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Enterprise Fund Overview What is an Enterprise Fund An enterprise fund establishes a separate accounting and financial reporting mechanism for municipal services for which a fee is charged in exchange for goods or services. Under enterprise accounting, the revenues and expenditures of the service are segregated into a separate fund with its own financial statements, rather than commingled with the revenues and expenses of all other governmental activities. Financial transactions are reported using standards similar to private sector accounting. Revenues are recognized when earned and expenses are recognized when incurred, under a full accrual basis of accounting. An enterprise fund provides management and taxpayers with information to measure performance, analyze the impact of financial decisions, determine the costs of providing a service and identi$' any subsidy from the general fund in providing a service. Enterprise accounting allows a community to demonstrate to the public the portion of total costs of a service that is recovered through user charges and the portion that is subsidized by the tax levy or other available firnds, if any. A community may choose to recover total service costs through user charges, but it is not required. IIistory The enterprise fund statute, MGL Ch 44 $ 53F % (formerly Chapter 4l $ 39K), was enacted in 1986. Before that time, communities used special r€venue funds authorized under various general laws or special acts in order to separately account for their business type services. These special revenue funds were limited, however, with regard to the services and costs covered. The funds were most commonly authorized for water, gas and electric utility deparfrnents and used primarily to account for annual operating costs, not the indirect costs, capital expenditures or fixed assets of the service. The purpose of the enterprise fund statute was to give commtmities the flexibility to account separately for all financial activities associated with a broader range of municipal services. New for FY 2014 As part of the FY 2014 budget process the Mayor requested and the Cþ Council approved the adoption of the Massachusetts Department of Revenue Division of Local Services Bulletin 2012-028 (page 3/7) which allows for the combining of water and sewer enterprise funds voted under MGL Ch 44 ç53F y, into a single water-sewer fund. The combined funds will be treated the same as the individual funds were and will have only one certifred retained eamings. For operational and accounting purposes the water and sewer enterprise funds will remain separate and distinct funds but will be combined for the purpose of certifying retained earnings and for reporting on the annual Tax Recapitulation report which sets the annual tax rate. This will allow the Cþ to use the Sewer Fund Balance to help offset Water revenue deficits and to help keep the water and sewer rate increases lower for rate payers. Sec 5 - 1 ---PAGE BREAK--- Basis of Accounting Proprietary fund revenues and expenses are recognized on the accrual basis. Revenues are recognizedinthe accounting period in which they a¡e eamed and become measurable; expenses are recognized in the period incurred, if measurable. The following major proprietary funds are classified as Proprietary and audited as such: o The Sewer Enterprise fund is used to account for the Sewer activities. o The Water Enterprise fimd is used to account for the Water activities. o The Trash Enterprise fund is used to account for the Trash activities. The following major proprietary funds are classified by the City as Special Revenue Funds but are audited and reported as proprietary o The Golf Course Enterprise fuird is used to account for the Golf Course activities. The following major proprietary fund is budgeted and revenue collected as part of the General Fund but is audited and reported as proprietary funds: o The Parking Department Enterprise fund is used to account for the Parking activities. For the entire MGL on Enterprise Funds visit the Massachusetts Department of Revenue website: Sec 5 - 2 ---PAGE BREAK--- Five Year Financial Forecast Water and Sewer Enterprise Funds FYI3 - FY17 3.59 3.77 5,095,989 270,000 4,838,523 0 3.92 5,299,829 280,800 4.O3 5,458,824 289,224 1,074,947 2,500 1,260,795 Updated 612612013 3.04 4.11 5,568,000 295,008 1,088,056 2,500 1,233,851 98 Non-Residential WATER REVENUE User Charges Other Department Revenue WATER RATES Retained Earnings Appropriated Other Financing Sources (OFS) Subsidy from Sewer Fund Balance WATER OFS/Trans in WATER EXPENSES 3% Administration lnsurance Expense (Deductibles) Long Term Debt - existing Short Term Debt - existing 3% Assessment Retained Earnings Expended Reserve Fund Other Financing Uses (OFU) TOTAL WATER REVENUE 4,853,323 200,000 Subtotal 4,804,613 77 (241,1291 655,080 5,053,323 5,365,989 5,580,629 5,748,048 5,963,009 218,738 136 7 120 I 1,025,597 2,500 1,322,701 3,000 2,450,815 1,043,638 2,500 1,306,854 3,000 2,482,531 1,056,365 2,500 1,299,039 2% lndirect Costs Subtotal TOTAL WATER EXPENSES NET CHANGE lN WATER FUND BALANCE (Projected) NET CHANGE lN WATER/SEWER BALANCE (Projected) 2,557,007 2,633,717 2,712,729 4,914,911 4,971,959 5,037,136 165 81 834 572 0 0 641,402 717 74qU7 517,733 664,550 Sec 5 - 3 ---PAGE BREAK--- Five Year Financial Forecast Water and Sewer Enterprise Funds FYI3. FYIT 8.19 10,49 8.60 11.01 Non-Residential < 25,000 cu ft Non-Residential > cuft SEWER REVENUE User Charges Other Department Revenue I ntergovernmental-SESD SEWER RATES oFs Retained Earnings Appropriated SESD Trans ln SESD PILOT SUBSIDY SEWER OFS/Trans ln TOTAL SEWER REVENUE SEWER EXPENSES 3% Administration lnsurance Expenses (Deductibles) Long Term Debt FY'l 4-FY 17 New Debt (Canal Street lmprovements) *Note - 58,500 not in FY2014 budget 3% SESD Assessment Retained Earnings Expended Other Financial Uses Subtotal 2% lndirect Costs Subtotal TOTAL SEWER EXPENSES NET CHANGE lN SEWER FUilD BALAilCE (Proþcted) Updated 612612013 8.94 11.45 9.12 11.68 9.31 't1.91 E,793,034 9,595,936 9,921,773 9,175,927 9,350,445 8,783,034 8,595,936 8,921,773 9,175,927 9,350,¡145 7,758,O34 225,000 800,000 876,1 13 5,000 259,¿+63 I,145,936 450,000 896,504 5,000 248,850 58,500 8,471,773 450,000 902,396 5,000 249,275 309,075 8,725,927 450,000 923,399 5,000 244,625 303,225 8,900,¿145 450,000 929,468 5,000 239,500 297,375 5,962,900 5,831,817 6,006,772 6,186,975 6,372,584 1,1l,3,116 ltwo,f¡ll 7,472,518 ,6,6,3,224 ,443.927 831 522 848 153 865 116 7,886,525 7,855,889 E,304,040 E,511,377 E,709,043 I 889 81 7 049 525 7 E96,fltg 710,U7 617.733 .5q, il1.102 Sec 5 - 4 ---PAGE BREAK--- CITY OF SALEM ENTERPRISE FUNDS A2 SUilIMARY FY 2012 FY 2013 FY 2014 FY 13 VS FY I¡I FY 13 VS FY 14 REVENUE SEWER RATES 7,459,648 481,872 7,758,034 225,000 8,145,936 450,000 5.00% 100.00o/o 387,902 225,000 OTHER SEWER WATER RATES OTHER SUBSIDIES 4,306,700 267,450 4,853,323 200,000 5,095,989 270,000 5.00% 35.00% 242,666 70,000 TRANS/OFS/GF SUBSIDIES/SEWER SUBSIDY 000 150 632,551 54,283 21 738 600,000 50,000 970 540,000 45,000 -10.00% -10.00% -14.87o/o (60,000) (5,000) TRASH FEES OTHER TRASH TRANS/OFS/GF SUBSIDIES 2 047 REVENUE I REVENUE EXPENDITURES SEWERADMIN SEWER FIXED COSTS Sewer -lndirect Costs/OTHER FINANCIAL USES 959,824 876,1 1 3 6,227,363 896,504 6,08s,667 2.33o/o -2.28o/o 20,391 (141,696) [PHONE REDACTED] 1,016,278 3,546,595 783 049 1,025,597 3,779,016 1,043,638 3,794,885 1,760/o 0.12o/o 10.94o/o 169 18,041 15,869 81 I 4.11 WATER ADMIN WATER FIXED COSTS -1.13o/o 7 -l ndirect Costs/OTHER FINANCIAL 30,416 2,703,912 34,585 2,776,099 67,078 2,357,210 93.95% -15.09% 77 32,493 (418,889) TRASH PERSONNEL TRASH NON-PERSONNEL TRASH Costs/OTHER FINANCIAL USES 1 TOTAL Sec 5 - 5 ---PAGE BREAK--- ENTERPRISE FUND -A2 REVENUE ¡ ûËhe SddÍCrFs lûõhFe6 ttx tß FY 2013 I WeÞrn# inx ¡Sær(F o* ¡Sæhs si¿x ToTAr S ß,gss,ttg ENTERPRISE FUND -A2 REVENUE lT?âdrfa€ lx I f¡ãhGF sùb¡dyG 1t6 FY 20t4 tvE6 ¡Seçlnæs 5i& ¡ SflÞr(F ú TorAt S r6,fl5,183 ENTERPRISE FUND -A2 EXPENDITURES a* ttx t ¡hrtud Goels Gosb att6 FY 2013 r TdtC lSffilnú,sct @sE 5r sl¡¡s¡dyofs t* r$bfËîh 6!X TOTAT S 16,210,699 ENTERPRISE FUND -A2 EXPENDITURES t fãsh Fer$mal aß I ¡ f 5dË ÈEoüal 4X GGts rSætud G6È FY 2OL4 ¡ rdrc slúddfot t* ltãEâúúr tx rSær[dßü C¡6ls sf, TOTAL $ 15,8/16,635 Sec 5 - 6 ---PAGE BREAK--- 1. Enterprise Revenues & Available Funds User Charges Connection Fees Other Departmental Revenue lnvestment lncome I ntergovernmental-SESD Total Revenues Retained Earnings Appropriated (stabilize rates in FY12 - meter install) Other Enterprise Available Funds - WS Combined Other Enterprise Available Funds Total Revenue & Ava¡lable Funds 2. Total Costs Appropriated a. Costs appropriated in enterprise fund Public Services Engineernig Long Term Debt (principal and interest) Short Term Debt (interest only) Other (SESD assessment) Retained Earnings Expenditures I nsurance Expense (Deductibles) Enc/Trans Out SCHEDULE A-2 ENTERPRISE FUNDS SALEM SEWER ENTERPRISE FUND -FY14 7,459,648 481,872 0 7.941.520 148,000 1324 8,090,844 445,781 514,O43 166,125 0 6,140,989 0 0 7,758,034 225,OOO 800,000 8,783,034 0 ö, /63,U34 460,255 415,858 259,463 0 5,962,900 5,000 8,145,936 450,000 0 8.595.936 (798,547) ,(9(,389 502,910 393,594 248,850 0 5,831 ,817 5,000 5.0% 100.0% -2.1% -11.zYo 9.3o/o -5.4o/o -4j% -2.2% 0.0% FY12 Actual FY13 Estimated DOR Recap FY14 Mayor's Recommended Percentage Change FY13 vs FY14 Total costs tn fund b. Costs appropriated in the general fund (to be transferred to enterprise Total costs in the Total Sec 5 - 7 ---PAGE BREAK--- 3. Calculation of General Fund Subsidv Revenue & available funds less: Total costs less: Prior year deficit lNeqative reoresents oeneral fund subsidv) 4. Sources of Fundinq for Costs Appropriated in the Enterprise Fund a. Revenue & available funds b. Taxation c. Free Cash d. Non-Enterprise available funds Total Sources of Funding for Gosts Aoorooriated in Enterorise Fund SCHEDULE A-2 ENTERPRISE FUNDS SALEM SEWER ENTERPRISE FUND .FY'14 8,090,844 8,059,245 31,599 8,059,245 8,059,245 8,783,034 7,886,525 896,509 7,886,525 7,886.525 7,797,389 7,797,389 0 7,797,389 7.797.389 -11.2% -11% -11% -1j% FY12 Actual FYl3 Estimated DOR Recap FY14 Mayor's Recommended Percentage Ghange FYl3 vs FYl4 Sec 5 - 8 ---PAGE BREAK--- 1. Enterprise Revenues & Available Funds User Charges Connection Fees Other Departmental Revenue lnvestment lncome SCHEDULE A-2 ENTERPRISE FUNDS SALEM WATER ENTERPRISE FUND -FY14 4,306,700 267,450 4.853,323 200,000 5,095,989 270,O00 5.O% 35.0% FY12 Actual FYI3 Estimated DOR recap FY14 Mayor's Recommended Percentage Change FY13 vs FY14 360,000 5 053 323 218,738 5 365 989 258,970 6.2o/o Retained Earnings Appropriated (stabilize rates in FY12 - meter install) General Fund Subsidy for PR FY (FY12) Deficit General Fund Subsidy EOFY 2013 Other Enterprise Available Funds 6 2. Total Costs Appropriated a. Costs appropriated in enterprise fund Public Services Engineernig Long Term Debt (principal and interest) Short Term Debt (interest only) Other assessment) Retained Earnings Expenditures I nsurance Expense (Deductibles) Enc/Trans Out 492,341 523,937 1 ,1 30,049 0 2,403,095 0 0 500,939 524,658 1,322,701 3,000 2,450,815 0 2,500 541,144 502,494 1,306,854 3,000 2,482,531 0 2,500 8.Oo/o 4.2Yo 1.3o/o costs aoorooriated in enterorise fund b. Costs appropriated in the general fund (to be transferred to enterprise) 4.562_873 4.804.613 4.838.523 Total costs Tnfal Casfs 786 436 10.9% 5.263.484 5.513.490 ,624,959 2.0% Sec 5 - 9 ---PAGE BREAK--- 3. Galculation of General Fund Subsidv Revenue & available funds less: Total costs less: Prior year deficit SCHEDULE A-2 ENTERPRISE FUNDS SALEM WATER ENTERPRISE FUND .FY14 4,934,150 5,263,484 5,272,061 5,513,490 5,624,959 5,624,959 6.7% 2.0% FY12 Actual FY13 Estimated DOR recap FY14 Mayor's Recommended Percentage Ghange FY13 vs FY14 0 4. Sources of Fundinq for Costs Appropriated in the Enterprise Fund a. Revenue & available funds b. Taxation c. Free Cash d. Non-Enterprise available funds Total Sources of Funding for Costs Aoorooriated in Enterorise Fund 5,263,484 5.263.484 5,513,490 5.513,490 5,624,959 5,624,959 2.Oo/o 2.OYo Sec 5 - 10 ---PAGE BREAK--- l. Enterorise Revenues & Available Funds User Charges Other Departmental Revenue Total Revenues Retained Earnings Appropriated** SCHEDULE 4.2 ENTERPRISE FUNDS SALEM TRASH ENTERPRISE FUND .FY14 632,551 54,283 686,835 600,000 50,000 650,000 540,000 45,000 585,000 -10.00% -10.00% -10.00% FY12 Actual FY13 Estimated DOR Recap FY'14 Estimated Mayor's Recommended Percentage Change FY13 vs FY14 Other Available Funds 2. Total Costs Aooropriated a. Costs appropriated in enterprise fund Salaries Contracted Services - Collection Contracted Services - Disposal Contracted Services - Collection and Disposal (flat fee) Other Expenses Reserve Fund 30,416 2,674,291 29,621 34,585 2,741,'t49 34,950 67,078 2,326,760 30,450 93.95% -15.120/o -12.88o/" Total costs aopropriated ¡n enterprise 2.734.328 2,810,684 2,424,288 Sec 5 - 11 ---PAGE BREAK--- 1. Enterprise Revenues & Available Funds b. Costs appropriated in the general fund (to be transferred to enterprise) Total costs aoorooriated in the qeneral fund 3. Calculation of General Fund Subsidv Revenue & available funds less: Total costs less: Prior year deficit SCHEDULE 4.2 ENTERPRISE FUNDS SALEM TRASH ENTERPRISE FUND .FY14 0 686,835 2,734,328 0 650,000 2,810,684 0 0 2,424,288 585,000 2,424,288 0 -13.750/o -10.00% -13.75o/o 0 Total Gosts 2.734.328 2,810,684 fund 4. Sources of Funding for Gosts Appropriated in the Enterprise Fund a. Revenue & available funds b. Taxation c. Free Cash d. Non-Enterprise available funds Total Sources of Funding for Costs Aoorooriated in Enterorise Fund 686,835 2,089,981 2.776,816 650,000 2,160,684 2,810,684 585,000 1,839,288 2,424,288 -10 00% -14.87o/o -13.75o/o Sec 5 - 12 ---PAGE BREAK--- CITY OF SALEM REVENUE SUMMARY. ENTERPRISE FUNDS Actual FY 2011 RECAP FY 2013 ncrease FY 2012 FY 2010 FY 2014 FYl3 vs. FY14 FYl3 vs. FY14 ENTERPRISE FUND SEWER RATES SEWER TRANS/OFS 7,170,497 7,587,055 7,941,520 8,783,034 8,595,936 -2.13% 1,008,881 0 WATER RATES WATER TRANS/OFS 360 sEwER 7,530,885 7,587,055 4,270,968 389 4,728,851 TOTAL WATER 4,271,357 4,728,851 713,827 700,000 7,941,520 8,783,034 8,595,936 -2.13% 4,574,150 360,000 5,053,323 218,738 5,365,989 6.19% 258,970 585,000 1,839,288 -10.00% -14.87% 1,008,881 637,138 258,970 896,108 (115,000) 4,934,150 686,834 650,000 5,272,06',1 5,624,959 6.69% TRASH FEES TRASH General Fund 1 249 2 o47 160 961 195,961 TOT 1,902 504 616 I 2 2 288 ,13.75% ENTERPRISE FUN AL1 18,573 1 155 15,609,997 779 I 183 -1.31% 1 Sec 5 - 13 ---PAGE BREAK--- ESTIMATED REVENUES SEWER ENTERPRISE FUND r Odpritbc n6ßnE :tt6 ! OûêrfffiH solrEþFsl FY 2013 ¡ Smrn¿bs 8* TOTAT S 8,783,034 ESTIMATED REVENUES SEWER ENTERPRISE FUND I OdErl,l¡s nænE 5* r (Xls Éffibl sq¡tæÍOFSI ox FY 2OL4 I s€FrnaEs 95t6 TOTAT S 8,s9s,936 ESTIMATED REVENUES WATER ENTERPRISE FUND r Rænc 1X r soucPEs¡ FY 2013 r WaÈrRa!É c¡:Jß TOTAL 5 5,272,06r ESTIMATED REVENUES WATER ENTERPRISE FUND ¡ ÈrenE 5X r (xlpr Énadal sorc(nrf 5* FY 20t4 I IÐx TOIAL s 5,624,9s9 Sec 5 - 14 ---PAGE BREAK--- ESTIMATED REVENUES TRASH ENTERPRISE FUND ¡ fFõhFe6 zrx r nænE tx FY 2013 t GeæBlFud 9¡bs¡dv Ttx TOTAT S 2,810,684 TOTAL ESTIMATED REVENUES ENTERPRISE FUNDS t ttsadr Fùd tTN 5ærF¡nd tzx FY 2013 ! HerF¡nd 3tx TOTAr s L6,865,7f9 TOTAL ESTIMATED REVENUES ENTERPRISE FUNDS ¡kterRDd vI% FY 2OL4 ¡ ftsõhF¡nd tlx ¡s:IærF¡rd tzf5 TOTAL s 16,64s,183 ESTIMATED REVENUES TRASH ENTERPRISE FUND ¡ fFõùhs zÉx rR3qd¡tt R#nB FY 20t4 xx sl¡b¡df TOTAT 5 2,424,288 7* Sec 5 - 15 ---PAGE BREAK--- ENTERPRISE FUND REVENUE DETAIL In FY 2013 the City Council voted to COMBINE the water and sewer enterprise funds as allowed by the Department of Revenue as outlined in Bulletin 20I2-B (page 317). Over the past two years the V/ater Enterprise fund revenues have not been sufficient to cover expenses. In FY 2013 we had to raise $218,738 on the General Fund Tax Recapitulation to cover the FY 2012 deficit. We will also have to appropriate Free Cash to cover the June 30, 2013 anticipated deficit of approximately $200,000. By combining the funds we can use sewer revenue to help offset the water deficit. We are also requesting a 5Yo íncrease on both water and sewer rates for FY 2014 to cover the def,rcit and to build up funds to cover anticipated water and sewer bond costs for projects including the Canal Street project which we anticipate to be approximately l6M. The water and sewer funds will remain in separate funds for accounting and budgeting purposes within the City. But they will be combined for reporting purposes on the City's annual f,rnancial statements (CAFR) and for calculating Retained Eamings by the Department of Revenue. Revenues for enterprise funds are derived from the following sources Charges and Fees - Amounts paid by those who use the service. These include late charges, fees and interest incurred in the collection process. Other Revenue Sources (OFS) - Includes all other receipts such as state funding, grants, surplus from South Essex Sewer District (SESD) & the Salem Beverly W'ater Supply Board and monies from apportioned and un-apportioned betterments and special assessments relating to the enterprise fund. Retained Earnings - The operating surplus of the enterprise fund. Based on the submission of a June 30 balance sheet, the retained earnings of an enterprise may be used for appropriations only after the Bureau of Accounts certifies it as a surplus. This surplus may be used for capital projects or to offset the operating budget, which effectively reduces the user charges, rates, or general fund subsidy. Like free cash and other general fund reserves, the surplus must be appropriated before the subsequent June 20. After July 1, no appropriation can be made from the surplus until after it is certified by the Director of Accounts. General Fund Subsidy - Any revenue deficits in an enterprise fund can and should be funded by the general fund, either during the initial budgeting process (if anticipated) or raised on the Recap after year end The City of Salem uses the following sources to fund each enterprise fund Sewer - User fees, penalties and interest, sewer liens, backflow tests, other miscellaneous revenue and any fund balance surplus at the South Essex Sewerage District (SESD). SESD surpluses are the result of our assessment payment being more than the actual costs of running SESD. Water - User fees, penalties and interest, water liens, sale of water meters, and revenue from shutoffs. Trash - User fees, penalties and interest and general fund subsidy. a a a a Sec 5 - 16 ---PAGE BREAK--- SEWER ENTERPRISE FUNI) Sewer Revenue - The sewer revenues consist of penalties & interest, sewer rates revenues, sewer liens revenue, sewer backflow tests, and miscellaneous revenue. V/e also request on an annual basis that SESD send us any fund balances that they may be holding in our behalf. In FY 2014 we are proposing a 5Yo rate increase to help cover operational, debt service, and assessment charges for FY2014 as well as help offset the water deficit. We anticipate increasing retained earnings to help fund our capital improvement program. The chart below shows an overall deficit of 2.1%o due to the 800K we received from the South Essex Sewerage District (SESD) in FY 2013 (the City's retained earnings held by SESD) that we do not anticipate getting in FY 2014. Sewer Enterprise Revenue 10,OOO,O0O g,ooo,0o0 6,OoO,OOo 4OOO,OOO 2,OOO,OOO FYO5 FYO6 FYOT FYOS FYOg FY1O FY].1 FYL2 FYl-3 FYT4 Per Recap Estimated -2.1% Revenue 7,909,582 6,990,045 7,074,210 7,082,031 7,582,289 7,955,103 7,587,055 7,941,520 8,783,034 8,595,936 FiscalYear 2008 2009 2010 2011 2012 2013 2014 % Ghange FY13 vs. FYl4 2005 2006 2007 Sec 5 - 17 ---PAGE BREAK--- WATER ENTERPRISE FUNI) \ilater Revenue - The water revenues consist of penalties & interest, water rates revenues, water liens revenue, and miscellaneous revenue. In FY 2014 we are proposing a 5Yo rate increase to cover operational, debt service, and assessment charges for FY20I4. As mentioned in the overview we are combining water and sewer funds in FY 2014 as allowed by the DOR to help offset a revenue deficit in the water fund. V/e anticipate sewer revenues will more than offset the water deficit and allow us to build up retained earning reserves to help fund future debt service for Capital Improvement Programs. We also anticipate the final phase of the water meter program and the installation of new water meters for commercial building throughout the City will aide in increasing water reserves for FY 2014 andbeyond. Water Enterprise Revenue 6,OOO,OOO 5,OOO,OOO 4OOO,OOO 3,OOO,OOO 2,OOO,OOO l_,ooo,ooo FYO5 FYO6 FYOT FYOS FYOg FY1O FYl-]- FYLZ FY13 FYT Per Recap Estimated 6.7To Revenue 4,273,573 4,544,002 4,544,171 4,613,919 4,056,195 4,271,357 4,662,937 4,934,150 5,272,061 5,624,959 FiscalYear 2005 2006 2007 2008 2009 2010 2011 2012 2013 20'14 % Change FYl3 vs. FYl4 -IEIT r õ Sec 5 - 18 ---PAGE BREAK--- TRASH ENTERPRISE FUNI) Trash Revenue - The trash revenues consist of penalties & interest and trash fee revenue. We subsidize the majority of the fund with a general fund transfer. We renegotiated the trash contract which resulted in a reduced trash collection fee which will allow us to reduce the amount *e .h*g. ont ratepayers. In FY 2014 we anticipate a lÙYo revenue decrease based on lower rates. The City recently voted a mandatory recycling initiative which we hope will increase recycling rates and decrease trash tonnage. Trash Enterprise Revenue 1,000,000 800,000 600,000 400,000 200,000 FYO5 FYO6 FYOT FYOS FYOg FYI-O FY11 FYL2 FYl-3 FY14 In FY 2014 we anticipate a 14.9Yo decrease in the General Fund Subsidy to the Trash Enterprise Fund due to the renegotiated trash contract. We reduced rate fees based on that factor as well. General Fund Subsidy to Trash Enterprise Fund 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500 000 FYOS FYO6 FYOT FYOS FYOg FYI.O FY1.1. FYL2 FY1.3 FY14 Per Recap Estimated -10.0% Revenue 780,268 715,844 713,827 697,050 685,835 650,000 585,000 FiscalYear 200s 2006 2007 2008 2009 2010 2011 2012 2013 2014 % Ghange FY13 vs. FYl4 Per Recap Estimated -14.9% Revenue 2,425,186 1,811,834 I,902,504 1,912,399 2,047,493 2,160,684 I,839,288 FiscalYear 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 % Change FYl3 vs. FY14 Sec 5 - 19 ---PAGE BREAK--- ACTUAL EXPENDED FY 2012 445,781 460,255 514,043 415,858 6,'140,989 5,962,900 166,125 259,463 0- 0 5,000 CITY OF SALEM, MASSACHUSETTS FY 2014 OPERATING BUDGET ADOPTED ADJUSTED DEPT BUDGET BUDGET BUDGET FY2013 FY20t3 FY 2014 FY 13 Adj vs FY 14 Budget Inc/Decr Amount Percentage MAYOR BUDGET î( 2014 ENTERPRISE FUNDS SEWER: Sewer - Public Services Sewer - Engineering SESD Assessment Long ïerm Debt Short Term Debt Sewer - lnsurance Deduction WATER: Water-Public Services Water-Engineering Long Term Debt Sho¡tTerm Debt SBWS Assessment Water - lnsurance Deduction TRASH: Trash - Engineering TOTAL SEWER 5,000 5,000 5,000 7,266,938 7,103,476 7,128,476 6,990,307 6,982,171 491,769 419,596 5,962,900 249,211 501,395 403,245 5,831,817 248,850 542,079 512,045 1,306,854 3,000 2,482,531 2,500 502,910 393,594 5,831,817 248,850 541,144 502,494 1,306,854 3,000 2,482,531 2.500 1'1,141 (26,002) (r 31,083) (361) 33,69'1 (25,902) (5,5s5) 31,716 2.27% -6 20o/o -2 20o/o 664% -4.90o/o -0.43o/o 0.00% 1.29o/o 0.00% -146,305 -2.050/0 492,341 523,937 1,130,049 0 2,403,095 0 500,939 524,658 1,322,701 3,000 2,450,815 2,500 507,453 s28,396 1,312,449 3,000 2,450,815 2,500 TOTALWATER TOTAL TRASH ENTERPRISE FUND TOTAL 4,549,422 4,804,613 4,804,613 4,849,009 4,838,523 33,910 0.710/o 2,734,328 2,810,684 2,810,684 2.465.395 2.[PHONE REDACTED].396) -13.750/o 2,734,328 2,810,684 2,810,684 2,465,395 2,424,288 (386,396) -13.750/0 14,550,688 14,718,773 14,743,773 11,304,711 14,24,992 (498,791) -3.39% Sec 5 - 20 ---PAGE BREAK--- ADOPTED BUDGET SEWER ENTERPRISE FUND I lnseE I TiËhGF subüt(rs v ¡ h¡U¡cSêßi.B 6!X FY 2013 ¡ SED Affint a4* TOTAL 5 7,tO3,476 ADOPTED BUDGET SEWER ENTERPRISE FUND ¡ lßutæ r ûõhGF 9¡H.lyOCs t* ¡ Püb[c$]úc 7X FY 20t4 ! SED Asnqt &tx TOTAT 5 a,gaz,Yt ADOPTED BUDGET SEWER ENTERPRISE FUND FY 2013 SEWER FUNI) Personnel E)@enses 438,844 6.664.632 TOTAL $ 7.103.476 f Rreild 6r rF4€E lyl'É ADOPTED BUDGET SEWER ENTERPRISE FUND FY 2014 SEWER FUNI) Personnel 466,325 Epenses 6,515,84ô TOTAL I 6,982,171 I Fêm[rd rÐc6 9!!X Sec 5 - 21 ---PAGE BREAK--- ADOPTED BUDGET WATER ENTERPRISE FUND ¡ llËlm r ShortTem Dêh sx !E*¡tElt D€úrtiDn gx¡ R¡bl¡csaflirË tú, I Dcl't ax FY 2013 lúsñÍrút 5t* TOTAL s 4,804613 ADOPTED BUDGET WATER ENTERPRISE FUND FY 2013 IVATERFUNT) Personnel E)eenses 455,284 4.349.329 TOTAL 4,804,613 I Fersord s* 4etæs í'¡x ADOPTED BUDGET WATER ENTERPRISE FUND llreH ¡ ¡ ¡Þbts€ruke FY 2OT4 swB TOTAT S 4,838,523 ADOPTED BUDGET WATER ENTERPRISE FUND FY 2014 WATER FIJND Personnel ExDenses 442,765 4.355.758 TOfAt 4,838.523 lÈÐm.a tax lErlg Sec 5 - 22 ---PAGE BREAK--- ADOPTED BUDGET TRASH ENTERPRISE FUND lF¡glEdlt Adnin t* FY 2013 ¡Sold*& Golletfon tm TOTAL s ¿810,684 ADOPTED BUDGET TRASH ENTERPRISE FUND FY 2013 TRASH FUND Personnel 34,585 Epenses 2,776,099 TOTAL $ 2,610,684 ! PsþnrìC 1t6 r 4eE c,tx ADOPTED BUDGET TRASH ENTERPRISE FUND ¡ErEl¡Etlt Adr¡n lx tY 20L4 TOTAT 5 2,424,288 I Colledon Itß ADOPTED BUDGET TRASH ENTERPRISE FUND FY 2014 TRASH FUNI) Personnel E)@enses 67,078 2.357.210 TOTAL 2,424.258 !ÈmDC 3N rF4æ Ifit6 Sec 5 - 23 ---PAGE BREAK--- INTERFUND TRANSFERS/OTHER FINANCIAL USES (OFÐ Enterprise Fund Other Financial Uses (OFU) - The Water and Sewer Enterprise Funds, financed by water and sewer usage charges, provide reimbursements for direct and indirect costs associated with a variety of City services, provided by Finance, Treasury, Human Resources, and other City Departments. Additionally, enterprise funds provide reimbursements to the general fund for all employee benefits (health, life, dental insurances, etc) of those employees who work for the water and sewer departments, as well as costs for the maintenance of the Vy'ater and Sewer accounting and billing system. Finally, a portion of the City's assessments for property/casuaþ insurance, unemployment and worker's compensation are also captured in the indirect costs of the enterprise funds of the water and sewer departments. For FY 2014 an increase in indirect costs of 5109,782(7.4%) is projected. The Trash Enterprise Fund is not self sustaining and therefore subsidized by the General Fund. Indirect Costs are booked by a journal entry from Tax Recapitulation Sheet (RECAP) when the Tax Rate is sent in December as voted by City Council. OFU - lndirect Costs Water & Sewer 1,8OO,OOO 1,60O,0OO 1,40O,000 1,20O,0OO 1,00o,00o 800,ooo 600,oo0 400,ooo 200,ooo FYOs FYO6 FYOT FYOS FYO9 FY1O FYl-]. FYL2 FY1.3 FY74 Per Recap Estimated 7.4o/o 1,507,632 1,195,330 1,258,161 1,301,747 I,430,065 1,452,222 1,477,O74 1,491,926 1,601,654 Revenue 1,384,097 2009 2011 2012 2013 2014 % Change FY13 vs. FY14 FiscalYear 2005 2006 2007 2008 2010 G - I Sec 5 - 24 ---PAGE BREAK--- curent $ 2.431.20 $ 't .519.00 8 1.352.20 006 E0 s 1.786 80 $ 400.00 s 774 00 s 120600 $ 1,323 00 $ 306 00 $ 410 00 $ 716 00 $ 386 00 $ 1.592 00 Water: $ 707 00 $ 318.00 648 00 966.00 907.20 s$ 445.00 964 00 Combined: $ 871 20 $ 915 60 $ 737 00 $ 1,137 00 $ 549 00 ewer: ewer: ewer: Annual Co Water: Sewer: Combined: Water: Combined: Water: Sewer: Combined: Water: Combined: 00 $1 Combined Water: Sewer: Comb¡ned Water: Sewer: Combined: Water: Sewer: Combined: Water: Comb¡ned: comb¡ned: 7 50o/o 4 5Oo/o 270o/o 0.00% 3 900/. 0 00% 0 00% % chanoe from FY201 I 5 600/. 5.00% 3 60% 711012013 7 t1t2012 Fund 7t112012 811t2011 Last Rate 7t1t2012 71112012 71112011 71112012 71112012 Entemrise Fund Enleror¡se Fund Enterorise Fund 3-Fam 7 1 General Fund Enterprise Fund Weler & Sewer Fund Ad¡ustmenl Water & Sewer Water& Sewer Enterorise Water & Sewer Enterprise Fund Water & Sewer Water & Sewer Enterprise Fund Enterprise Fund Water & Sewer Water & Sewer Enterprise Fund Waler & Sewer no yes sentor no D¡scounts ves 10% water if pd within 15 davs yes 10% water if od. wilh¡n 15 davs no no ves 15o/o weler elderly/low tncome no owner occ- yes elderly/d¡sabled no 251+ HCF HCF HCF HCF 0-250 HCF 0-250 HCF 251+ HCF I-ICF > 10-15 HCF 20-24HCF 24-Greater HCF 0-40 HcF 40- Greater HCF 0-27 HCF 27-73 tlCF 73-2,812 HCF belence 0-30 HcF balance 0-1s HcF 630 $ 375 $ $ 10 49 $ 1420 same Commercial $ 819 $ 860 $ '11 01 same same r0-10 HCF same same $ 612 same same same same same same same $ 4.13 balance $ 7.63 $ 't1.10 $ 6f2 s 639 s 325 $ 1005 $ 610 $ 587 $ 803 875 10 06 $ $ $ 612 s 630 $ 633 $ 644 $ 645 $ 358 $ s60 Sewer Res¡dent¡al $ 540 $ 567 20-24 HCF HCF HCF 0-15 HCF 15-30 HCF balance HCF HCF HCF 0-10 HcF > f0-f5 HcF > I SHCF 0-20 HcF 24 - GrcaletHCF 0-40 HcF 40- Greater HÇF t-tcF o-27 HCF 27-73 HCF 73-2 412 HCF balance 0-30 HcF balance 290 344 470 359 i 593 57E same same seme $ 316 seme $ 377 same same sâme same same same $ 290 $ 322 s 265 $ 560 s 333 same $ 440 s 640 $ 410 g 244 $ 2.66 Water Residentiel $ 278 $ 2.52 $ 410 $ 499 $ 5 97 seme $ 503 $ 7.26 $ 916 $ 343 $ 3.52 Beverlv SwamDscott Lvnn Marblehead Peabody Revere salem - 71112012 Salem - 71112013 Proposed Chelsea Danvels $ 861.1 1 $ $ Communities vs, $ (1 34 Sewer: Comb¡ned 46 09 88.67 NOTE: All data taken from MWRA Annual Water and Sewer Retail Rate Suruey - December 2012 except Danvers (source:Danvers DPW, May 2013) Sec 5 - 25 ---PAGE BREAK--- 2021 140,000 14,700 30,375 '135,000 30,375 32,000 12,960 95,000 41,325 50,000 21,750 300,000 139,500 140,000 '18,900 75,000 75,000 32,625 32,000 13,920 50,000 300,000 148,500 23.100 75.000 '135,000 135,000 38,475 34,425 47,025 44,175 50,000 24,750 23,250 300,000 '157,500 '140,000 140,000 37,125' 34,975 135,000 42,525 32,000 32,000 15,840 14,880 95,000 95,000 95,000 49,875 50,000 26,250 300,000 166,500 2020 2019 2018 2017 140,000 31,500: 27,300 75,000 ; 75,000 39,375 135,000 46,575 32,000 16,800 95,000 52,725 50,000 27,750 300,000 175,500 2016 140,000 35,700 75,000 41,625 135,000 50,625 32,000 17,760 95,000 55,575 50,000 2015 39,900 43,875 '135,000 78,975 32,000 18,720 28,500 90,000 15,000 29,250 2014 '140,000 2'1,000 r 75,000 22,500 40,500 2,700 Principal Principal lnterest Principal lnterest Principal lnterest Principal lnterest Principal lnterest Principal lnterest 3.00% Projected Bond lnterest Rate $ 1,400,000 lnterest $ 1,500,000 $ 1,000,000 $ 6,000,000 Salem Debt Service Projection FY2014 - FY2016 Projects Folly Hills Storage Tank - full rehab (FY'l4-FY15) $ 2,700,000 Fire Hydrant Replacement System (FY14 - FY15) $ 640,000 Transmission Main Sohier Road (FY15) $ 1,900,000 Salem PS and Booster Station (FY16) Distribution Main Rehab (FY16) 15,140,000 Principal lnterest 382,000 224,970 527,000 320,535 827,000 390,225 827,000 365,415 827,000 340,60s 827,000 315,795 827,000 290,985 86,700 TOTAL: Water Enterprise s Sewer Enterprise 24,975 1 10,000 Canal Street Canal Street 1 $ $ $ $ P ram: Drainage Canal Street Utility Program: Sewer ram: Water ram: South River Conduit 11,100 33,000 500 13 Prin 2,200,000 P Principal 900,000 22,275 20,925 19,575 11 10,000 47,850 150 54,450 , 51 000 700 000 8 20 20 I 9,900 20,000 20,000 110,000 18,225 45,000 8,100 20,000 8,'100 44,550 20,000 110,000 23,625 45,000 '10,500 20,000 10,500 20,000 1 10,000 45,000 61,050 20,000 '1 1,'100 20,000 11,700 26,325 20,000 45,000 11,700 64,350 20,000 6,000 6,000 lnterest lnterest Principal lnterest lnterest 110,000 9,900 8,700 45,000 45,000 57,750 3,900,000 Principal lnterest 195,000 114,075 195,000 108,225 195,000 90,675 195,000 84,825 195,000 78,975 TOTAL: Departmental Equipment 58,500 $ 195,000 195,000 102,375 96,525 GRAND TOTAL GRAND TOTAL PRINCIPAL INTEREST 19,040,000 Principal lnterest 577,000 339,045 722,OO0 428,760 1,022,000 492,600 1,O22,O00 461,940 1,022,000 1 431,280 o22000 400 620 1,022,000 369,960 145,200 $ GRAND TOTAL: PRINCIPAt AND INTEREST COMBINED t45,200 760 1,514,600 t,483,940 r,453,280 1,422,620 1,391,960 Water Enterprise Water Meter Replacement (FY13) Gallow Hills Storage Tank - full rehab (FY14) Sec 5 - 26 ---PAGE BREAK--- 2031 7s,000 7,875 135,000 18,225 32,000 3,360 95,000 12,825 50,000 6,750 300,000 49,500 2,100 20,000 45,000 4,725 2030 75.000 10,125 135,000 32,000 4,320 15,675 50,000 20,000 2,100 2,700 20,000 1'10,000 20,000 1 1,550 2029 75,000 12,375 32,000 5,280 95,000 95,000 18,525 50,000 6,075 10,125 14,175 150 11 1 10,000 14,850 110,000 21 000 75,000 2027 " 2028 16,875 14,625 135,000, '135,000 '135,000 6,075 32,000 32,000 7,200 6,240 95,000 95,000 24,225 21,375 50,000 50,000 11 8,250 58,500 300,000 9,750 67,500 300,000 12,750 85,500 300,000 20.000 4.500 900 10¡25 7,425 20,000 3,300 2,700 6,075 45,000 8,775 000 000 900 45.000 20,000 3,300 2026 75,000 75,000 19,125 135,000 10,125 32,000 8,'160 95,000 27,075 50,000 14,250 300,000 94,500 20,000 5,1 00 45,000 11,475 32,000 9120 95,000 103,500 2025 50,000 '15,750 140,000 2,100 75,000 75,000 23,625 21,375 135,000 135,000 18,225 14,175 32,000 10,080 95,000 32,775 29,925 50,000 17,250 300,000 300,000 112,500 1 10,000 '1 10,000 20,000 6,300 500 4 1 10,000 1 10,000 24,750 20,000 31,350 5,700 20,000 28,050 5,'100 20,000 12,825 5,700 45,000 140,000 6,300 75,000 25,875 135,000 22,275 32,000 11,040 95,000 35,625 50,000 '18,750 300,000 121,500 15,525 45,000 6,900 34,650 20,000 6,300 20,000 45,000 14,175 20,000 20,000 6,900 7,500 41,250 20,000 20,000 7,500 2022 140,000 10,500 75,000 28,125 '135,000 26,325 32,000 12,000 95,000 38,475 50,000 20,250 300,000 130,500 Salem Debt Service Projection FY2014 - FY20l6 Projects Fire Hydrant Replacement System (FY14 - FY15) 827,000 266,175 827,000 241,365 827,000 216,555 687,000 193,845 687,000 173,235 687,000 152,625 687,000 136,065 687,000 123,555 687,000 111,045 687,000 98,535 TOTAL: Water Enterprise Sewer Enterprise Canal Street Utility Program: South River Conduit 11 11 Canal Street Utility Proqram: Water 37,950 45,000 16,875 Canal Street Utility Program: Sewer Canal Street Utility Program: Drai 195,000 73,125 195,000 67,275 195,000 61,425 195,000 55,575 195,000 49,725 19s,000 43,875 195,000 38,025 195,000 32,175 195,000 26,325 195,000 20,475 TOTAL: Departmental Equipment GRAND TOTAL: PRINCIPAL GRANDTOTAL: INTEREST 1,022,000 339,300 1,022,000 308,640 1,022,000 277,980 882,000 249,420 882,000 222,960 882,000 196,500 882,000 174,090 882,000 155,730 882,000 137,370 882,000 '1 19,01 0 GRAND TOTAI: PRINCIPAL AND INTEREST COMBINED 1,361,300 1,330,640 980 13t,420 1,104,960 1,078,500 1,056,090 1,037,730 1,OI9,370 t, Water Enterprise Water Meter Replacement (FY13) Gallow Hills Storage Tank - full rehab (FY14) Folly Hills Storage Tank - full rehab (FY14-FY15) Transmission Main Sohier Road (FY15) Salem PS and Booster Station (FY16) Distribution Main Rehab (FY16) Sec 5 - 27 ---PAGE BREAK--- 3.900.000 15.140.000 1,231,425 19,040,000 5,526,150 1,400,000 23'1,000 1,500,000 585,225 194,700 1,900,000 599,925 315,750 4,294,725 2,200,000 694,650 400,000 126,300 2036 Total 473,625 2,700,000 640,000 1,000,000 300,000 6,000,000 9,000 1,894,500 1 284,175 2035 95,000 2,850 50,000 '1,500 300,000 13,500 2034 75,000 2,250 13s.000 28,350 32.000 480 95,000 4,275 50,000 2,250 300,000 22,500 3,300 1 10,000 600 45,000 '1,350 4,950 600 20,000 900 20,000 20,000 20,000 900 45,000 2,025 2033 75,000 3,375 135,000 26,325 32,000 1,440 95,000 7,125 50,000 3,750 300,000 31,500 110,000 2032 75,000 5,625 135,000 22,275 32,000 2,400 95,000 9,975 50,000 5,250 300,000 40,500 20,000 1,500 45,000 3,375 Salem Debt Service Projection FY2O14 - FY20l6 Proiects Water Enterprise Water Meter Replacement (FY13) Gallow Hills Storage Tank - full rehab (FY14) Folly Hills Storage Tank - full rehab (FY14-FY15) Fire Hydrant Replacement System (FY14 - FY15) Transmission Main Sohier Road (FY15) Salem PS and Booster Station (FY16) Distribution Main Rehab (FY16) 687,000 86,025 687,000 73,515 687,000 60,105 445,000 17,850 300,000 9,000 TOTAL: Water Enterprise Sewer Enterprise 11 000 ram: Program: Sewer 000 20 1,500 250 Canal Street Canal Street Canal Street Utility Program: Water Canal Street Utilitv Proqram: South River Conduit TOTAL: Departmental Equipment 195,000 14,625 195,000 8,775 195,000 5,850 GRAND TOTAL: PRINCIPAL GRANDTOTAL: INTEREST 882,000 100,650 882,000 82,290 882,000 65,955 445,000 300,000 17,850 9,000 TOTAL: PRINCIPAI AND INTEREST COMBINED 982,650 964,290 947 955 24,566,150 Sec 5 - 28