Page 20 - NRH FY20 Approved Budget

primarily due to increased treatment costs, but also related to the cost of replacing a large trunk
main that carries wastewater from NRH to the treatment plant in Fort Worth.

With the exception of last summer, consumption levels have remained lower since 2012 when
local and regional conservation efforts began. Increased public education has informed
customers on how to water more efficiently and minimize consumption. In addition, the rising
cost of water has caused some customers to reduce their consumption.

One of the weaknesses of the Utility Fund rate structure is that it relies too heavily on high
consumption years to provide income that will cover periods of low consumption. In looking at
our water rate structure we have discovered that our Base Rate does not even cover the City’s
direct cost for the 2,000 gallons of water that are included in the Base Rate, let alone cover fixed
costs such as metering and billing. In FY 2018/2019 we raised the Water Base Rate by $2, from
$10 to $12 per month. For FY 2019/2020 we are recommending an increase in the Water Base
Rate by another $5.50. Comparisons with other area cities reveals that our Base
Rate is significantly below market and this change will place our base rate charge in market.
Without modifying our rate structure, we will continue to be too heavily dependent on years
where there is high water consumption in order to keep the Utility Fund in the black on a
regular basis.

The Sewer Base Rate is also below average for area cities and was increased by $2 per
month to help capture more of the city's fixed costs.

Crime Control District Fund

As discussed in the General Fund, the lack of growth in sales tax revenues is limiting the
programs that can be funded through the Crime Control District (CCD). If this trend continues
in the future it will be necessary to either increase the General Fund subsidy or shift various
programs from the CCD over to the General Fund.

Parks and Recreation Facilities Development Fund

The Parks and Recreation Facilities Development Fund receives the majority of revenues from
the half cent sales tax for parks and recreation facilities approved by NRH voters in 1991. Other
major revenue sources to the fund include NRH Centre and Grand Hall revenues, tennis center
revenues, and revenue from park impact fees.

As previously mentioned, sales tax revenue is relatively flat, and this is reflected in adopted
revenues from sales tax to the Park Development Fund of $5,199,346. NRH Centre revenues of
$3,430,527 reflect a slight increase compared to the adopted budget as a result of increased
rentals at the Grand Hall, increased revenues in recreation and aquatic programs, and a slight
increase in revenues from memberships. An appropriation of sales tax reserves in this fund of
$224,057 is also reflected in adopted revenues to cover parks capital project costs.

Now that the NRH parks and trails system is built out, the cost of maintenance and upkeep,

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