|The FY13 budget appropriately separates sanitation service finances into a 'Water, Wastewater, and Garbage Removal Enterprise Fund.' This fund budget includes detailed line items for all the associated costs of utility operations in Kake including chemicals, water testing, electricity, and insurance, as well as the salaries, taxes, and workers compensation insurance coverage for the utility operators. While projected revenues from user fees are insufficient to cover all these expenses, the budget clearly indicates a subsidy of $77,801 (46 percent of the utility budget) transferred from the general fund to balance the budget. Repair and replacement costs are not budgeted. The utility board has recently increased their water rates to be reflected in the FY14 budget and in the next quarterly report.
A separate fund is used to budget for water and wastewater revenues and expenditures. The city's actual revenues for FY12 are significantly lower than initially budgeted. Therefore, the city has budgeted for FY13 based on the actual amount of revenues. Additionally, expenditures were equally lower than expected for FY12 and the FY13 budget reflects this reality.
The city council passed budget amendments when necessary through FY12.
In FY13, the city continues to budget slightly more for items such as fuel and maintenance in consideration of possibly higher fuel costs year-to-year. Fuel is purchased as needed from Kake Tribal Fuel, who receives fuel shipments about once a month and stores it in four 20,000-gallon tanks and eight 10,000-gallon tanks. They report no fuel shortage problems. A review of the city's monthly payments to the Inside Passage Electrical Cooperative (IPEC) shows that the city is current in paying its water/wastewater electric bills and that all eligible community facility accounts are receiving Power Cost Equalization (PCE) credit.
The city's bookkeeper provides financial reports to all council meetings, including a budget vs. actual, a profit and loss report and a verbal utility manager's report. As of March, 2013, water utility revenues collected are 49 percent of the budgeted amount, while expenses are 68 percent of budgeted. The city has drafted an amended budget to compensate for these expenses and has identified revenues to cover these expenses. Revenues may not be accurate at this time, as the city has recently taken back the billing responsibilities from Alaska Rural Utilities Collaborative (ARUC), and is still integrating reports and totals into the QuickBooks system.
A water utility rate study in January 2013, identified that while the utility charges customers $30 per month for water and wastewater, the actual cost of the utility is $75.88 per month. The city plans on gradually increasing its rates to better reflect the cost of service, with the first increase occuring July 1, 2013.|