3.5. SR 11-28-1994
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~lil River TO:
FROM:
ITEM 3.5.
MEMORANDUM
MAYOR & CITY COUNCIL
PAT KLAERS, CITY AD
DATE:
NOVEMBER 28, 1994
SUBJECT: ENTERPRISE FUNDS B
The City has three Enterprise funds that are under its control. These
Enterprise budgets are for the Liquor Store, the Wastewater Treatment
System (WWTS), and the Garbage Collection Program. The City Council
should review, discuss, and change these budgets as appropriate and then
approve them for 1995 activities. Generally,revenues are sufficient to offset
expenditures in these budgets and these funds are somewhat self-sustaining
where the level of revenues dictate the operating expenses that are allowed.
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The Liquor Store has generated a surplus of revenues over expenditures in
the past few years. Most of these profits have been funneled into the General
Fund in order to offset operating expenses on a city-wide basis, and to keep
the City tax levy low. Mter the transfers into the General Fund have taken
place, the City attempts to move most of the balance into an internally
designated reserve for a second liquor store site and facility. Some funds are
retained within the Liquor Store reserve for cash flow and inventory
purposes.
The WWTS budget has sufficient revenues to meet its operating
expenditures. All of the sewer connection charges are planned to be placed
into a plant replacement reserve. Total funds available for the proposed
plant expansion are not yet high enough to undertake this project. Phase I of
the expansion project did take place in 1994, and over $1 million of bonds
were issued for this phase of the plant expansion. The balance of the plant
expansion is expected to cost approximately $4.8 million and needs to be
undertaken in the next few years.
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The Garbage Collection Program began in 1990 and the billing for this
program shifted to the Municipal Utilities in 1993. The most significant
component of this budget is the fee paid to the contract haulers. The City has
slightly subsidized the garbage collection budget the past few years as
revenues have not met expenditures. This subsidy comes from the Landfill
surcharge designated for waste abatement purposes and is due mainly to the
City subsidizing the 32 gallon bi-weekly collection and for the costs
associated with the addition of plastics to the recycling program.
P.O. Box 490 · 13065 Orono Parkway · Elk River, MN 55330 · (612) 441-7420 · Fax: (612) 441-7425
LIQUOR STORE FUND
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Provides for the total operation of the Elk River Municipal Liquor store as
authorized by Minnesota State Law and the Elk River City Council.
1995 BUDGET COMPARED WITH 1994 BUDGET
The 1995 planned operating expenditures for the Municipal Liquor Store are listed
on the adjacent page. The 1994 and 1995 year end income projections are shown below.
The 1995 Municipal Liquor Store budget is planned in the amount of $495,350. This is
a $2,400 decrease from the adopted 1994 budget.
Most of the liquor store expenditures are fairly stable from year to year. There are some
annual increases in personal services and most of the line items in the supplies and
charges and contractual services categories tend to go up slightly on an annual basis due
to inflation. The Liquor Store budget deviates greatly from year to year in only the
capital outlay category and sometimes in the transfers out category. This is where most
of the change in the 1995 budget is located as compared to the 1994 budget. In this
regard, capital outlay requests decreased by $49,000 and the transfer out to the general
fund is scheduled to increase by $40,000 in 1995.
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The liquor store budget overall decrease is due to limited capital outlay expenditures
taking place in 1995, especially when compared to what was planned in 1994. It should
be noted that the $50,000 building expansion proposal did not take place in 1994 and
these budgeted funds were not spent. In 1995, the Liquor Store facility is somewhat in a
status quo position until it is determined how the property in its vicinity will develop.
The transfers out to the general fund increased by $40,000 in 1995 to a total of$125,050.
This $40,000 increase is almost a 50 percent increase in this line item.
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Cost of Sales
Gross Profit
Operating Expenses
Operating Income
Other Revenue (Expenses)
Interest Income
Net Income Before Transfers
Transfers In (Out)
City Hall Reserve Fund
General Fund
General Fund-Fire Lease
Income After Transfers
Capital Outlay
Balance After Capital Outlay
1995 Projected
$2,300,000
1. 778.000
522,000
308.900
213,100
25,000
238,100
1994 Adopted
$2,400,000
1 ,848,000
552,000
302,300
249,700
15.000
264,700
(30,000)
(125,050)
(28,400)
54,650
(3,000)
$51,650
(30,000)
(85,050)
(28.400)
121,250
(52,000)
$69,250
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LIQUOR STORE
PERSONAL SERVICES
SUPPLIES AND CHARGES
CONTRACTUAL SERVICES
OTHER CHARGES
CAPITAL OUTLAY
TRANSFERS OUT
TOTAL
1992
ACTUAL
$177,797
12,033
45,716
27,930
15,830
262,550
$541,856
EXPENDITURE ANALYSIS
PERSONAL SERVICES
Regular Salaries
Overtime Salaries
Part Time Salaries
Employee Pensions
Employee Insurance
SUPPLIES AND CHARGES
Rug & Laundry Services
Operating Supplies
CONTRACTUAL SERVICES
Audit
Other Professional Services
Telephone
Postage
Advertising
Repair & Maintenance
Utilities
Insurance
OTHER CHARGES
Conferences & Schools
Dues & Subscriptions
Depreciation
Licenses & Taxes
Cash Short
Bank Charges
CAPITAL OUTLAY
Building & Land Improvements
Furniture & Equipment
TRANSFERS OUT
General Fund
General Fund - Fire Station
City Hall Reserve
1993
ACTUAL
$184,458
6,264
38,266
25,192
8,857
153,450
$416,487
1994
ADOPTED
$199,300
6,700
58,200
38,100
52,000
143,450
$497,750
$121,650
1,300
40,000
1 7,400
24,950
1,000
6,000
6,250
3,500
1,600
150
7,500
7,000
16,500
18,500
4,800
850
26,000
450
500
3,000
o
3,000
125,050
28,400
30,000
1995
PROPOSED
$205,300
7,000
61 ,000
35,600
3,000
183,450
$495,350
$205,300
7,000
61,000
35,600
3,000
183,450
$495,350
WASTE WATER TREATMENT SYSTEM
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Provides for the administration, operation and maintenance of the sanitary
sewer system, laboratory and lift stations for the sanitary treatment of
household, commercial and industrial waste deposited into the sanitary sewer
system.
1995 BUDGET COMPARED WITH 1994 BUDGET
The 1995 Waste Water Treatment System (WWTS) budget calls for expenditures in the
amount of $705,800. This represents a $72,750 or 11.5% increase from the
adopted 1994 budget. When depreciation and reserves for plant replacement
and expansion is removed from both the 1994 adopted budget and the 1995 proposed
budget, it is more appropriate to state that the WWTS budget increased by $42,750 or
6.8 percent.
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The major change in the WWTS budget is the increase in personal services and in the
capital outlay categories. The personal services category increased approximately 10
percent due to the hiring of an operator/electrician rather than the more typical WWTS
operator position. The transfers line item is for administrative/finance department staff
time dedicated to this department and this is also a personnel related expenditure. The
main increase in the capital outlay category is due to the purchase of a used vehicle to
serve as the truck for the sewer jet machine.
The reserve for plant replacement and expansion increased by $30,000 or 10 percent to a
total of $330,000. A major plant improvement project took place in 1994 and over $1
million of bonds were issued for this improvement. This was phase one of the plant
expansion project. The balance of the plant expansion project is estimated at $4.8
million. The plant reserves will be necessary to help fund some of this improvement so
that the semi annual bond payments can be financed mainly by sewer connection charges.
Expenditures for various components of the WWTS are shown below. Customer charges
for 1995 are estimated at $500,000. Accordingly, excluding the reserve/depreciation line
item, revenues exceed projected expenditures. It is hoped that the reserve/depreciation
line item will equal the funds generated from sewer connection charges.
1995 Projected
1994 Budget
Reserve/Depreciation
$ 50,350
181,550
49,250
40,800
53,850
375,800
330,000
$705,800
$ 51,100
164,700
46,650
24,450
52,650
339,550
300,000
$639,550
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Plant Administration
Plant Operations
Laboratory
Sewer System Collection
Lift Stations
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WASTE WATER TREATMENT SYSTEM
PERSONAL SERVICES
SUPPLIES AND CHARGES
CONTRACTUAL SERVICES
OTHER CHARGES
CAPITAL OUTLAY
TRANSFERS OUT
TOTAL
1992
ACTUAL
$169,133
36,571
117,256
128,227
125,000
6,000
$582,187
1993
ACTUAL
$171,251
55,385
6,000
$232,636
PERSONAL SERVICES
EXPENDITURE ANALYSIS
Regular Salaries
Overtime Salaries
Employee Pensions
Employee Insurance
SUPPLIES AND CHARGES
Office Supplies
Operating Supplies
Motor Fuels & Lubricants
Chemicals
Rug & Laundry
Repair & Maintenance Supplies
Uniform Allowance
Small Tools
CONTRACTUAL SERVICES
Engineering Services
Legal Services
Audit
Other Professional Services
Telephone
Postage
Printing & Publishing
Other Repair & Maintenance
Insurance
Solid Waste
Utilities
OTHER CHARGES
Conferences & Schools
Dues & Subscriptions
Licenses & Taxes
CAPITAL OUTLAY
Equipment
Reserve for Plant & Equipment*
TRANSFERS OUT
General Fund
* Includes Depreciation Expenses as part of Reserve
1994
ADOPTED
$189,050
28,200
98,900
7,700
303,200
6,000
$633,050
$154,300
9,000
1 7,400
22,700
200
4,950
4,000
5,400
150
10,000
2,200
1,500
5,000
2,500
3,300
2,500
900
100
1,000
16,500
27,900
2,000
47,000
2,000
200
7,800
19,300
330,000
6,000
1995
PROPOSED
$203,400
28,400
108,700
10,000
349,300
6,000
$705,800
$203,400
28,400
108,700
10,000
349,300
6.000
$705,800
GARBAGE COLLECTION PROGRAM
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Provides for the coordination with the Elk River Municipal Utilities for the
billing of the garbage collection program. The garbage collection program
includes expenditures for the total administration and service contracts for the
operation of the City garbage and recycling collection program
1995 BUDGET COMPARED WITH 1994 BUDGET
The City began organized garbage collection services November, 1990. In 1993,
the Elk River Municipal Utilities took over the responsibility for the garbage billing
process.
The 1995 Garbage Collection Program budget is proposed in the amount of $716,850.
This is approximately the same amount as the 1994 budget. The single largest item in the
Garbage Collection Program budget is the fee paid to the garbage haulers. In 1995, the
projection for this item is $696,000. This is the same amount as in the 1994 budget. This
amount has not increased due to this projection being slightly high in 1994. This
expenditure represents 97 percent of the total budget in 1995.
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In 1992 and in 1993, the charges for services have not covered all of the operating
expenses and the garbage fund showed an operating loss. This operating loss is due to the
City subsidizing the 32 gallon bi-weekly pick up service and due to the City subsidizing
the plastics recycling program It is estimated that this subsidy amount (funded from the
Landfill surcharge for waste abatement purposes) will be decreasing in 1995 due a rate
reduction in the garbage hauler fees. This rate reduction was based on a tipping fee
reduction that is charged to the garbage haulers.
The Utilities Department collects garbage fees and remits the money to the City on a
monthly basis so payment can be made to the garbage haulers. Currently this program
bills for the collection of approximately 2,500 ninety gallon containers, 560 thirty-two
gallon containers which are picked up weekly, and 245 thirty-two gallon containers that
are picked up bi-weekly.
Projected 1995 revenues for customer charges, late penalties, and interest income are
anticipated to be slightly more than $700,000.
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GARBAGE COLLECTION
1992 1993 1994 1995
ACTUAL ACTUAL ADOPTED PROPOSED
PERSONAL SERVICES $ 5,834 $ 15,499 $ 2,100 $ 2,150
SUPPLIES AND CHARGES 431 0 0 0
CONTRACTUAL SERVICES 632,369 672,385 714,300 714,700
OTHER CHARGES 5,000 0 0 0
CAP IT AL OUTLAY 0 0 0 0
TOTAL 643,634 687,884 716,400 716,850
EXPENDITURE ANALYSIS
PERSONAL SERVICES
Regular Salaries ....................................... $ 1,650
Overtime Salaries ....................................... 100
Employee Pensions ....................................... 200
Employee Insurance ....................................... 200 $ 2,150
SUPPLIES AND CHARGES
....................................... 0 0
- CONTRACTUAL SERVICES
Billing Services ....................................... 16,000
Legal Services ....................................... 1,500
Hauler Contracts ....................................... 696,000
Other Professional Services ....................................... 1,200 714,700
OTHER CHARGES
....................................... 0 0
CAP IT AL OUTLAY
....................................... 0 0
$ 716,850
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