Minutes 10/28/1975 - Laserfiche WebLink

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. (' H LUV TUESDAY OCTOBER 28, 1975 First, I am very concerned with the Water and Sewer Fund revenue and expense projections. In June Council outvoted me 4 to 1 and elected to transfer $47,000.00 from the Water and Sewer Funds in order to pay for operating expenses and balance the budget. I objected to the transfer, and have voiced my objections, on at least four occasions, for the following reasons: (1) Assuming Mr. George Brown's five year revenue-and-expense estimates are correct, the City can complete four projected capital projects by 1980 without borrowing. If funds are transferred out of surplus the City may have to borrow money to complete the projects. In addition, it is possible that Council may elect, in the future, to divert some of the surplus for other capital expenditures such as the thoroughfare street program, recreation or CBD. (2) The City has a deficit in the Sewer Bond Fund of $452,076.00 which, sooner of later, must be retired. (3) I was concerned that by transferring Water and Sewer Funds to the General Fund we would be setting a dangerous precedent. Once we began making the transfer it would be difficult to stop it from year to year because we would need to find the money from another source to transfer to the General Fund. Also, I was concerned that, once the door was opened, the same mistakes that were made in the Electric Department would be repeated. The City had a surplus in the Electric Department of $610,766.00 on June 30, 1971 to be used for capital expansion, replacement and reserve for contingencies of the system. The actual surplus of the Electric Department on June 30, 1975, according to Ford, Hogg and Cobbe was only $64,249.00. The main reason the surplus dropped to such a low level is because each year, for the last four years, the net profits of the Electric Department, which were budgeted for transfer to the General Fund, were over-estimated by a total of $458,503.00, $6,677.00 in Fiscal '72, $63,181.00 in '73, $214,627.00 in '74 and $174,018.00 in '75. Because of this, Council was forced to use $458,503.00 of Electric Department Surplus in order to balance the budget. In my opinion, Mr. Yeaman's October 22nd quarterly financial summary reflects the fact that, if present trends continue, the surplus of the Water and Sewer Funds will be depleted by $80,599.00 due to over-estimating the profits of the Water and Sewer Funds. The 1976 Budget includes a transfer of $60,081.00 from the Water and Sewer Funds to the General Fund. The figure is $13,081.00 greater than the $47,000.00 approved by Council, and it represents Mr. George Brown's forecasted net profit of the Water