FYE 14 Budget prelim - City of Norman

CITY OF NORMANWATER FUNDBUDGETHIGHLIGHTSBackgroundThe Water Fund is an enterprise fund established to account for the resources utilized to treatand supply water to the customers of the City of Norman. Water is supplied from Lake Thunderbirdthat is owned by the Central Oklahoma Master Conservancy District (COMCD) and by water wellsthat are owned by the City. The cities of Del City, Midwest City and Norman created the COMCD forthe purpose of creating a water supply. The City annually pays a reclamation charge to the District asthe City’s share of debt retirement for construction of the lake. The City also pays a pro rata share ofthe cost to operate the District. There are approximately 549 miles of water mains in the City. TheCity operates a treatment plant whose capacity for treated water is 14 million gallons per day / peakday and as of April 2012 serves an average of 34,800 customers.FYE 14 BudgetStatement of Revenues and ExpendituresThe Norman Water Utility has a highly progressive residential rate structure, designed toencourage conservation of water resources. Current (as of May 2006) monthly residential water ratesare as follows:$4.00 Base Fee$2.00 per thousand for 0 – 5,000 gallons$2.10 per thousand gallons for 5,001 to 15,000 gallons$2.75 per thousand gallons for 15,001 to 20,000 gallons$4.95 per thousand gallons in excess of 20,001 gallonsRevenue projections are based on historic collection patterns and a simple regression modelusing average rainfall as a predictor variable. Because of the extremely progressive nature of theNorman “inverted” water rate structure, Water Utility revenues are highly dependent on weatherpatterns, and can therefore fluctuate significantly.The Water Utility has undertaken an aggressive capital improvement program to enhance theCity’s water supply and treatment systems. A revenue bond program was implemented in fiscal year2006-2007 to finance the construction of 17 additional ground water wells and distribution systems toexpand water supply and to replace ground water supply lost to new Federal drinking water standards;improvements to system-wide distribution facilities, including facilities to serve major new Universityof Oklahoma (OU) structures; expansion of the Water Treatment Plant and the water supply line fromLake Thunderbird; and other capital projects. These supply projects are nearing completion, andalternatives for long-term future water supply sources are being explored.ANNUAL BUDGET83