PROJ00235

• Contract/PO #: C153633
• Contractor Name: Greeley, City of
• Contract Type: Loan
• Water District: 3
• County: Larimer
• Bill Number: HB 91-1006
• Loan Projects - Doc Type: Feasibility Study

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2.4

FINANCIAL STATUS

The diversity of City services and the necessity of assuring legal compliance preclude recording
and summarizing all financial activity of the City in a single account entity. Therefore, the
accounting system used by the City of Greeley combines several fiscal un~s which are
accounted for in separate funds. For the Water and Sewer Department, two separate funds
have been established the water fund and the sewer fund. Only the water fund is discussed
in this report.

The water fund is a proprietary fund which is used to provide water service to the residents of
the City, The fund Is self-sustaining and self-supporting by relying completely on user charges,
The water fund is administered by the Water Department. All activ~ies necessary to provide
treated water to the City's water customers are supported by this fund, Including administration,
operations, maintenance, financing and debt service, and billing and revenue collection.

The schedule of water general obligation bond coverage for the last ten fiscal years is presented
on Table 2,1. The column in the table representing the net revenue available for debt service
is derived from the gross revenues, less expenses, excluding debt services. The ratio of the
net revenue available for debt service to the debt service requirement has exceeded 1,5 over
the last eight years, except for 1987 when ~ was 1.48, In 1989, the debt service requirement
was slightly over $2.4 million. This compares favorably with net revenues of $4.1 million. The
difference between net revenue and debt service requirements is placed in reserve accounts for
replacement of depreciated cap~aJ assets.

In 1989, gross revenue of $9,3 million was derived primarily from user fees including income
from sale of residential, commercial, agricultural, and industrial water inside and outside the city,
Water tap fees are also Included,

Debt service requirements for 1990 through 2007 are shown on Table 2,2, The total amount
of outstanding bonds is about $29.2 million, With interest, future payments through the year
2007 will total nearly $50 million, Over the next 10 years, the annual debt service requirement
declines from $3.04 million to $2,64 million,

2-4