6.7. SR 12-05-2005
Item 6.7.
MEMORANDUM
TO: Mayor and City Council
FROM: Lori Johnson, Finance and Administrative Services
Directorllnterim City Administrator
DATE: December 5, 2005
SUBJECT: 2006 Enterprise Budgets
A summary of the enterprise fund budgets was included in the Truth in Taxation hearing
presentation and the budget details were included in the attachments for that item. The
enterprise fund budgets include wastewater treatment, liquor operations, and garbage
collection. Each of these budgets is funded through revenue collections for service or sales.
Below is a description of the highlights and changes for each:
Wastewater Treatment
Revenues are projected to increase due to new customers resulting in increased flow. As has
been the case in the past, rates are proposed to increase three percent to keep up with
inflationary increases in operating costs. Previously, this increase was approved by a separate
resolution. This year the increase was included in the city's fee schedule with all other fees.
Other revenues include sewer access charges for new connections to the system. The SAC
amount for 2006 was previously increased by the Council and was also included in the city's
fee schedule.
Expenditures have increased mainly because of additional capital ouday costs. Several lift
stations are scheduled for major improvements and security lights are proposed to be added
at all lift station locations. Operating costs increased including fuel and utility line items
because of significant increases in prices.
Liquor Operations
This is the first full year budget for Westbound which has been open since this October.
Because no reliable sales or expense data are available yet, the Westbound budget is based on
sales projections and estimated operating expenses. The Northbound budget has been
adjusted for the very slight sales decrease expected because of Westbound and for the new
allocation of employees and shared expenses such as advertising. The combined net profit
for both stores is $333,600. Westbound is projected to have a net profit of $34,850.
S:\Council\Lori\2005\Enterprise budgets.doc
Garba~e Collections
Revenues are expected to increase slightly based on additional customers. Hauler contracts
and solid waste tipping fees are also projected to increase based on the addition volumn
from new customers. The recycling rebate transfer in from the Landfill and the related
expense were both increased because the rebate was increased to $25 and the number of
residents applying has increased substantially. The Sherburne County Waste Management
Advisory Commission is currently evaluating offering the recycling rebate program county-
wide next year. If approved, this would reduce the 2007 garbage budget for the rebates
applied for in 2006 that are paid for in 2007.
Action Requested
The Council is asked to review the enterprise budgets. The budgets may be approved at this
meeting or at the next meeting if changes are requested.
S:\Council\Lori\2005\Enterprise budgets. doc