Find us on Facebook

Budget Information

Fiscal Year 2013-2014 & 2014-2015 Newly Adopted Budget

I am pleased to present to the Board the Ojai Valley Sanitary District's Final Budget for Fiscal
Years 2013-2014 and 2014-15.

Prior to preparation of this Two-Year Budget, Staff completed an in depth review of all the
reserve funds, the Customer Service Database, Operations and Maintenance budgets and
the Capital Improvement Program. In addition, the following Major Drivers were also considered:

  • Algae TMDL Program Implementation
  • Inflow and Infiltration (1&1) Control
  • Laterals, Roots, Rags and Protrusions
  • Constituents of Emerging Concerns (CEC's)
  • Collection System Rehabilitation
  • Treatment Plant Optimization
  • Spill Prevention
  • Staffing

The comprehensive review results show that each of the following areas play an important role in meeting the environmental discharge restrictions, maintaining a fiscally conservative business approach, maintaining a high quality and safe collection and treatment system and looking to the future. This effort looks at planning for the next 10-20 years:

  • Collection System Rehabilitation and 1&1 Control
    • Lateral Program
    • Enhanced Root, Rag and Grease maintenance
    • 1&1 reduction for groundwater protection and nutrient reduction
    • Aging system rehabilitation, reconstruction and lining
  • Treatment Plant Optimization
    • Algae TMDL Compliance
    • Enhanced Constituent testing and Control
    • Nutrient and Constituent removals
  • Capital Improvement Program Implementation
  • Staffing: Anticipate Full Staff turnover
  • Reserve Fund Enhancement and Fiscal Management

This two-year budget has been prepared to begin to focus and address the Major Drivers listed above.

This Final Budget has been prepared with the following information:

  • 2.2% increase in wages matching the CPI increase
  • No increase in employee benefits
  • anticipated 9.0% increase in health insurance costs
  • A net increase in rates with some offsetting reserve reallocation
  • Enhanced Collection System Investment
  • Increase in Contingency Reserve
  • Funding for Algae TMDLlNutrient studies and projects

Income
Sewer service charges comprise the vast majority of the District's income; however, interest, fees and property tax also make up the income stream. The final budget includes a couple of changes to the total income.

First, Staff has lowered the projected/anticipated interest rate the District will receive on our investments due to economic factors.

Second, during our 3-year Commercial Account review and in conjunction with our Customer Service Database and County Tax roll review, we have reduced the number of Capacity Units that will be billed.

O&M
The final O&M budget has been reduced from FY 2012-13 based on actual operational needs.

Reserves
A couple of changes are included in this two-year budget. The balance of the Equipment Replacement Reserve has slowly risen over the past few years. This is due to efficient purchases and purchasing equipment through other reserves or O&M where possible. Staff is proposing to reallocate funds to the Contingency & Stabilization Reserve. In addition, Staff is focusing on building the Contingency &Stabilization Reserve where possible and feasible. This "Rainy Day" fund is typically used for rate stabilization and unfunded emergencies. A reserve balance equivalent to 50 percent of the O&M budget would be an appropriate amount. It will take several years and prudent budgeting to meet this goal; however, small focused steps will help achieve some enhanced savings.

Staff has also reviewed the 2003 and 2007 bond fund reserves. A re-allocation of these reserves to continue to meet bond payment requirements, while reducing the customer charges, is possible and included in this budget.

CIP
The first 5 years of the CIP represent the highest priority and most immediate project needs. The aging collection system, dating back to the 1920's is showing signs of age, settlement, corrosion and decay. Staff will continue to watch the most concerning areas, however, a steady and improved re-investment is necessary. The Treatment Plant, built in 1997 is in very good shape, however improvements to the instrumentation and treatment system is required to meet the Algae TMDL nutrient goals.


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 fol lowing charts.

EXPENSES BY ACTIVITY 2013-2014

 

EXPENSES BY ACTIVITY 2014-2015

 

The following table compares the FYs 2013-14 & 2014-15 budgets to the current year budget.

Expense Summary By Activity FY 12-13 FY 13-14 FY 14-15
Treatment Plant $1,804,148 $1 ,799,861 $1,831 ,957
Collection System $1,162,279 $1 ,053,226 $1,135,779
District Management $2,426,587 $2,240,887 $2,272,623
Transfers $3,567,607 $3,439,447 $3,545,641
  ------------- -------------  -----
Totals $8,960,621 $8,533,421 $8,786,000



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.

 

O&M EXPENSES BY TYPE 2013·2014

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 844,266 689,485 1,017,947 $2,551,698 50%
Maintenance 767,270 295,210 180,804 $1,243,284 24%
Equipment & Supplies 107,295 21,396 219,433 $348,124 7%
General 590 750 216,492 $217,832 4%
Professional Services 40,900 19,000 395,635 $455,535 9%
Miscellaneous 39,540 27,385 210,576 $277,501 5%
  ------------- ------------ ------------- -------------  
Totals 1,799,861 1,053,226 2,240,887 $5,093,974 100%

 

O&M EXPENSES BY TYPE 2014·2015

 

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 879,842 722,599 1,062,628 $2,665,069 50.8%
Maintenance 779,290 344,649 183,174 $1,307,113 25.0%
Equipment & Supplies 93,495 21,396 218,365 $333,256 6.4%
General 590 750 218,777 $220,117 4.2%
Professional Services 40,900 19,000 376,735 $436,635 8.3%
Miscellaneous 37,840 27,385 212,944 $278,169 5.3%
  ------------- ------------ ------------- -------------  
Totals 1,831 ,957 1,135,779 2,272,623 $5,240,359 100%

The Salaries & Benefits category for both fiscal years appears to be maintaining a proportional consistency with prior years and 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 fiscal year 20 13-14's budget the following chart shows the destination or intended use of the transfers.

 

TRANSFERS BY DESTINATION 2013·2014

The following table shows the transfers for 2013-2014 in tabular form.

Transfer Destination Amount
Treatment Plant Replacement $857,896
Collection System Replacement $625,812
Equipment Replacement $562,554
Vehicle Replacement $75,458
Building Reserve $20,874
2003 Revenue Bond Debt Service $350,000
2007 Debt Issue $391,638
Future Purchases Reserve $55,215
SRF Debt Service (Internal Loan) $500,000
  -------------
  $3,439,447

*Red hIghlighted reserve funds are restrrcted; see Reserve narratIve for details.

The uses of the various reserve funds are presented in greater detail in Sections 2 and 3 of the budget.

For fiscal year 20 14-15's budget the following chart shows the destination or intended use of the transfers.

 

TRANSFERS BY DESTINATION 2014·201

The following table shows the transfers in tabular form.

Transfer Destination Amount
Treatment Plant Replacement $857,896
Collection System Replacement $625,812
Equipment Replacement $562,554
Vehicle Replacement $75,458
Building Reserve $20,874
2003 Revenue Bond Debt Service $350,000
2007 Debt Issue $391,256
Future Purchases Reserve $55,215
SRF Debt Service (Internal Loan) $500,000
Contingency & Stabilization $106,576
  -------------
  $3,545,641

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 charts below, the majority of funding for the budget is from the sewer service charge.

 

FUNDING BY SOURCE 2013-2014

The following table shows the funding in tabular form.

Description Amount Pct
Service Charges - All Sources $7,604,386 89%
General Fund Interest $40,000 0%
Transfer from Reserves $313,935 4%
Property Tax (Prop 13 - 1%) $540,000 6%
Miscellaneous $35,100 1%
  -------------  
Total $8,533,421 100%

 

FUNDING BY SOURCE 2014-2015

 

The following table shows the funding in tabular form.

Description Amount Pct
Service Charges - All Sources $7,960,609 91%
General Fund Interest $40,000 0%
Transfer from Reserves $200,291 2%
Property Tax (Prop 13 - 1%) $550,000 6%
Miscellaneous $35,100 1%
  -------------  
Total $8,786,000 100%



Service Charge Rates

Fiscal Year 2013-2014

The sewer service charge rate is set at $50.07 effective July 1, 2013.

Service
Area
Basic
Service
Special
Debt
Total
Rate
Oak View 50.07 1.90 51.97
Ojai 50.07 3.44 53.51
Meiners Oaks 50.07 1.90 51.97
Ventura Avenue 50.07 1.90 51.97

The add on increments to pay for 2003 Debt Issue costs which are not part of the basic service are shown above and described in greater detail in Section 3 -- Debt Service.

Service
Area
FY12-13
Rate
FY13-14
Rate
Rate
Change
%
Chg
Oak View 50.21 51.97 1.76 3.5%
Ojai 52.07 53.51 1.44 2.7%
Meiners Oaks 50.21 51.97 1.76 3.5%
Ventura Avenue 50.21 51.97 1.76 3.5%

 

Fiscal Year 2014-15

The sewer service charge rate is set at $52.42 effective July 1, 2014.

Service
Area
Basic
Service
Special
Debt
Total
Rate
Oak View 52.42 1.90 54.32
Ojai 52.42 3.44 55.86
Meiners Oaks 52.42 1.90 54.32
Ventura Avenue 52.42 1.90 54.32

The add on increments to pay for 2003 Debt Issue costs which are not part of the basic service are shown above and described in greater detail in Section 3 -- Debt Service.

Service
Area
FY13-14
Rate
FY14-15
Rate
Rate
Change
%
Chg
Oak View 51.97 54.32 2.35 4.5%
Ojai 53.51 55.86 2.35 4.3%
Meiners Oaks 51.97 54.32 2.35 4.5%
Ventura Avenue 51.97 54.3 2.35 4.5%



Reserves & Debt Service

2013·2014 RESERVES

The transfers into the reserves (other than Debt Service) total $2,697,809 plus interest of $120,500 will total $2, 818,309.

2013·2014 DEBT SERVICE

The transfers into the debt service accounts total $741,638 plus interest of $14,500 will total $756,138. After expenses to pay principal, interest and trustee charges on the various debts, the outstanding debt owed will be reduced by $430,000.

2014·2015 RESERVES

The transfers into the reserves (other than Debt Service) total $2,804,385 plus interest of $122,096 will total $2, 926,481 .

2014·2015 DEBT SERVICE

The transfers into the debt service accounts total $741,256 plus interest of $14,500 will total $755,756. After expenses to pay principal, interest and trustee charges on the various debts, the outstanding debt owed will be reduced by $450,000.

 


Summary

The Fiscal Years 2013-14 & 2014-15 Final Budget continues the District's history of responsible fiscal management. Available resources are focused on maintaining services and programs essential to District facil ities and improving the quality of service to the customers of the District with minimal rate increases.

Jeff Palmer
General Manager