Utility Fund Use of Funds

Interest Income -$1,000 Interest revenues have decreased steadily since 2020 due to the ongoing pandemic. Rates have begun to rise again, and this is reflected in the Fiscal Year 2023 budget.

Penalty Income - $200,000 Penalties are charged for late payments and disconnection of services including late fees, administrative fees and returned check, and after-hours fees.

Miscellaneous Income - $6,500

UTILITY FUND EXPENSES

The Utility Fund accounts for expenses associated with maintenance and repair of a water distribution system that includes 134 miles of water lines and associated pump stations and water storage tanks, a sewer collection system that includes 130 miles of sanitary sewer line and associated sewer lift stations, salary and benefits of twenty four employees, and the purchase of water, and sewer collection and treatment services from the North Texas Municipal Water District (NTMWD).

The Salary & Benefits expense in the Fiscal Year 2023 budget will increase by 13%. The increase is due to four additional positions as well as the proposed 3% COLA and 2% merit proposed for all employees as well as increasing insurance cost.

UTILITY OPERATING TRANSFER

Each year the city budgets a transfer from the Utility Fund to the General Fund to offset expenses paid on behalf of the Utility Fund.

Salary & Benefits – This portion of the transfer decreased as a result of moving the Street, Facilities, and Fleet employees from the General Fund to the Utility Fund. Finance - 25% of the costs of the city’s annual audit and 25% of other professional services utilized by the Finance department for continuing disclosure and arbitrage. Facilities & Fleet – This allows for the repair and maintenance of water and sewer facilities as well as upkeep for their fleet of vehicles and equipment. Legal Services - $125,513 will be transferred to cover legal expenses on behalf of the Utility Fund. The significant increase relates to the continued PUC case with the city’s wholesale custromers.

Information Technology – These are costs associated with hardware and software used by or on behalf of the Utility Fund. Human Resources – 15% of the city’s benefits broker and EMS Service Benefit cost.

UTILITY FUND DEPARTMENT SUMMARIES

UTILITY BILLING

The Utility Billing department is responsible for the billing and collection of fees for water, sewer, and refuse service. The department establishes new accounts, installs new meters, reads meters, maintains utility account records, collects payments, and addresses billing inquiries. This department accounts for all the expenses associated with the purchase of water and sewer treatment and transmission services from the North Texas Municipal Water District (NTMWD). The cost of purchasing water for Fiscal Year 2023 will increase by 17.83%. The NTMWD will be increasing the rate per 1,000 gallons by 13.4%. Additionally, the City has exceeded the 2022 contract minimum of 2,572,850,000 by 100,933,000 gallons. This will result in an annual adjustment of approximately $213,775 for Fiscal Year 2022.

The new contract minimum of 2,673,783,000 gallons for 2023 will result in annual charges of $9,064,124.

The cost of sewer services is divided between the Utility Fund and the Interceptor Fund. Maintenance and operation of the interceptors is charged to the Utility Fund and the debt owed for construction of the interceptor lines is charged to the Interceptor Fund. Total costs for sewer services to the city will be decreasing by 14.95% due to decreased flow estimates. However, sewer treatment and transmission costs as applied to the Utility Fund will be increasing by 15.22%.

Regular residential and commercial sewer customers of the city will see no increase in their sewer rates in Fiscal Year 2023. Wholesale and Industrial Sewer customers will see increases based on the terms of their individual contracts.

PUBLIC WORKS ADMINISTRATION

The Public Works Administration department is responsible for the coordination, management, and oversight of water, sewer, and streets maintenance. The department also provides coordination with all public works construction activities. The significant increase in the department is due to the addition of four additional employees and the cost of training and equipping them for their positions. The budget also includes a proposed 3% COLA and 2% merit for all employees as well as increasing insurance cost.

WATER

The Water department is responsible for the repair, maintenance, and rehabilitation of 134 miles of water lines within the water distribution system as well as the associated pump stations and water storage tanks. Maintenance & Repair costs are increasing as the Water department develops new maintenance plans for the city’s water system. The $223,000 in budgeted capital purchases include: • Truck for water crew • Single cab truck • Boring machine • Water pump with trailer • GIS Trimble GPS

SEWER

The Sewer department is responsible for the repair, maintenance, and rehabilitation of 130 miles of sewer line as well as the sewer lift stations within the sewer collection system. Maintenance & Repair costs are increasing as the Sewer department develops new maintenance plans for the city’s sewer system. The $175,000 in budgeted capital purchases include: • Truck with utility bed • Landscape truck