Page 135 - FY 2020-21 Budget Cover.pub

UTILITY FUND – IN BRIEF

REVENUES

Total Utility Fund revenues of $9,033,080 are projected for FY 2020-21. This reflects an
increase of $376,995 (4.36%) over the FY 2019-20 budget. This increase is based on historical
consumption and actual and projected growth in the City’s customer base. A water and
wastewater rate study was completed in FY 2016-17 and the recommended rate structure from
that study was implemented in FY 2017-18. After careful evaluation, it was determined that
these rates will continue to provide sufficient revenues and remain unchanged for FY 2020-21.

The graphs below show the growth in the number of customer accounts from FY 2016-17 to the
FY 2020-21 projection.

EXPENSES

Total expenses for the Utility Fund are projected at $8,432,923 which is $198,726 more than the
adopted FY 2019-20 budget. The increase is due in large part to increases in the personnel
services, contractual services, and capital outlay categories. Included in these categories are
increases for step raises and a new dump truck for the Utility Maintenance Department. Funds
to cover anticipated increases in health insurance, workers’ compensation insurance, and
TMRS retirement are also included in this budget. Major maintenance projects include the
continued slip lining of sewer lines near Glenhaven Drive. Expenditures for debt service
actually decreased this year by $210,127. This decrease is due to the laddered structure of the
City’s utility-related debt.

The projected ending working capital in the Utility Fund is $3,876,854, which is a decrease of
$68,811. This decrease is related to the capital expenses in the Utility Maintenance Department
mentioned above. In addition to budgeted expenses, the annual transfer to the General Fund to
cover the various administrative costs of the fund that are accounted for in the General Fund is
$668,968. The reduction in the projected ending working capital is not expected to negatively
impact Utility Fund operations as this amount exceeds the City’s stated goal of maintaining
reserves of 33% of operating expenses.

City of Azle 2020-2021 Budget 124