FY2022

WASTEWATER FUND The Wastewater Fund accounts for the business-like operations of the City’s wastewater/sewer utility. The wastewater utility operates the City’s waste treatment plant, the sewage lift stations, the sanitary sewer collection system, and the wastewater monitoring operations. The Wastewater Fund is primarily supported through user fees. The wastewater operations have been undergoing a major transformation over the last few years. The City completed a major expansion of the South Wastewater Treatment Plant during fiscal year 2015, and all of the City’s sewage treatment operations were consolidated at the South Plant. The project cost was $55 million, and was funded from $41.4 million from state and federal grants, $8.6 million from Local Option Sales Tax revenue, and $5 million from Wastewater user fees. A project to demolish and remove the North Treatment Plant and establish wetlands and a park was started in fiscal year 2015 at an estimated cost of $6 million with the assistance of a State sales tax flood mitigation grant. The Wastewater Fund provided a $6 million loan to the Capital Projects Fund for the demolition of the North Wastewater Treatment Plant in fiscal year 2015. This loan is being repaid with the State sales tax flood mitigation grant. The loan payment schedule is as follows:

Year 2015 2016 2017 2018 2019 2020 2021

Principal

Interest

Payment

Balance

Rate

$

200,000 200,000 225,000 975,000

$

166,598 166,258 165,698 164,640 67,708 55,320 26,400 812,621

$

366,598 366,258 390,698

5,800,000 $

0.17% 0.28% 0.47% 0.78% 1.21% 1.56% 1.92%

5,600,000 5,375,000 4,400,000 3,125,000 1,375,000

1,139,640 1,342,708 1,805,320 1,401,400

1,275,000 1,750,000 1,375,000

-

6,000,000 $

$

6,812,621 $

Fund Balance: The Wastewater Fund’s unassigned fund balance at fiscal year 2020 year-end was lower than fiscal year 2019 by approximately $2,989,271 or 21%. This decrease was primarily due to the creation of a Capital Reserve Fund. A Capital Reserve was created in fiscal year 2020, and $8.6 million was transferred into it from unassigned fund balance. This transfer out was offset by several factors including a $1.75 million interfund loan payment from the sales tax flood mitigation grant program and reduced Wastewater Charge revenues . In fiscal years 2021, unassigned fund balance is expected to increase by $872,636 or 7.6%. This increase is stemming from a $1.375 million sales tax flood mitigation grant program interfund loan payment reduced by revenue losses from lower University of Iowa usage charges stemming from the COVID-19 pandemic. In fiscal year 2022, the unassigned fund balance is budgeted to increase by $1,731,561 or 13.9% primarily due to the projected restoration of pre-COVID revenue levels and due to the

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