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3. Evergreen Sewer Rate ApprovalCity of Kalispell Post Office Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406)758-7700 Fax(406)758-7758 REPORT TO: Mayor Kennedy and City Council Members FROM: Amy Robertson, Finance Director Chris Kukulski, City Manager SUBJECT: Evergreen Sewer Rate MEETING DATE: August 5, 2002 BACKGROUND: Included in the packet are documents compiled by the Finance Office analyzing the charges to be levied by the City on the Flathead County Sewer District #1 - Evergreen for treatment of sewage by the City's wastewater treatment plant. The charge is made pursuant to an Interlocal Agreement between the City and the District dated July 25, 1990 and a subsequent Addendum, dated June 24, 1996. Sewer rate adjustments for flows contributed by the District are adjusted yearly retroactive to July 1st. Documentation for the rate is attached. The rate for M&O and replacement is $1.54 per thousand gallons, $.05 less than last year. The debt service amount is $9,796.38 per month a decrease of $293 per month based on actual debt service schedules. RECOMMENDATION: A motion to approve the rate by the Council. FISCAL EFFECTS: Evergreen Sewer District is our largest customer generating $181,628.30 toward maintenance & operations, $52,349.62 for replacement and $117,556.56 toward debt service for a total of $ 351,534.48. ALTERNATIVES: Amy H. Robertson Finance Director As suggested by Council. Report compiled: July 26, 2002 Chris A. Kukulski City Manager Attachments: 5 pages- including the current rate calculation and the prior year, flows spreadsheet, and schedule of Evergreens cash equity in the replacement fund and explanatory memo. City of Kalispell Post Offlee Box 1997 - Kalispell, Montana 59903-1997 - Telephone (406)758-7700 Fax(406)758-7758 DATE: July 26, 2002 TO: Chris Kukulski, City Manager Mayor Kennedy & City Council Members FROM: Amy Robertson, Finance Director a- - RE: Evergreen Sewer Rate for Fiscal Year 2003 Please find attached several sheets of information. This compilation is for the Wastewater Treatment Plant operations only and does not include the billing costs, bad debt expense, depreciation or sanitary sewer expenses. The first sheet is a compilation of the expenses of the WWTP for the fiscal year 2002. Our operating expenses have increased by 25% from the prior year. FY2001 expenses are included for comparison purposes only. The increase for electricity was 33% or $54,975. The other large increase was in equipment maintenance for cleaning clarifier no. 2 at a cost of $167,646. Although this item is large it is not considered capital as it does not extend the life of the clarifier beyond its original expected life. Evergreen Sewer District's FY2003 rate is based on our operational expenses for FY2002 prorated at the percent of usage based on meter readings at the lift station and the plant. A page is attached with the meter readings and usage. Evergreen's usage is down slightly, less than 1%, while the total plant usage is up 22.15%. As a result, Evergreen's share of the total flows has decreased from 20.82% to 16.94%. This is not a percent of capacity only a percent of flows treated at the plant. The percent of usage (16.94%) is applied to our operating expenses and replacement fund requirements to arrive at the total cost for treating Evergreen's sewage. The cost is then divided by their gallons of usage to arrive at the rate per thousand. This calculates to $1.54 per thousand and is the new rate for FY2003. The district pays 22% of the debt service costs regardless of the usage. It dropped $3,512 this year due to the refinancing of the bonds. The Evergreen rate is down $ .05 per thousand gallons from last year. The amended Evergreen agreement calls for Evergreen to share in the equity of the W WTP Replacement Reserve account. A reconciliation of the reserve account is included. The items for which replacement funds were used are listed on the reconciliation page. The account earned $59,373 in interest. The equipment replacement schedule was adjusted for the items listed on the sheet for the reconciliation of the reserve account. The new amount to be placed in the Wastewater Replacement account is $309,019.48 for FY2003. 2002 WWTP... FISCAL YEAR2002 W ages/fica/medt/wc/unemp. Overtime Health Ins. PERD Office Supplies Small office equip Computer supplies Computer Equip Safety equip Lab supplies Janitorial Supplies Alum Chemicals Other supplies Gas & Oil Consumable tools Postage & freight Memberships & dues Licenses & fees Electricity Water Natural Gas phone lease/charges/pagers/alarms Lab Services Auditing Contract Serv-Glacier Gold Contract Serv-Gravity Thickener Maim. & Repair Equipment Maintenance Consultants Building maint. School & Training Medical services/drug testing Rental Equipment Property & Liability Ins. Central Garage Admin. Transfer Data Processing Total Operating Expenses Replacement Debt service / Evergreen 22% Evergreen Flows Total Kalispell Flows $ 236,721.75 $ 10,437.36 $ 31,153.20 $ 15,072.53 $ 652.46 $ 351.11 $ 1,146.49 $ 2,410.00 $ 1,045.12 $ 3,722.97 $ 105.90 $ 1,788.77 $ 9,020.93 $ 2,872.74 $ 5,226.29 $ 2,661.00 $ 549.42 $ 415.00 $ 4,366.00 $ 201,549.00 $ 2,415.60 $ 30,318.16 $ 3,330.64 $ 4,733.15 $ 1,800.00 $ 104,402.87 $ 12,709.80 $ 4,511.01 $ 248,633.89 $ 16,181.83 $ 3,208.15 $ 6,691.36 $ 340.00 $ 148.39 $ 22,780.81 $ 4,000.00 $ 69,174.00 $ 5,503.00 $ 1,072,150.70 x $ 309,019.48 x Annual cost to Evergreen $ 117,556.56 annual 151,500,300 894,305,300 Prepared: 7/24/02 City Finance Office 0.169406 $ 181,628.30 $ 1.20 per thousand gallons 0.169406 $ 52,349.62 $ 0.35 per thousand gallons 16.9406% $ 233,977.92 $ 1.54 per thousand gallons $ 9,796.38 permonth 2001 W WTP... FISCAL YEAR 2001 W ages/fica/medt/wc/unemp. Overtime Health Ins. PERD Office Supplies Small office equip Computer supplies Computer Equip Safety equip Lab supplies Janitorial Supplies Alum Chemicals Other supplies Gas & Oil Consumable tools Postage & freight Memberships & dues Licenses & fees Electricity Water Natural Gas phone lease/charges/pagers/alarms Lab Services Auditing Contract Serv-Glacier Gold Contract Serv-Gravity Thickener Maint. & Repair Equipment Maintenance Radio maint. Building main. School & Training Medical services/drug testing Property & Liability Ins. Central Garage Admin. Transfer Data Processing Total Operating Expenses Replacement Debt service / Evergreen 22% Prepared: 8/2/01 City Finance Office $ 216,186.00 $ 11,332.00 $ 29,761.00 $ 14,165.00 $ 539.00 $ 1,475.00 $ 1,199.00 $ 1,516.00 $ 2,156.00 $ 3,437.00 $ 529.00 $ 2,493.00 $ 11,244.00 $ 4,055.00 $ 6,608.00 $ 3,039.00 $ 470.00 $ 469.00 $ 3,856.00 $ 146,574.00 $ 2,120.00 $ 36,858.00 $ 3,227.00 $ 3,147.00 $ 1,800.00 $ 102,966.00 $ 5,656.00 $ 5,317.00 $ 106,140.00 $ 1,124.00 $ 3,500.00 $ 5,937.00 $ 197.00 $ 24,102.00 $ 4,000.00 $ 80,411.00 $ 5,273.00 $ 852,878.00 x 0.208168 $ 177,541.51 $ 1.16 per thousand gallons $ 308,400.73 x 0.208168 $ 64,199.02 $ 0.42 per thousand gallons Annual cost to Evergreen $ 121,068.86 annual Evergreen Flows 152.406.754 20.8168% Total Kalispell Flows 732,135,100 $ 241,740.52 $ 1.59 per thousand gallons $ 10,089.07 per month p $ .0 d 3a OOOOOOO 0O00000000000 pC rWooMl� Non �000W C (q (o C6 (3 m C n� of r M(D o 0) o 00 m N N(O I-M (q iV ® CD W LO V I".O W W 1-- O (q 01 C4 6 M N C N d O N 1- r- N 1� O w 1l- O O 1` r or-- oil- 1` W r o I d I '.d CL D 0 cm = p N IL; o 0 O 0OOO n o O o'O 0 0 O OOOO,q,D O o O 0 !i r O00 MONN 1� OMNM Iq(O V V n(O V U Y,_ 9 rODr0 O (D W W N l0 N M CO 1-- N W W tq 0 W W N (O I- M W d d �'w V O V I,, 1` O W O N O O O O 00 W I,- LO OD CD N O(D V o, co N Cl) V LO U( (0 1 CO CO W - cc 00000 O 0 0 0 0 0 O O O d a 0Oooloo000OOOO (q W O (0 r V OD (D W, M LO e (p -- C a C(ONN WM I- (OM �- V li Oa! y W to 0)0r(O M(D C (0O3 p 'O dN (qN N W OD M OIN u0 f0 C4 W 7 N 7 V rl-n NN V V 0 r '' d ` W 0. rn C O �O C C a�O M w 0 0 O O 0 0 O 0 O 0 o 0 0 0 a O'O.O O O O O �jp� 3 Lc) 'O Q1r 0 W W'.(q O n 0) Iq 4 ID 00 M p �r ++ d W d >*! 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