Fiscal Year 2011-2012 Final Budget
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Overall, the basic rate is unchanged from last year. Paying off the SRF Loan in January has reduced the expenditures significantly allowing us to achieve a balanced budget and pay off several internal loans, while still rebuilding the Treatment Plant Reserve. There was a 1.2% increase in the District Management portion of the Operating Expenses due to the addition of computer related equipment purchases to the budget; the overall total of the Operating Expenses are 0.5% higher than the 2010-2011 fiscal year budget. Total Expenses (which includes contributions to the Reserve funds) decreased by 2.9% because the SRF Reserve Fund Contribution is eliminated this year while the contributions to the other Reserve Funds are increased. Income estimates increased by 4.1% due to increased accuracy in our Customer Database resulting in increasing the Service Unit count by over 500. This explains why we have frequently received income so much in excess of our previous estimates. This Budget has been prepared in accordance with the 2011 Strategic and Operations Plans. |
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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 2011-12 budget to the current year budget.
| Expense Summary By Activity | FY 10-11 | Pct | FY 11-12 | Pct |
|---|---|---|---|---|
| Treatment Plant | $1,783,370 | 21% | $1,813,548 | 22% |
| Collection System | $977,396 | 11% | $946,394 | 11% |
| District Management | $2,017,504 | 24% | $2,041,764 | 25% |
| Transfers | $3,802,728 | 44% | $3,530,447 | 42% |
| ------------- | ----- | ------------- | ----- | |
| Totals | $8,580,998 | 100% | $8,332,153 | 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 | 779,769 | 611,026 | 985,732 | $2,376,527 | 49% |
| Maintenance | 839,156 | 264,160 | 175,677 | $1,278,993 | 27% |
| Equipment & Supplies | 115,193 | 21,915 | 166,000 | $303,108 | 6% |
| General | 610 | 750 | 186,277 | $187,637 | 4% |
| Professional Services | 40,860 | 27,450 | 337,810 | $406,120 | 8% |
| Miscellaneous | 37,960 | 21,093 | 190,268 | $249,321 | 5% |
| ------------- | ------------ | ------------- | ------------- | ||
| Totals | 1,813,548 | 946,394 | 2,041,764 | $4,801,706 | 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 | $835,179 | 13% |
| Collection System Replacement | $609,241 | 12% |
| Equipment Replacement | $562,554 | 8% |
| Vehicle Replacement | $75,458 | 2% |
| Building Reserve | $20,321 | 1% |
| 2003 Revenue Bond Debt Service | $437,000 | 12% |
| 2007 Debt Issue | $435,379 | 12% |
| Future Purchases Reserve | $55,215 | 1% |
| SRF Debt Service | $500,000 | 11% |
| ------------- | ------------- | |
| $3,530,447 | 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 | $7,525,733 | 90% |
| General Fund Interest | $95,000 | 1% |
| Transfer from Reserves | $145,770 | 2% |
| Property Tax (Prop 13 - 1%) | $530,000 | 6% |
| Miscellaneous | $35,650 | 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 |
FY10-11 Rate |
FY11-12 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 $2,657,968 plus interest of $243,130 will total $2,901,098. Expenses for the proposed projects and/or purchases will total $2,029,856 if all the estimates are correct. Detail of the proposed projects and/or purchases can be found in Section 2 – Reserves. Projects and/or purchases will be approved by the Board on a case by case basis.
Debt Service
The transfers into the debt service accounts total $872,479 plus interest of $41,000 will total $913,479. After expenses to pay principal, interest and trustee charges on the various debts, the outstanding debt owed will be reduced by $405,000.
Summary
The Fiscal Year 2011-12 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.
John K. Correa
General Manager
