Budget Message / Highlights - Metropolitan Water Reclamation ...

Five-Year Financial Forecast, 2009-2013 October 21, 2008
Reserve Claim and Working Cash Funds
Tax levy increases for the Reserve Claim Fund are projected to range from $3.1 million to $8.6 million from 2009 – 2013.
There is no levy planned for the working cash funds for this period. The District is authorized to levy a half-cent annually
against taxable property for the Reserve Claim, Corporate and Construction Working Cash funds. The Stormwater Working
Cash Fund has no debt or tax levy authority. The annual increases projected for the Reserve Claim Fund is equal to our
projected increase in Equalized Assessed Valuation (EAV). Consistent with Board of Commissioner’s policy, the Reserve
Claim fund levy will continue at its statutory limit in order to accumulate a reserve fund balance approaching the statutory
maximum.
The District’s Board of Commissioners may, by a two-thirds vote of all its members, transfer fund balances among its
Working Cash Funds. The Corporate, Stormwater, and Construction Working Cash Funds will remain sufficiently funded by
transfers among the working cash fund, themselves.
TAX RATE FORECASTS
Forecasts of property tax rates are dependent on projected Equalized Assessed Valuations (EAV). The estimated tax rates are
calculated using the projected levy and EAV applicable for a particular tax year. Annual tax rate limits exist for the District's
Corporate, Construction, Reserve Claim, and Working Cash funds. The District's Corporate and Construction Funds annual
tax rate limits are 41 and 10 cents, respectively. Adequate margins exist in both the Corporate Fund and Construction Fund to
extend taxes for District operations. A half-cent annual levy is allowed for the Reserve Claim, Corporate & Construction
Working Cash Funds. The Stormwater Management Fund can levy up to 5 cents and is not limited by the Tax Cap.
The rates are expected to increase primarily due to increases for Stormwater and debt service. Public Act 93-0715 limits the
growth of residential property EAV to 7 percent annually with a maximum individual property exemption of $20,000. This
law had only a marginal impact on the revenue for funds levying their maximum rate, i.e., the Reserve Claim Fund. The 7
percent limit on residential EAV increases was effective 2004 through 2006. In 2007 Public Act 95-0644 renewed the 7
percent EHE (Expanded Homeowner’s Exemption) for an additional assessment period with new maximum exemption
amounts.
SUPPORTING EXHIBITS
The data presented to illustrate the projected financial status of the District is divided into six segments: Summary of All
Funds, the Corporate Fund, Capital Improvements Funds, Debt Service, Program Distribution within Fund, and the Combined
GAAP-Basis Balance Sheets for the Corporate Fund Group.
The graphs on page 68, and the tables on page 69, summarize the projected appropriations, property tax rates and tax levies
for all funds for the years 2009 through 2013. Historical comparisons can be made by reviewing the actual appropriations, tax
rates and levies for the years 2000 – 2009 on page 47.
Table II, on page 70 provides detailed revenue and tax rate projections, as well as expenditures by department and major
categories for the Corporate Fund for 2009 – 2013. Actual Corporate Fund appropriations and expenditures for the years
2000 – 2009 can be found on page 109.
Appropriable resources and projected expenditures for the Capital Improvements Bond Fund appear on page 72, and
projections for revenues, tax rates, and expenditures for the Construction Fund for the years 2009 – 2013, appear on page 71.
A summary of actual and projected expenditures for both funds, for the years 2004 – 2013, can be found in the Capital
Program Section, on page 366. The table on the top of page 72, and the exhibits on page 73, present appropriation projections
by major programs.
The balance sheet statement on page 74 is prepared on a GAAP-basis of accounting and is included to show the effect on the
Corporate Fund Group. The Corporate Fund Group is made up of the Corporate, Corporate Working Cash and Reserve Claim
Funds. One of the most important factors in evaluating the financial position of a government is the balance sheet of the
corporate fund group, which relates total assets, liabilities, and fund equity. The strength of a government’s financial position
is shown in its total fund equity and unreserved, undesignated fund balance. The total fund equity projection for 2009 is
$226.8 million. This total fund equity projection includes future claims in the Reserve Claim Fund. The projection for the
years 2009 to 2013 shows an average of $213.0 million.
Very truly yours,
Beverly K. Sanders
Budget Officer
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