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Regular City Council Meeting <br />June 9,2003 <br />Page 14 <br /> <br />statement available for this fund such as a balance sheet. <br /> <br />Gene Anderson, Director of Finance, said this has all the traditional financial <br />statements that a full business would have and they are all included in the annual <br />audit. He will bring a copy of last year's audited financial statement. <br /> <br />Councilman Bell asked if during the presentation of the water rate analysis by <br />Reed and Stowe they showed the fund being short $600,000.00. Mr. Anderson <br />said water rates in Texas are set on a cash basis and there was an indication of <br />a deficit of about that number. The city has been falling behind since the last <br />study because the consumption that was forecasted has never been reached. <br />Consumption has been dropping the entire time and therefore cash has been <br />dropping. <br /> <br />Councilman Bell questioned that if we had a shortfall of $600,000.00 and if <br />Councilman Plata's changes were adopted and, in effect, did what he thinks the <br />changes might do, whether we would then be at a shortfall of approximately <br />$200,000.00. Mr. Anderson said that is talking about on any given year, and as <br />he has reported to the City Council in the past, the operating fund of the water <br />and sewer area has a deficit balance of about 1.2 million dollars, currently, <br />because the city has been losing money ever since the city adopted the last rates. <br />That was because consumption has been less than what was anticipated. Mr. <br />Anderson said that unless the rates are increased the deficit will be more like 1.8 <br />million dollars by the end of this fiscal year. He said it is not just a matter of <br />cutting it to the point where it breaks even or also most breaks even, the city has <br />to make up the deficit that they worked themselves into. Mr. Anderson said it <br />was a two-fold problem. Councilman Bell asked that Mr. Anderson bring the <br />Council the balance sheet that shows where this deficit is coming out of the <br />reserve funds. Mr. Anderson advised that the city has a consolidated cash bank <br />account where all money they can legally put in a single bank account, they do. <br />He said that is what has allowed us to keep going because the water and sewer <br />fund can legally be placed in the consolidated cash bank account. This may be <br />a surprise to the new council people, but it is not a surprise to the old council <br />members because they have discussed this problem during the last two budget <br /> <br /> <br />