Sterling 1996 WC Plan

• Project Type: Water Conservation Plan
• Project Name: City of Sterling Water Conservation Plan
• Title: Water Conservation Plan
• Date: 6/21/1996
• County: Logan
• Water Conservation - Doc Type: Complete Plan

STERLING WATER CONSERVATION PLAN

MAY 28, 1996

existing facilities, 2) nonnal extensions and improvements, and 3} major capital
improvements and replacements.

Generally, nonnal replacements and extensions and minor improvements are
financed from current revenues. These items nonnally indude transportation and
wor1< equipment such as trucks, automobiles, and mechanized-wor1< equipment;
small extensions to the collection system; office furniture and equipment; and other
recurring capital needs. SinCe these items are, in .most cases, non-recurring in
nature, the costs for these items can often be considered as a part of the debt
service coverage.

Major capital improvements, on the other hand, are typically funded through debt
frnancing. The need for and timing of major capital improvements are usually
detennined through the' development of a utility master plan and capital
improvement program. However, the City does not have a current master plan for
either the water or the sewer utilities.

In the absence of a capital improvement plan, the City adopted a policy in 1994 to
build up the reserve funds in anticipation of future capital improvement needs by
induding a capital recovery charge in the annual budget. One guide used by some
utilities (induding Sterling) for detennining the annual reserve contribution is the
annual depreciation of the system. For the Water Fund, the capital recovery charge
in the 1996 budget is $155,395 compared to the annual depreCiation on the system
of $140,129.

Water Fund:

The audits for the past four years and the estimated figures for 1995 indicate a
signiflC8llt variation in expenditures for capital improvements from year to year. In
1991, $38,672 was spent on capital improvements compared to $320,748 in 1993
and $554,791 in 1995. The large expenditures are usually considered major capital
improvements and are not nonnally funded through the rates in a single year. The
capital expenditures induded in the 1996 budget and projected through 2001 are
$216,075.

Debt Payments:

_u__u____n - --- The annual debt service requirement consists of p,i"dpdl a"d illtEo,est /lIqui...III.."l$
on outstanding bonds and loans, as well as any necessary obligations to debt
service reserves. At this time, the City's Water f(fndcfoeS/1ot have any outstanding
debts.

Annual Audits

Colorado law requires an annual audit of the City's accounting records by an inde-
pendent public accountant selected by City Council. The audit for the period ending
December 31, 1994 was perfonned by Lauer & Associates, P.C. As reported in the
1994 Comprehensive Annual Financial Report, it was the auditor's opinion that "the
general purpose financial statements present fairly, in all material respects, the financial
position of the City, as of December 31, 1994, and the results of its operations and

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