Utility Fund Use of Funds

Interest Income -$600 Interest revenues have decreased steadily since 2020. The Federal Reserve made two emergency rate cuts in March 2020 in response to the coronavirus pandemic, moving the federal funds rate to a target range of 0-0.25 percent.

Penalty Income - $155,000 Penalties are charged for late payments and disconnection of services including late fees, administrative fees and returned check, and after-hours fees.

Miscellaneous Income - $6,500

MISCELLANEOUS

40900 Miscellaneous 40911 Sale of Assets History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 3,956 6,500 6,500 6,500 30 - - -

40917 Insurance Reimbursements 8,080 - - -

Miscellaneous 12,066 6,500 6,500 6,500 -

UTILITY FUND EXPENSES

The Utility Fund accounts for expenses associated with maintenance and repair of a water distribution system that includes 134 miles of water lines and associated pump stations and water storage tanks, a sewer collection system that includes 130 miles of sanitary sewer line and associated sewer lift stations, salary and benefits of twenty employees, and the purchase of water, and sewer collection and treatment services from the North Texas Municipal Water District (NTMWD).

Salary & Benefits expense in the Fiscal Year 2022 budget will increase by 110%. All of the fulltime equivalents in the Public Works Division have been reallocated to the Public Works Administration department regardless of department or fund. Relocating all of the Public Works employees to the Public Works Administration department will simplify processes for Human Resources, Finance, and Public Works. Due to the nature of the services provided by these departments, frequent turnover is not unusual. It is also not unusual for employees in one department to apply for positions in other departments within

Expense by Category History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change

Salary & Benefits

976,413 1,360,820 1,259,345 2,857,749 110.00% Services & Supplies 1,324,773 1,344,607 1,428,218 1,529,629 13.76% Maintenance & Repair 11,862,068 14,348,699 14,448,699 15,249,149 6.28% Capital Outlay 288,789 - - 609,000 - Miscellaneous 747,523 50,000 - 50,000 -

Utility Expenses 15,199,566 17,104,126 17,136,262 20,295,527 18.66%

the division in order to advance in their careers or to vary their experience. The departments and individual positions also often overlap or provide assistance to departments outside of their originally assigned roles. Accounting for all of the Public Works positions will decrease the paperwork and processes required of HR and Finance and should eliminate most of the issues brought up as employees move between departments. Operating transfers will continue to include appropriate percentages for each position and will offset work done in the Utility Fund on behalf of General Fund activities.

The Public Works Administration department will also add ten new positions in Fiscal Year 2022. In addition to salary and benefits, many of the expenses associated with employees (education, uniforms, supplies, etc.) were also reallocated to the administration department or increased to cover the additional personnel.

Expense by Department History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change Utility Billing 12,947,945 15,463,792 15,631,510 16,325,293 5.57% Public Works Administration 115,853 274,177 211,858 2,586,034 843.20% Water 1,629,705 807,918 742,650 700,900 -13.25% Sewer 506,064 558,239 550,244 683,300 22.40%

Utility Expenses 15,199,568 17,104,126 17,136,262 20,295,527 18.66%

UTILITY OPERATING TRANSFER

Each year the city budgets a transfer from the Utility Fund to the General Fund to offset expenses paid on behalf of the Utility Fund.

Salary & Benefits – This portion of the transfer decreased as a result of moving the Street, Facilities, and Fleet employees from the General Fund to the Utility Fund. Finance - 25% of the costs of the city’s annual audit and 25% of other professional services utilized by the Finance department for continuing disclosure and arbitrage. Facilities & Fleet – For Fiscal Year 2022, this will be a flat $60,000. This portion of the transfer will be re-evaluated for 2023 when more history is established for these newer departments. Legal Services - $37,500 will be transferred to cover legal expenses on behalf of the Utility Fund. The signicant decrease in this portion of the tranfer is expected as the PUC cases are resolved. In the event that any major expenditures develop, the transfer will be adjusted at year end.

Fiscal Year 2022 Fiscal Year 2021 Salary & Benefits 984,575 1,265,198 Finance 22,305 13,750 Legal Services 37,500 275,000 Facilities & Fleet 60,000 60,000 Technology 159,392 159,392 Human Resources 6,557 12,540

1,270,329 1,785,880

Information Technology – These are costs associated with hardware and software used by or on behalf of the Utility Fund. Human Resources – 15% of payroll processing costs, the city’s benefits broker, and EMS Service Benefit.

UTILITY FUND DEPARTMENT SUMMARIES

UTILITY BILLING

1122

Salary & Benefits Services & Supplies Maintenance & Repair Capital Outlay Information Technology Miscellaneous

Utility Billing

History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 326,345 348,619 357,725 366,015 4.99% 1,013,716 985,774 1,094,386 1,129,729 14.60% 11,607,481 14,079,399 14,179,399 14,779,549 4.97% - - -

- -

- - -

- 403 50,000 - 50,000 -

12,947,945 15,463,792 15,631,510 16,325,293 5.57%

The Utility Billing department is responsible for the billing and collection of fees for water, sewer, and refuse service. The department establishes new accounts, installs new meters, reads meters, maintains utility account records, collects payments, and addresses billing inquiries.

This department accounts for all of the expenses associated with the purchase of water and sewer treatment and transmission services from the North Texas Municipal Water District (NTMWD).

The cost of purchasing water for Fiscal Year 2022 will increase by 12.5%. The NTMWD will not be increasing the rate per 1,000 gallons. However, the City has exceeded the 2021 contract minimum of 2,318,622,000 by 254,228,000 gallons. This will result in an annual adjustment of approximately $125,000 for Fiscal Year 2021.

The new contract minimum of 2,572,850,000 gallons for 2022 will result in annual charges of $7,692,822.

The cost of sewer services is split between the Utility Fund and the Interceptor Fund. Maintenance and operation of the interceptors is charged to the Utility Fund and the debt owed for construction of the

interceptor lines is charged to the Interceptor Fund. Total costs for sewer services to the city will be increasing by 8.5%.

Sewer treatment and transmission costs as applied to the Utility Fund will be decreasing by 4.79%.

Sewer PreTreatment Buffalo Creek Interceptor Forney Interceptor Regional Wastewater System Mustang Creek Interceptor 2021 Budget 2021 Revised 2022 Budget Revised vs 2021

29,563 29,563 41,854 42%

455,112 455,112 518,060 518,060

125,994 562,200 4,288,141 4,288,141 4,245,527 300,843 300,843 348,376

5,591,719 5,591,719 5,323,951

-72% 8% -0.99% 81%

-4.79%

Regular residential and commercial sewer customers of the City will see no increase in their sewer rates in Fiscal Year 2022. Wholesale and Industrial Sewer customers will see increases based on the terms of their individual contracts.

PUBLIC WORKS ADMINISTRATION

1511

Salary & Benefits Services & Supplies Maintenance & Repair

Public Works Administration

History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 87,435 241,563 177,057 2,491,734 931.50% 24,845 30,414 32,601 90,300 196.90% 3,573 2,200 2,200 4,000 81.82%

115,853 274,177 211,858 2,586,034 843.20%

The Public Works Administration department is responsible for the coordination, management, and oversight of water, sewer and streets maintenance. The department also provides coordination with all public works construction activities. During Fiscal Year 2021, the Facilities Maintenance and Fleet departments were added to the Public Works Division.

The significant increase in expenses in this department is offset by decreases in the other Public Works Division departments. All Public Works personnel costs were reclassified to this department for the upcoming Fiscal Year.

WATER

1512

Salary & Benefits Services & Supplies Maintenance & Repair Capital Outlay

Water

History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 274,910 402,215 362,211 - -100.00% 239,500 286,103 260,839 274,300 -4.13% 115,391 119,600 119,600 209,600 75.25% 252,783 - - 217,000 -

1,629,705 807,918 742,650 700,900 -13.25%

The Water department is responsible for the repair, maintenance, and rehabilitation of 134 miles of water lines within the water distribution system as well as the associated pump stations and water storage tanks. Maintenance & Repair costs are increasing as the Water department develops new maintenance plans for the city’s water system. The $217,000 worth of budgeted capital purchases include: • Truck for new water crew • Hydraulic Breaker • Valve Exerciser • Skid Steer • Mini Excavator

SEWER

1513

Salary & Benefits Services & Supplies Maintenance & Repair Capital Outlay

Sewer

History Projected Budget

2020 Actual 2021 Budget 2021 Revised 2022 Budget % Change 287,723 368,423 362,352 - -100.00% 46,712 42,316 40,392 35,300 -16.58% 135,622 147,500 147,500 256,000 73.56% - - - 392,000 -

470,058 558,239 550,244 683,300 22.40%

The Sewer department is responsible for the repair, maintenance, and rehabilitation of 130 miles of sewer line as well as the sewer lift stations within the sewer collection system. Maintenance & Repair costs are increasing as the Sewer department develops new maintenance plans for the city’s sewer system. The $392,000 worth of budgeted capital purchases include: • Truck for new sewer crew • Two Trailers • Sewer Jet Machine • Medium Dump Truck (Replacement)