Budget Information
Fiscal Year 2012-2013 Newly Adopted Budget
I am pleased to present to the Board the Ojai Valley Sanitary District’s Final Budget for Fiscal Year 2012-2013.
This Final Budget has been prepared with the following information:
- 2.3% increase in wages matching the CPI increase
- No increase in employee benefits
- anticipated 3.0% increase in health insurance costs
- Use of Contingency & Stabilization Reserve to maintain rates
Overall, the basic rate is proposed to be unchanged from last year. The final budget has been prepared with two over-arching concepts: (1) “Pay as you go” and (2) “Living within our means”. In addition, the Five-Year Capital Improvement Plan has been prepared for overall planning for major projects.
Due to continued attention to efficiency efforts, the final budget includes many areas of savings that offset price and cost increases.
Operating Expenses increased 8.7 percent primarily due to the amount of computer related equipment scheduled for replacement this year and increased number of manholes to be raised following scheduled City of Ojai and County of Ventura street overlays. Total Expenses (which includes contributions to the Reserve funds) increased by 5.4 percent because the Treatment Plant Expenses decreased which offset a portion of the increase in other areas.
Income estimates increased by 0.8 percent primarily due to increased accuracy in our Customer Database and implementation of the Unpermitted Program which combined has resulted in increasing the Service Unit count by 108.
This Budget has been prepared in accordance with the 2011 Strategic and Operations
Plans.
Operating Budget
The operating budget is the routine operation and maintenance of District facilities and services at their existing service level and does not directly include funds for upgrades, increased capacity, or betterments. The operating budget is broken down in several different ways in the following material.
Expenses By Activity
Historically the District has used its funds for four major activities: Treatment Plant, Collection System, District Management and transfers to specific reserves. A transfer is not really an activity, but rather the source of funding for special projects. Transfers will be explored in more depth below. The budget is broken down into these four activities as shown in the following chart.
The following table compares the FY 2012-13 budget to the current year budget.
| Expense Summary By Activity | FY 10-11 | Pct | FY 11-12 | Pct |
|---|---|---|---|---|
| Treatment Plant | $1,813,548 | 22% | $1,804,148 | 21% |
| Collection System | $946,394 | 11% | $1,106,239 | 12% |
| District Management | $2,041,764 | 25% | $2,307,910 | 26% |
| Transfers | $3,530,447 | 42% | $3,567,607 | 41% |
| ------------- | ----- | ------------- | ----- | |
| Totals | $8,332,153 | 100% | $8,785,904 | 100% |
O&M Expenses By Type
Treatment plant, Collection System and District Management budgets are a reflection of the on-going activities of the District. It is interesting to note how the same expense type varies from one activity to another. For example, routine professional services are higher in District management because of the high cost of lawyers, auditors, etc. than it is in field operations for engineers to support day-to-day operations. The following chart shows how the budget is allocated to different expense types.
The following table details the breakdown of these expenses to each activity.
| O&M Expense Type | T/P | C/S | D/M | Total | Pct |
|---|---|---|---|---|---|
| Salaries & Benefits | 822,069 | 663,909 | 959,935 | $2,445,913 | 47% |
| Maintenance | 801,807 | 371,860 | 188,787 | $1,362,454 | 26% |
| Equipment & Supplies | 96,520 | 21,030 | 392,628 | $510,828 | 10% |
| General | 610 | 750 | 189,392 | $190,752 | 4% |
| Professional Services | 40,860 | 25,800 | 368,485 | $435,145 | 8% |
| Miscellaneous | 42,282 | 22,890 | 208,033 | $273,005 | 5% |
| ------------- | ------------ | ------------- | ------------- | ||
| Totals | 1,804,148 | 1,106,239 | 2,307,910 | $5,218,297 | 100% |
The Salaries & Benefits category appears to be maintaining a proportional consistency with prior years. This category continues to stay within the 40% to 50% range which appears appropriate for the size of the District.
Transfers By Destination
Transfer from the General Fund to reserves is the primary mechanism used to fund capital
projects and the various special reserves. For this year’s budget the following chart shows
the destination or intended use of the transfers.
The following table shows the transfers in tabular form.
| Transfer Destination | Amount | Pct. |
|---|---|---|
| Treatment Plant Replacement | $857,896 | 24% |
| Collection System Replacement | $625,812 | 18% |
| Equipment Replacement | $562,554 | 16% |
| Vehicle Replacement | $75,458 | 2% |
| Building Reserve | $20,874 | 1% |
| 2003 Revenue Bond Debt Service | $434,394 | 12% |
| 2007 Debt Issue | $435,404 | 12% |
| Future Purchases Reserve | $55,215 | 1% |
| SRF Debt Service | $500,000 | 14% |
| ------------- | ------------- | |
| $3,567,607 | 100% |
The uses of the various reserve funds are presented in greater detail in Sections 2 and 3 of the budget.
Personnel
The District work force consists of 19 full-time positions.
Funding
As can be seen in the chart below, the majority of funding for the budget is from the sewer service charge.
The following table shows the funding in tabular form.
| Description | Amount | Pct |
|---|---|---|
| Service Charges - All Sources | $7,587,752 | 86% |
| General Fund Interest | $52,000 | 1% |
| Transfer from Reserves | $577,352 | 7% |
| Property Tax (Prop 13 - 1%) | $530,000 | 6% |
| Miscellaneous | $38,800 | 1% |
| ------------- | ||
| Total | $8,332,153 | 100% |
Service Charge Rates
The sewer service charge rate remains at $47.82 effective July 1, 2011.
| Service Area |
Basic Service |
COP Increment |
Total Rate |
|---|---|---|---|
| Oak View | 47.82 | 2.39 | 50.21 |
| Ojai | 47.82 | 4.25 | 52.07 |
| Meiners Oaks | 47.82 | 2.39 | 50.21 |
| Ventura Avenue | 47.82 | 2.39 | 50.21 |
The add on increments to pay for special costs which are not part of the basic service are shown above and described in greater detail in Section 3 --Debt Service.
| Service Area |
FY11-12 Rate |
FY12-13 Rate |
Rate Change |
% Chg |
|---|---|---|---|---|
| Oak View | 50.21 | 50.21 | 0 | 0% |
| Ojai | 52.07 | 52.07 | 0 | 0% |
| Meiners Oaks | 50.21 | 50.21 | 0 | 0% |
| Ventura Avenue | 50.21 | 50.21 | 0 | 0% |
Reserves
The transfers into the reserves (other than Debt Service) total $2,697,809 plus interest of $185,502 will total $2,883,311.
Debt Service
The transfers into the debt service accounts total $869,798 plus interest of $29,400 will total $899,198. After expenses to pay principal, interest and trustee charges on the various debts, the outstanding debt owed will be reduced by $415,000.
Summary
The Fiscal Year 2012-13 Final Budget continues the District’s history of responsible fiscal management. Available resources are focused on maintaining services and programs essential to District facilities and improving the quality of service to the customers of the District with minimal rate increases.
Jeff Palmer
General Manager