Staff identified the city’s wastewater fund, with a 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 wastewater fund isn’t paying for itself.
The wastewater fund also owes the water fund for years of operating transfers, a loan for the upgrades to the city lift stations and litigation expenses.
Though wastewater revenues aren’t matching the true cost of expenses, the council took a step last week toward beginning to address that issue, voting to authorize the mayor to execute a contract for a utility rate study. The council is expected to adopt a new rate structure later in the year. New rates would not become effective until January.
Similarly, the staff attempted to separate and clarify water fund accounting, which has a 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.”