F-3 Sanitation Fees
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August 9, 1978
RECEIVED
AUG 1 0 1978 ;";.~
CITY MANAGER'S OFFlC~ .
To:
Norris Olson, City Manager
George Wood, Administrative Assi~tant
From:
Subject:
Proposed Sanitation Fee Increase
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The fiscal situation in the Sanitation Fund demands the immediate atten-
tion of the City Commission. The Adjusted Current Budget for 1978 projected
a 25% increase, from $3.00 to $3.75 monthly, for residential refuse collection,
effective August 1, 1978. If an ordinance to increase the fee were introduced
August 21, and placed on second reading August 28, the revenue projection would
only be reduced by one month, or $7,570.00.
The 1979 Proposed Budget is, of course, also based on such an increase.
Please note that even with the $90,850 increase, expenditures in 1979 will
outstrip revenues by $47,075. (Se~ attachment.) However, this includes re-
placement of 3 packer trucks at $61,365 with trade-ins. While each operating
year will not require this large a capital outlay, the cost of replacing 9
packer trucks every 6 years, and 2 dump trucks every 10 years, should be pro-
jected on an annual basis and carried forward in unemcumbered cash until such
purchases become necessary. At today's prices and trade-ins, each packer would
cost about $20,455, and each dump truck $8,400. The annual projection for these
capital outlays based on these figures should be $30,682.50 for the packers and
$1,680 for the dumps, totaling $32,362.50. These figures ignore inflation, so
they should be regarded as minimums.
Removing the $61,365 for capital outlays from the 1979 Budget and substi-
tuting an annual sinking fund allocation of $32,362.50, expenditures would amount
to $475,872.50. Please note that this amount would still outstrip revenue by
$18,072.50. This means that even with the increase, our operating and capital
outlay costs will annually outstrip revenues by over $18,000 before an infla-
tionary factor is added! Only the unemcumbered cash balance - $68,711.18 as
of December 31, 1979 - will offset these losses. With the proposed increase,
this reserve will last only a maximum of three years. Without the 25% increase
on September 1, 1978, the fund would deplete the entire cash reserve in 1979;
and would create a $52,422.82 deficit!
I trust this information has been of some benefit, and will result in a
timely review of the situation by the City Commission.
Respectfully submitted,
~.~'~~~
GW: bh
cc: Bill Harris, Assistant City Manager
John Estes, Director of Services
Don Harrison, Director of Finance
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August 10, 1978
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SANITATION BUDGET WITHOUT AN INCREASE
Actual Adjusted
Previous Cu rren t Proposed
Year Budget Budget
Cl ass i fi cati on 1977 1978 1979
PERSONAL SERVICES $234,202.40 $250,810.00 $270,355.00
CONTRACTUAL SERVICES 109,764.07 136,810.00 148,835.00
MATERIALS AND SUPPLIES 23,123.97 23,305.00 24,320.00
CAPITAL OUTLAY 16,575.00 9,055.00 61,365.00
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TOTAL EXPENDITURES $383,665.44 $419,980.00 $504,875.00
Beginning Cash Balance
January 1 $155,887.51 $136,846.18 $ 85,502.18
TOTAL REVENUE 364,624.11- 368,636.00 366,950.00
TOTAL REVENUE AND
BEGINNING BALANCE $520,511.62 $505,482.18 $452,452.18
Less Expenditures 383,665.44 419,980.00 504,875.00
UNENCUMBERED CASH
BALANCE DECEMBER 31 $136,846. 18 $85,502. 18 (-) $52,422.82
SANITATION BUDGET WITH AN INCREASE TO $3.75
EFFECTIVE SEPTEMBER 1, 1978
Actual Adjusted
Previous Current Proposed
Year Budget Budget
Cl ass i fi ca ti on 1977 1978 1979
PERSONAL SERVICES $234,202.40 $250,810.00 $270,355.00
CONTRACTUAL SERVICES 109,764.07 136,810.00 148,835.00
MATERIALS AND SUPPLIES 23,123.97 23,305.00 24,320.00
CAPITAL OUTLAY 16,575.00 9,055.00 61,365.00
TOTAL EXPENDITURES $383,665.44 $419,980.00 $504,875.00
Beginning Cash Balance
January 1 $155,887.51 $136 ,846. 18 $115,786.18
TOTAL REVENUE 364,624.11 398,920.00 457,800.00
TOTAL REVENUE AND
BEGINNING BALANCE $520,511.62 $535,766.18 $573,586.18
Less Expenditures 383,665.44 419,980.00 504,875.00
UNEMCUMBERED CASH
BALANCE DECEMBER 31 _$136,846. 18 $115,786.18 $68,711.18