,089
-
1,805,610
742,763
2,548,373
(13,722,318)
Year2026
500,000
34,355
606,761
-
1,801,035
744,480
2,545,515
(15,126,717)
Year2027
500,000
33,127
624,964
-
2,499,000
2,499,000
(16,467,625)
Year 2028
30,674
643,713
-
(15,793,238)
$7,906,300
$ 606,110
$ 8,905,564
$ 535,568
$10,504,185
$ 29,235,483
29,235,483
Note that the 2010 hookup revenue was $639,496; 2009 was $498,189 and the 2008 revenue was $501,796.
Based on this 3 year historical information the current projections assume the same level of hookup revenue in 2014 and beyond, but 2011 has been significantly less
Total WAC and SAC hookup money received thru October 3, 2011 totals $256,300.
This schedule includes Riverbend Mobile Home Park water hook up that is active beginning in 2014. $400,000 at 4% for 15 years.
The schedule draws $577,245 (excess) net revenues thru 2012 operations. This leaves sufficient monies in the Water and Sewer Funds
for operations and major repair and maintenance issues and fully funds the maintenance reserve requirements as determined with PeopleService assistance.
W