Sewer Fund Analysis
The Village sewer fund required a $205K General Fund advance in February 2026 because operating costs exceeded revenue. Here is the path to a sustainable fund.
Forgive the advance
Convert the $205K General Fund advance to a permanent transfer. Fund balance lands at ~$109K, above the $91K target.
Rightsize the budget
Sludge $20K to $50K, add $20K contingency. Corrected opex: $258K.
Establish reserves
~$18K from advance excess seeds the Repair Reserve. $30K/yr ongoing from Year 2.
Raise rates
New rate by December 2026 for January 2027 billing. Covers full ~$513K/yr including reserves.
Can the fund cover the March bond payment?
Every year, the Sewer Fund must write a $205K check in March. The test: will there be enough cash in the account?
Today ($76K)
| Cash in the bank | $76K |
| Bills collected by Mar 18 | +$388K |
| Operating costs | -$246K |
| Bond payment | -$205K |
| What's left | $13K |
Not enough margin.
After forgiveness ($91K)
| Cash in the bank | $91K |
| Bills collected by Mar 18 | +$388K |
| Operating costs | -$246K |
| Bond payment | -$205K |
| What's left | $27K |
Safety margin met.
Monthly cash flow — starting at $91K
March is the only month where outflows exceed inflows — the $205K bond payment hits on top of operating costs.
| Month | Cash in | Cash out | Balance |
|---|---|---|---|
| Jun | $5K | $26K | $70K |
| Jul | $114K | $26K | $158K |
| Aug | $10K | $26K | $142K |
| Sep | $5K | $26K | $122K |
| Oct | $114K | $26K | $210K |
| Nov | $10K | $26K | $194K |
| Dec | $5K | $26K | $173K |
| Jan | $114K | $26K | $261K |
| Feb | $10K | $26K | $245K |
| Mar | $5K | $231K | $19K |
| Apr | $114K | $26K | $107K |
| May | $10K | $26K | $91K |
Proposed budget amendments
| Item | Current | Proposed |
|---|---|---|
| WWTP Sludge (8130.43) | $20,176 | $50,000 |
| Contingency (1990.4) | -- | $20,000 |
| GF Admin allocation | -- | $20,000 |
| Reserve contribution | -- | $30,000 |
| Corrected operating expenses | $208,131 | $257,955 |
| Bond principal | $205,430 | |
| Ongoing total (Year 2+) | $513,385 | |
Is the sewer fund self-supporting?
An enterprise fund should cover its own costs from user fees. See how sewer revenue compares to expenses in each fiscal year — actual (AFR), projected, and budgeted.
All numbers derive from the OSC Annual Financial Report FY 24-25, the FY 26-27 budget draft (3/30/26), and the FY 25-26 approved budget. The cash flow model uses a 12.8% unpaid rate derived from AFR accounts receivable data.
Calculations are implemented in sewer_budget_calc.py and sewer_cash_flow_calc.py, both verified with internal consistency checks.