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1i Utility Rate Increase CITY OF CHANHASSEN 7700 Markel Boulevard PO Box 147 Chanhassen, MN55317 Administration Phone: 952227.1100 Fax: 952.227.1110 Building Inspections Phone: 952227.1180 Fax: 952.227.1190 j Engineering Phone: 952227.1160 , Fax 952.227.1170 ! 1 , Finance , , I Phone: 952227.1140 ! Fax 952227.1110 ~ , 1 Park & Recreation j 1 Phone 952.227.1120 ¡ Fax: 952227.1110 j ,I RecrealionCenter 2310 Couller Boulevard 7 Phone 952.227.1400 , , Fax: 952227.1404 '1 .! , , Planning & Natural Resources Phone: 952.227.1130 Fax: 952227.1110 Public Works 1591 Park Road Phone: 952227.1300 Fax: 952.227.1310 Senior Center Phone: 952227.1125 Fax 952.227.1110 Web Site www.ci,chanhassen,mn.us .i.,¿ ¡.; !. f f I i ~ r i r MEMORANDUM TO: Mayor City Council Members FROM: Bruce M. DeJong, Finance Director ~~ DATE: December 7, 2004 SUBJECT: Approval of Scheduled Utility Rate Increase The utility rate study that was completed and approved in January, 2004 showed estimated rate increases for both water and sewer operations through the next ten years. In order to maintain these funds in healthy financial shape, Ehlers recommended that we implement the projected rate increases on an annual basis and revisit the results in a couple of years. Background The rate study recommended raising rates by 9% in 2004 and 5.5% in 2005 and 2006 with inflationary increases after that. The increases are seven cents per thousand gallons ($1.49) on water up to and ten cents per thousand ($1.87) on sewer. Staff believes that implementing these increases are necessary to cover the costs associated with covering the operating expenses and to pay for the inftastructure replacements that have been built in to the budget for street reconstructions. The funds both have performed well this year. They have nearly reached the revenue targets that were established and we still have additional revenue to come in the December - February time ftame. Because of accrual accounting, and the fact that we bill our users on a quarterly basis, we are basically going to earn an additional two months of revenue. This is made up of the full December billing, 2/3 of the January billing, and 1/3 of the February billing. Recommendation Staff recommends that the City Council approve the rate increase as presented. This action requires a simple majority of those present at the meeting. Enclosures: Rate Study Projections Revenue/Expenditure Reports Balance Sheets The City 01 Chanhassen . A growing communlly wilh clean lakes, Quality schools, a channing downlown, Ihriving businesses, winding lrails, and beauliful parks. 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YTD UnencBal % Bud Fund: 700, Water Fund Revenues Dept: 0000 SpoóalAssessmenm 0.00 0.00 22,210.79 421.89 0.00 -22,210.79 0.0 Permits 1,200.00 1,200.00 0.00 0.00 0.00 1,200.00 0.0 Charges for Services 1.174,600.00 1,174,600.00 1,453,490.06 313,68 0.00 -278,890.06 123.7 Miscellaneous Revenue 121,000.00 121,000.00 8,634,625.53 0.00 0.00 -8,413,625.537,053.4 Dept: 0000 1.296,600.00 1,298,600.00 10,010,326.38 735.57 0.00 '8,713,526.38 771.9 Dept: 7008 Minnewashla Loop Miscellaneous Revenue 0.00 0.00 208,487.91 0.00 0.00 -208,487.91 0.0 Minnewashta Loop 0,00 0.00 208,487,91 0.00 0.00 ·208,487.91 0.0 Revenues 1,296.800.00 1,296,600.00 10.218,814.29 735,57 0.00 ·8,922,014.29 788.0 Expend~ures Dapt: 0000 Personal Services 317,600.00 317,800.00 329,411.61 11,824.84 0.00 -11,811.61 103.7 Malarlals and Supplies 148,150.00 148,150.00 108,345.21 0.00 0.00 39,804.79 73.1 Contractual Services 238,400.00 238,400.00 241,989.49 9.13 0.00 '3.589.49 101.5 Capital Ouday 0.00 0.00 7,08 1.88 0.00 0.00 ·7,081.88 0.0 Dabt Service 0.00 0.00 156,300.04 0.00 0.00 -156,300.04 0.0 Miscellaneous Expensa 0.00 0.00 11.56 0.00 0.00 -11.56 0.0 Dapt: 0000 704,150.00 704,150.00 843,139.79 11,633.97 0.00 -138,989.79 119.7 Dapt: 7003 WaterTrealment Contractual Services 0.00 0.00 28,339.87 0.00 0.00 -28.339.87 0.0 Water Treatment 0.00 0.00 28,339.87 0.00 0.00 ·28,339.87 0.0 Dept: 7006 Well No.9 Project No. 03-02 Contractual Services 0.00 0,00 79,406.11 0.00 0.00 ·79,406.11 0.0 Capital Ouday 0.00 0.00 471,699.22 0.00 0.00 -471,899.22 0.0 Well NO.9 Project No. 03-02 0.00 0.00 551,105.33 0.00 0.00 -551,105.33 0.0 Dept: 7007 Lift Slatlon 1 Capital Outlay 0.00 0.00 1,000.00 0.00 0.00 ·1,000.00 0.0 , , (1 LiftSlatlon 1 0.00 0.00 1.000.00 0.00 0.00 -1,000.00 0.0 f Dept: 7008 Mfnnewashla Loop ~ ~ Contractual Services 0.00 0.00 13,004.89 0.00 0.00 -13,004.89 0.0 Minnewashta loop 0.00 0.00 13,004.89 0.00 0.00 -13,004.89 0.0 Dapt: 7011 North Bay Walarmain Extension F, ~ Contractual Services 0.00 0.00 1,957.50 0.00 0.00 -1,957.50 0.0 . North Bay Watermain Extension 0.00 0.00 1.957.50 0.00 0.00 -1.957.50 0.0 £ ¡ , ~. t k , ~ REVENUE I EXPENDITURE REPORT Cfty of Chanhassen For lI1a Period: 1/112004 to 12/3112004 Fund: 700, Water Fund EJ<penditures paga: 2 121812004 10:24 am Original Bud. Amendad Bud. YTD Actual CURR MTH Encumb. YTO UnancBaI % Bud Net Effect for Water Fund Change in Fund Balance: 704,150.00 704,150.00 1,438,547.38 11.633.97 0.00 '734,397.38 204.3 592.650.00 S92,650.00 8,780,266.91 -10.898.40 0.00 '8,187,616.911,481.5 8,780,266.91 . REVENUE I EXPENDITURE REPORT Paga: 3 121812004 City of Channassen 10:24 am Fortha Period: 1/112004 to 12/3112004 Original Bud. Amended Bud. YTO Actual CURR MTH Encumb. YTO UnencBal % Bud Fund: 701 - Sewer Fund Revenues Oept: 0000 Spedal Assessments 0.00 0.00 10,553.63 266.47 0.00 '10,553.63 0.0 Permits 1,200.00 1,200.00 0.00 0.00 0.00 1,200.00 0.0 Charges for SONicas 1,629,400.00 1,629.400.00 1,436,702.76 0.00 0.00 192,69724 882 Miscellaneous Revenue 31,000.00 31,000.00 364,740.52 7S.00 0.00 '333,740.521,176.6 Dept 0000 1,661.600.00 1,661,600.00 1,811,998.91 341.47 0.00 '150,396.91 109.1 Revenues 1,861.800.00 1,881.600.00 1,811.996.91 341.47 0.00 '150,396.91 109.1 Expenditures Dept 0000 Personal Services 317,600.00 317,600.00 241,988.74 8.413.83 0.00 75,611.26 782 Materials and Supplies 43,150.00 43,150.00 11.657.12 0.00 0.00 31,492.88 27.0 Contractual Services 273,400.00 273,400.00 1,237.898.48 9.13 0.00 '964,298.48 452.7 Capital Outlay 34,000.00 34,000,00 0.00 0.00 0.00 34,000.00 0.0 Miscellaneous Expense 0.00 0.00 18.84 0.00 0.00 ·18.84 0.0 Dept: 0000 888,150.00 888,150.00 1.491.380.98 8,422.96 0.00 -823,210.98 223.2 Oept: 7009 SCAOA System Replacemenl Contractual5arviœs 0.00 0.00 28,889.30 0.00 0.00 -28,889.30 0.0 SCAOA Syslam Replacement 0.00 0.00 28,889.30 0.00 0.00 -28,889.30 0.0 Oept: 7010 Lift Station #2 Contractual Services 0.00 0.00 8,288.67 0.00 0.00 -8,266.67 0.0 Lift Station #2 0.00 0.00 8.288.67 0.00 0.00 -8,286.67 0.0 ExpendntJres 889.150.00 888.150.00 1,528,536.95 8,422.98 0.00 '860,366.95 228.8 Net Effect for Sewer Fund 993,450.00 993,450.00 283,459,96 -8,081.49 0.00 709.990.04 28.5 Change in Fund Balance: 283,459.96 Grend Total Net Effect: 1,586.100.00 1,586,100.00 9.083,728.87 -18,979.89 0.00 ,7,477,626.87 571.4 COMPARATIVE BALANCE SHEET City of Chanhassen Page: I 12/8/2004 10:13 am As of: 12/31/2004 CY Balances PY Balances Fund Type: 700 Enterprise Fund: 700· Water Fund Assets Acct Class: 100 Cash 1010 Cash 13,275,428,95 4,459,060,75 13,275,428.95 4,459,060.75 142,520.22 165,382,16 0.00 71,691.26 0,00 5,268,69 55,549.45 50,920,72 198,069,67 293,262,83 ·394,21 0.00 32,834.40 32,834.40 0.00 -4,510,83 0,00 6,018,25 80,653,27 174,924.19 113,093.46 209,266.01 85,831.06 85,831.06 3,592.46 3,688.47 89,423.52 89,519,53 0,00 19,774,84 1,190,19 1,190.19 1,190,19 1,190,19 35,987.71 35,987.71 488,372.15 488,372.15 1,099,231.81 1,099,231.81 30,586,634.06 30,586,634.06 ·12,145,067,95 -12,145,067.95 32,264.00 32,264.00 20,097 ,421.78 20,097,421.78 33,774,627.57 25,169,495,93 0.00 537.92 0.00 374.87 0.00 461.00 0.00 51,885.14 3,814.36 1,702.76 3,814,36 53,587,90 0,00 7,739,95 Acct Class: 100 Cash Acct Class: 11 0 Accounts Receivables 1191 Utility Accounts Receivable 1192 Utility AIR Unbilled 1193 Mise Accounts Receivable 1195 AIR Certification - Utility Acct Class: 110 Accounts Receivables Acct Class: 120 Special Assessments Receivable 1210 Spec Assessments Rec Current 1240 Spec Assessments Spec Deferred 1250 Due From County 1251 DUE FROM COUNTY SA 1260 Connection Charges Receivable Acct Class: 120 Special Assessments Receivable Acct Class: 126 Connection Charges Receivable 1261 Connection Charges Deferred 1262 Delinquent Connection Charges Acct Class: 126 Connection Charges Receivable 1300 Investment Interest Receivable Acct Class: 150 Prepaid Expenses 1550 Prepaid Expenses Acct Class: 150 Prepaid Expenses Acct Class: 160 Fixed Assets 1600 Land 1611 Construction in Progress 1620 Machinery and Equipment 1630 Other Improvements 1660 Accumulated Depreciation 1670 Water Meter Inventory Acct Class: 160 Fixed Assets Total Assets Liabilities 2001 Social Security Taxes Payable 2010 PERAPayable 2019 Due to Other Governmental Uuit Acct Class: 202 Accounts Payable 2020 Accounts Payable 2021 Sales Tax Payable Acct Class: 202 Accounts Payable 2050 Salaries Payable Acct Class: 206 Contracts Payable COMPARATIVE BALANCE SHEET City of Chanhassen Page: 2 12/8/2004 10:13 am CY Balances PY Balances As of: 12/3112004 Fund Type: 700 Enterprise Fund: 700· Water Fund Liabilities Acct Class: 206 Contracts Payable 2060 Contracts Payable 2061 CONTRACT RETENSION Acct Class: 206 Contracts Payable Acct Class: 220 Deferred Revenue 2231 Deferred Revenue-Spec Assmts Acct Class: 220 Deferred Revenue Acct Class: 230 L T Debt Payable 2313 Bonds Payable. Revenue 2315 Bond Interest Payable 2395 Compensated Absences Payable Acct Class: 230 LT Debt Payable Total Liabilities ReserveslBalances Acct Class: 260 Fund Balance 2600 Fund Balance 2630 Contributed Capital· Net 2699 Change In Fund Balance Acct Class: 260 Fund Balance Total ReserveslBalances Total Liabilities & Balances 0.00 116,153.78 23,925.76 23,925.76 23,925,76 140,079,54 -394.21 0,00 -394,21 0.00 1,825,000,00 1,825,000.00 35,162.39 35,162.39 34,446,10 34,446.10 1,894,608.49 1,894,608.49 1,921,954.40 2,097,389,67 10,554,286,60 12,517,619,66 8,780,266,91 31,852,173.17 31,852,173.17 9,981,318.45 12,517,619,66 572,968.15 23,071,906.26 23,071,906.26 33,774,127.57 25,169,295.93 COMPARATIVE BALANCE SHEET City of Chanhassen Page: 3 12/8/2004 10:13 am As of: 12/31/2004 CY Balances PY Balances Fund Type: 700 Enterprise Fund: 701 - Sewer Fund Assets Acct Class: 100 Cash 10 10 Cash Acct Class: 100 Cash Acct Class: 110 Accounts Receivables 1191 Utility Accounts Receivable 1192 Utility AIR Unbilled Acct Class: 110 Accounts Receivables Acct Class: 120 Special Assessments Receivable 1260 Connection Charges Receivable Acct Class: 120 Special Assessments Receivable Acct Class: 126 Connection Charges Receivable 1261 Connection Charges Deferred 1262 Delinquent Connection Charges Acct Class: 126 Connection Charges Receivable 1300 Investment Interest Receivable Acct Class: 150 Prepaid Expenses 1550 Prepaid Expenses Acct Class: 150 Prepaid Expenses Acct Class: 160 Fixed Assets 1611 Construction in Progress 1620 Machinery and Equipment 1630 Other Improvements 1660 Accumulated Depreciation Acct Class: 160 Fixed Assets 2,398,785.73 1,985,682.76 2,398,785,73 1,985,682.76 156,568,37 212,475,89 0,00 119,600,01 156,568.37 332,075.90 58,011.08 133,003.58 58,011.08 133,003.58 74,649,60 74,649.60 2,032,05 2,782.53 76,681.65 77,432,13 0,00 1,694,25 1,190,20 1,190.20 1,190,20 1,190,20 58,330.08 58,330,08 1,074,728.52 1,074,728.52 26,549,032.00 26,549,032.00 ·11,507,323.00 -11,507,323.00 16,174,767.60 16,174,767.60 18,866,004,63 18,705,846.42 0,00 353,97 0,00 289.15 0,00 139,308,50 0.00 17,135.64 35,100,00 -3,825.00 35,100,00 13,310,64 0,00 5,139.49 34,446,09 34,446,09 34,446,09 34,446,09 69,546,09 192,847,84 Total Assets Liabilities 2001 Social Security Taxes Payable 2010 PERAPayable 2019 Due to Other Governmental Unit Acct Class: 202 Accounts Payable 2020 Accounts Payable 2023 SAC Payable Acct Class: 202 Accounts Payable 2050 Salaries Payable Acct Class: 230 LT Debt Payable 2395 Compensated Absences Payable Acct Class: 230 LT Debt Payable Total Liabilities ReserveanBalances Acct Class: 260 Fund Balance 2600 Fund Balance 18,512,998.58 18,891,716.41 City of Chanhassen As of: 12/31/2004 COMPARATIVE BALANCE SHEET CY Balances Page: 4 12/8/2004 10:13 am PY Balances Fund Type: 700 Enterprise Fund: 701 - Sewer Fund ReserveslBalances Acct Class: 260 Fund Balance 2699 Change In Fund Balance Acct Class: 260 Fund Balance Total ReserveslBalances Total Liabilities & Balances 283,459.96 18,796,458.54 18,796,458.54 18,866,004,63 ·378,717,83 18,512,998,58 18,512,998,58 18,705,846.42