City expects $1M water, sewer surplus
North bay residents consumed more water than anticipated this year, contributing to a projected year-end surplus of nearly $1 million.
based on financial projections as of Sept. 30, the city is anticipating a $924,760 water and sewer budget surplus, according to a report presented to council tuesday.
the unspent dollars are the result of higher consumption, lower personnel costs from gapping and vacancies, lower insurance and material costs, and interest savings from deferring borrowing for some capital projects. the surplus is partially offset by higher fuel and utility costs, states the report.
it shows that $413,329 of the projected surplus relates to the sanitary sewer system, while $511,431 is related to the water system.
a little more than $427,480 of the projected surplus is due to higher than anticipated consumption between June and august.
that’s in sharp contrast to last year when there was an overall year-end deficit of $513,352, partly due to a drop in water usage.
it’s believed that fewer residents watered their lawns and gardens during the spring and summer of 2017 due to the amount of rainfall that hit the area.
as a result, the city budgeted in 2018 for lower consumption for both residential users and those within the industrial, commercial and institutional sector.
Staff indicated last year an analysis was being conducted on a yearover-year basis by account to determine root causes of the drop in consumption within that sector.
Staff also indicate in the latest report that changes in consumption levels are likely to continue.
“it is anticipated that annually the city will continue to experience fluctuations in consumption patterns based on seasonal trends, changing weather patterns and conservation initiatives undertaken by customers as they continue to adapt to the metered structure,” states the report.
risks, including fluctuations in consumption, fuel and utility costs, along with potential unforeseen issues, are highlighted in the report as possible risks that could see changes to the projected surplus before the end of the year.
the report also recommends any savings included in the surplus related to deferred borrowing be transferred to a reserve in order to cover future principal repayment costs. the report, however, does not show how much that may be.
a separate report indicates there is $6 million in debt financing being carried forward into 2019 from the 2017 and 2018 capital budgets which has not yet been issued because the related projects are “still in progress.
“the forecasted principal and interest payments for 2019 assume that the 2017 authority will be issued in early 2019 and the 2018 authority will not be issued until late 2019,” states the report. “this means that repayments on the 2018 authority will not occur until 2020 thus reducing the amount of principal and interest budgeted for 2019.”