1 town of lockport financial review focus on the sewer plant and sewer collection service

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TOWN OF LOCKPORTTOWN OF LOCKPORT

FINANCIAL REVIEWFINANCIAL REVIEW

Focus on the Sewer Plant and Focus on the Sewer Plant and Sewer Collection ServiceSewer Collection Service

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INTRODUCTIONINTRODUCTION

Sewer Plant was built in the mid 1990’sSewer Plant was built in the mid 1990’s DEQ determined that the aging sewer plant must be DEQ determined that the aging sewer plant must be

replaced. New standards and new restrictions could not replaced. New standards and new restrictions could not

be met with the old sewer plantbe met with the old sewer plant..

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SEWER SERVICE RATESEWER SERVICE RATE Current sewer service rates have not changed since Current sewer service rates have not changed since

the existing sewer plant was put in service in the mid the existing sewer plant was put in service in the mid 1990’s.1990’s.

$5.00 minimum for first 2,000 gals of water used$5.00 minimum for first 2,000 gals of water used $1.93 for each 1,000 gals of water used above 2,000 $1.93 for each 1,000 gals of water used above 2,000

galsgals Subsidizing the sewer maintenance and operating Subsidizing the sewer maintenance and operating

costs is causing a drain on Town revenues and costs is causing a drain on Town revenues and reserves making other public works projects difficult to reserves making other public works projects difficult to fundfund..

The Town auditor recommended a sewer rate increase The Town auditor recommended a sewer rate increase or some other revenue source to reduce the financial or some other revenue source to reduce the financial drain on Town funds and reserves.drain on Town funds and reserves.

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INFORMATION GATHERED FROM OTHER MUNICIPALITES INFORMATION GATHERED FROM OTHER MUNICIPALITES (population from 2,000 to 5,000)(population from 2,000 to 5,000)

AND FROM THE LOUISIANA LEGISLATIVE AUDITOR WEBSITE AND FROM THE LOUISIANA LEGISLATIVE AUDITOR WEBSITE (www.lla.state.la.us/)(www.lla.state.la.us/)

FOR SEWER SERVICE DISTRICTSFOR SEWER SERVICE DISTRICTS

The following information was gathered in an effort to arrive The following information was gathered in an effort to arrive at an average sewer bill in municipalities similar in size to at an average sewer bill in municipalities similar in size to Lockport, or sewer districts in the proximity of Lockport.Lockport, or sewer districts in the proximity of Lockport.

PopulationPopulation Number of sewer customersNumber of sewer customers Revenue generated by sewer service feesRevenue generated by sewer service fees Maintenance and Operations expensesMaintenance and Operations expenses

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COMPARISON TO OTHER COMPARISON TO OTHER SEWER DISTRICTSSEWER DISTRICTS

Compare Lockport Statistics to other Compare Lockport Statistics to other municipalities and sewer service districtsmunicipalities and sewer service districts Compare sewer revenue vs. number of sewer Compare sewer revenue vs. number of sewer

customers. (average monthly sewer bill)customers. (average monthly sewer bill)

Source of informationSource of information Email request for information from other municipalities Email request for information from other municipalities

with similar populationwith similar population LA Legislative Auditor website – annual audit reports LA Legislative Auditor website – annual audit reports

for sewer districts in proximity of Lockportfor sewer districts in proximity of Lockport Combination of the above sourcesCombination of the above sources

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LOCKPORTLOCKPORT

Population of Lockport – 2,640Population of Lockport – 2,640 Approximate number of sewer bills – Approximate number of sewer bills – 1,1351,135 Sewer Service Revenue - Sewer Service Revenue - $155,000$155,000 Sewer Service Expenses - Sewer Service Expenses - $294,264$294,264

Average monthly sewer bill - $11.38Average monthly sewer bill - $11.38

LOCKPORT EXPENSES LOCKPORT EXPENSES

BOND PRIN + INTEREST

UTILITIES + COLLECTIONS

PAYROLL EXPENSES

PLT / EQUIP MAINT +

SLUDGE + CHEMICALS

OTHER / MISC EXPENSES

TOTAL EXPENSES

LESS CAP EXP

2005-2006 $121,516 $54,581 $49,385 $39,573 $19,933 $284,988

2006-2007 $121,959 $49,792 $53,374 $39,511 $3,760 $268,395

2007-2008 $121,333 $50,703 $49,997 $27,183 $20,335 $269,552

2008-2009 $121,619 $47,171 $57,852 $43,753 $47,315 $317,710

2009-2010 $122,740 $53,325 $60,904 $43,752 $13,543 $294,264

5 year average

$286,981

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LOCKPORT EXPENSES & LOCKPORT EXPENSES & SUBSIDIESSUBSIDIES

TOTAL EXPENSES

LESS GRANT FUNDED EXP

TOTAL SEWER FEE REVENUE

SUBSIDIZED ANNUALLY

FROM SALES TAX FUND

FROM RESERVES

2005-2006 $284,988 $168,085 $116,902 $55,000 $102,000

2006-2007 $268,395 $163,173 $105,221 $55,000 ($26,000)

2007-2008 $269,552 $161,230 $108,322 $55,000 $90,000

2008-2009 $317,710 $152,797 $164,913 $75,000 $68,000

2009-2010 $294,264 $155,000 $139,264 $97,000 $51,000

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LAFOURCHE SEWER SERVICE LAFOURCHE SEWER SERVICE DISTRICT NO 1DISTRICT NO 1

Number of sewer bills – 387Number of sewer bills – 387 Total sewer revenue - $206,853Total sewer revenue - $206,853


• Information taken from the LA Legislative Auditor website, audit report of 12/31/2008.

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LAFOURCHE SEWER SERVICE LAFOURCHE SEWER SERVICE DISTRICT NO 2DISTRICT NO 2

Number of sewer bills – 100Number of sewer bills – 100 Total sewer revenue - $36,834Total sewer revenue - $36,834


Information taken from the LA Legislative Auditor website, audit report of 12/31/2007.

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TOWN OF GOLDEN MEADOWTOWN OF GOLDEN MEADOW

Population – 2,385Population – 2,385 Number of sewer bills – 285Number of sewer bills – 285 Total sewer revenue - $56,641Total sewer revenue - $56,641 Total sewer operating expenses -$104,689Total sewer operating expenses -$104,689


* Information taken from the LA Legislative Auditor website, audit report of 12/31/2008, and from Town of Golden Meadow

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Town of GramercyTown of Gramercy

Population – 3,300Population – 3,300 Number of sewer bills – 1,420Number of sewer bills – 1,420 Total sewer revenue - $350,000Total sewer revenue - $350,000 Total sewer expenses - $312,000Total sewer expenses - $312,000


* Information requested from the Town of Gramercy.

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TOWN OF BLANCHARDTOWN OF BLANCHARD



* Information requested from the Town of Blanchard.

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TOWN OF WELSHTOWN OF WELSH



* Information requested from the Town of Welsh.

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TOWN OF VIVIANTOWN OF VIVIAN



* Information requested from the Town of Vivian.

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TOWN OF OAK GROVETOWN OF OAK GROVE

Population – 2,163Population – 2,163 Number of sewer bills – 866Number of sewer bills – 866 Total sewer revenue - $126,206Total sewer revenue - $126,206 Total sewer expenses - $110,923Total sewer expenses - $110,923


* Information requested from the Town of Oak Grove.

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AVERAGE MONTHLY SEWER BILLAVERAGE MONTHLY SEWER BILL

LockportLockport $11.38$11.38

Laf Sewer Dist No 1Laf Sewer Dist No 1 $44.55$44.55

Laf Sewer Dist No 2Laf Sewer Dist No 2 $30.70$30.70

Golden MeadowGolden Meadow $16.33$16.33

GramercyGramercy $20.54$20.54

BlanchardBlanchard $15.34$15.34

WelshWelsh $17.26$17.26

VivianVivian $13.04$13.04

Oak GroveOak Grove $12.15$12.15

Average Monthly BillAverage Monthly Bill $20.15$20.15

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SOLUTION OPTIONSSOLUTION OPTIONS

The following three options were researched and reviewed The following three options were researched and reviewed to determine the least financial effect on all of the Town to determine the least financial effect on all of the Town residents as well as the elderly and those on fixed residents as well as the elderly and those on fixed income or lower income.income or lower income.

Increase in monthly sewer billsIncrease in monthly sewer bills Increase in annual property tax (alimony)Increase in annual property tax (alimony) Sales Tax Proposal .7%Sales Tax Proposal .7%

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Solution Option 1Solution Option 1Increase in Monthly Sewer BillIncrease in Monthly Sewer Bill

Total Sewer RevenueTotal Sewer Revenue $155,000$155,000

Total Sewer ExpenseTotal Sewer Expense $294,264$294,264

Subsidized by Sales Tax Subsidized by Sales Tax & Reserves& Reserves

$139,264$139,264

Number of sewer billsNumber of sewer bills 1,1351,135

Annual increase in billAnnual increase in bill $122.70$122.70

Monthly increase in billMonthly increase in bill $11.38 + $10.23 = $21.61$11.38 + $10.23 = $21.61

HoumaToday.comHoumaToday.comPublished: Sunday, March 21, 2010 at 6:01 a.m.Published: Sunday, March 21, 2010 at 6:01 a.m.

HOUMAHOUMA – – Terrebonne Parish residents would pay Terrebonne Parish residents would pay about $4 more a month for sewerage service under a about $4 more a month for sewerage service under a

fee increase set for final approval this weekfee increase set for final approval this week..

For those on the public sewer system, the average monthly For those on the public sewer system, the average monthly

bill would rise from $17.17 to bill would rise from $17.17 to $21.61$21.61, according to parish , according to parish officials. That’s based on the average household, which uses officials. That’s based on the average household, which uses 5,600 gallons of water per month.5,600 gallons of water per month.

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Solution Option 2Solution Option 2Increase in Property TaxIncrease in Property Tax

Total Property Tax RevenueTotal Property Tax Revenue $65,500$65,500

Number of Property Tax billsNumber of Property Tax bills 1,1591,159

Sewer amount subsidizedSewer amount subsidized $139,264$139,264

Annual increase in Property Tax if sewer is Annual increase in Property Tax if sewer is subsidized by Property Taxsubsidized by Property Tax

$56.52 + $120.16$56.52 + $120.16

= $176.68= $176.68

Monthly increase in Property Tax cost if Monthly increase in Property Tax cost if sewer is subsidized by Property Taxsewer is subsidized by Property Tax

$10.02$10.02

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Solution Option 3Solution Option 3.7% Sales Tax.7% Sales Tax

Source:Source:

Sales Tax Calculator IRS.govSales Tax Calculator IRS.gov

Income Range $30,000 to $40,000Income Range $30,000 to $40,000

Lockport, Lafourche, LouisianaLockport, Lafourche, Louisiana TOTAL TOTAL

TAX RATETAX RATE

ANNUAL ANNUAL STATE TAXSTATE TAX

AMOUNTAMOUNT

ANNUAL ANNUAL LOCAL TAXLOCAL TAX

AMOUNTAMOUNT

ANNUAL ANNUAL TOTAL TAXTOTAL TAX

AMOUNTAMOUNTTAX AMOUNT TAX AMOUNT PER MONTHPER MONTH

Current Sales TaxCurrent Sales Tax 8.00%8.00% $358.00$358.00 $480.00$480.00 $838.00$838.00 $69.83$69.83

Proposed Tax at .7%Proposed Tax at .7% 8.70%8.70% $358.00$358.00 $564.00$564.00 $922.00$922.00 $76.83$76.83

Increase in Sales TaxIncrease in Sales Tax .7%.7% 0.000.00 $84.00$84.00 $84.00$84.00 $7.00$7.00

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SOLUTION COMPARISONSOLUTION COMPARISON

Annual IncreaseAnnual Increase Monthly IncreaseMonthly Increase

Option 1Option 1

Sewer BillSewer Bill$122.70$122.70 $10.23$10.23

Option 2Option 2

Property Tax BillProperty Tax Bill$122.16$122.16 $10.02$10.02

Option 3Option 3

Sales Tax IncreaseSales Tax Increase$84.00$84.00 $7.00$7.00

Option 3 is the least cost Option 3 is the least cost

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RECOMMENDATION RECOMMENDATION

SALES TAXSALES TAX After reviewing the 3 options very carefully:After reviewing the 3 options very carefully:

The Town has placed a .7% Sales Tax Proposal on the The Town has placed a .7% Sales Tax Proposal on the ballot of May 1, 2010.ballot of May 1, 2010.

If approved, the proceeds will be used to fund the If approved, the proceeds will be used to fund the subsidy to the sewer plant operations as well as street subsidy to the sewer plant operations as well as street and drainage improvements.and drainage improvements.

If approved, the sales tax revenue can be bonded to If approved, the sales tax revenue can be bonded to

provide funds for significant improvement projectsprovide funds for significant improvement projects..

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SOME RECENT PROJECTSSOME RECENT PROJECTS

Several financially significant projects have been undertaken in the last few Several financially significant projects have been undertaken in the last few years. Some are complete, others are in progress. Some financed by State years. Some are complete, others are in progress. Some financed by State or Federal Grants, others financed by Town revenues.or Federal Grants, others financed by Town revenues.

How does the Town decide which projects are to be funded through grant How does the Town decide which projects are to be funded through grant applications or by Town revenues?applications or by Town revenues?

Some grants are designated for a specific purpose such as sidewalks.Some grants are designated for a specific purpose such as sidewalks. Some grant applications are more likely to be approved for projects Some grant applications are more likely to be approved for projects

involving the arts, or infrastructure, or water treatment, etc.involving the arts, or infrastructure, or water treatment, etc. Grant eligibility is sometimes determined by average household income.Grant eligibility is sometimes determined by average household income. Town revenues can be used to fund any project, provided sufficient funds Town revenues can be used to fund any project, provided sufficient funds

are available.are available.

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Recent Public Works ProjectsRecent Public Works ProjectsFUNDED BYFUNDED BY AMOUNT AMOUNT

FUNDEDFUNDEDTOWN TOWN FUNDINGFUNDING

TOTAL PROJECTTOTAL PROJECT

COSTCOST

DATEDATE

COMPLETECOMPLETE

Safe Routes to School Safe Routes to School Sidewalks – Church Sidewalks – Church St, Seventh St., St, Seventh St., School St.School St.

LA DOTDLA DOTD $281,681.76$281,681.76 $281,681.76$281,681.76 02/200802/2008

Street ImprovementsStreet Improvements Town of Town of LockportLockport

$188,386.57$188,386.57 $188,386.57$188,386.57 09/200809/2008

Lower Catherine Lower Catherine Street Sewer Pump Street Sewer Pump Station GeneratorStation Generator

LGAPLGAP

LA Dept of LA Dept of TreasuryTreasury

$48,300.00$48,300.00

$50,000.00$50,000.00

$65,420.00$65,420.00 $163,720.00$163,720.00 11/200811/2008

Upper Catherine Upper Catherine Street Pump StationStreet Pump Station

Pump ReplacementPump Replacement

Town of Town of LockportLockport

$90,300.00$90,300.00 $90,300.00$90,300.00 03/200903/2009

Upper Catherine Upper Catherine Street Sewer Pump Street Sewer Pump Station GeneratorStation Generator

LGAPLGAP $35,000.00$35,000.00 $9,782.61$9,782.61 $44,782.61$44,782.61 02/201002/2010

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More Recent Public Works ProjectsMore Recent Public Works ProjectsFUNDED BYFUNDED BY AMOUNT AMOUNT

FUNDEDFUNDED TOWN TOWN FUNDINGFUNDING

TOTAL TOTAL PROJECTPROJECT

COSTCOST

DATEDATE

COMPLETECOMPLETE

Town Hall Town Hall GeneratorGenerator

Lafourche Parish GovtLafourche Parish Govt

DHS GrantDHS Grant

$75,000.00 $75,000.00 estimatedestimated



03/201003/2010

Sewer Plant Sewer Plant GeneratorGenerator

LA Capital OutlayLA Capital Outlay $100,000.00$100,000.00 $79,000.00 $79,000.00 estimatedestimated

$179,000.00$179,000.00 06/201006/2010

Safe Routes to Safe Routes to School School Sidewalks & Sidewalks & Drainage Drainage School StreetSchool Street

Louisiana DOTDLouisiana DOTD $270,974.00$270,974.00 $270,974.00$270,974.00 12/201012/2010

Catherine Catherine Street / Street / Comeaux Comeaux Drive DrainageDrive Drainage

LGAPLGAP $35,000.00$35,000.00 $35,000.00$35,000.00 12/201012/2010

Comeaux Comeaux Drive Sewer & Drive Sewer & Street Street ImprovementsImprovements

FY09 LCDBGFY09 LCDBG $669,400.00$669,400.00 $132,700.00 $132,700.00 estimated estimated


12/2011 12/2011 estimateestimate

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Other Recent ProjectsOther Recent ProjectsCenter for Traditional Louisiana BoatbuildingCenter for Traditional Louisiana Boatbuilding

Purchase “Old Ford Building”Purchase “Old Ford Building” Town of Lockport FundsTown of Lockport Funds $57,900.00$57,900.00 12/200512/2005

ImprovementsImprovements Town of Lockport FundsTown of Lockport Funds $39,272.50$39,272.50 2005-20092005-2009

ImprovementsImprovements LA Capital OutlayLA Capital Outlay $100,000.00$100,000.00 06/200806/2008

ImprovementsImprovements LA Capital OutlayLA Capital Outlay $100,000.00$100,000.00 06/200906/2009

ImprovementsImprovements LA Dept of Treasury – ACT 122LA Dept of Treasury – ACT 122 $25,000.00$25,000.00 11/200911/2009

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A DECISION WILL BE MADE FOLLOWING A DECISION WILL BE MADE FOLLOWING THE MAY 1THE MAY 1STST ELECTION ELECTION

If the Sales Tax Proposal is approved by the voters, If the Sales Tax Proposal is approved by the voters, there will be no need to increase the sewer fees or there will be no need to increase the sewer fees or property tax in the foreseeable future. The Town’s property tax in the foreseeable future. The Town’s revenues will be sufficient to fund maintenance and revenues will be sufficient to fund maintenance and operations as well as some improvement projects.operations as well as some improvement projects.

If the Sales Tax Proposal fails, the Town Council will If the Sales Tax Proposal fails, the Town Council will need to consider the alternatives to generate the needed need to consider the alternatives to generate the needed revenue.revenue.

1 town of lockport financial review focus on the sewer plant and sewer collection service

Documents

sewer maintenance

sewer service expenses

sewer service revenue

sewer service feesmaintenance

sewer collection service

total sewer revenue

average sewer bill

aging sewer plant