Water and wastewater funds
City staff identified the city’s wastewater fund, with a proposed budget of $628,000, as the city’s largest financial challenge.
With a small customer base and a different billing structure than the water system, often allowing customers to have their bills capped, the fund isn’t paying for itself.
“The wastewater fund has been largely neglected by previous administrations, often being treated as an extension of the water fund, which is why the interfund transfers between the water and wastewater [funds] went unnoticed,” Shaffstall wrote.
The wastewater fund owes the water fund for years of operating transfers, a loan for the upgrades to the city lift stations, and litigation expenses.
At their next meeting, the city council is expected to finalize a contract for a rate study and adopt a new billing structure later in the year. New rates would not become effective until January.
However, staff recommended the city separate the accounting for the city’s two enterprise funds, certify the amount owed the water fund and create a debt repayment schedule during the upcoming fiscal year.
Similarly, the staff attempted to separate and clarify water fund accounting, which has a proposed budget of more than $1.8 million.
“For years the water fund has paid for a blend of expenses in the Public Works Department which included general fund, wastewater fund, solid waste fund and water fund expenses,” Shaffstall wrote. “This year’s budget made a concerted effort to identify the total cost of operating a water system and distribute expenses accordingly. In several cases, personnel costs were allocated by percentage to the city’s different enterprise funds.”
Objections to tax rate
With the city’s tax valuations up and the city’s debt obligations decreasing, keeping the current property tax rate will bring in more revenue for the city but isn’t expect to exceed the rollback rate, which would allow residents to call for a rollback election.