CCR2005205.
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COMMON COUNCIL - CITY OF MUSKEGO
RESOLUTION #205-2005
APPROVAL OF 2006 SEWER UTILITY BUDGET AND RATES
BE IT RESOLVED That the Common Council of the City of Muskego, upon the
recommendation of the Public Utilities Committee, does hereby approve the attached
Sewer Utility Budget for the year 2006.
BE IT FURTHER RESOLVED That the Common Council of the City of Muskego, upon
the recommendation of the Public Utilities Committee, does hereby establish the
following sewer usage rates for 2006:
Residential Users:
Single Family Home
Duplex: 3 Bedroom Unit
Duplex: 2 Bedroom Unit
Duplex: 1 Bedroom Unit
$159.60 per quarter/$638.40 per year
$159.60 per quarter
$119.70 per quarter
$79.80 per quarter
Industrial and Commercial Users (Including Multifamily with three or more units):
Based on actual metered water use:
$5.67 per 1,000 gallons plus a connection charge of $63.08 per quarter,
with a minimum charge of $638.40 per year per building.
DATED THIS 22nd DAY OF November ,2005
SPONSORED BY:
PUBLIC UTILITIES COMMITTEE
Ald. Eric Schroeder
Ald. Eileen Madden
Ald. Patrick Patterson
Deferred: 11/08/05
This is to certify that this is a true and accurate copy of Resolution #205-2005 which
was adopted by the Common Council of the City of Muskego.
11/05jmb
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CITY OF MUSKEGO
SEWER UTILITY BUDGET
2006
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CONTENTS
Schedule Paqe
Statement of income and expense 1 1-2
Detailed schedule of operating expenses 2 3
Schedule of capital outlay 3 4
Schedule of changes in utility working capital:
2004 Projected 4 5
2005 Budget 5 6
Schedule of construction funds 6 7
Sewer Rate Design 7 8
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CITY OF MUSKEGO SEWER UT. ,J 1.
11/03/05
STATEMENT OF INCOME AND EXPENSE
2006 BUDGET
2005 2006 2006
2004 Aug. 31, 2005 2005 Adopted Proposed Adopted Account
Actual Actual Proiected Budaet Budaet Budaet Number
Operatina revenues
Sewer service charges $ 3,333,039 2,249,895 4,513,810 4,330,821 5,440,486 4801/4810
Miscellaneous revenues 22,824 5,701 7,368 6,100 10,803 4820/4822/4823/4824
Total operating revenues 3,355,863 2,255,596 4,521,178 4,336,921 5,451,289
Operatina expenses
Operation and maintenance:
Milwaukee Metropolitan Sewerage District:
Contract amortization 316,477 316,475 316,477 61.01.6405/6406/6407
Capital charge 1,105,733 2,276,219 2,276,219 2,220,224 2,673,318 61.02.6071
User charge 571,804 303,569 615,000 650,000 627,300 61.03.6072
Town of Norway
Capital charge 73,295 73,295 75,000
User charge 282,546 186,242 260,000 341,468 315,000 61.10.6068
Supervision and labor 327,931 205,949 328,924 353,737 377,910 61.11.5101/5102
Supplies and expense 17,915 10,648 21,985 21,985 22,985 Schedule 2
Maintenance:
Amortization - Odor control & manhole rehabilitation 44,231 44,231 44,231 44,231 61.16.5428
Odor control 10,518 4,920 21,000 21,000 21,000 61.16.5426
Building and structures 8,601 8,534 10,000 10,000 10,000 61.15.5415
General plant equipment (safety equipment) 2,667 11,245 12,000 10,000 10,000 61.15.5425
Sewerage collection system 77,645 42,495 50,000 50,000 50,000 61.16.5411
I & I reduction 49,110 13,730 40,000 140,000 100,000 61.16.5427
Electricity 82,564 50,033 115,000 115,000 115,000 61.20.5910
Transportation expense 9,053 7,335 9,850 9,850 16,963 61.21.5306
2,906,795 3,120,921 4,193,979 4,377,267 4,458,707
Customers' account expenses:
Accounting and collection 52,447 40,690 60,601 60,601 59,014 63.40.5101
Meter expense 26,210 28,000 28,000 28,000 63.40.5101
78,657 40,690 88,601 88,601 87,014 63.40.5101
General expenses:
Office salaries 57,472 40,690 60,601 60,601 59,014 63.40.5101
Employees' pensions and benefits 173,472 98,278 168,772 168,771 181,728 63.41.5201/5202/5203/5204/5229/
Unemployment compensation 2,000 2,000 2,000 63.42.6020
Office supplies and expenses 70,169 55,861 102,118 102,118 98,221 Schedule 2
Outside services 114,885 63,163 136,713 130,213 178,882 Schedule 2
415,997 257,992 470,204 463,703 519,846
Total operation and maintenance 3,401,448 3,419,602 4,752,784 4,929,570 5,065,567
Depreciation 913,777 923,796 970,767 958,291 64.50.6705
Total operating expenses 4,315,225 3,419,602 5,676,580 5,900,337 6,023,857
Net operating income (loss)
(forward) (959,362) (1,164,006) ( 1,155,402) ( 1 ,563,416) (572,569)
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CITY OF MUSKEGO SEWER UTILITY
STATEMENT OF INCOME AND EXPENSE
(concluded)
2006 BUDGET
2005 2006 2006
2004 Aug. 31, 2005 2005 Adopted Proposed Adopted Account
Actual Actual Proiected Budqet Budqet Budqet Number
Net operating income (loss)
(forwarded) $ (959,362) (1,164,006) (1,155,402) (1,563,416) (572,569)
Add non- operatinq income
City subsidies 307,636 617,888 617,888 4950
Interest from investments 151,547 58,587 175,000 200,000 130,000 4531/4910
Interest income on RCA's and special assessments 53,145 16,842 48,629 59,627 52,749
Sewer Connection Fees 89,500 50,000 50,000 50,000
Total non-operating income 601,828 75,428 891,517 927,515 232,749
Income before non-operating expenses (357,534) (1,088,578) (263,884) (635,901 ) (339,820)
Deduct non-operatinq expenses
Interest charges on long-term debt 447,210 215,168 244,670 430,336 154,997 65.60.7010
Amortization of debt discount 25,473 45,453 23,764 54,544 65.61.7015
Amortization of extraordinary property losses 65.62.6401
Total non-operating expenses 472,683 215,168 290,123 454,100 209,541
Net income (loss) before capital contributions $ (830,217) (1,303,746) (554,007) (1,090,001) (549,361)
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Schedule 1
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Schedule 2
3.
11/03/05 CITY OF MUSKEGO SEWER UTILITY
DETAILED SCHEDULE OF OPERATING EXPENSES
2006 BUDGET
2005 2006 2006
2004 Aug. 31,2005 2005 Adopted Proposed Adopted Account
Actual Actual Projected Budget Budget Budget Number
Operation and maintenance:
Supplies and expense:
Operating supplies $ 2,173 964 2,485 2,485 2,485 61.12.5702
Chemicals 11,243 9,684 14,000 14,000 14,000 61.12.5750
Water expense 4,500 5,500 5,500 6,500 61.22.5915
$ 17,915 10,648 21,985 21,985 22,985
General expense
Office supplies and expenses:
Supplies $ 5,240 3,844 5,729 5,729 7,200 63.42.5701
Other general expense 1,186 686 3,000 3,000 3,000 63.42.6056
Telephone and communications 11,186 7,360 20,590 20,590 21,048 63.42.5430/5606
Insurance 46,402 37,860 61,790 61,790 57,132 63.42.610216101/6104
Contingency 67.00.6601
Computer expense 6,155 6,111 11,009 11,009 9,841 63.42.5509
$ 70,169 55,861 102,118 102,118 98,221
Outside services:
City administrative charge $ 31,807 23,842 23,842 23,382 63.43.6057
Accounting 20,288 7,000 20,500 20,500 20,500 63.43.5810
Legal 11,361 19,386 40,000 40,000 40,000 63.43.5805
Engineering 15,066 26,236 30,000 30,000 30,000 63.43.5815
Other outside services 33,584 10,541 16,500 10,000 60,000 63.43.5801
Amortization - mapping 63.43.5824
Computer software modification 2,779 5,871 5,871 5,000 63.43.5509
$ 114,885 63,163 136,713 130,213 178,882
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11/03/05 CITY OF MUSKEGO SEWER UTILITY
SCHEDULE OF CAPITAL OUTLAY
2005
Estimated 2005 2006 2006
Total Adopted Proposed Adopted
A/C# Description Cost Budqet Budget Budget
1. 2002 Projects
Janesville Box Culvert (A) $ 15,000 134,731 134,110
2. 2004 Projects
NW Sewer Study In operations in 2006 1,021 40,879
Facility plan - Muskego share of MMSD (A) 10,000 40,000
2020 Facility plan (A) 5,000 50,000 145,000
Future projects (A) 50,000 50,000
$ 16,021 140,879 235,000
3. 2005 Projects
Oversizing on land purchases (A) 10,000 10,000
Truck (A) 18,759 21,000
SCADA Renovations (Radio Study 50%) (A) 11,000 11,000
Woods Rd Forcemain 20" Sandy Beach (E) 1,415,000 1,300,650
Future Projects (A) 50,000 50,000
$ 1,444,759 1,392,650 60,000
4. 2006 Projects
Rain gages (A) 16,000
Truck (A) 15,000
SCADA Renovations (A) & (C) 188,000
SCADA software and hardware programing (A) 55,000
Variable frequency drive for Woods Road (D) 13,000
Future Projects
$ 287,000
Totals $ 1,475,780 1,668,260 716,110
Note A: Anticipated to be financed with available construction funds
Note B: Anticipated to be financed with 2005 borrowing
Note C: Finance with working capital
Note 0: Finance with replacement funds
Note E: Finance with reserve capacity assessment funds
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Schedule 3
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CITY O.SKEGO SEWER UTILITY
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11/03/05
SCHEDULE OF CHANGES IN UTILITY WORKING CAPITAL
2005 PROJECTED
2005 Projected
NON TIF
Operation Reserve
and Special Equipment Capacity
Maintenance Redemption Replacement Assessment Construction 2005
Fund Fund Fund Fund Fund Total Budaet
Funds provided
From operations:
Net income (loss) for the year $ (554,007) (554,007) (1,090,002)
Add charges to income not requiring funds:
Depreciation 923,796 923,796 970,767
Amortization:
MMSD contract 316,475 316,475 316,477
Debt discount 45,453 45,453 23,764
Manhole Rehabilitation 44,231 44,231 44,231
Less:
Other
Funds provided from operations 775,948 775,948 265,237
Increases in:
Collection of special assessments 57,244 503,610 560,854 374,744
Refunding debt issued 4,225,000
Other contributed capital collections
Total funds provided 833,192 4,225,000 503,610 5,561,802 639,981
Funds applied
Principal payments on debt 4,430,000 4,225,000 8,655,000 590,000
Debt discount and issue costs 89,143 89,143
Capital outlay (Schedule 6) 1,475,780 1,475,780 1,618,260
Total funds applied 4,430,000 4,314,143 1,475,780 10,219,923 2,208,260
Interfund transfers - net
Interest earnings (94,500) 13,000 66,500 15,000
Equipment replacement (26,350) 26,350
Sewer Connection fees (50,000) 50,000
Funds used for debt retirement 931,430 (931,430)
RCA funds used to finance capital outlays (1,415,000) 1,415,000
RCA funds used to finance MMSD capital charge 520,222 (520,222)
Total transfers 1,280,802 (931,430) 39,350 (1,818,722) 1,430,000
Increase (decrease) in working capital (2,316,007) (1,020,573) 39,350 (1,315,112) (45,780) (4,658,121 ) (1,568,279)
Workina capital. beainnina of vear 7,218,293 1,512,009 530,101 3,424,465 717,894 13,402,762 13,249,378
Workina capital. end of vear i 4,902,286 491,436 569,451 2,109,354 672,114 8,744,641 11,681,099
2004 Budgeted Working Capital, end of year $ 6,083,233 1,536,622 566,854 3,101,176 393,214 11,681,099
. . Schedule 5 .
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11/03105 CITYOF MUSKEGO SEWER UTILITY
SCHEDULE OF CHANGES IN UTILITY WORKING CAP IT AL
2006 BUDGET
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 $ (549,361) (549,361 )
Add charges to income not requiring funds:
Depreciation 958,291 958,291
Amortization:
MMSD contract
Debt discount 54,544 54,544
Manhole Rehabilitation and Mapping Projects 44,231 44,231
Less:
Proceeds from long-term debt
Other
Funds provided from operations 507,705 507,705
Increases in:
Collection of special assessments 66,474 430,293 496,767
Other contributed capital collections
Total funds provided 574,179 430,293 1,004,472
Funds applied
Principal payments on debt 75,000 75,000
Capital outlay (Schedule 6 for Construction Fund) 716,110 716,110
Total funds applied 75,000 716,110 791,110
Interfund transfers - net
Interest earnings (78,000) 15,000 53,000 10,000
Equipment replacement (26,350) 26,350
Use Equipment replacement (13,OOO) 13,000
Sewer Connection fees (50,OOO) 50,000
Transfer to Construction Fund (20,996) 20,996
Transfer for debt retirement reserve (117,083) 117,083
RCA funds used to finance MMSD capital charge 668,330 (668,330)
Total transfers 375,900 117,083 28,350 (565,330) 43,996
Increase (decrease) in working capital 875,079 117,083 28,350 (135,037) (672,114) 213,362
Workina capital. beainnina of year 4,902,286 491,436 569,451 2,109,354 672,114 8,744,641
Workina capital, end of year $ 5,777,366 608,519 597,801 1,974,317 8,958,003
$260K due 5/1/06P
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Reserve
173,333
26,051
409,135
608,519
. . Schedule 6 .
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11/03/05
SCHEDULE OF CONSTRUCTION FUNDS
PROJECTED 2005 AND 2006
Actual 2005 Projected 2006 Projected
Balance Projected Balance Projected Balance
Project 12/31/2004 Revenues Costs Transfers 12/31/2005 Revenues Costs Transfers 12/31/2006
Debt issue and working capital funds:
Janesville Road Box Culvert 134,731 15,000 119,731 134,110 14,379
Oversizing on land purchase 10,000 10,000 10,000
Truck 21,000 18,759 2,241 15,000 12,759
NW Sewer Study 40,879 1,021 (39,858)
2020 Facility plan 50,000 5,000 45,000 145,000 100,000
Facility plan - Muskego share of MMSD 10,000 10,000 40,000 40,000
SCADA Renovation (Radio Study) 11,000 11,000
Woods Rd Forcemain 20" Sandy Beach 1,415,000 1,415,000
Future projects 100,000 100,000 100,000
Rain gages 16,000 16,000
SCADA Renovations 188,000 188,000
SCADA software and hardware programing 55,000 55,000
Variable frequency drive for Mc Shane 13,000 13,000
Transfer from replacement funds 13,000 (13,000)
Transfer from working capital funds 20,996 (20,996)
Transfer from reserve capacity assessment funds 1,415,000 (1,415,000)
Unallocated debt proceeds and
interest earnings 350,284 15,000 29,858 395,142 10,000 (405,142)
TOTAL $ 717,894 1,430,000 1,475,780 672,114 43,996 716,110
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City of Muskego
Sewer Rate Design
2006 Budget
1. Estimated Reyenue Reauirement (Based on the year 2006 Budaetl
Aocmons:
Operation and maintenance expenses
Depreciation
Replacement Fund - DNR requirement
Mortgage Revenue Bond compliance requirements
Rate of return of average investment rate base - ( Exhibit C 1.)
RCA funds used
Gross revenue requirement
Rate Stabilization component - use of interest income, other income and operating reserves
Net Revenue Requirement per Budget
2. Estimated number of aallons (0001 billed
3. Number of laterals .lconnectlonsl
4. Estimated annual number of aallons used by a ayeraae residential customer
5 Inflow Ilnflltration based on an eiaht year ayeraae proylded by Ruekert & Mielke. Inc.
6. Rate components
Type of Charae Model Formula
Connection Charge Net Revenue Reauirement X Inflow and infiltration %
Number of laterals
Consumption Charge Net Revenue Reauirement X Billable %
Number of gallons (000) billed
Computation
Connection Charge $ 5,410,485.87 X
7,128
34.46%
Consumption Charge $ 5,410.485.87 X
598,390
65.54%
7. Ayeraae annual residential charae
Estimated number of gallons used by a average residential customer per year
Consumption charge per 1,000 gallons
Average residential annual consumption charge
Average residential annual connection charge
Total average residential annual sewer usage charge
(A) Use of Fund balance per MRB test
Interest income
Penalties and other income
Additional use of fund balance
130,000
40,802
197,308
368110 (AI
Schedule 7
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Data
$ 5,065,567
958,291
26,350
396,718
6,446,925
(668,330)
5,778,596
(368,110) (AI
$ 5,410,486
598,390
7,128
63,539
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::: connection Charge
= Consumption Charge
$261.58 Connection Charge
~ Consumption Charge
63,539
~
$376.53
$261.58
$638.11
Use of Fund balance per MRB test
Interest income
Penalties and other inoome
Use of fund balance to partially finance depreciation
(A)
130,000
40,802
197,308
368,110