|An FY14 budget was adopted by the city council, the policy-making body for the water utility, on June 18, 2013. The budget includes a written narrative summary from the city administrator and is organized by department or function, such as administration and finance, city council, EMS, fire, law enforcement, library, parks and recreation, streets and roads, RV park, water, wastewater, solid waste, and harbors and ports. The water/wastewater section of the budget are comprehensive and include all necessary revenues and expenses, including the cost of equipment maintenance and repair. The budget is balanced and realistic, as demonstrated by actual revenues and expenditures from FY13, and anticipated changes in finances for the coming year, as outlined in the city administrator’s written report. The utility budgets to collect more revenue in FY14 than it did in FY13. As of December, 2013, these higher rates of income have not been realized, though the utility has also not incurred as many expenses as it originally planned. Accordingly, budget amendments have been proposed to lower the amount of anticipated revenue and expenses, ensuring that the budget remains appropriately balanced. The FY15 budget is currently in the process of being adopted.
Each month the city administrator, who serves as the utility manager, provides a written report to the city council regarding water/wastewater finances and any other issues. The city clerk/treasurer also provides monthly profit and loss reports for each fund or account of the city, including the water/wastewater fund. Those reports compare budgeted amounts to actual income and expenses. The city is currently converting the FY14 financials to a new QuickBooks company, and therefore the reports being created are not accurate at this time. It is hoped this will be completed and meaningful reports will begin being produced again within the next month.
Residential customers are charged a base rate of $49.50 for wastewater and $48.00 for the first 3,000 gallons of water used; commercial customers are charged $129.50.00 for the first 5,000 gallons used. Every 1,000 gallons used over these amounts are charged an excess fee of $12.00. FY14 user fees are expected to cover 80 percent of the cost of water/wastewater operations. The remaining 20 percent totaling $58,869.31 will be met by outside revenue sources such as the Community Revenue Sharing and Payment in Lieu of Taxes (PILT) programs. A rate study in May 2014 indicated that the actual cost of the utility is $157.39 per customer per year. The council is considering options for raising the rates to meet these costs.
The city’s budget appropriately covers the cost of all necessary fuel and anticipates increases in fuel prices. Fuel is provided to the community by Petro Marine, who fills fuel tanks throughout the community under a keep-full agreement. The city receives its electricity from Alaska Power and Telephone (APT) and pays this bill on time each month. The electricity use for each facility is identified separately on the APT bills and the appropriate city department is charged for that cost. |