Page 54 - City of Watauga FY22 Adopted Budget

FIVE YEAR FINANCIAL FORECAST

Water and Wastewater Fund

Revenues in this enterprise operation are based on projected rates sufficient to
cover operations in each of the future years. Rates are based on projected cost
increases from Fort Worth and North Richland Hills as well as baseline increases
for the city’s operations, including salary plan adjustments, health insurance
increases, and changes in depreciation expense. Future projected rate
increases for both water and wastewater are shown.

The operating budget includes funding for the outstanding water and wastewater
debt issuances and funding to continue the annual water and wastewater
infrastructure improvements. The water and sewer fund has been in recovery
mode for several years due to inflow and infiltration costs in prior years. A water
and sewer rate study is conducted annually to ensure future revenues will be
sufficient to cover costs.

Water and Wastewater Debt Service Fund

Debt service transfers are based on current debt outstanding and projected debt
for the continuation of the waterline and wastewater line infrastructure
improvements. Debt is issued to fund various water and sewer projects in the
coming years. Debt payments related to these issuances will be paid from
system revenues.

Drainage Fund

The Drainage Utility fund provides for salary plan adjustments, health insurance
increases, and drainage improvement projects. User fees are expected to
remain flat, and projects will be paid from user fees when possible. Funding for
Whitley Road drainage projects continue through FY2023. There are two other
major projects scheduled to be paid from drainage rates in the next few years to
include Bunker Hill and Astor Heights.

Equipment Replacement Fund

Due to operating revenue constraints, funding for equipment may shift to debt to
relieve the General Fund operating fund. This is currently being evaluated for
future years, thus is The Equipment Replacement Fund is not included in this
year’s 5-year plan.

CLOSING COMMENTS
This document is a plan for the future. Many things will certainly change and this
document will need to be adjusted accordingly. Future capital projects and the

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