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CCR2018093-Attachment Distributed Tuesday, October 9th, 2018 W182 S8200 Racine Avenue, Muskego, WI 53150 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: 2019 Budget 3 4 Sewer Fund Definitions 4 5 CONTENTS Schedule 1 Page 1 2018 2019 2019 $ Change % Change 2017 Aug. 31, 2018 2018 Adopted Proposed Adopted From 2018 From 2018 Actual Actual Projected Budget Budget Budget Budget Budget Operating revenues Sewer service charges $ 6,235,256 3,123,307 6,214,750 6,176,750 6,195,000 - 18,250 0.30% Miscellaneous revenues 13,277 6,460 11,460 12,500 11,750 - (750) -6.00% Total operating revenues 6,248,533 3,129,767 6,226,210 6,189,250 6,206,750 - 17,500 0.28% Operating expenses Operation and maintenance: Milwaukee Metropolitan Sewerage District: Capital charge 3,834,221 3,744,349 3,744,349 3,800,000 3,766,023 - (33,977) -0.89% User charge 1,150,719 651,871 1,269,562 1,253,516 1,325,933 - 72,417 5.78% Town of Norway - User charge 223,617 137,897 285,000 360,000 300,000 - (60,000) -16.67% Supervision and labor 401,027 275,707 453,809 462,269 470,230 - 7,961 1.72% Supplies and expense 19,042 10,685 26,500 28,000 34,000 - 6,000 21.43% Maintenance: Odor control 28,108 43,292 50,000 22,500 50,000 - 27,500 122.22% Building and structures 13,559 8,650 15,500 18,000 16,750 - (1,250) -6.94% General plant safety equipment 1,613 2,092 5,000 7,000 7,000 - - 0.00% Sewerage collection system 57,266 50,434 100,000 125,000 125,000 - - 0.00% I & I reduction - - 45,000 100,000 100,000 - - 0.00% Electricity 130,292 77,549 131,000 125,500 132,000 - 6,500 5.18% Transportation expense 12,841 8,825 18,000 20,000 20,000 - - 0.00% 5,872,306 5,011,352 6,143,720 6,321,785 6,346,936 - 25,151 0.40% Customers' account expenses: Accounting and collection 51,250 35,342 56,750 58,390 59,776 - 1,386 2.37% Meter expense 30,713 - 32,500 32,500 32,750 - 250 0.77% 81,962 35,342 89,250 90,890 92,526 - 1,636 1.80% General expenses: Office Salaries 57,314 38,264 57,300 64,090 59,976 - (4,114) -6.42% Employee pensions and benefits 288,334 133,685 247,947 253,026 261,973 - 8,947 3.54% Unemployment compensation - - 1,000 2,000 2,000 - - 0.00% Office supplies and expenses 65,123 36,224 75,270 79,880 82,375 - 2,495 3.12% Outside services 56,589 26,945 61,743 71,243 67,081 - (4,162) -5.84% 467,359 235,118 443,260 470,239 473,404 - 3,166 0.67% Total operation and maintenance 6,421,627 5,281,812 6,676,230 6,882,913 6,912,866 - 29,953 0.44% Depreciation 1,068,493 - 1,080,000 $1,120,000 $1,090,000 - ($30,000) -2.68% Total operating expenses 7,490,121 5,281,812 7,756,230 8,002,913 8,002,866 - (47) 0.00% Net operating income (loss) (forward) (1,241,588) (2,152,045) (1,530,020) (1,813,663) (1,796,116) - 17,547 0.97% CITY OF MUSKEGO SEWER UTILITY STATEMENT OF INCOME AND EXPENSE 2019 BUDGET Schedule 1 Page 2 2018 2019 2019 $ Change % Change 2017 Aug. 31, 2018 2018 Adopted Proposed Adopted From 2018 From 2018 Actual Actual Projected Budget Budget Budget Budget Budget Net operating income (loss) (forwarded) $ (1,241,588) (2,152,045) (1,530,020) (1,813,663) (1,796,116) - 17,547 0.97% Add non-operating income Interest from investments 134,186 10,471 265,000 95,000 270,000 - 175,000 184.21% MMSD I&I Subsidy - - 125,000 250,000 250,000 - - 0.00% Interest income on RCA's and special assessments 11,508 16,128 16,128 8,900 10,719 - 1,819 20.44% Sewer Connection Fees 29,000 17,500 32,000 32,250 30,000 - (2,250) -6.98% Total non-operating income 174,694 44,098 438,128 386,150 560,719 - 174,569 45.21% Income before non-operating expenses (1,066,894) (2,107,947) (1,091,892) (1,427,513) (1,235,397) - 192,116 13.46% Deduct non-operating expenses I&I MMSD Program - - 125,000 250,000 250,000 - - 0.00% Total non-operating expenses - - 125,000 250,000 250,000 - - #DIV/0! Net income (loss) before capital contributions $ (1,066,894) (2,107,947) (1,216,892) (1,677,513) (1,485,397) - 192,116 11.45% CITY OF MUSKEGO SEWER UTILITY STATEMENT OF INCOME AND EXPENSE (Concluded) 2019 BUDGET Schedule 2 Page 3 2018 Estimated 2018 2019 2019 Total Adopted Proposed Adopted Description Funding Cost Budget Budget Budget 1.2018 Capital Projects Truck - 25% DPW Replacement (C ) - 46,875 Truck - 50% Water/Sewer (C ) 15,926 17,000 Lift Station Upgrades (C ) 90,000 90,000 PW Facility Project (70% of Utility portion) (C ) 545,250 468,666 SCADA Upgrade (C ) 30,000 30,000 - - $ 681,176 652,541 - - 2.2019 Capital Projects Scissor Lift (PW, Water & Sewer) (C ) - - 4,250 - SCADA Upgrade (C ) 5,000 - Bobcat Skid-Steer Loader (Water & Sewer) (C ) - - 34,000 - Truck - 25% DPW Replacement (C ) - - 49,745 Truck & Camera (C ) - - 260,000 - Sewer Study (C ) - - 50,000 Lift Station #8 (C ) 852,000 Lift Station Upgrades (C ) - - 40,000 - $ - - 1,294,995 - $681,176 652,541 1,294,995 - 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 $ (1,485,397) - - - - (1,485,397) Add charges to income not requiring funds: Depreciation 1,090,000 - - - - 1,090,000 Amortization: Debt discount - - - - Manhole Rehabilitation and Mapping Projects - - - - - - MMSD Funding 250,000 - 250,000 Less: Other - Implicit Cash Subsidy to Water Utility - - - - - - Funds provided from operations (145,397) - - - - (145,397) Increases in: Collection of special assessments 4,500 - - 350,000 - 354,500 Other contributed capital collection- RCA Landfill - - - - - - Total funds provided (140,897) - - 350,000 - 209,103 Funds applied Principal payments on debt - - - - - - Capital outlay (Schedule 6 for Construction Fund) - - - - 1,294,995 1,294,995 Total funds applied - - - - 1,294,995 1,294,995 Interfund transfers - net Interest earnings (19,250) - 19,250 - - - Equipment replacement (26,350) - 26,350 - - - Sewer Connection fees (30,000) - - 30,000 - - Transfer to Construction Fund (402,995) - - (892,000) 1,294,995 - Transfer for debt retirement reserve - - - - - - RCA funds used to finance MMSD capital charge - - - - - - Total transfers (478,595) - 45,600 (862,000) 1,294,995 - Increase (decrease) in working capital (619,492) - 45,600 (512,000) - (1,085,892) Working capital, beginning of year 6,047,121 - 946,419 7,135,297 - 14,128,837 Working capital, end of year $ 5,427,629 - 992,019 6,623,297 - 13,042,945 -10.24% 0.00% 4.82% -7.18% 0.00% -7.69% CITY OF MUSKEGO SEWER UTILITY SCHEDULE OF CHANGES IN UTILITY WORKING CAPITAL 2019 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 2019 BUDGET