Year 2025 Utility Budgets Narrative

2025 WATER AND SEWER UTILITY BUDGET NOTES August 12, 2025 The draft Water Utility and Sewer Utility budgets are structurally balanced, meaning there are sufficient annual inflows to meet annual operating expenses, with funds available for future expenditures. 1. Advances and Debt Service appear in separate tables to mimic how these expenses are reported in the 2024 audit report. a. Advance – an internal loan between Village funds. b. Debt – a loan, note or bond with an external entity, such as a bank. c. Advances and Debt are both money the Utility must repay. i. Advances are paid through an accounting transfer; the money remains under the control of the Village. The Village Board determines how much is to be transferred and how often. ii. Debt payments are paid to whoever holds the loan, note or bond. Loans, notes, and bonds are a type of contract with a set payment schedule. 2. Committed funds are monies the Village Board has set aside for specific purposes. Money in a committed fund can be repurposed to other projects or programs, or returned to general savings if priorities change or the purpose for the fund no longer exists. a. A new Well 2 Rehabilitation Fund is proposed for the 2025 and 2026 Water Utility budget years. The Village is required to do a well inspection no later than 2026. The Finance Committee is proposing to set aside projected excess funds from the 2025 budget for this project; additional funds will be added in the 2026 budget to cover the worst-case scenario project cost of $67,000. b. A new Arsenic Treatment System Fund is proposed for the Sewer Utility, with projected excess funds from the 2025 budget. This same fund will be created for the Water Utility but not funded in 2025. The funds would exist until a treatment system is constructed. Funds wouldn’t be committed until 2026, after the Village receives the 2025 audit. c. Unspent monies from fiscal year 2024 are projected for both utilities. It’s recommended these funds be moved to committed funds after the Village receives the 2024 audit, which is anticipated by mid-September. The Finance Committee supports reducing the Water Utility debt ratio, so the Village Board could use at least part of any Water Utility balance for a principal payment to the Sewer Utility on its advance. 3. The 2025 Water Utility metered sales revenue reflects the first full year under the new rates. The 2025 metered sales revenue for both utilities includes new billing beginning in Summer 2025 for ClearSky Hospital and the Dairyland Park Shelter. 4. Notable projects and expense changes in the 2025 Water Utility budget: a. Water tower inspection by remote operated vehicle (ROV): $3,000 2025 WATER AND SEWER UTILITY BUDGETS PAGE 2 b. Weekly hydrant arsenic testing: $1575 c. Lead and copper sampling: $500 d. Kubota PTO repair: $1,000 (25% of total estimate) e. SCADA programming upgrade: $2,000 f. Curb stop repairs, including driveway repairs: $15,000 g. Culvert replacement at hydrants on Lakeshore Dr, in anticipation of the Manitowoc County highway project: $5,000 (if the Public Works Department completes the work) h. Valve box repair with asphalt, on Lake Bluff Ct: $1,500 i. Meter upgrades: $15,000 (includes higher-cost large meters with endpoints) j. Server upgrade: $5,000 (25% of total expense) k. Accounting software setup and chart of accounts update: $5,000 (33% of total expense) l. Technology services: $5160 (25% of contracted technology services) 5. Notable projects and expense changes in the 2025 Sewer Utility budget. a. RAS and decant pump repair: $13,000 b. Kubota PTO repair: $1,000 (25% of total estimate) c. Hika Lift Station multi-trode replacement: $1,900 d. Server upgrade: $5,000 (25% of total expense) e. Accounting software setup and chart of accounts update: $5,000 (33% of total expense) f. Technology services: $5160 (25% of BCS contracted technology services) g. New line item to be added for 2026: Technology, Internet and Website Services. Currently included in the 2025 utility budgets as part of Village Hall expenses. The budgets include values for uncollectible accounts for both utilities. Each year, there are accounts we are or will be unable to collect—customers who move out of state or country, for example, or pass away before the bill is paid. This amount appears as an expenditure in the budget even though this adjustment is a reduction in receivables and not a cash transaction.