Finance Committee

CITY OF VERONA FINANCE COMMITTEE MONDAY, JUNE 10, 2019 – 6:30 P.M. VERONA CITY CENTER – Conference Room D110 111 LINCOLN STREET AGENDA 1. Call to order. 2. Roll call 3. Public Comment 4. Discussion and Possible Action re: Recommended Approval of the May 28, 2019 Finance Committee Minutes 5. Presentation from Baker Tilly regarding the 2018 Financial Statements/Utilities 6. Discussion and Possible Action re: Updates on the 2020 Budget 7. Discussion and Possible Action re: Payment of Bills 8. Adjournment. Chairperson Chad Kemp POSTED: Verona City Hall Verona Public Library Miller's Market City Web Page at www.ci.verona.wi.us 6/6/2019 Notice is hereby given that a quorum of the members of the City Council or other standing committees of the City Council may be present at the meeting of the Finance Committee to gather information about a subject over which they have decision-making responsibility. The City Council and any other standing committees will not take formal action at this meeting IF YOU NEED AN INTERPRETER, MATERIALS IN ALTERNATIVE FORMATS, OR OTHER ACCOMMODATION TO ACCESS THE MEETINGS, PLEASE CONTACT THE CITY CLERK AT 845- 6495 AT LEAST 48 HOURS PRECEDING THE MEETING. EVERY REASONABLE EFFORT WILL BE MADE TO ACCOMMODATE YOUR REQUEST.  City of Verona Finance Committee City Hall – 111 Lincoln Street Verona, WI 53593-1520 MINUTES FINANCE COMMITTEE May 28, 2019 The meeting was called to order by Chairperson Chad Kemp at 6:30 p.m. in Conference Room D110 Roll Call: Chairperson Chad Kemp, Alder Kate Cronin and Alder Christine Posey were present Also present: Interim City Administrator Adam Sayre and Finance Director Brian Lamers Public Comment: None Discussion and Possible Action regarding approval of May 13, 2019 Finance Committee minutes: Motion was made by Posey, seconded by Cronin to approve the May 13, 2019 Finance Committee minutes with no changes noted. Motion carried 3-0. Discussion and Possible Action regarding write off of miscellaneous billing for bulk water: Lamers explained that the billing to Koch’s Telecom was done at the end of 2017 for an amount of $67.41 for bulk water. Notices were sent out with them coming back with no longer at that address. Lamers stated he found them on the website and called the number but had been disconnected. Motion was made by Kemp, seconded by Cronin to approve to write off $67.41 owed by Koch’s Telecom. Motion carried 3-0. Discussion and Possible Action regarding write off utility billing balance: Lamers stated that apparently when the properties split parcel numbers and owners between the 270’s and 280’s Meadowside Drive it was never switched in the utility billing system. So when there were delinquent charges to 280’s Meadowside Drive it was placed on 270’s Meadowside Drive owner’s tax bills since 2011. The notices were sent to the individuals that rented the 280’s addresses and once placed on the tax bill never got any more notices because it was unknowingly paid through the 270’s owner’s tax bills. After internal discussion with the Public Works Director the decision with approval was to charge last year’s delinquent utility bills in the amount of $616.03 and write off the remaining $2,392.94. Motion was made by Kemp, seconded by Posey to approve to write off $2,392.94 of delinquent utility bills. Motion carried 3-0. Discussion and Possible Action regarding write off of personal property balances: Lamers explained that the tax bills for Smith Team Management for 2015 and 2016 were in total of $7,339.81. Delinquent letter and notice were sent out in 2017 in which Adam Smith contacted Lamers and stated that he felt the bills were incorrect and he communicated that with the City. Lamers sent that information to the Assessor at the time, who told Lamers to hold off as www.ci.verona.wi.us something was incorrect. Lamers tried to find out from the Assessor on occasions what was happening with this in which the Assessor stated he couldn’t get a hold of Adam Smith. Since then the Assessor is no longer with the City and Smith is unreachable. There is no information on what the correct assessment should have been at the time and what the correct amount of taxes should have been. Lamers also explained that there is $1,966.22 of outstanding personal property tax bills of business that are out of business and no longer able to get in contact with to get the taxes collected. After further discussion regarding collection and how to avoid writing off personal property a motion was made by Kemp, seconded by Cronin to approve to write off $7,339.81 for Smith Team Management and $1,966.22 of other outstanding Personal Property bills. Motion carried 3-0. Discussion and Possible Action regarding the 2020 Budget Timeline, Process and Goals: In reviewing of the calendar, Kemp stated he may not be here on July 8th which is also a regular Finance Committee meeting. Lamers questioned whether the Committee wanted to use the same process as in the past or are there changes the Committee would like to see. Lamers asked should Administration work with the Departments and bring the budget to the Committee after it was more complete. After further discussion it was decided to move forward with the budget and Administration trying to meet with departments prior to Finance presentation. Posey stated she would like the departments to have maybe a presentation for example bullet points about their budgets especially when there are changes. Discussion and Possible Action regarding the payment of bills: Motion was made by Kemp, seconded by Posey to approve the payment of bills totaling $495,406.61. Motion carried 3-0. Adjournment: Motion was made by Cronin, seconded by Posey, to adjourn the Finance Committee Meeting at 6:58 p.m. Motion carried 3-0. Respectfully submitted, Brian Lamers CPA Finance Director www.ci.verona.wi.us  CITY OF VERONA REPORT TO THE FINANCE COMMITTEE June 10th, 2019 Presented By: Baker Tilly Virchow Krause, LLP Ten Terrace Ct, PO Box 7398, Madison, WI 53707-7398 USA John Rader, CPA, Firm Director Cameron Sawyer, CPA, Senior Actual data was derived from current and prior years audited financial statements This communication is intended solely for the information and use of management, the board/council, and others within the organization, and is not intended to be, and should not be, used by anyone other than the specified parties. © 2018 Baker Tilly Virchow Krause, LLP  CITY OF VERONA 2018 FINANCIAL STATEMENT HIGHLIGHTS DETAILS OF GENERAL FUND BALANCE Nonspendable 2018 includes fund balance amounts that cannot be spent either because they are not in spendable form or because legal or contractual requirements require them to be maintained intact. $128,161 Assigned includes spendable fund balance amounts that are intended to be used for specific purposes that are not considered restricted or committed. 766,955 Unassigned includes residual positive fund balance within the general fund which has not been classified within the other above mentioned categories. 3,680,598 Total General Fund Balance $ 4,575,714 General Fund Balance Nonspendable General Fund Balance Nonspendable 3% Assigned 17% Assigned Unassigned Unassigned 100% 80% © 2018 Baker Tilly Virchow Krause, LLP Page 1  CITY OF VERONA 2018 FINANCIAL STATEMENT HIGHLIGHTS ANALYSIS OF GENERAL FUND BALANCE 2014 2015 2016 2017 2018 Unassigned Fund Balance $ 2,422,604 $ 2,682,485 3,219,361 3,495,138 3,680,598 Budgeted Expenditures 7,184,000 7,348,000 8,124,377 8,684,416 9,322,772 % of expenditures 33.72% 36.51% 39.63% 40.25% 39.48% Unassigned General Fund Balance as a Percentage of Budgeted Expenditures 45.00% 40.25% 42.82% 42.84% General Fund Actual 40.00% 39.48% 38.85% 39.42% 39.63% 35.00% 33.72% GFOA 36.51% recommended 30.00% minimum Reference - Median 25.00% 20.00% 15.00% 2014 2015 2016 2017 2018 City policy targets to maintain unassigned general fund balance between 25% to 35% of total subsequent year's budgeted general fund expenditures. GFOA recommended range for % of expenditures: no less than 2 months of regular GF operating expenditures Reference values for the population range: 10,000 to 17,500 generated from 2014-2017 Baker Tilly municipal client data for Wisconsin. © 2018 Baker Tilly Virchow Krause, LLP Page 2  CITY OF VERONA 2018 FINANCIAL STATEMENT HIGHLIGHTS GENERAL OBLIGATION DEBT OUSTANDING 2014 2015 2016 2017 2018 Total General Obligation (G.O.) Debt City $ 35,952,951 $ 43,170,084 $ 46,407,524 $ 46,228,567 $ 49,846,645 Utilities 3,060,152 2,735,452 3,858,650 4,940,000 5,170,000 TOTAL $ 39,013,103 $ 45,905,536 $ 50,266,174 $ 51,168,567 $ 55,016,645 Population 11,775 12,491 12,540 12,303 12,384 G.O. Debt Capacity $ 98,358,850 $ 104,690,580 $ 118,694,535 $ 133,492,155 $ 145,392,325 G.O. debt per capita $ 3,313 $ 3,675 $ 4,008 $ 4,159 $ 4,443 % of debt limit 39.66% 43.85% 42.35% 38.33% 37.84% Percentage of Debt Limit G.O. Debt Outstanding - Per Capita 90% $5,000 80% Reference ‐ $4,500 High 70% $4,000 60% $3,500 Reference ‐ Median $3,000 50% $2,500 40% Reference ‐ $2,000 30% Low $1,500 20% $1,000 City of Verona 10% $500 0% $- 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014-2016 Reference values for the population range: 10,000 to 17,500 taken from MunicpalFacts18 publication by the Wisconsin Policy Forum, 2018. © 2018 Baker Tilly Virchow Krause, LLP Page 3  CITY OF VERONA 2018 FINANCIAL STATEMENT HIGHLIGHTS ANALYSIS OF DEBT SERVICE - GOVERNMENTAL FUNDS 2014 2015 2016 2017 2018 Total Debt Service Principal $ 3,884,318 $ 4,578,867 $ 9,887,559 $ 7,113,957 $ 5,306,922 Interest 1,392,926 1,571,486 1,568,587 1,381,767 1,356,232 TOTAL $ 5,277,244 $ 6,150,353 $ 11,456,146 $ 8,495,724 $ 6,663,154 Total Non-Capital Expenditures Total governmental funds expenditures $ 22,421,051 $ 36,982,125 $ 52,241,914 $ 29,809,026 $ 31,421,869 Less: capital outlay (5,499,149) (18,944,318) (6,533,367) (7,901,197) (11,084,533) TOTAL NON-CAPITAL EXPENDITURES $ 16,921,902 $ 18,037,807 $ 45,708,547 $ 21,907,829 $ 20,337,336 % of debt service to non-capital expenditures 31.19% 34.10% 25.06% 38.78% 32.76% Debt Service to Non-Capital Expenditures 90.00% 80.00% 78.13% City of Verona 70.00% 60.00% Reference - High 50.00% 49.57% 40.00% 36.11% 34.10% 38.78% 32.76% 31.19% 31.19% Reference - Median 30.00% 20.00% 18.92% 25.06% 26.16% 18.99% 21.70% 16.04% Reference - Low 9.65% 10.00% 11.48% 6.45% 0.00% 2014 2015 2016 2017 2018 2014 2015 2016 2017 High - Reference: 31.19% 36.11% 49.57% 78.13% Median - Reference: 18.99% 18.92% 26.16% 21.70% Low - Reference: 6.45% 9.65% 16.04% 11.48% Reference values for the population range: 10,000 to 17,500 generated from 2014-2017 Baker Tilly municipal client data for Wisconsin. © 2018 Baker Tilly Virchow Krause, LLP Page 4  CITY OF VERONA 2018 FINANCIAL STATEMENT HIGHLIGHTS ANALYSIS OF DEBT SERVICE - GOVERNMENTAL FUNDS (Excluding TIF debt service) 2014 2015 2016 2017 2018 Total Debt Service (excluding TIF) Principal $ 2,419,117 $ 3,068,300 $ 4,252,909 $ 5,967,180 $ 4,028,584 Interest 877,861 1,096,352 1,130,675 1,162,999 1,171,354 TOTAL $ 3,296,978 $ 4,164,652 $ 5,383,584 $ 7,130,179 $ 5,199,938 Total Non-Capital Expenditures Total governmental funds expenditures (excl. TIF debt) $ 20,440,785 $ 34,996,424 $ 24,377,816 $ 24,779,464 $ 29,320,856 Less: capital outlay (5,499,149) (18,944,318) (6,533,367) (4,889,258) (10,598,020) TOTAL NON-CAPITAL EXPENDITURES $ 14,941,636 $ 16,052,106 $ 17,844,449 $ 19,890,206 $ 18,722,836 % of debt service to non-capital expenditures 22.07% 25.94% 30.17% 35.85% 27.77% Debt Service to Non-Capital Expenditures (excl TIF debt) 40.00% 35.85% 35.00% 30.17% 30.00% 25.94% 27.77% 25.00% 22.07% 20.00% City of Verona 15.00% 10.00% 5.00% 0.00% 2014 2015 2016 2017 2018 © 2018 Baker Tilly Virchow Krause, LLP Page 5  CITY OF VERONA 2018 FINANCIAL STATEMENT HIGHLIGHTS GENERAL FUND REVENUES 2014 % 2015 % 2016 % 2017 % 2018 % Total Revenues Taxes $ 3,585,005 60% $ 4,001,633 63% $ 4,199,474 63% $ 5,179,628 70% $ 5,298,507 67% Intergovernmental 1,056,900 18% 1,092,957 17% 1,100,112 17% 1,303,133 18% 1,172,597 15% Regulation and Compliance 801,419 13% 691,482 11% 826,658 12% 420,945 6% 652,693 8% Special Assessments - 0% - 0% - 0% - 0% - 0% Public Charges for Services 233,608 4% 274,035 4% 258,429 4% 284,510 4% 302,916 4% Investment Income & Miscellaneous 307,981 5% 257,675 4% 307,147 5% 227,141 2% 483,577 6% TOTAL $ 5,984,913 100% $ 6,317,782 100% $ 6,691,820 100% $ 7,415,357 100% $ 7,910,290 100% % of Total Revenue Total Revenue 80% $60 x 100,000 Taxes 70% $50 60% Intergovernmental $40 50% Regulation & Compliance 40% $30 Special Assessments 30% $20 20% Public Charges for Services $10 10% Investment Income & Miscellaneous 0% $- 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 © 2018 Baker Tilly Virchow Krause, LLP Page 6  CITY OF VERONA 2018 FINANCIAL STATEMENT HIGHLIGHTS 2018 GENERAL FUND REVENUES Total Revenues: $7,910,290 Investment Income & Miscellaneous Public Charges for Services 6% 4% Taxes Regulation and Compliance 8% Intergovernmental Intergovernmental 15% Regulation and Compliance Public Charges for Services Taxes 67% Investment Income & Miscellaneous © 2018 Baker Tilly Virchow Krause, LLP Page 7  CITY OF VERONA 2018 FINANCIAL STATEMENT HIGHLIGHTS GENERAL FUND EXPENDITURES 2014 % 2015 % 2016 % 2017 % 2018 % Total Expenditures General Government $ 1,103,586 17% $ 1,046,729 16% $ 1,149,409 16% $ 1,161,791 16% $ 1,151,357 15% Public Safety 3,338,773 50% 3,373,311 50% 3,433,003 49% 3,641,739 49% 3,836,093 49% Public Works* 1,125,626 17% 1,174,626 17% 1,245,108 18% 1,260,841 17% 1,409,283 18% Culture, Rec. & Education 719,764 11% 750,832 11% 793,653 11% 874,343 12% 963,104 12% Conservation & Development 364,774 5% 385,863 6% 404,169 6% 429,947 6% 449,407 6% TOTAL $ 6,652,523 100% $ 6,731,361 100% $ 7,025,342 100% $ 7,368,661 100% $ 7,809,244 100% *Includes capital outlay % of Total Expenditures Total Expenditures 60% $45 x 100,000 General Government $40 50% $35 Public Safety 40% $30 $25 Public Works 30% $20 20% Parks, Rec. & $15 Education $10 10% Conservation & $5 Development 0% $- 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 © 2018 Baker Tilly Virchow Krause, LLP Page 8  CITY OF VERONA 2018 FINANCIAL STATEMENT HIGHLIGHTS 2018 GENERAL FUND EXPENDITURES Total Expenditures: $7,809,244 Conservation & Development General Government 6% 15% Culture, Rec. & Education General Government 12% Public Safety Public Works* Public Works* 18% Culture, Rec. & Education Public Safety 49% Conservation & Development © 2018 Baker Tilly Virchow Krause, LLP Page 9  Verona Utilities Report to the City Council June 10, 2019 Presented By: Baker Tilly Virchow Krause, LLP Ten Terrace Court P.O. Box 7398 Madison, WI 53707-7398 800 362 7301 Jodi Dobson, CPA, Partner Gwen Zech, CPA, Manager Note: Actual data was derived from current and prior years audited financial statements  Verona Utilities Historical Consumption Data Water (000's gallons) 2015 2016 2017 2018 Residential 181,163 201,699 203,531 198,123 Commercial 109,179 90,270 85,603 82,195 Multifamily 35,346 36,461 40,708 38,555 Industrial 35,431 39,047 43,379 40,554 Public Authority 18,249 16,678 16,795 14,254 Total 379,368 384,155 390,016 373,681 Sewer (000's gallons) 2015 2016 2017 2018 Residential 176,772 196,856 198,735 194,678 Commercial 87,549 71,092 76,201 80,743 Multifamily 32,876 34,235 38,212 37,882 Industrial 10,320 16,686 19,831 19,669 Public Authority 12,678 11,425 12,702 12,085 Total 320,195 330,294 345,681 345,057 Stormwater (ERU's) 2015 2016 2017 2018 Total 9,947 10,705 11,009 11,192 What it means…. The general trend in the water industry has been declining usage, outside of extreme weather or growth. Local growth has offset the conservation trend in the last three years. Sewer volumes billed or treated tend to follow water consumption for most customers.  Verona Utilities Water Gallons (000) Sold 250,000 200,000 150,000 2015 100,000 2016 50,000 ‐ 2017 2018 Sewer Gallons (000) Treated 200,000 180,000 160,000 140,000 120,000 100,000 2015 80,000 60,000 2016 40,000 2017 20,000 ‐ 2018 Stormwater ERUs Served 11,500 11,000 2015 10,500 2016 2017 10,000 2018 9,500 9,000 Total  Verona Utilities Rate of Return Water 2015 2016 2017 2018 Average Net Rate Base $ 11,189,872 $ 11,576,249 $ 11,844,272 $ 11,749,401 Authorized Return 6.50% 6.50% 6.50% 6.50% Authorized Operating Return $ 727,342 $ 752,456 $ 769,878 $ 763,711 Actual Operating Income - Regulatory Basis $ 108,859 $ 190,325 $ 136,468 $ (70,299) Actual Return 0.97% 1.64% 1.15% -0.60% Difference $ (618,483) $ (562,131) $ (633,410) $ (834,010) Revenues and Expenses Sewer 2015 2016 2017 2018 Operating Revenues $ 1,398,709 $ 1,502,520 $ 2,144,703 $ 2,100,879 Operating Expenses Operation and maintenance 406,885 468,004 737,316 542,984 MMSD charges 878,134 1,005,710 1,085,759 1,316,396 Depreciation and amortization 499,760 407,995 440,248 451,103 Total 1,784,779 1,881,709 2,263,323 2,310,483 Operating Income (Loss) $ (386,070) $ (379,189) $ (118,620) $ (209,604) Stormwater 2015 2016 2017 2018 Operating Revenues $ 518,962 $ 548,565 $ 580,445 $ 624,699 Operating Expenses Operation and maintenance 233,572 263,251 323,076 285,400 Depreciation and amortization 344,911 367,375 390,191 408,866 Total 578,483 630,626 713,267 694,266 Operating Income (Loss) $ (59,521) $ (82,061) $ (132,822) $ (69,567)  Verona Utilities Water Rate of Return $800,000 $600,000 $400,000 $200,000 $0 $(200,000) 2015 2016 2017 2018 Authorized Actual Sewer Revenues and Expenses $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $‐ 2015 2016 2017 2018 Operating Revenue Operation and maintenance MMSD charges Depreciation and amortization Stormwater Revenues and Expenses $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $‐ 2015 2016 2017 2018 Operating Revenue Operation and maintenance Depreciation and amortization What it means... Rate of return is a key indicator of financial results in any regulated utility like your water utility. Any growth in plant requires that rates cover the cost of providing service or the utility will weaken financially in the long run. While the utility has used the simplified rate case to adjust water rates for inflation in recent years, a full rate case to incorporate the increase in rate base has not been done. This is currently in process. It is important to point out that the operating income reported here will not match what is reported in the financial statements due to PSCW rate-making rules. Sewer and stormwater rates are designed on a cash basis to recover operating costs, debt service, and provide for capital improvements. The operating losses shown are the result of depreciation expense for GAAP purposes being greater than debt service and capital additions. The sewer utility implemented new rates in two steps, July 1, 2016 and January 1, 2017 while the stormwater rates were last revised July of 2010. The stormwater utility is anticipating a rate increase in 2018.  Verona Utilities Unrestricted Cash Reserves Water 2015 2016 2017 2018 Funding Benchmark Estimated Monthly Revenues $ 156,318 $ 162,041 $ 163,337 $ 164,016 Actual Unrestricted Funds on Hand* $ 2,453,892 $ 2,671,743 $ 2,067,954 $ 2,558,061 Months billings on Hand 16 16 13 16 Sewer 2015 2016 2017 2018 Funding Benchmark Estimated Monthly Revenues $ 116,559 $ 125,210 $ 178,725 $ 175,073 Actual Unrestricted Funds on Hand* $ 1,204,921 $ 1,325,964 $ 1,245,182 $ 1,913,023 Months billings on Hand 10 11 7 11 Stormwater 2015 2016 2017 2018 Funding Benchmark Estimated Monthly Revenues $ 43,247 $ 45,714 $ 48,370 $ 52,058 Actual Unrestricted Funds on Hand* $ 748,296 $ 815,099 $ 912,486 $ 1,053,913 Months billings on Hand 17 18 19 20 * - Includes internally restricted funds What it means…. A utility should maintain funds to cover its operations in a normal business operation cycle (i.e. quarterly, monthly) plus a contingency. In addition, utilities should have available an amount equal to one year's capital improvements. The target generally is 3 months revenue. These funding levels facilitate budgeting since there will be less concern for business cycle fluctuations. This shows that the utility has historically had ample cash reserves for operations.  Verona Utilities Water Unrestricted Funds on Hand $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $‐ 2015 2016 2017 2018 Actual Minimum Recommended (3 months) Sewer Unrestricted Funds on Hand $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $‐ 2015 2016 2017 2018 Actual Minimum Recommended (3 months) Stormwater Unrestricted Funds on Hand $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $‐ 2015 2016 2017 2018 Actual Minimum Recommended (3 months)  Verona Utilities Capital Investment Water 2015 2016 2017 2018 Net Investment in Capital Assets $ 28,177,875 $ 28,906,755 $ 30,478,172 $ 30,412,896 Net Property, Plant, and Equipment 30,913,126 32,075,518 33,069,268 32,999,746 Net Plant Funded by Equity 91% 90% 92% 92% Net Plant Funded by Debt 9% 10% 8% 8% Sewer 2015 2016 2017 2018 Net Investment in Capital Assets $ 14,705,868 $ 14,783,655 $ 15,549,802 $ 15,650,249 Net Property, Plant, and Equipment 15,971,662 16,458,340 17,029,115 17,258,785 Net Plant Funded by Equity 92% 90% 91% 91% Net Plant Funded by Debt 8% 10% 9% 9% Stormwater 2015 2016 2017 2018 Net Investment in Capital Assets $ 21,483,389 $ 23,319,822 $ 23,976,551 $ 24,798,039 Net Property, Plant, and Equipment 22,518,042 24,225,823 25,095,494 25,855,654 Net Plant Funded by Equity 95% 96% 96% 96% Net Plant Funded by Debt 5% 4% 4% 4% What it means…. Obtaining financing for capital improvements is normally a necessity for capital intensive utilities. Management should keep their related debt to a manageable level as this allows you to be less aggressive seeking rate relief and provides more options to address unanticipated expenses. The utility industry generally targets 50% or more equity and 50% or less debt.  Verona Utilities Water Utility Net Assets vs. Net Plant 100% 90% 80% 70% 60% 50% Debt 40% Equity 30% 20% 10% 0% 2015 2016 2017 2018 Sewer Utility Net Assets vs. Net Plant 100% 90% 80% 70% 60% 50% Debt 40% Equity 30% 20% 10% 0% 2015 2016 2017 2018 Stormwater Utility Net Assets vs. Net Plant 100% 80% 60% Debt 40% Equity 20% 0% 2015 2016 2017 2018  Verona Utilities Debt Coverage Water & Sewer 2015 2016 2017 2018 Operating Revenues $ 3,274,527 $ 3,447,013 $ 4,104,741 $ 4,069,067 Investment Income 7,971 10,100 34,490 103,974 Build America Bonds subsidy - - - - Connection/ impact fees 260,365 122,714 276,758 777,330 Less: O & M Expenses (1,952,688) (2,134,403) (2,498,347) (2,694,176) Computed Net Earnings $ 1,590,175 $ 1,445,424 $ 1,917,642 $ 2,256,195 Subsequent Year Revenue Bond Debt Service 525,987 525,988 401,543 402,520 Coverage Factor 1.25 1.25 1.25 1.25 Required Net Earnings $ 657,484 $ 657,485 $ 501,929 $ 503,150 Difference $ 932,691 $ 787,939 $ 1,415,713 $ 1,753,045 Coverage 3.02 2.75 4.78 5.61 Water & Sewer Utility Debt Coverage Calculation 2,500,000 2,000,000 1,500,000 1,000,000 500,000 ‐ 2015 2016 2017 2018 Computed Net Earnings Required Net Earnings What it means…. The bond resolutions require that earnings from the system be greater than 1.25 times the highest annual debt service of the bonds for the water and sewer utilities, combined.  DRAFT 5/31/2019 2020 Budget Calendar Date Weekday Estimate Time Action 6/20/2019 Thursday N/A 2020 Capital and 5 Year Capital Plan Due from Departments to Administration 7/8/2019 Monday 6:00 Regular Finance Meeting/Review and Discussion on 2020 Capital/5 Year Plan Council at 7:00 (Police, Fire, Others if needed) 7/11/2019 Thursday N/A Administration sends Budget Sheets to Departments (Admin has updated Salary, Benefits, 2018 Actual and 6/30/19 amounts included) 7/22/2019 Monday 6:00 Regular Finance Meeting/Review and Discussion on 2020 Capital/5 Year Plan Council at 7:00 (Public Works and Parks) 8/2/2019 Friday N/A Department Budgets due back to Finance 8/5-8/9/19 Mon-Fri Scheduled Meetings with Departments and Administration 8/12/2019 Monday 6:00 Regular Finance Meeting/Department Presentations on 2020 Budgets Council at 7:00 (Planning, Fire, Municipal Court) 8/19/2019 Monday 6:00 Department Presentation on 2020 Budgets No Council Meeting (Senior Center, Buildings and Grounds, Library, Admin, Council, Cable (BTRB), Building Ins) 8/26/2019 Monday 6:00 Regular Finance Meeting/Department Presentations on 2020 Budgets Council at 7:00 (Police Department, Emergency Preparedness) 9/9/2019 Monday 6:00 Regular Finance Meeting/Department Presentations on 2020 Budgets Council at 7:00 (FItchRona EMS, Tax Increments Financing Disticts, Debt, Econ Dev) 9/16/2019 Monday 6:00 Department Presentation on 2020 Budgets No Council Meeting (Public Works, Parks, Recreation) 9/23/2019 Monday 6:00 Regular Finance Meeting/Department Presentations on 2020 Budgets Council at 7:00 (Updates on Budget or issues as needed) 9/30/2019 Monday Meeting if Needed No Council Meeting 10/14/2019 Monday 6:00 Regular Finance Meeting-2019 Proposed Recommended Budget and Authorization for Publication Council at 7:00 of Public Hearing 11/18/2018 Monday 6:00 Finance Meeting-Resolution on 2019 Budget Council at 7:00 (Added Council Meeting)