FISCAL YEAR 2008-2009 FINAL BUDGET

Click here to view a PDF 2008-2009 Adopted Budget

I am pleased to present to the Board the Ojai Valley Sanitary District's Adopted Budget for Fiscal Year 2008-2009.

This Adopted Budget has been prepared with the following information:

• 4.1% increase in wages and benefits
• 7.0% increase in health insurance costs
• 5.0% increase in electric utility costs
• $103,000 in new costs for a Retirement Health Insurance Trust - GASB 45
• Use of the Rate Stabilization Reserve

Overall the basic rate is proposed to be increased by 4%, which is the forecasted increase in the CPI. The Rate Stabilization Fund was then used to make up any remainder.

The Property Tax reduction is significant and is worth an equivalent of $2.22 in rates. The rate increase is limited to $1.84 by using $171,233 from the Rate Stabilization Reserve.

Operating Expenses increased by 4.5% in line with the CPI forecast and the new expense for the Retirement Health Insurance Trust.  The Total Budget increase is only 2.3% because of the better than expected rate we received on the 2007 COP issue and a large reduction in the amount contributed into that Payment Reserve Fund.

This Budget has been prepared in accordance with the adopted 2008 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 2008-09 budget to the current year budget.  It appears that two of the three operational areas have decreased in their percentage of the whole this year with the third remaining the same.  In actuality the Treatment Plant and District Management have maintained approximately the same percentage ratio as the current year and the Collection System has slightly increased its percentage ratio; the increase in the transfer total has skewed the percentages. 

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.

The Salaries & Benefits category appears to be maintaining a proportional consistency with prior years.  For the past 5 years this category has stayed 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.  This year transfers to some of the reserves include an extra amount which is a repayment of reduced contributions to these reserves in prior years. 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.

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.  A rate increase of $1.84 is reflected in the chart.

The following table shows the funding in tabular form.

Service Charge Rates

The sewer service charge rate is $47.84 effective July 8, 2008.

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. 

Reserves

The transfers into the reserves total $1,217,384 plus interest of $348,600 will total $1,565,984.  Expenses for the proposed projects or purchases will total $5,127,585 if all the estimates are correct.  Projects will be approved by the Board on a case by case basis.

Debt Service

The transfers into the debt service accounts total $1,913,204 plus interest of $36,400 will total $1,974,604.  After expenses to pay principal, interest and trustee charges on the various debts, the outstanding debt owed will be reduced by $1,343,563. 

Summary

The Fiscal Year 2008-09 Adopted 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.

John K. Correa
General Manager

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