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Budget Information

Fiscal Year 2021-2022 Final Budget

I am pleased to present to the Board the Ojai Valley Sanitary District’s Final Budget for Fiscal Year 2021-2022.

During preparation of this Budget, Staff utilized our Maintenance database, Customer Service Database, reviewed the asset management plan, reviewed Operations and Maintenance budgets and our Pretreatment and Private Sewer Lateral program. In addition, the following Major Drivers were also considered:

  • Pay as you go
  • Continue to address Nutrient reduction at the Plant
  • Algae TMDL Program Implementation
  • Inflow and Infiltration (I&I) Control
  • Laterals, Roots, Rags and Protrusions
  • Collection System Rehabilitation
  • Treatment Plant Optimization
  • Spill Prevention
  • Staffing and Succession Planning

The comprehensive approach shows 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 I&I Control
    • Lateral Program
    • Enhanced Root, Rag and Grease maintenance
    • I&I 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
    • Implement Solar Improvements for Energy production and shade in critical areas to lessen maintenance related to algae growth
    • Study the effects of reduced flow due to drought issues and related increasing strength of flow
  • Capital Improvement Program Implementation
  • Staffing Retirements
  • Reserve Fund Enhancement and Fiscal Management

This budget has been prepared to focus and address the Major Drivers listed above.

This Final Budget has been prepared with the following information:

  • 2.5% increase in wages matching the CPI increase
  • No increase in employee benefits
  • 2.5% Increase in service charge rates
  • Continued Enhanced Collection System Investment
  • Funding for Algae TMDL/Nutrient 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 proposed budget includes a couple of changes to the total income.

First, is an increase in the monthly service charge, by 2.5 percent.  Second, staff has slightly  increased the projected/anticipated interest rate the District will receive on our investments over the next year based on more positive results in the last 12 months and the District’s change in investment managers.

O&M

The proposed O&M budget has been increased slightly from FY 2021-2022 based on actual operational needs.

Reserves

A couple of changes are included in this one-year budget.  The balance of the Equipment Replacement Reserve has slowly risen over the past few years; consequently, a contribution  to this Reserve is not included in one year budget.

The 2016 Refunding Bond issue refinanced both the 2003 and 2007 bonds into one issue.
However, due to the payment distribution requirements of the 2003 Bond (discussed in detail in Sections 3 & 6) repayment of the balance of this issue is accounted for separately until fiscal year 2022-23 when the original bonds were slated to be satisfied.  The reserves for the 2007 bond have been re-allocated to be used for 2016 Refunding Bond issue; the 2003  bond reserve continues to be used to reduce the customer charges related to the payment obligation associated with this issue.

CIP

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 overall  is in very good shape.  However, it is 20 years old and there are components, motors and controls that are reaching their expected age.  In some cases, the original components are  still installed but are not supported by manufacturers and spare parts or repairs are difficult to complete.  Improvements to the instrumentation and treatment system is required to meet  the Algae TMDL nutrient goals.

Staff utilizes a component tracking spreadsheet to document, plan, review, and program specific projects based on priority and criticality.  There are currently nearly $50 million dollars of projects that are being tracked, in a one year, 5 year, and 20-year planning effort.  All  of these projects are then programmed using pay-as-you-go methods to complete the projects when funds are available, avoiding long term bond and interest costs.

 

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 charts.

 

Expenses By Activity Pie Chart

 

The following table compares the FYs 2020-21 budget to the current year budget.

 

Expense Summary
By Activity
FY 20-21 FY 21-22
Treatment Plant $2,433,308 $2,614,152
Collection System $1,537172 $1,485,025
District Management $2,740,291 $2,871,529
Transfers $3,171,858 $3,146,858
————- ————-
Totals $9,882,629 $10,117,564

 

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 Activity Pie Chart

 

The following table details the breakdown of these expenses to each activity.

 

O&M Expense Type 2021/22 T/P C/S D/M Total Pct
Salaries & Benefits 1,227,113 1,034,662 1,395,983 $3,657,758 52%
Maintenance 1,021,288 366,855 301,219 $1,689,362 24%
Equipment & Supplies 242,973 33,685 219,353 $496,011 7%
General 1,590 900 277,601 $280,091 4%
Professional Services 74,000 16,950 518,425 $609,375 9%
Miscellaneous 47,188 31,973 158,948 $238,109 3%
————- ————- ————- ————-
Totals 2,614,152 1,485,025 2,871,529 $6,970,706

The Salaries & Benefits category for this fiscal year 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 2021-2022’s budget the following chart shows the destination or intended use  of the transfers.

Transfers By Destination Pie Chart

 

The following table shows the transfers in tabular form.

 

 

Transfer Destination Transfer Amount for 2021-22
Treatment Plant Replacement $630,000
Collection System Replacement $1,270,526
Equipment Replacement $0
Vehicle Replacement $75,458
Building Reserve $20,874
2003 Revenue Bond Debt Service $225,000
2016 Debt Issue $425,000
SRF Internal Loan Service $500,000
Contingency & Rate Stabilization $0
————-
$3,146,858

*Red highlighted reserve funds are restricted; 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.

 

Personnel

The District work force consists of 21 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 Pie Chart

 

The following table shows the funding in tabular form.

2021-22

Description Amount Pct
Service Charges – All Sources $8,994,694 89%
General Fund Interest $53,712 1%
Transfer from Reserves $199,508 2%
Property Tax (Prop 13 – 1%) $825,000 8%
Miscellaneous $44,650 1%
————-
Total $10,117,564

 

 

Service Charge Rates Fiscal Year 2021-2022 

The sewer service charge rate is set at $58.73 effective July 1, 2021.  

 

 

Service
Area
Basic
Service
2003
Debt Issue
Total
Rate
Oak View 58.73 1.19 59.92
Ojai 58.73 2.03 60.76
Meiners Oaks 58.73 1.19 59.92
Ventura Avenue 58.73 1.19 59.92

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 FY21-22 Rate Rate Change % Chg
Oak View 58.73  1.43  2.5
Ojai 58.73 1.43 2.5
Meiners Oaks 58.73 1.43 2.5
Ventura Avenue 58.73 1.43 2.5

 

2021-2022

DEBT SERVICE & RESERVES  

Reserves

The transfers into the reserves (other than Debt Service) total $2,496,858 plus interest of  $299,407 will total $2,796,265.

Debt Service

The transfers into the debt service accounts total $650,000 plus interest of $32,421 will total  $682,421.  After expenses to pay principal, interest and trustee charges on the various debts, the outstanding debt owed will be reduced by $555,000.

SUMMARY 

The Fiscal Year 2021-22 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