Notice from Nephi City to Nephi City Utility Customers:
Nephi City operates several utilities (enterprise funds) in addition to the traditional functions of local government operated by the city’s general fund.
The utility funds are charged a reasonable allocation of the costs of services provided by the general fund and shared by all funds (utility billing and collection, financial accounting, human resource management, legal, and insurance services, for example).
Additional contributions from the utility funds to the general fund are meant to represent a return on investment or dividend for investments made by the community in these utilities, as well as the value of community assets utilized by the utilities to carry out their functions (city-owned property and streets rights-of-way, for example).
For Fiscal Year 2018 (July 1-June 30), the following are tentative dividend transfers projected to be made from utility funds to the general fund. The dividend transfers are the result of the community’s investment in these utilities, and the transfers help cover the costs of important city services, including police, streets, library, recreation services, parks, cemeteries, golf, and other city functions. These are not based on allocations of cost, but on a percentage of utility revenues, and will not be repaid:
% of Expenditures
Natural Gas Fund
Water & Sewer Fund
Solid Waste Fund
In addition, the natural gas fund will contribute $90,000 toward the city’s economic development and utility-load-growth efforts.
Another way the utility funds provide support for the general functions of the city is by providing utility service at less than actual cost. The general fund makes one flat-fee payment for electric service, pays the actual billed cost for natural gas service, and does not pay for water, sewer, or solid waste collection service. The cost of these services is not based on an allocation of costs and will not be repaid. The approximate value of the unbilled services for FY 2018 is: