Page 23 - City of Westlake FY20 Budget

Section 01 Executive
Transmittal Letter

The Town of Westlake Fund Balance Policy states, “The Town shall strive to maintain the General Fund
undesignated minimum fund balance at, or in excess of, 180 days of operation”. The unassigned balance
of $11.8M reflects 439 operating days and follows the optimum balance defined in the Town’s policy. In
FY 19-20 staff will begin the process of evaluating future use of reserve funds for upcoming projects and
priorities.

The UTILITY FUND, an Enterprise Fund, is used to account for the acquisition, operation, and
maintenance of Westlake’s municipal water and sewer utility, supported primarily by user charges to
utility customers. The fund accounts for operational costs as well as debt service for utility system
improvement bonds. The intent of this fund is for the direct beneficiaries to pay for all costs of the fund
— including debt service — through fees levied for services provided. Utility Fund dollars are not used to
pay for general operations of the Town.

Revenue Highlights
Total revenues are budgeted to increase $773K, a 16% increase with the largest factor in Charges for
Services.

Charges for Services – These are budgeted to increase $751K. Water revenues are projected to increase
16% or $509K due to additional consumption, and wastewater is projected to increase 21% or $241K.
This increase is based on a water rate study performed in FY18-19 by our independent rate analyst.

The Town’s Utility Rates have remained unchanged since adoption in January 2017. The adopted budget
includes staff recommendation to maintain the existing water rates and to increase wastewater rates by
7%. These rates will be brought to Council for adoption in December and implementation in January
2020.
Permits and Fees – These are budgeted to increase $27K based on duct bank permit fees on residential
and commercial construction projections.

Expense Highlights
Expenses are budgeted to be $4.9M; a 5% increase of $241K from the prior year. The two largest
increases are related to (1) debt service payments of $104K for the increased debt payment to the Texas
Water Development Board for the regional Fort Worth water-line capital project, and (2) budgeted
increase of $157K due to increased rates to purchase water from the City of Fort Worth and its associated
peak payment.

Working Capital
This anticipated end balance is $2.6M with an unassigned ending balance being $1.5M. Operating days
for the Utility Fund are projected at 191 days.

Our CAPITAL PROJECT FUNDS track major equipment, land, and infrastructure projects of $25,000 or
more financed with General Fund operating transfers, intergovernmental revenue, bond proceeds, and
Special Revenue Fund transfers. Project completion or procurement may extend across two or more
fiscal years and reflect multiple expenditure categories such as engineering, design, and construction.
Completed capital projects often have a continuing fiscal impact on the Town’s operating funds due to
routine maintenance, repair, and daily operating costs. When an ongoing operating impact has been
identified, it is included on the project description sheet, and costs are projected for the next three
years. Upon approval of the project, the ongoing fiscal impact is integrated into the operating budget.

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