Loading...
HomeMy WebLinkAboutRPT 3 WTR FUND BUDG 09-08-81: September ~, 1~81 C;Mm~ lnter-Com Ron Nault, Finance Direct~ Report on Water Fund Budget The attached report on the Water Fund Budget is presented for your review. There have been no requests for additional information since a preliminary report was distributed August 10, 1981. attachment DATE: August 10, 1981 Inter-Com TO: FROM: SUBJECT: Honorable Mayor and City C~uncil Members via C.R. Thayer, Acting City Mgr. Ron Nault, Finance Directo~~* Water Fund Budget Analysis Attached is a sun, nary of revenue, expenses, debt service, and fund equity for the fiscal year 1980-81 and the budget request for fiscal year 1981-82. The 12 months of 1980-81 were arrived at by going back to the books of the Tustin Water Works for July, August, September, and October of 1980. These are not audited figures, nor have I attempted to make any accruals nor break down their account structure into the accounts which the City is expecting to use. The detail for all three periods is also attached for your review. Because of the lengthy number of accounts and the differences of account structure I have collected the data into the major categories only. Personnel costs tend to get lost in the TWW records as they are spread throughout the report by job number. The summary shows that the overall increases over 80-81 in total expense are $653,000 or 24%. The most significant increases are in the area of purchased water, utility expense, debt service, and capital improvements. Detail by major increases for fiscal 1981-82: OPERATING EXPENSES Purchased Water Energy Salary Increases/New Personnel Vehicle Leasing Miscellaneous Items Franchise Fees Property Taxes $194,328 79,820 66,000 49,560 8,171 (41,476) (44,842) $311,561 DEBT SERVICE Net increase due to partial payment to stockholders 71,623 CAPITAL OUTLAY Net Reduction (15,513) CAPITAL IMPROVEMENTS Major Increase 286,164 $653,835 'Honorable Mayor and City Council August 10, 1981 Water Fund Budget Analysis page 2. As the detail shows, the largest single item increase is in the area of Capital Improvements. If we were to delete the $286,000 increase in Capital Improvements from the budget request, the overall increase would only be 13% greater than last year. I would consider this to be within a reasonable increase in the cost of doing business. Again, I would like to emphasis that these figures are not audited and in the case of TWW they remain in their original account structure. The combination of the total figures from these two accounting periods gives a fairly accurate fiscal comparison. Attached you will find a copy of a memo dated July 20, which has additional in- formation on the increases previously discussed, and the July 28 memo which has the capital improvement budget request. attachments Mayor and City Council ~Au~ust 10, 1981 Wate~ Fund Budget Analysis ~page 3. WATER FUND FISCAL ANALYSIS TWW CITY 4 mos. 8 mos. 7/1-10/31/80 11/1/80-6/30/81 Revenue 1,040,656 + 1,684,830 = Expenses: Operating Expenses 856,346 + 1,177,923 = Debt Service 183,705 '472,122 Capital Out- lay -0- 40,199 Capital Im- provement -0- 7,636 TOTAL EX- PENSES 1,040,051 + 1,697,880 = Fund Equity 605 (13,050) TOTALS 2,725,486 2,034,269 655,827 40,199 7,636 2,737,931 (12,455) 1981-82 Budget Request 3,196,556 2,345,830 727,450 24,686 293,800 3,391,766 (195,210) Increase (Decrease) 471,070 311,561 71,623 (15,513) 286,164 653,835 17% 15% 11% (39%) 3747% 24% *Includes $300,000 of matured bond payment Honorable Mayor and City Council Members August 10, 1981 Water Fund Budget Analysis page 4. WA~ER FUND EXPENDITURE COMPARISONS 1981-82 TWW CITY Budget *4 Mos. 8 Mos. TOTAL Request Operations Purchased Water 365,405 568,517 933,922 1,128,250 Pumping Exp. 9,706 25,359 35,065 24,630 Pump tax 64,946 87,948 152,894 120,000 Purchased Power 114,638 81,542 196,180 276,000 Water Treat- ment 386 -0- 386 270 Trans. & Distri- bution 91,828 32,094 123,922 65,630 Customer Accts. 48,910 18,124 62,034 49,240 Adm. & General Overhead 107,004 12,171 119,175 41,009 Property Taxes 17,047 27,-95 44,842 11,000 Franchise Fees 41,476 -0- 41,476 7,500 Trans. Exp. -0- 25,776 25,776 83,620 Personnel Exp. -0- 298,597 298,597 538,681 TOTAL OPER- ATIONS 856,346 + 1,177,923 = 2,034,269 2,345,830 Debt Service Developer Ad- vances 111,080 20,394 131,474 120,000 Bond Debt Ser- vice 72,625 451,728 524,353 191,500 Purchase Pay- ment 415,950 TOTAL DEBT SERVICE 183,705 + 472,122 = 655,827 727,450 Capital Outlay Vehicles -0- 40,199 40,199 23,800 Other -0- -0- -0- 886 TOTAL -0- 40,199 40,199 24,686 Capital Improve- ments -0- TOTAL EXPENSES 1,040,051 7,636 7,636 293,800 1,697,880 = 2,737,931 3,391,766 *Under Tustin Water Works a job accounting system was used whereby most salaries, except administrative overhead, was charged against job numbers vs. account numbers. ~he TWW information still has these salaries distributed throughtout the operating accounts. Honorable Mayor and City Council Members August 10, 1981 Water Fund Budget Analysis page 5. WATER FUND LONG-TERM DEBT ANALYSIS (1) (2) (3) Developer Outstanding Purchase Advances Bonds Payment Balance 6-30-81 $907,292 $2,300,000 $3,695,654 1981-82 Expenditures to reduce L/T lia- bilities 120,000 -0- 147,826 Balance 6-30-82 $787,292 $2,300,000 $3,547,828 (1) 1981-82 Budget $120,000 Payment of developer advances based on PUC formula which relates to the revenue generated from improvements installed by the developer. It is anticipated that they will be completely paid back within the next eight years. (2) 1981-82 Budget $191,500 The $191,500 budgeted for 1981-82 is interest only. The next principal payment will be April of 1985 in the amount of $900,000. The final payment on the out- standing bonds will be April of 1993. (3) 1981-82 Budget $415,950 Per the conditions of the purchase agreement,'a principal payment of 1/25th of the purchase price, $147,828, plus 7.25% interest, $267,935, shall be made to the stockholders November 1, 1981. In lieu of a bond sale or notes of participation with the stockholders an additional 1/25th payment plus 8.25% interest will be payable November 1, 1982. The balance of the purchase price will be payable on the third anniversary, November 1983, of the transfer. OATE: TO: FROM: $ UBJ ECT: July 20, 1981 Inter-Corn The attached m~morandum from Bon Nault is that information requested by Council fc~ the "baseline" comparison of the water budget b:) the 8 months actual experience the city has had in the operation of the water service since November 1980. As 5~u will note that colL~n 1, is for 8 months only and therefore an accurate c~mparison to col,..,.,~ 3 can appear skewed if you do not k~ep this mind. In averaging the total of colum 1 to per month expenditures they are $193,751.00 and projected 1981/82 budget average per m~nth is $282,314.00. Of the increase, $83,000 average per month will go to the following: a) b) c) d) e) f) Increase in personnel Increase in debt service Increase in vehicle leasing accounting Increase in special equil~ent maintenance Increase in water consumptic~ costs Increase in electricity costs Salary increases are in addition to the 83,000 per month. As I have discussed with you m==viously, the water department is still under review. The budget as now outlined for your review is ccm~prehensive and demonstrates a budget that adequately explains the inner workings and atteD~ant costs with the water service. The water budget will be presented at the August 3rd Council meeting for your comments and hopefully your approval. If you have any coaments or questions, please ~ntact me and I will assist you. Interim City Manager DATE: TO: FROM: S UB~J ECT: July 20, 1981 Inter-Corn Charles R. Thayer, Acting City Manager Ron Nault, Finance Direc~ ~ Water Fund Budget Comparison Attached is a worksheet which compares the first eight months of operations of the City of Tustin Water Service with the fiscal '82 budget request. So~ of the main increases are as follows: 1. Salaries Bob has requested one additional full time position and one part time position for fiscal '82. Increase to operating budget $26,000. 2. Professional Services The major increase in this area will be the charge back from the General Fund for administrative services and the contractual engineering services. 3. Purchased Water The high consumption warm weather months are not reflected by the projected amount. Because of the increased water usage during these months a full twelve months of expense will vary greatly from what we have projected for eight months. The budget amount for '81-'82 is based on total consumption which is anticipated to increase by at least ten percent to a usage of 8,500 acre feet. The current water purchase rate is $128 per acre foot. 8,500 acre foot x 128 ~ $1,088,000 4. Pumping Electric The electric cost for all our pumping activities is based on an anticipated kilowatt usage, and known rate increases. During '80-''81 we abandoned one well and had others that were shut down for extended periods of time. Both these conditions greatly contributed to the reduction in electric costs last year. We have based the fiscal '82 budget request on full usage of all pumping facilities. 5. Transportation Expense we will begin leasing of all rolling stock at full rental rates during fiscal '82. This will contribute to a reserve to replace vehicles and equipment in the future. 6. Long-termDebt The major increase in this area is the partial payment to the previous Charles R. Thayer July 20, 1981 Water Fund Budget Co~parison page 2. stockholders. 7. Capital Improvements During the first eight months of operation there was virtually no capital improvements undertaken unless absolutely necessary. The budget request for '81-'82 is the beginning of a major capital improvement program. Part of this request is for a complete engineering study of the system. The first eight months of operating the water system have been in the nature of caretaking. We have simply monitored its operations and attempted to familiarize ourselves with its workings. While we still have much to learn, the fiscal '82 budget is the start of instilling the City of Tustin municipal philosophy into the Water Service. attachment 38 4O 3 1 2 3 4 $ 6 ? 8 9 lO 12 14 15 17 18 19 2O 21 22 23 24 25 26 27 28 29 30 31 32 38 39 4 1 2 4 5 6 9 lo II 12 13 14 15 11~ 11 20 21 22 23 24 25 26 28 35 4 5 6 7 8 9 10 11 12 13 T4 15 17 18 20 21 22 23 24 25 26 ;8 26 30 3'[ '12 34 35 ,7 38 ,~9 4O 1 2 4 5 6 7 8 9 I0 11 12 13 14 15 16 17 18 16 20 21 22 23 24 :25 ;26 ~0 lO DISCUSSION The proposed Water Fund Budget for fiscal year 1981-82 is attached for your re- view and approval. There are several a~jus~nts reflecte~ in the attache~ proposal which include the addition of the $191,500 for bonded debt service; the negotiated salary increases; and changes to the capital im~rov--~nt budget. The changes to the capital improvement budget were necessitated by the desire to coordinate a water main replacement on Red Hill Avenue with an A~-m widen- lng and reconstruction project, it is ese~m~ted that this project will cost $40,000. We can accomplish this by diverting ~wo main line projects, Nos. 9 and 10, in the Budget, to 1982-83. RECOMMENDATION Review the attached Budget request and adopt Resolution No. 81-90, appropriating $3,391,766 for the Water Fund d~ring fiscal year 1981-82. attachment Personnel Schedule Accounting Detail Personnel Regular Salary Overtime Para-time/Temporary Retirement & Insurance Total Personnel Supplies & Services Contractual Services Facilities Expense Office Expense Departmental Expense Transportation Expense Training & Development Total Supplies & Services Debt Service Developer Advances Debt Service Capital Outlay Vehicles office Equipment Department Equipment Capital Improvements GRAND TOTAL WATER FUND 1981-82 PROPOSED BUDGET 1980-81 8 mo. Projection 19 $227,918 8,850 1,673 60,156 $298,597 $ 12,057 3,016 10,211 828,152 25,776 114 $879,326 $ 20,394 303,853 $324,247 $ 40,199 $ 40,199 $ 7,636 $1,550,005 1981-82 Request 20¸ $ 403,621 19,100 4,250 111,710 $ 538,681 $ 39,000 14,230 22,010 1,646,280 83,620 2,009 $1,807,149 $ 120,000 607,450 $ 727,450 $ 23,800 250 636 $ 24,686 $ 293,800 $3,391,766 !