Select Board Reviews FY23 Enterprise Funds | News
TEWKSBURY – At the Tewksbury Select board meeting on February 15, City Manager Richard Montuori presented the FY23 corporate budgets and capital improvement plans for FY23-FY27.
Montuori explained that a corporate fund is a “separate financial accounting and reporting mechanism for municipal services for which fees are charged in exchange for goods or services.”
Costs are fully recovered through royalties. Enterprise funds include sewer, water, telemedia and cable, and stormwater; all were approved over the past two decades at a special town meeting.
The Telemedia Enterprise Fund is funded by cable franchise fees; expenses include a cost-of-living salary increase for full-time and part-time staff. The operating budget has decreased in the areas of repairs and maintenance and communications. There were no capital expenditures.
The new budget provides for an increase in capital expenditures of $229,500 to upgrade and replace public meeting cameras and audio equipment.
“We’ve had a lot of complaints about the sound in this room,” he said, adding that the cost would be covered by cable franchise fee revenue.
Montuori said the city will need to be aware of changing cable revenues as more people switch to streaming services and cut cable.
“Having healthy retained earnings will be important to help pay for future costs,” Montuori said.
The total capital expenditure allocation is recommended at $581,232, with projected income of $600,000 producing an operating surplus of $18,768.
The water company fund is made up of the water distribution budget and the water filtration budget. Expenses included cost of living increases and salary step increases, as well as increases for maintenance and repairs.
Montuori added that expenses are expected to increase for chemical costs and disposal of residues. There are no capital expenditure votes in either budget. Total revenue is projected at $7,575,683 with an operating surplus of $22,308.
Montuori explained that the plan over the next five years is to spend retained earnings, water stabilization funds and borrowed funds to pay for capital projects in the amount of $18,214,231 for the design and improvement of water supply, maintenance/upgrade of water tanks, replacement of fire hydrants and replacement of vehicle.
In FY23, the city will use federal funds from the American Rescue Plan Act for capital improvement projects.
“It actually helps keep rates the same this year,” he said.
In FY23, debt will be 34% of the budget, but Montuori said the debt was incurred for major capital improvement projects. He added that high usage in recent years has contributed to high revenues.
Water tariffs, which pay for the water company’s fund, are not expected to increase for FY23 – fourth-year tariffs have not increased – but could increase by 4% l ‘next year.
Annual water consumption is expected to be 659,972,000 gallons, an increase from the prior year’s projection of 9,344,000 gallons. Montuori said water distribution improvements will be a critical part of future capital spending plans.
The sewer enterprise fund budget maintains the city’s collection system and 47 pumping stations.
Salaries have decreased due to retirements and increased with the cost of living. Utilities increased due to usage. The total recommended allocation is $6,850,979, of which $985,000 is allocated to sewer retained earnings.
Retained earnings will also be used to offset debt and keep rates stable; debt currently represents 54% of the FY23 budget, but is expected to decline significantly over the next decade.
Over the next five years, Montuori plans to credit $4.1 million for inflow and seepage control, sewer pump station upgrades, and fleet and equipment replacement. Sewer rates should not increase; forecast sewer usage for FY23 is 528,702,600 gallons, an increase of 17,709,600 gallons.
The Stormwater Enterprise Fund, now in its third year, focuses on system maintenance and compliance. Tewksbury charges a flat fee for residential plots of three units or less, and stormwater fees are based on a billing metric known as the Equivalent Residential Unit (ERU).
Current charges are $75 per year and will remain the same in FY23. Total credit is projected at $1,118,910 and total revenue is projected at $1,139,307, for an operating surplus of 20 $397.
Over the next five years, $3.1 million will be allocated for drain capital improvements and project development. Montuori noted that many residents shared their concerns about flooding in the city.
“The only way we’re going to deal with flooding is to improve our drainage,” Montuori said.
Montuori also reviewed future capital improvement projects that will be funded from corporate funds and the general fund. Proposed spending would go to the fire department, sidewalk construction and maintenance, DPW equipment and more.
Montuori added that $5 million could be used to help fund the DPW/school maintenance facilities project. The May City Assembly mandate will seek approval for the transfer of Community Preservation Act funds and the Stabilization Fund for police station upgrades, facility maintenance, renovations to the South Fire Station Street, the modernization of the Livingston Street skate park and new benches for the city. common.
Montuori stressed the need to keep an eye on the future, citing long-term investments such as the purchase and maintenance of DPW equipment, pavement management, stormwater permit compliance, construction and maintenance of sidewalks and improvement of town and school facilities.
Budget spreadsheets, stories and slides from the meeting are available at tewksbury-ma.gov.