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5. Proposed Water Rate Increase.CITY OF Sol, CHANHASSEN. 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 -1900 • FAX (612) 937 -5739 MEMORANDUM TO: Don Ashworth, City Manager FROM: Pam Snell, Finance Director OV 1 DATE: January 22, 1997 SUBJ: 1997 Municipal Sewer & Water Rates Attached is the additional information that was requested in reference to the water and sewer utility fund. 1994 1995 1996est 1997est* Net Income 201,279 113,357 (1,400) (99,300) 1997 estimate does not include revenues for projected water rate increase. With the proposed water rate increase, net income is projected to be $8,700. Manager's Comments: This item was tabled from the last agenda to allow Pam to provide revenue and expense for the Utility Fund over the past four years. The trend obviously shows that we are in trouble if a rate increase is not considered. Approval of the increase as previously recommended (approximately 4.8 %) is recommended. :!? CITY OF CHANHASSEN, MINNESOTA STATEMENT 20 ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS YEAR ENDED DECEMBER 31,1994 Sewer Sewer Surface & Water & Water Water Totals Utility Expansion Management 1994 1993 OPERATING REVENUES: Charges for services $ 1,845,607 $ 153,710 $ 1,999,317 $ 1,782,047 Connection charges $ 539,948 539,948 587,015 Licenses and permits 12,404 616 13,020 5,580 Penalties and other 5.626 71.396 77.022 63.929 Total operating revenues 1,863,637 611,344 154,326 2,629,307 2,438,571 OPERATING EXPENSES: Administrative: Personal services 97,220 53,807 151,027 108,768 Materials and supplies 1,208 12,078 13,286 8,378 Contractual services 36,721 75,067 51,845 163,633 527,322 Capital outlay 39,365 148,604 1,753 189,722 37,776 Miscellaneous disbursements Total administrative 4.056 804 1.063 120,546 5.923 523,591 5348 687,992 224,475 178,570 Service: Personal services ! 315,464 315,464 262,798 Materials and supplies 72,909 72,909 70,158 Contractual services: MWCC 907,649 907,649 849,585 Other 152,744 152,744 87,091 Repairs and maintenance 37,551 37,551 51,710 4,091 Miscellaneous disbursements Depreciation: Purchased assets 13,522 13,522 16,730 Contributed assets Total service 526.547 526.547 2.026.386 476.491 1.818.654 2.026.386 Total operating expenses 2.204.956 224.475 120.546 2.549.977 2.506.646 OPERATING (LOSS) INCOME (341,319) 386,869 33,780 79,330 (68,075) NONOPERATING REVENUE (EXPENSE): Interest on investments 71,171 88,717 18,458 178,346 361,269 Valuation writedown of investments (517) (44,837) (45,354) (165,758) (47, Interest expense Intergovernmental grants 397 5.000 10.452 15.849 9.081 Total nonoperating revenue 71,051 48,880 28,910 148,841 156,620 OPERATING TRANSFERS: 349,454 Operating transfers in' Operating transfers out (55.000) (282.600) (337.600) (214,000) NET (LOSS) INCOME (325,268) 153,149 62,690 (109,429) 233,999 ADDBACK OF DEPRECIATION ON CONTRIBUTED`ASSETS 526.547 526.547 476.491 INCREASE IN RETAINED EARNINGS 201,279 153,149 62,690 417,118 700,490 RETAINED EARNINGS AT BEGINNING OF YEAR 1.391.077 347.993 259.502 1.998.572 1.298.082 RETAINED EARNINGS AT END OF YEAR S 1592356 0 •1 z L� STATEMENT 20 CITY OF CHANHASSEN, MINNESOTA ENTERPRISE FUNDS COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN RETAINED EARNINGS YEAR ENDED DECEMBER 31,1995 Sewer Sewer Surface & Water & Water Water Totals Utility Expansion Management 1995 1994 OPERATING REVENUES: Charges for services Connection charges Licenses and permits Penalties and other Total operating revenues OPERATING EXPENSES: Administrative: Personal services Materials and supplies Contractual services Capital outlay Miscellaneous disbursements Total administrative Service: Personal services Materials and supplies Contractual services: MWCC Other Repairs and maintenance Depreciation: Purchased assets Contributed assets Total service Total operating expenses OPERATING (LOSS) INCOME NONOPERATING REVENUE (EXPENSE): Interest on investments Valuation writedown of investments Interest expense Intergovernmental Total nonoperating revenue OPERATING TRANSFERS - Operating transfers out NET (LOSS) INCOME $ 2,025,390 $ 196,481 $ 2,221,871 $ 1,999,317 $ 607,561 607,561 539,948 6,891 100 6,991 13,020 8,187 138,022 146,209 77,022 2,040.468 745,583 196,581 2,982,632 2,629,307 t 67,022 67,162 29,131 163,315 178,346 1 (5,300) (49,786) (55,086) (45,354) 76,101 22,500 22,500 46,104 122,205 151,027 17,376 554 148,841 18,608 19,162 13,286 (119,616) 26,795 119,650 99,534 245,979 163,633 (109,429) 84,865 4,069 106,713 195,647 189,722 BEGINNING OF YEAR 1,248 848 2,096 5,923 188,315 124,967 271,807 585,089 523,591 88 331,718 331,718 315,464 89,214 89,214 72,909 1,062,302 1,062,302 907,649 183,566 183,566 152,744 72,486 72,486 37,551 6,232 6,232 13,522 580,961 580,961 526,547 2,326,479 2,326,479 2,026,386 2,514,794 124,967 271,807 2,911,568 2,549,977 (474,326) 620,616 (75,226) 71,064 79,330 67,022 67,162 29,131 163,315 178,346 1 (5,300) (49,786) (55,086) (45,354) ON CONTRIBUTED ASSETS 22,500 22,500 15,849 580,961 61,722 17,376 51,631 130,729 148,841 (55,000) (64,616) (119,616) (337,600) 113,357 (467,604) 573,376 (23,595) 82,177 (109,429) RETAINED EARNINGS AT ADDBACK OF DEPRECIATION ON CONTRIBUTED ASSETS 580,961 580,961 526,547 INCREASE (DECREASE) IN RETAINED EARNINGS 113,357 573,376 (23,595) 663,138 417,118 RETAINED EARNINGS AT BEGINNING OF YEAR 1,592,356 501,142 322,192 2,415,690 1,998,572 RETAINED EARNINGS AT END OF YEAR $ 1,705,713 $ 1,074,518 $ 298,597 $ 3,078,828 $ 2,415,690 88 CITY OF CHANHASSEN 1996 BUDGET ENTERPRISE FUNDS 1996 1996 1996 1996 S & W SANITARY SURFACE TOTAL UTILITY S &W EXP WTR MGMT FUNDS ACCOUNT DESCRIPTION BUDGET BUDGET BUDGET BUDGET REVENUE PERMITS INTERGOVERNMENTAL REVENUE CHARGE FOR CURRENT SERVICES OTHER REVENUE ** TOTAL REVENUE 1. 1 m 1,880,100 71,000 1,959,100 M$ 0 0 303,000 2,183,100 12,000 433,000 315,000 2,624,100 EXPENDITURES PERSONAL SERVICES MATERIALS & SUPPLIES CONTRACTUAL SERVICES CAPITAL OUTLAY DEBT SERVICE MISCELLANEOUS ** TOTAL EXPENDITURES REVENUE OVER /(UNDER) EXPENDITURES FUND BALANCE FORWARD BOND PROCEEDS TRANSFER IN /(OUT) LESS REQUIRED RESERVE 452,900 93,800 1,357,300 1,500 0 1,905,500 350,000 350,000 1,000 618,895 100,000 139,490 859,385 53,600 (509,385) 1,705,713 1,074,518 269,200 720,000 (55,000) (35,000) 1,704,313 1,250,133 69,700 522,600 38,000 132,800 269,200 2,245,395 70,000 171,500 139,490 0 446,900 3,211,785 (131,900) (587,685) 298,597 3,078,828 720,000 (90,000) 166,697 3,121,143 TOTAL RESOURCES OVER /(UNDER) LIABILITIES 0 0 0 0 CITY OF CHANHASSEN 1997 BUDGET ENTERPRISE FUNDS 1997 1997 1997 1997 S & W SANITARY SURFACE TOTAL UTILITY S &W EXP WTR MGMT FUNDS ACCOUNT DESCRIPTION BUDGET BUDGET BUDGET BUDGET REVENUE PERMITS INTERGOVERNMENTAL REVENUE CHARGE FOR CURRENT SERVICES OTHER REVENUE ** TOTAL REVENUE EXPENDITURES PERSONAL SERVICES MATERIALS & SUPPLIES CONTRACTUAL SERVICES CAPITAL OUTLAY DEBT SERVICE MISCELLANEOUS ** TOTAL EXPENDITURES REVENUE OVER /(UNDER) EXPENDITURES FUND BALANCE FORWARD BOND PROCEEDS TRANSFER IN /(OUT) LESS REQUIRED RESERVE 8,000 8,000 100,000 100,000 1,967,100 303,000 2,270,100 81,000 350,000 12,000 443,000 2,056,100 350,000 415,000 2,821,100 490,300 75,700 566,000 98,000 1,000 22,500 121,500 1,501,800 206,100 270,300 1,978,200 5,300 480,000 70,000 555,300 176,650 176,650 0 0 2,095,400 863,750 438,500 3,397,650 (39,300) (513,750) 1,704,313 1,250,133 0 (60,000) (35,000) 1,605,013 701,383 (23,500) (576,550) 166,697 3,121,143 0 (95,000) 143,197 2,449,593 TOTAL RESOURCES OVER/(UNDER) LIABILITIES 0 0 0 0 690 COULTER DRIVE • P.O. BOX 147 • CHANHASSEN, MINNESOTA 55317 (612) 937 - 1900 • FAX (612) 937 -5739 r �! 4 Action by City FdnlinWator MEMORANDUM undo se ✓ W A .odifle TO: Don Ashworth, City Manager Rejecte3_ Dxt FROM: Pam Snell, Finance Director Date Submitted to Commission DATE: January 9, 1997 SUBJ: 1997 Municipal Sewer & Water Rates Date Su! rr - , d to Couneil This item was tabled on the December 16, 1996 agenda in order that a public hearing could be held. A Notice of Public Hearing was published on January 9th in the Chanhassen Villager. The last adjustment to Chanhassen municipal water rates occurred in January of 1993. No increase to municipal sewer rates is proposed. The proposed modification would increase the average quarterly utility bill for a Chanhassen resident from $74.40 to $78.00 per quarter. As a part of the 1995 audit process, Deloitte & Touche, LLP, in their Management Recommendations, noted that the Metropolitan Council Environmental Service (Met Council) increases rates for sewer and water services annually and that the City should pass those increased costs along to the consumer. The City has not changed its billing rates since January 1993. Below are actual costs (per million gallons) passed on to the City of Chanhassen from Met Council along with cost of living increases for the respective years that would apply to the actual operation and treatment of the water lift stations. 1993 1994 1995 1996(est.) Total Cost per Million Gallons $1,201.10 $1,252.76 $1,296.44 $1,318.08 Percent Increase 4.3% 3.5% 1.7% 9.5% CPI 3.2% 2.4% 3.0% 8.6% Although the proposed increase appears high if you solely look at water rates, the proposed increase of 4.8% to an average quarterly utility bill appears reasonable and staff would recommend approval.