Adopt Resolution #19-021 Adopting 2019 Enterprise Fund Budgets

Purpose:  Annually the city adopts Enterprise Fund budgets related to Water, Sewer, Street Lighting, Recycling and Storm Drainage utilities.  These five services are billed out quarterly via the utility bill and the budgets reflect the expected revenue to be generated and the offsetting operating expenditures that these revenues support. Enclosed for your review are the 2019 Enterprise Fund Budgets which cover the Water Utility Fund, Sewer Utility Fund, Street Light Utility Fund, Recycling Utility Fund and Storm Water Utility Fund. While formal budgets are required to be prepared and adopted annually for the General Fund, this is not the case for Enterprise funds.  Included in the 2019 Water and Sewer Utility Fund is $24,000 per utility to fund the purchase of a replacement for utility vehicle #651 which is a 2005 Chevy truck and $15,625 per sewer and water utility and $31,250 from the General Fund for the purchase of a backhoe to replace #634 which is a 2001 Case Backhoe.  The City's 2019-2028 Capital Improvement Plan (CIP) outlines this vehicle replacement as well as other utility capital improvements that are recorded directly to the balance sheet of an enterprise fund and only annual depreciation of said asset(s) are reflected in the expenditure section of the related utility fund budget.  In order to establish fair rates for all of the utilities that the City operates, it is necessary to determine the actual cost of providing those utilities to the residents. An important factor in these costs is the recovery of depreciation through the rate structures. We are required to keep the accounting for these funds on the full accrual method which means recognizing total depreciation, whether on City or developer installed systems. This is what we have attempted to do in preparing the attached Proposed 2019 Enterprise Fund Budgets.

The recommendation for the Adoption of the 2019 Enterprise budgets is to approve Resolution #19-021 noting that the budget is an outline of how the revenues generated from the utility bill will be used in daily operations.  The utility rates for each utility has already been adopted as part of the city's annual schedule of rates, fees and charges

Motion to adopt Resolution #19-021 Adopting the 2019 Enterprise Fund Budgets.