Hildale City Open & Adjust Budget PURPOSE: TO ACCOMMODATE THE PURCHASE OF A NEW SEWER VACUUM TRUCK
Public Hearing Overview Purpose FY 2018 Budget Adjustment for Wastewater Department Inform and receive input from the Public regarding the intent of the city to increase the Sewer Fund Budget by $125,000 in revenues and expenditures (from $1,339,300 to $1,464,300).
Background The Wastewater Fund solely represents the Wastewater Department of Hildale City. The Fund is managed by the Utility Board. The Wastewater Fund is responsible to care for sanitary sewer service for Hildale City, the Town of Colorado City, and the lift station for the sanitary sewer waste from Mohave County Centennial Park Waste Water Improvement District.
Background The revenues for the Wastewater Fund come from customer rates. Customer rates are based on their water usage during the winter months of December, January, and February and from connection fees and impact fees.
Background The expenses of the wastewater system include administrative costs salaries & wages training laboratory and testing legal
Background The expenses of the wastewater system include administrative costs repair, maintenance, and improvements collection systems treatment systems
Background The expenses of the wastewater system include administrative costs repair, maintenance, and improvements reserve funds for future purchases equipment maintenance new equipment
In the Plan 2009 Wastewater Department purchased a used vacuum truck. Wastewater Department set aside $10,000 into an R&R Fund toward replacement of the truck. 2011 Wastewater Department began setting aside $30,000/yr. toward the new truck. Goal $300,000 by FY 2020.
In the Plan 2013 Fire Department borrowed $175,000 from Sewer R&R for new ladder truck. Goal pay back by December 2018, before need for new vac truck. 2017 The old vacuum truck begins showing need for either major repair or replacement. The Wastewater Department budgets to replace vacuum truck with $288,000 from R&R.
The Need Vactor 2100 Plus: Combination single engine sewer cleaner Vacuum system mounted on a heavy-duty truck chassis.
The Cost Truck is available through Utah State Purchase Contract (Bidding requirements are met)
The Cost Freightliner 114SD chassis $107,512 Vactor 2100 Plus vacuum system $304,789 Lateral Kit: Hose/Nozzle system $ 2,878 Rear Bumper Strobes $ 1,172 Camera System (front/rear/sides) $ 1,120 Tool Box: Front bumper mount $ 1,826 TOTAL $419,297
Adjust the Plan FY 2018 Budget The new vac truck is budgeted for FY2018. FY 2018 Budget allowed $305,000 for all reserve purchases. Department reserve purchase needs increased Submersible pump $15,000 (R&R adequate, but not budgeted for this year) Inspection camera equipment $8,100 (R&R adequate, but had only budgeted for $2,000 this year) Vacuum Truck $419,300 (R&R will cover $298,000, but will not cover all) Will need $121,300 for Vac-Truck
Options Wait until R&R builds up (risk not having a dependable truck) Use from Wastewater Unassigned Fund Balance Borrow from another fund
Options 1. Wait until R&R builds up (risk not having a dependable truck) Last year the Wastewater Superintendent urged the Utility Board to put this item into the budget. He felt that repairing the old truck was a good idea and felt that we should budget $10,000 for its maintenance; however, he did not feel that repair of the old truck was the solution to the bigger picture. We recently had an incident that required the old truck to haul 70 loads. By the time they finished the project, the old truck had new rattles and whines, indicating that it needs help.
Options 2. Use from Wastewater Unassigned Fund Balance At the end of the last audited year (2016), the Wastewater Fund had available $537,097 in unrestricted fund balance. $277,806 of that balance was in R&R (an assigned balance); $259,290 was unassigned fund balance. FY 2017 audit is not complete; however, the Wastewater Fund unaudited financial report indicates growth of about $100,000 in the unassigned balance and $180,000 in R&R balance. It is important to retain a healthy portion in the unassigned balance to meet the cash flow needs of the department.
Options 3. Borrow from another fund Internal: Borrow from Water or Gas Fund It may be possible to borrow from the R&R Funds of one of the other utility departments. That would require a separate public hearing for that purpose. If the department chooses to borrow internally the affected department will have to adjust its budget to recognize the transaction. The Water Department is setting aside for a Water Treatment Plant and may need those funds in the near future, so they may not be available. The Gas Department is setting aside for a Propane Truck and for System improvements, their R&R dollars may not be available.
Options 3. Borrow from another fund External: Borrow from CIB or Banking/Lending Institution To borrow from an outside institution would cost the department the interest. However, it is possible. I believe the banks would work with the city. The CIB has proven to be a great blessing in meeting this type of need and offers a lower interest rate than most banks. They like to see cities develop and use R&R programs like the utility departments are doing, showing that they are operating responsibly, and I think they would look favorably upon lending. (They are not doing very many grants right now).
Analysis and Recommendation Based on its review, the staff recommends that the department allocate a portion of the Wastewater unassigned balance to complete the purchase of the vacuum truck. The bottom line is this: If the Wastewater Department is going to purchase the truck indicated, its budget will need to be increased to accommodate the purchase .
Summary FY 2018 Budget Adjustment for Wastewater Department Public Hearing is to inform the Public and receive input from the public regarding the intent to increase the Sewer Fund Budget by $125,000 in revenues and expenditures (from $1,339,300 to $1,464,300) to allow the purchase of a sewer vacuum truck.
Action to be Considered
Action to be Considered
Comments and Public Input Come to the microphone State your name for the record Keep comments related to the topic Be respectful Thank You
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