There are more than a few uncomfortable facts to uncover
THE AGENDA (Printed on 08.25.2020)
Audit, Finance and Enterprise Committee
City of Mesa
Meeting Agenda - Final
Mesa Council Chambers 57 East First Street
Jennifer Duff - Chairperson
Mark Freeman
David Luna
Christopher Brady - Ex Officio
8:00 AM Virtual Platform Thursday, August 27, 2020
Start 08:17 > End 09:33
Roll Call
1 Items from citizens presentThere were no items from citizens present
The agenda was available only
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2 Presentations:
Item 2-b 20-0834
Hear a presentation and discuss the City’s fiscal year 2019-20 sales tax revenue
Item 2-a
| File #: | 20-0834 |
| Type: | Presentation | Status: | Agenda Ready |
| In control: | Audit, Finance and Enterprise Committee |
| On agenda: | 8/27/2020 |
| Title: | Hear a presentation and discuss the City’s fiscal year 2019-20 sales tax revenue. |
| Attachments: | 1. Presentation |
City of Mesa Transaction Privilege (Sales) Tax
FY 2019/20 Review
Audit, Finance & Enterprise Committee
August 27, 2020
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> City of Mesa – Unemployment Rate 17%
(Page 7)
> City of Mesa – City of Mesa Utility Bills – Total Past Due Amount $4,000,000
(Page 8)
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Next Steps
• Continue to monitor
• Sales tax revenue and economic trends
• Shopping behavior
• Business closures/re-openings
• Stimulus & unemployment benefits
• Return to the AF&E Committee in January 2021 with an update
_________________________________________________________________________
Item 2-b 20-0835
Hear a presentation and discuss the Utility Enterprise Fund forecast
| File #: | 20-0835 |
| Type: | Presentation | Status: | Agenda Ready |
| In control: | Audit, Finance and Enterprise Committee |
| On agenda: | 8/27/2020 |
| Title: | Hear a presentation and discuss the Utility Enterprise Fund forecast. |
| Attachments: | 1. Presentation |
City of Mesa
FY 2020/21 Utility Enterprise Fund Forecast
Audit, Finance & Enterprise Committee
August 27, 2020
Presented by:
Brian A. Ritschel – Management & Budget Assistant Director
Chris Olvey – Management & Budget Forecast Coordinator
> Sources (Revenue) Forecasting
• The City’s forecasting approach to utility revenues includes statistical analysis and collaboration with Departments
• Statistical software is applied in house to analyze the correlation between economic trends and the City’s utility sources
• Relevant economic indicators are considered, such as population growth, along with reviewing historical trends in account growth and consumption/usage
• Mesa specific factors are applied such as economic development activities, additional large customers, etc.
• Impact of pandemic on utilities
3
> Uses (Expense) Forecasting
• Departments provide specific forecasts for large budget items where costs can fluctuate over time, including water commodity purchases, water and wastewater treatment plant chemicals, and solid waste tipping fees
• Debt service payments are included in the Utility Enterprise Fund forecast, where funds are transferred according to utility debt service schedules
• Other departmental operating expenses, such as, step pay increases, salary benchmark study, and General Fund contribution.
4
> Financial Principles
• Balanced net sources and uses
• 20% or higher reserve fund balance
• Rate adjustments that are predictable and smoothed throughout the forecast
• Equity between residential and non-residential rates
• Affordable utility services
5
> Rate Adjustment History
6
> *FY 19/20 Effective date shifted from July to March/April
9
As of 08/17/2020
FY 20/21
FY 21/22
FY 22/23
FY 23/24
FY 24/25 FY 25/26
Projected Forecast Forecast Forecast Forecast Forecast
WATER $596,627 ($1,048,693) ($205,484) $3,935,297 $1,237,726 $2,764,980 WASTEWATER ($12,984,174) ($10,092,584) ($8,207,513) ($8,515,511) ($6,908,221) ($5,422,729)
SOLID WASTE $4,028,650 $1,904,900 $3,175,091 $2,272,961 $4,473,500 $5,591,629 ELECTRIC $1,526,727 $574,495 $310,320 ($288,041) $44,675 ($203,048)
NATURAL GAS $2,310,474 $4,995 ($311,780) ($476,115) $536,357 $979,911
DISTRICT COOLING ($251,566) ($110,159) ($156,107) ($150,469) ($238,691) ($390,925)
TOTAL NET SOURCES AND USES ($4,773,261) ($8,767,045) ($5,395,474) ($3,221,879) ($854,653) $3,319,819
Beginning Reserve Balance $135,470,845 $130,697,584 $121,930,539 $116,535,065 $113,313,186 $112,458,533
Ending Reserve Balance $130,697,584 $121,930,539 $116,535,065 $113,313,186 $112,458,533 $115,778,352
Ending Reserve Balance Percent* 31.7% 28.7% 26.5% 25.1% 24.1% 24.1%
*As a % of Next Fiscal Year's Expenditures
WATER Residential 2.50% 2.50% 2.50% 2.50% 2.50% 1.50%
WATER Non-Residential (usage only) 5.00% 5.00% 5.00% 5.00% 5.00% 3.00% WASTEWATER Residential 4.00% 4.00% 4.00% 4.00% 4.00% 3.50%
WASTEWATER Non-Residential 4.00% 4.00% 4.00% 4.00% 4.00% 3.50%
SOLID WASTE Residential 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
SOLID WASTE Commercial 4.00% 3.00% 3.00% 3.00% 3.00% 3.00%
SOLID WASTE Rolloff 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
ELECTRIC Residential - svc charge only $2.50 $2.50 $2.50 $2.50 $2.50 $2.50
ELECTRIC Non-Residential - svc charge only $3.00 $3.00 $3.00 $3.00 $3.00 $3.00
GAS Residential - svc charge only $1.50 $1.50 $1.50 $1.50 $1.50 $1.50
GAS Non-Residential - svc charge only $2.50 $2.50 $2.50 $2.50 $2.50 $2.50
Next Steps
• Finalize FY 20/21 rate recommendations with the utility departments
• Present to the AF&E Committee the rate recommendations for FY 20/21 and a forecast that balances the financial principles.
Schedule for FY 2020/21 Utility Rates Adjustment Recommendation
Sept 3 – AF&E Committee Discussion of Utility Rates
Sept 21 – City Council Action on Notice of Intent
Oct 1 – City Council Discussion of Utility Rates
Nov 16 – Introduce Utility Rate Resolutions & Ordinances
Dec 1 – City Council Action on Utility Rates
________________________________________________________________________3 Adjournment
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THE APPROVED MINUTES
Virtual Platform
Thursday, August 27, 2020
8:00 AM
Audit, Finance and Enterprise Committee
08:17 - 09:33 a.m.
Jennifer Duff - Chairperson
Mark Freeman
David Luna
Christopher Brady - Ex Officio
Roll Call
Chairperson Duff called the meeting to order with all members present at 8:17 a.m.
Committee members participated in the meeting through a virtual format.
1 Items from citizens present.
There were no items from citizens present.
2 Presentations
2-a Hear a presentation and discuss the City’s fiscal year 2019-20 sales tax revenue. Presentation and discussion only; no formal action taken by the Committee.
2-b Hear a presentation and discuss the Utility Enterprise Fund forecast.
Presentation and discussion only; no formal action taken by the Committee.
3 Adjournment
Without objection, the meeting adjourned at 9:33 a.m.
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