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CCR2012096-Sewer Budget (2) 2013 Sewer Utility Budget Prepared by City of Muskego Finance & Administration Department Adopted Tuesday, October 23, 2012 W182 S8200 Racine Avenue, Muskego, WI 53150-0749 Waukesha County, Wisconsin (262) 679-4100 Schedule Page Statement of income and expense 1 1-2 Schedule of capital outlay 2 3 Schedule of changes in utility working capital: 2013 Budget 3 4 Sewer Fund Definitions 4 5 CONTENTS Schedule 1 Page 1 2012 2013 2013 % Change 2011 Aug. 31, 2012 2012 Adopted Proposed Adopted From 2012 Actual Actual Projected Budget Budget Budget Budget Operating revenues Sewer service charges $ 5,947,200 2,963,346 5,936,500 5,936,500 5,940,000 5,940,000 0.06% Miscellaneous revenues 13,887 3,721 11,300 11,700 10,200 10,200 -12.82% Total operating revenues 5,961,087 2,967,067 5,947,800 5,948,200 5,950,200 5,950,200 0.03% Operating expenses Operation and maintenance: Milwaukee Metropolitan Sewerage District: Capital charge 2,741,485 2,707,803 2,707,803 2,800,000 3,002,403 3,002,403 7.23% User charge 1,016,921 511,494 1,050,000 1,050,000 1,070,000 1,070,000 1.90% Town of Norway Capital charge - - - - - - 0.00% User charge 177,899 111,501 250,000 275,000 225,000 225,000 -18.18% Supervision and labor 417,095 290,982 437,458 442,973 450,488 450,488 1.70% Supplies and expense 25,493 11,459 24,000 24,000 24,000 24,000 0.00% Maintenance: Amortization - - - - - - Odor control 22,189 14,529 18,000 15,000 18,000 18,000 20.00% Building and structures 7,648 8,104 10,000 10,000 10,000 10,000 0.00% General plant safety equipment 4,007 3,851 10,000 10,000 10,000 10,000 0.00% Sewerage collection system 53,573 89,963 100,000 75,000 100,000 100,000 33.33% I & I reduction 44,509 26,632 100,000 100,000 100,000 100,000 0.00% Electricity 128,607 66,476 125,000 125,000 130,000 130,000 4.00% Transportation expense 18,007 7,713 18,000 18,000 18,000 18,000 0.00% 4,657,433 3,850,507 4,850,261 4,944,973 5,157,891 5,157,891 4.31% Customers' account expenses: Accounting and collection 53,231 36,452 53,340 53,340 58,005 58,005 8.75% Meter expense 27,466 - 29,500 29,500 29,500 29,500 0.00% 80,697 36,452 82,840 82,840 87,505 87,505 5.63% General expenses: Office Salaries 58,231 39,305 58,840 58,340 63,505 63,505 8.86% Employee pensions and benefits 210,508 131,237 208,887 208,887 232,184 232,184 11.15% Unemployment compensation - - 2,000 2,000 2,000 2,000 0.00% Office supplies and expenses 53,231 40,300 59,830 59,830 64,530 64,530 7.86% Outside services 61,144 32,664 70,684 85,684 86,546 86,546 1.01% 383,114 243,506 400,241 414,741 448,765 448,765 8.20% Total operation and maintenance 5,121,244 4,130,465 5,333,341 5,442,553 5,694,162 5,694,162 4.62% Depreciation 1,064,640 - 1,150,813 1,150,813 1,175,000 1,175,000 2.10% Total operating expenses 6,185,884 4,130,465 6,484,154 6,593,366 6,869,162 6,869,162 4.18% Net operating income (loss) (forward) (224,797) (1,163,398) (536,354) (645,166) (918,962) (918,962) 42.44% CITY OF MUSKEGO SEWER UTILITY STATEMENT OF INCOME AND EXPENSE 2013 BUDGET Schedule 1 Page 2 2012 2013 2013 % Change 2011 Aug. 31, 2012 2012 Adopted Proposed Adopted From 2012 Actual Actual Projected Budget Budget Budget Budget Net operating income (loss) (forwarded) $ (224,797) (1,163,398) (536,354) (645,166) (918,962) (918,962) 20.29% Add non-operating income Interest from investments 25,552 1,461 25,000 25,000 25,000 25,000 0.00% Interest income on RCA's and special assessments 24,620 35,813 35,813 38,053 31,495 31,495 6.25% Sewer Connection Fees 20,500 - 21,500 15,000 15,000 15,000 -30.23% Total non-operating income 70,672 37,274 82,313 78,053 71,495 71,495 -5.18% Income before non-operating expenses (154,125) (1,126,124) (454,041) (567,113) (847,467) (847,467) 24.90% Deduct non-operating expenses Interest charges on long-term debt 111,277 54,093 101,885 101,885 90,627 90,627 0.00% Amortization of debt discount 51,276 - 51,276 51,276 51,276 51,276 0.00% Total non-operating expenses 162,553 54,093 153,161 153,161 141,903 141,903 0.00% Net income (loss) before capital contributions $ (316,678) (1,180,217) (607,202) (720,273) (989,370) (989,370) 18.62% CITY OF MUSKEGO SEWER UTILITY STATEMENT OF INCOME AND EXPENSE (Concluded) 2013 BUDGET Schedule 2 Page 3 2012 Estimated 2012 2013 2013 Total Adopted Proposed Adopted Description Funding Cost Budget Budget Budget 1.2012 Capital Projects Truck - 25% DPW Replacement (C ) 44,138 44,138 - - Janesville Reconstruction (C ) 32,193 66,815 - - Backflow Prevention (C ) 75,000 200,000 - - Private Property I & I (C ) 100,000 514,000 - - Ryan Road Inceptor (Musk/Franklin) (C ) & (G) 317,314 361,000 - - McShane Lift Station (C ) 724,000 - Oversizing Land Purchase (C ) - 30,000 - - $ 1,292,645 1,215,953 - - 2.2013 Capital Projects Truck - 25% DPW Replacement (C ) - - 43,750 43,750 Truck - 50% Water/Sewer (C ) 15,000 15,000 Janesville Reconstruction (C ) - - 32,660 32,660 Backflow Prevention (C ) - - 125,000 125,000 Private Property I & I (F) - - 414,000 414,000 McShane Lift Station Roof (C ) - - 50,000 50,000 Portable Radio Replacement (C ) - - 28,790 28,790 $- - 709,200 709,200 $ 1,292,645 1,215,953 709,200 709,200 Note A: Anticipated to be financed with available construction funds Note B: Anticipated to be financed with borrowings Note C: Finance with working capital Note D: Finance with replacement funds Note E: Finance with reserve capacity assessment funds Note F: Reimbursement from MMSD Note G: Reimbursement from Franklin Grand Total CITY OF MUSKEGO SEWER UTILITY SCHEDULE OF CAPITAL OUTLAY Schedule 3 Page 4 Non-TIF Operation Reserve and Special Equipment Capacity Maintenance Redemption Replacement Assessment Construction Fund Fund Fund Fund Fund Total Funds provided From operations: Net income (loss) for the year $ (989,370) - - - - (989,370) Add charges to income not requiring funds: Depreciation 1,175,000 - - - - 1,175,000 Amortization: Debt discount 51,276 - - - 51,276 Manhole Rehabilitation and Mapping Projects - - - - - - MMSD Funding 414,000 414,000 Less: Other - - - - - - Funds provided from operations 236,906 - - - 414,000 650,906 Increases in: Collection of special assessments 1,000 - - 75,000 - 76,000 Other contributed capital collection- RCA Landfill - - - - - - Total funds provided 237,906 - - 75,000 414,000 726,906 Funds applied Principal payments on debt 280,000 - - - - 280,000 Capital outlay (Schedule 6 for Construction Fund) - - - - 709,200 709,200 Total funds applied 280,000 - - - 709,200 989,200 Interfund transfers - net Interest earnings (6,000) - 6,000 - - - Equipment replacement (26,350) - 26,350 - - - Sewer Connection fees (15,000) - - 15,000 - - Transfer to Construction Fund (295,200) - - - 295,200 - Transfer for debt retirement reserve (6,667) 6,667 - - - - RCA funds used to finance MMSD capital charge - - - - - - Total transfers (349,217) 6,667 32,350 15,000 295,200 - Increase (decrease) in working capital (391,310) 6,667 32,350 90,000 - (262,294) Working capital, beginning of year 10,058,089 615,186 792,813 4,827,608 - 16,293,696 Working capital, end of year $ 9,666,779 621,853 825,163 4,917,608 - 16,031,402 -3.89% 1.08% 4.08% 1.86% 0.00% -1.61% CITY OF MUSKEGO SEWER UTILITY SCHEDULE OF CHANGES IN UTILITY WORKING CAPITAL 2013 BUDGET Schedule 4 Page 5 FUND DESCRIPTION Operations and Maintenance Required to fund, at a minimum, 3 months of operations and maintenance costs. Special Redemption Accounts as a reserve for a percentage of annual principal and interest payments, as required by the debt covenants. Equipment Replacement Fund Used for significant mechanical equipment replacements as required by the DNR. Non-TIF - RCA Includes reserves established to account for capacity assessment levies restricted to finance related capital and/or debt service costs. Construction Accounts for borrowed funds or interfund transfers from working capital to cover the cost of capital projects. MMSD Capital Charge Funding 77.83% = Utility rates & 22.17% = Reserve Capacity Assessments (Prior to 2007, 27.83% was funded by positive tax increments from TID's #2-#7) CITY OF MUSKEGO SEWER UTILITY WORKING CAPITAL FUND DESCRIPTIONS 2013 BUDGET