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With income from sales, transportation revenue and interest down across the board for Carrollton Utilities, city council approved a budget amendment Monday night to reflect the declines.
During its April 27 meeting, city council heard Carrollton Utilities general manager Bill Osborne crunch the numbers for the remainder of this year and provide a look ahead at a proposed budget for the 2009-10 fiscal year that begins July 1.
Council’s action on the current year’s budget made changes in several areas, including gas and water and sewer revenues and expenditures. The amendment shows lower revenues in the gas and sewer departments that are offset by lower expenses.
Total revenue for the gas department are down 40 percent, with projected revenues being $103.6 million and actual revenues being $62.3 million. Estimated expenditures were reduced by 41 percent from $103.2 million to $61.7 million.
The sewer department revenues dropped 45 percent going from a projected income of $4.4 million to $2.4 million. Estimated expenditures changed less than 1 percent due to the fixed expenses of chemicals to treat the water.
The water department and the West Carroll water department had similar gains and losses that reflected in net losses of $21,009 and $3,098 respectively.
Revenues are down for a number of reasons including the dramatic swing in gas prices over the past 10 months, according to Osborne. “We have not raised gas prices for 11 years,” Osborne said.
The city purchases gas and reselles it to its customers and any increase is due to what the city has to pay for the gas. Carrollton Utilities charges the same amount for their share of the cost as it did 11 years ago, Osborne explained in an interview following the meeting.
“It is too early to say what the price of gas will be this year,” Osborne said. He explained that many factors such as how hot the summer is, any damage done during the hurricane season, how cold the winter is, and what the economy does are all involved.
When the summer is very hot, power-generating plants use more natural gas to generate electricity for air conditioning, which will eventually raise the cost to heat homes in the winter, Osborne said.
Hurricane season also makes the home heating market unstable. It is nearly an impossible job to correctly predict what all those factors will do in any given year, he explained.
Carrollton Utilities’ proposed budget presumes a five percent water and sewer rate increase for the coming year, Osborne noted. The average person used 4,000 gallons of water monthly, which would mean a rate increase of $1.05 per month for water and $1.12 per month for sewer, he said.
Osborne has not made a recommendation for a rate increase yet, but said this could be done in June so that it can take effect July 1 when the new budget is in place.
Mayor Dwight Louden gave his budget message stating, “the city’s financial position has improved this year due to the PEAK contribution and the prudent spending habits of our departments.”
Public Energy Authority of Kentucky, PEAK, was created in conjunction with the city of Henderson to purchase gas for the two cities at a more consistent rate for 10 years. The city receives monthly payments from PEAK after they sell gas to other entities in several other states.
Louden also said the future of PEAK contributions is uncertain at this time, which means the city will need to stretch money available until the economic environment improves.
Items in the budget include a three percent raise for city employees, computer hardware for the administrative department and a dump truck for the public works department.
The council heard the first reading of an ordinance that requires individuals applying for a business license to be current on all taxes, assessments, fines or civil penalties at the time the application is made.
Two resolutions were passed allowing the mayor to renew contracts with city attorney Nick Marsh and Raisor, Zapp and Woods for legal and accounting services for the upcoming fiscal year.