GOLETA SANITARY DISTRICT BUDGET FISCAL YEAR

Transcription

1 GOLETA SANITARY DISTRICT BUDGET FISCAL YEAR

2 BUDGET FOR FISCAL YEAR Approved by the Governing Board Special Board Meeting June 13, 2014

3 MEMORANDUM TO: FROM: Members of the Governing Board Kamil S. Azoury, P.E. General Manager/District Engineer DATE: June 6, 2014 SUBJECT: PROPOSED DISTRICT BUDGET FOR FISCAL YEAR Enclosed please find the District s budget report for Fiscal Year (FY) which provides details of the District s revenues, expenditures, and designated funds. The budget presentation is similar to that of previous years. The attached budget includes descriptions of the District s funds and their respective purposes as defined by policies established by the District s Governing Board. Details of all funds activities in the coming fiscal year are provided to depict the revenues and expenditures associated with each fund. The budget shows sewer service charge (SSC) revenues deposited directly to the corresponding funds. The SSC for FY has not changed from its value in FY and FY The budget narrative sections include descriptions of the District s revenues and their corresponding sources, as well as the proposed expenditures with supporting backup data. Additionally, the budget contains comparisons with the previous fiscal year s revenues and expenditures. The District s operations and maintenance expenditures in the Fiscal Year are anticipated to be about five percent above last year s value mainly due to the cost of additional labor to accommodate the new plant process operations, and increases in Biosolids hauling. Additionally, this budget includes a proposed increase in expenditures for capital outlay of 42% from last year mostly due to large collection projects and several plant projects, and inter-fund loan repayment associated with the recently completed Plant Upgrading Project. The District is expected to realize an increase of about 3% in its total fund balance by the end of the upcoming fiscal year mostly as a result of completion of the plant upgrading project. The budget report includes detailed budget expense data presented under several service categories. These service categories are based on the contractual customers benefiting from the District services.

4 GOLETA SANITARY DISTRICT PROPOSED BUDGET FISCAL YEAR TABLE OF CONTENTS Description Page No Introduction... 1 District Governance... 1 District Staff and Operating Departments... 1 District Capital Improvements and Operating Budget... 2 District Operating and Designated Funds... 3 Activities of Designated Funds Revenues Fiscal Year Expenditures Fiscal Year Comparison Summary of Expenses and Revenues Service Category Expense Data Administration Collection System Firestone Pump Station Main Pump Station Industrial Waste Control Treatment Facilities Outfall Reclamation Operations Capital Projects Summary... 64

5 GOLETA SANITARY DISTRICT Budget for Fiscal Year INTRODUCTION The Goleta Sanitary District (GSD) was formed in 1942 under the 1923 Sanitary District Act by petition of local residents to provide wastewater management services to the small community of Goleta in Santa Barbara County. Throughout the past years, the District s boundaries have expanded by individual annexations of parcels to its original service area. At present, the District owns and operates approximately 131 miles of sewers that collect wastewater from its service area, which extends from the westerly boundary of the City of Santa Barbara to the City s Municipal Airport. In addition to its collection system, the District owns and operates the wastewater treatment and disposal facilities that serve the entire population of approximately 80,000 in the Goleta Valley. Approximately half of this population is served under separate contractual agreements with the following four public agencies. 1. Goleta West Sanitary District 2. University of California at Santa Barbara 3. Santa Barbara Municipal Airport 4. County of Santa Barbara The District also owns and operates a reclamation facility that produces recycled water for distribution in the Goleta Valley. Under an agreement with the Goleta Water District, the Goleta Sanitary District can produce up to 3 million gallons of recycled water per day that are distributed by the Water District for landscape irrigation of the campus of the University of California at Santa Barbara (UCSB), as well as parks and golf courses in western Goleta. Treated wastewater not used for irrigation is discharged in the Pacific Ocean through a pipeline (outfall) that extends over one mile off shore to a depth of approximately 93 feet below the ocean surface. DISTRICT GOVERNANCE A five-member Governing Board of Directors elected at-large from the District s service area for a term of four years is commissioned to establish service policies. The Governing Board holds two regular monthly meetings to attend to the District s business. These meetings are held on the first and third Monday of every month at the District s Administration Building located at One William Moffett Place in Goleta. DISTRICT STAFF AND OPERATING DEPARTMENTS The District employs approximately 34 regular employees that work under five closely related operating departments. These departments are 1) Administration; 2) Technical Services; 3) Collection System; 4) Treatment and Reclamation Facilities; and 5) Facilities Maintenance. Each department is managed by one supervising employee who is responsible for the 1

6 operations of, and all employees associated with, the respective department. The five departmental supervisors report to the Assistant Manager, who reports to the District's General Manager responsible for the District s overall implementation of the service policies adopted by the Governing Board. DISTRICT CAPITAL IMPROVEMENTS AND OPERATIONS BUDGET The District s fiscal year (FY) is defined as a 12-month period starting on the first day of July and ending on the last day in June of the following calendar year. The District s budget is that document which defines the District s estimated expenditures and the estimated required revenues for the corresponding fiscal year. The District prepares an annual budget early each year for adoption by the Board in June of the same year. The budget is prepared by each department supervisor in conjunction with the General Manager and the Assistant General Manager. The draft budget is circulated for comments and input among the public agencies served by the District. The draft budget is also reviewed by the District s Finance Committee before its consideration and final adoption by the Governing Board. The District s budget consists of three major sections for the fiscal year under consideration. 1. Existing District Designated Funds Activities and Balances 2. Anticipated District Revenues 3. Estimated District Expenditures Designated funds are pools of funds that the District has established for its operational needs. These funds are designated by formal Board resolutions for specific purposes, some of which are mandated by State and Federal statutes. These designated funds permit the District to mitigate extreme fluctuations in charges to its customers. The revenue section of the District s budget contains estimated revenues that the District anticipates receiving in the upcoming fiscal year. Included in the revenues are the estimated funds to be received from users fees based on the existing fee structure of the District. The expenditure section includes estimated expenditures for operations and maintenance of the District s facilities in the upcoming fiscal year. Additionally, the District includes in its budget expenditure section its planned capital improvement projects, as defined by District staff for the upcoming fiscal year. Following the determination of the estimated expenditures and revenues for the upcoming fiscal year, the District evaluates the need to revise its user fee structure, in conjunction with supplementing the budget with resources from designated capital improvement fund. The District anticipates the following total expenditures and revenues in fiscal year Withdrawals from the District s designated funds for capital improvement projects are shown separately. Total Estimated Expenditures: $16,813,212 Total Anticipated Revenues: $11,693,333 Total Withdrawals from Designated Funds: $ 5,119,879 Total Anticipated Revenues and Withdrawals: $16,813,212 2

7 DISTRICT OPERATING AND DESIGNATED FUNDS 3

8 DISTRICT FUNDS The District established several funds in which revenues are deposited, and are sources for District expenditures including capital improvement projects. The established funds have been designated by the Governing Board through separate resolutions that specifically address the need and purpose of each fund. The main objective behind establishing these different funds is to address the District s service needs in a very responsible fiscal manner. A brief description of each of the current District funds follows. Running Expense Fund This fund was established to maintain a balance that would support eight months of operational expenses without receiving any revenue. Six of those eight months are in the new fiscal year, and the other two fall in the preceding fiscal year. As such, the Running Expense Fund at the beginning of the fiscal year must have a balance sufficient for six months of operations and maintenance activities. This fund is very important to the operations since the District does not invoice for its services monthly, and therefore does not receive monthly revenues. Under the current method of sewer service charge collection, the District contracts with Santa Barbara County to collect its fees with property taxes. The District receives its fees from the County in two lump sum payments; one in April, and the other in December of each year. The payments are forwarded to the District soon after property tax collection deadlines. Therefore, it is essential to maintain an operating fund that would account for about six months of operating expenses to cover expenses between payment cycles. As noted in the fund balance summary sheet, the Running Expense fund balance is anticipated to be $1,615,539 as of June 30, This fund constitutes 12% of the total District funds as of that date. In early 2015 the District will review the balance of this fund and determine accordingly the need to cover the dry financing period between July, 2015 and December, The existing Running Expense Reserve fund balance as of June 2014, shown on the designated fund balance summary, is broken down per department. The majority of the fund is for the treatment facilities, at 65% of the total balance, with the administration balance at almost 12% and collection system at 17% of the same total fund. The administration component of the fund at 12% includes outside professional services such as legal counsel and consultants, among others. Plant Reserve Fund The District established a plant emergency reserve fund through a contractual agreement with other plant users. This fund is for addressing plant emergencies. The contracts among plant users specify that this fund must not exceed $25,000. The balance of this fund as of June 30, 2014 is $33,184 which includes accrued interest for the year. The anticipated value by June 2015 is anticipated to be $33,260 (with interest) as noted in the designated fund balance summary sheet. Periodically, the amount over $25,000 is used in conjunction with capital improvements of the treatment facilities. Capital Reserve Fund This fund was established to hold revenues from connection and annexation fees. This reserve fund is mandated by legislation to account for capacity expansion projects of the District s facilities. 4

9 Capacity expansion reserve funds should be protected and used only for expanding the facilities capacities to accommodate community growth. In May 2007, the Board elected to allocate $3,700,000 from this fund to fund 4670 (plant upgrading project) to partially finance the District s share of the plant upgrading project which increases the capacity of the secondary treatment process from 3.8 million gallons per day (MGD) to 9.84 MGD. The Board has resolved to pay back the Inter-fund loans and those payments began in FY With the loan payments, the anticipated balance of this fund at the end of June, 2015 is $4,572,138 as noted in the fund balance summary sheet. Replacement Reserve Fund This fund is mandated by the State Water Resources Control Board (SWRCB) in its guidelines for development of Facilities Financial Plan and Revenue Program (FPRP). This mandate requires annual funding of the facilities depreciation. The Plant Upgrading Project substantially increased the annual depreciation value which will have to increased in future years on a gradual basis to full value. The current budget funds the new depreciation value at 81% (depreciation funding level without the upgraded facilities) of its new full value of the District s share. The fund, with its anticipated balance of $5,821,629 at the end of FY as shown in the designated fund balance summary sheet, is designated for the basic replacement of components of the existing facilities. The fund ensures the useful life of facilities in a wholesome manner to utilize the entire design capacity for the community planned growth. The District has been funding this fund over the past years whereby the annual funding is adjusted annually, and is $2,260,861 for FY Similar to the Capital Reserve Fund above, the Board resolved to repay previously borrowed monies in the amount of $2,000,000 from this fund, beginning in FY The summary sheet shows a breakdown of this fund among the District s facilities. Retiree Health Insurance Sinking Fund 4660 In December 2004, the District s Governing Board acted to provide medical insurance coverage for District employees upon retirement. In order to mitigate the impact of such benefit, the Board directed that a sinking fund be created for future payments of medical insurance premiums of District retirees, and that such fund be annually funded in an initial amount of $30,000 per year. In August 2006 the Board revised this action directing District staff to change its current health insurance program from Blue Shield of California to the California Public Employees Retirement System (CalPERS) health program. In doing so, the CalPERS health plan would be at a lower premium and would allow the District to offer health insurance coverage for its retirees and their respective dependents similar to the prior plan. In addition, the District and employees will fund the costs of the Medicare supplemental insurance plan in an equally shared manner. Employee s hourly wage will be reduced by $.19 per hour over a three year period starting in July, 2007 and ending in This employee contribution along with the District s matching contribution, and the savings on the health insurance premium will be allocated to this fund. The current annual funding of this fund would amount to $240,646 which will escalate annually to cover the necessary annual funding defined by the retiree actuarial analysis. The District will periodically review this annual funding level in order to make 5

10 sure that such fund balance is sufficient to meet its obligation. The fund balances at the end of fiscal years 2014 and 2015 are -$623 and $329 respectively. In 2009 and to comply with the Governmental Accounting Standard Board (GASB) Statement 45 requiring a separate trust fund for retiree benefits, the District joined the California Employees Retirement Benefit Trust (CERBT) fund administered by CalPERS to manage its retiree fund investments and to pay for the retirees health insurance premium. The District annually transfers cash from its own Retiree Health Insurance Sinking fund to CERBT fund that will subsequently be used for retiree insurance premium funding. The negative balance of the District sinking fund mentioned above reflects the transfers to CERBT in fiscal year that exceeded the annual required contribution. Outfall Re-ballasting Fund 4666 This fund does not carry any balance since it is used for management of the debt service of the State Revolving Fund (SRF) loan for the outfall re-rocking project. The revenues into this fund are disbursed within the same fiscal year, leaving no balance in the fund. Fiscal has the last scheduled payment for this loan, leaving the District debt free after this payment. Plant Upgrading Fund 4670 On May 7, 2007, the District s Governing Board acted to establish a separate fund designated as the Plant Upgrading Fund to pay for the Upgrading Project costs including but not limited to planning, design, environmental review, permitting and construction. Partial funding of the project was provided by a transfer from the Capital Reserve Fund in the amount of $3,700,000 and from the Replacement Reserve Fund in the amount of $2,000,000. The District is currently repaying the borrowed monies from this fund. District Emergency Fund 4675 On May 7, 2007, the District s Governing Board established a separate fund designated as the Emergency Fund for the purpose of paying costs associated with emergency projects. Funding was provided by a transfer from the Replacement Reserve Fund in the amount of $500,000. The balance of this fund at the end of June 2015 is anticipated to be $552,710 as noted in the fund balance summary sheet. Summary Enclosed in this budget are a summary table and associated pie and bar charts that show fund balances and distributions at the beginning and end of FY The total value of the District s funds will be increased in FY by $361,241 or 3% of its value at the end of

11 DESIGNATED FUND BALANCE SUMMARY Estimated Cash Balance Fund No. and Name 6/30/2014 6/30/ Running Expense Administration 390, ,103 Collection System 533, ,769 Firestone Pump Station 40,235 20,331 Main Pump Station 50,800 25,670 Industrial Waste Control Program 65,079 32,885 Wastewater Treatment Facilities 2,080,719 1,051,426 Effluent Disposal Ocean Outfall 36,321 18,354 Subtotal $3,197,069 $1,615, Plant Reserve 33,184 33, Capital Reserve Collection System 1,755,209 1,784,991 Wastewater Treatment Facilities 1,097,969 2,642,633 Effluent Disposal Ocean Outfall 142, ,514 Subtotal 2,995,281 4,572, Replacement Reserve Collection System 4,301,648 3,963,153 Administration Facilities 76,031 70,048 Wastewater Treatmt. & Pumping Facilities 1,128,099 1,861,039 Effluent Disposal Ocean Outfall 315, ,998 Subtotal 5,821,629 6,185, Retiree Health Insurance Fund (623) Outfall Reballasting Project 84,919 84, Plant Upgrading Project 6,711 $6, District Emergency Fund 551,442 $552,710 a b c d e f g h TOTALS $12,689,611 $13,050,852 NOTES: a Designated to meet half of annual operation & maintenance costs for FY b Designated for emergency repairs. c Designated for facilities capacity expansion. d Designated for facilities replacement projects. Distributed relative to the replacement value of facilities. e Designated for retiree medical insurance sinking fund. f This fund receives and disburses monies for the SRF loan payment for the Outfall Rerocking Project, therefore its balance is zero at the end of each fiscal year. g Designated to pay for Plant Facilities Upgrading Project costs. h Designated for costs associated with emergency projects. Goleta Sanitary District 7 Fiscal Year

12 Fund Balance June 30, 2014 Plant Reserve 0.3% Capital Reserve 23.8% Running Expense 25.4% District Emergency Fund 4.4% Plant Upgrading Project 0.1% Retiree Sinking Fund 0% Replacement Reserve 46.2% Goleta Sanitary District 8 Fiscal Year

13 Fund Balance June 30, 2015 Plant Reserve 0.3% Capital Reserve 35.3% Replacement Reserve 48% Running Expense 12.5% Retiree Sinking District Fund Emergency Fund 0.0% 4.3% Plant Upgrading Project 0.1% Goleta Sanitary District 9 Fiscal Year

14 Fund Balance June 30, 2014 and June 30, ,000,000 6,000,000 $4,572,138 $6,185,238 $5,821,629 5,000,000 4,000,000 3,000,000 $3,197,069 $2,995,281 2,000,000 $1,615,539 ` 1,000,000 $551,442 $552,710 - $33,184 $33,260 $329 $6,711 $6,718 ($623) (1,000,000) Running Expense Plant Reserve Capital Reserve Replacement Reserve Retiree Sinking Fund Plant Upgrading Project District Emergency Fund June 30, 2014 June 30, 2015 Goleta Sanitary District 10 Fiscal Year

15 ACTIVITIES OF DISTRICT FUNDS The enclosed fund activity sheet shows the District s fund balances at the beginning and end of the fiscal year, as well as the activity of each fund during the year. Each fund s name and number are shown in the extreme two left columns, followed by the cash balance of the fund at the beginning of the year in the third column. The fourth and fifth columns designate the activity in terms of revenues and expenditures for each fund as demanded by the District s budget. The last column to the right of the sheet shows the anticipated ending balance of each fund at the end of the fiscal year. The main objective of the enclosed fund activity sheet is to provide a record of allocating revenues and expenditures to meet the District s operating objectives. For FY , the District anticipates a increase in its overall fund balances by $361,241 mostly due to the treatment plant upgrading project inter-fund loan repayments. The overall balance of all of the District s funds is anticipated to be $13,050,852 by the end of fiscal year Enclosed in this budget is a fund activity tabulation and associated bar chart illustrating the activities of the District s designated funds in FY

16 FUND CASH ACTIVITY Fund No. and Name Estimated Estimated Cash Balance Estimated Revenue Estimated Cash Expenditures Cash Balance 6/30/ /30/ Running Expense $3,197,069 Interest $7,035 O & M Expense $7,446,506 $1,615,539 Revenue $5,819,215 WWRec O & M Expense $609,054 GWD WWRec O&M $609,054 Admin Chg: WWRec $38,725 Subtotal $6,474,030 $8,055, Plant Reserve $33,184 Interest $76 $0 $33,260 Subtotal $76 $0 650 Capital Reserve $2,995,281 Interest $7,014 Sewerline capacity related $0 $4,572,138 Fund 670 Loan repayment $1,526,034 Connection & Annex Chgs $43,810 Subtotal $1,576,858 $0 655 Replacement Reserve $5,821,629 Interest $13,038 Sewer Line Replacement $1,877,500 $6,185,238 Revenue $2,260,861 Administration & Outfall $120,000 Fund 670 Loan repayment $821,710 Plant and Pump Stations Projects $734,500 Subtotal $3,095,608 $2,732, Retiree Health Insurance -$623 Interest $552 $329 Revenue $240,646 $240,246 Subtotal $241,198 $240, Outfall Reballasting Project $84,919 RFOGA SRF Outfall $67,238 SRF Loan Paymt $152,157 $84,919 Revenue $84,919 Subtotal $152,157 $152, Plant Upgrading Project $6,711 Interest $8 Plant Upgrading Project $100,000 $6,718 RFOGA Plant Upgrade $52,130 Sewer Service Charges (670 loan $1,559,919 Revenue $2,447,744 Sewer Service Charges (670 loan $839,956 Subtotal $2,499,882 $2,499, District Emergency Fund $551,442 Interest $1,268 $0 $552,710 Subtotal $1,268 $0 TOTALS $12,689,611 $13,050,852 Goleta Sanitary District 12 Fiscal Year

17 Fund Activity June 2014-June ,500,000 $6,474,030 8,500,000 7,500,000 $8,055,560 6,500,000 5,500,000 4,500,000 3,500,000 2,500,000 1,500, ,000 $1,576,858 $0 $3,095,608 $2,732,000 $152,157 $152,157 $76 $0 $241,198 $240,246 $2,499,882 $2,499,874 $1,268 $0 (500,000) Running Expense Capital Reserve Replacement Reserve Outfall Rerocking Plant Reserve Retiree Sinking Fund Plant Upgrading Project District Emergency Fund Revenue Expense Goleta Sanitary District 13 Fiscal Year

18 REVENUES FISCAL YEAR

19 DISTRICT REVENUES IN FISCAL YEAR The District receives revenues from several sources. The District has grouped its revenues under the various funds utilized for the District s operations as discussed earlier in previous sections of this budget. These funds may change over time depending on the specific purpose of establishing the fund. Currently the District has allocated its various revenues to the following eight funds. 1. Running Expense Fund 2. Plant Reserve Fund 3. Capital Reserve Fund 4. Replacement Reserve Fund 5. Retiree Health Insurance Fund 6. Outfall Re-ballasting Fund 7. Plant Upgrading Project Fund 8. District Emergency Fund Running Expense Fund The running expense fund is where most of the operating revenues of the District are deposited when received. This fund has several accounts that hold the revenues from a variety of sources. The most significant revenues are the user fees or charges, as noted in this budget. Revenues from the various sources are accounted for under separate District internal accounts carrying different account numbers in order to track these revenues by their respective sources and allocate or designate them for their required and/or intended purposes. District revenues shown in the budget are estimates based on revenues from previous years, in addition to information associated with specific developments in the community. The running expense fund is used to fund the operations and maintenance activities of the District. Sewer Service Charges Account 3100 The sewer service charges may also be described as the utility charge paid by the District s users for the services rendered by the District. These charges are very similar to telephone, gas, or electric charges invoiced monthly by the utilities to their customers. The District collects its sewer service charges, also known as users fees, through the property tax collection process of the County. The District s annual charges are placed on the tax roll, and are separately shown on property tax statements mailed by the County to the District s users. The County forwards the collected District fees to the District twice annually, immediately after tax collection in December and April of each year. Users fees are expected to reflect the cost of operations and maintenance by the District, and are reviewed annually to ensure their appropriate values. The sewer service charges are based on a mathematical model, which calculates rates using various parameters associated with flows and types of wastewater. The charge model is based on guidelines established by the Federal and State governments in accordance with the Clean Water Act, which applies to agencies like the District, that received Federal and State grants for construction of wastewater treatment and disposal facilities. The District has classified its users into 27 categories used in calculating the user fees. The model takes into consideration the estimated expenditures for the upcoming fiscal year in order to calculate the required appropriate user fees. Based on the District s model, the charge for a single-family dwelling or an equivalent is $ per year or $37.80 per month for FY 15

20 The sewer service charges are deposited into the individual funds of the District based upon their intended use and in an amount determined by the Governing Board. Of the monthly $37.80 anticipated sewer charges revenue per single-family dwelling for Fiscal Year , $24.10 will be deposited in the running expense fund Permit and Inspection Fees Account 3120 Permit and Inspection fees are collected for issuing permits to connect to District facilities. Inspection fees are charges for the District s inspection of the construction of new developments connecting to the District s facilities. This estimated revenue is projected based on past history and knowledge of proposed developments in the upcoming year. Administration Charges Accounts 3140 and 3145 These revenues are charges levied on the District s contractual users for administrative costs associated with treatment, disposal and reclamation of wastewater. These charges are fixed percentages of the operating costs as defined in separate agreements with these users. Treatment and Disposal Revenue Account 3150 This revenue is the monthly expense charged to the District s contractual users in accordance with an agreement with the District for treatment and disposal of their respective wastewaters. The charge to each user is based on each user s percentage of the monthly-metered flow into the plant applied to the total monthly expense of the treatment plant only. Fixed assets charged to the treatment plant are expensed to the contractual users based on their respective fixed capacity percentage allocations of the total treatment plant and outfall capacities as defined in the agreements between the District and its users. Goleta Water District Reclamation O&M Cost Reimbursement Account 3155 This revenue is the total estimated annual expense invoiced to the Goleta Water District for production of reclaimed water. Fixed assets purchased for the reclamation facility are included in this estimated revenue. This revenue was estimated based on the projected demand of reclaimed water as defined by the Goleta Water District. Industrial Waste Control (IWC) Analysis Reimbursement Account 3160 This revenue source is projected based on historical data, and accounts for reimbursements to the District by industries for costs of re-sampling their respective discharges to the District following violations of their respective permit limits. Homeowners Exemption Account 3170 Homeowners exemption revenues are the District s share of the annual revenue received by the County from the State for tax exemptions offered to homeowners. This amount is usually estimated by Santa Barbara County, and does not vary greatly from year to year. 16

21 Annexation Processing Account 3205 This estimated revenue is the administration fee charged for processing applications for annexations submitted to the District each year. The projected amount is based on an application fee of $200 per application, and is estimated based on past history and knowledge of any known future annexations. Revenue from Other Government Agencies (RFOGA) Running Expense Account 3240 This revenue is received from the Santa Barbara Municipal Airport and Santa Barbara County for their shares of the operations and maintenance of the treatment facilities; and from SBMA for Firestone and the Main pump stations. The value of this revenue is based on the Airport s percentages of the annual flow and expenses of the Main Pump Station and the percentage flow for the Firestone pump station only. Other Revenue-Running Expense Account 3260 Other revenues account for all undesignated sources. Examples of these revenues would be reimbursements for travel from agencies on which members of Governing Board serve (CSDA and CSRMA), miscellaneous invoices to other agencies, and reimbursements for miscellaneous expenses. Projections of this revenue are based on historical data and are usually conservative. FY14-15 Total revenue anticipated in the Running Expense Fund is $6,466,995. Capital Reserve Fund The Capital Reserve fund is the depository of funds allocated for expansion of the District s facilities to accommodate the community s growth. Funds collected from connection and annexation fees are directed to this fund for capacity-related capital improvements. Connection Fees Account 3130 Connection fees are generally understood to be the costs of buying a unit of capacity in the District s facilities. The simplest form of measuring capacity for the purpose of determining connection fees is by equivalency to the capacity normally utilized by a normal single family residence. A capacity unit is expressed as one equivalent residential unit (ERU). Therefore, the connection fee is the cost of buying capacity units expressed in ERUs. The value of the connection fee is normally the price of one ERU. Since connection fees are associated with capacity of service, they should be used for expansion of the existing facilities where capacity for serving additional growth in the community is required. In this respect, connection fees are mandated by law to be kept in a separate fund designated by the District as the Capacity Expansion Reserve. Connection fee revenue estimates are based on historical data and estimates of growth and development anticipated in the fiscal year. The current District connection fee is $2,058 per ERU. Annexation Charges Account 3200 Annexation to the District is the process of entering a land parcel into the service area of the District. The District s annexation fees were developed based on equity in maintenance of the 17

22 District s facilities over a period of several years. The underlying assumption is that a new customer, when annexed to the District, would have to pay certain annexation charges to catch up with the operations and maintenance costs paid by existing customers for a certain defined period of time. These fees are clearly separate from connection fees in that there is no overlap of both fee structures. Currently the annexation charge revenue is based on a fee of $1,905 per acre to be annexed. The District s annual projection of this revenue is based on historical data of the anticipated number of parcels to be annexed. FY14-15 Total revenue anticipated in the Capital Reserve Fund is $43,810. Replacement Reserve Fund 4655 The replacement reserve fund is designated to hold and disburse funds for the District s capital improvement projects that are needed to maintain the District s facilities. This fund does not hold nor disburse funds for major projects where capacity increases are required. The District annually deposits funds from sewer service charges into this fund to account for its facilities depreciation. Sewer Service Charges Account 3100 Of the monthly $37.80 anticipated sewer charges revenue per single-family dwelling for Fiscal Year , $2.00, which amounts to $432,846 in FY , will be deposited into the replacement reserve fund 4655 for future capital improvement projects in addition to the 81% of the District's portion of facilities annual depreciation estimated to be $1,325,310 in The total amount of sewer service charges expected to be received by the District and deposited into the replacement reserve fund is $1,758,156 in Property Tax Account 3220 This revenue is the District s share of the property taxes collected by the County based on the District s percentage of property tax revenues to the County. The District s percentage is defined based on separate property tax negotiations during the process of property annexations to the District. Current annual property tax revenues to the District are predominantly based on the District s percentage in effect prior to Proposition 13. Property tax revenue is based on data submitted by Santa Barbara County. Because the District s budget is approved before the actual amount of property taxes is calculated, the amount shown is an estimate based on the previous year. The amount of property tax revenue received by the District does not vary considerably from year to year. RFOGA Capital Projects Account 3260 This revenue is received from the District s contractual users for their share of the plant capital project expenditures. Each entity pays according to its capacity percentage entitlement as defined in the agreement between the District and these users. FY14-15 Total revenue anticipated in the Replacement Reserve Fund is $2,260,

23 Retiree Health Insurance Fund 4660 The Retiree Health Insurance fund was established by the District in The District will deposit approximately $240,646 annually into this fund for medical insurance premiums for District retirees. The District annually transfers cash from this fund to the CERBT fund as part of the required annual contribution required by GASB 45. FY14-15 Total deposit into the Retiree Health Insurance Fund is $240,646. Outfall Re-ballasting Fund 4666 This fund was established to manage the funds directed for payment of annual debt service for a loan received from the State Water Resources Control Board for placement of ballast rock over the District s outfall for the purpose of maintaining its stability. The loan was received under the State Revolving Fund (SRF) Loan Program. As noted above, this is the last scheduled payment on this loan. Sewer Service Charges Account 3100 The amount of sewer service charges expected to be received by the District and deposited into the outfall re-ballasting fund is $84,919. The RFOGA-Outfall SRF Loan Account 3245 To maintain an audit trail, the District s contractual users contributions are placed in this account to pay the annual debt service of the State Revolving Fund loan. Each entity pays according to its percentage entitlement in the outfall capacity as defined in the agreement between the District and these users. FY14-15 Total revenue anticipated in the Outfall Re-ballasting Fund is $152,157. Facilities Upgrading Fund 4670 The expenditures from this fund are primarily repayments of the Inter-fund loans. Sewer Service Charges Account 3100 Of the monthly $37.80 anticipated sewer charges revenue per single-family dwelling for Fiscal Year , $11.31 will be deposited into the facilities upgrading fund The total amount of sewer service charges expected to be received by the District and deposited into the facilities upgrading fund is $2,449,

24 Revenue Treatment Plant Facilities Upgrade Account 3250 This revenue of $52,130 anticipated in is received from the District s contractual users for their share of the plant upgrading project expenditures. Each entity pays according to its capacity percentage entitlement as defined in the agreement between the District and these users. FY14-15 Total revenue anticipated in the Facilities Upgrading Fund is $ 2,499,874. Interest Earnings Account This account receives the interest earnings of all District funds. Interest accrued per fund is also transferred from this account as revenue to each of the District funds. The interest for each fund for this year is calculated based on a conservative percentage of 0.23% FY14-15 Total interest anticipated is $28,991. FY14-15 TOTAL DISTRICT REVENUE ANTICIPATED IS $11,693,333 20

25 Fiscal Year REVENUE Fund Budgeted Revenue Projected Over(Under) Revenue Name and Revenue to date Actual Budget Projection Number Acct Revenue Classification /31/ Sewer Service Charges $3,686,219 $1,782,056 $3,686,219 $0 $3,649,322 Running 3120 Permits and Inspections $28,000 $29,882 $32,000 $4,000 $28,000 Expense 3140 Admin Chgs - Treatment $103,668 $64,374 $85,832 ($17,836) $109, Admin Chgs - Reclamation $34,372 $23,475 $31,300 ($3,072) $38, Treatment, Disposal & Equip $1,820,076 $1,148,130 $1,530,841 ($289,235) $1,962, GWD WWRec O&M Cost Reimb. $397,722 $239,640 $319,519 ($78,203) $609, IWC Analysis Reimbursement $500 $0 $0 ($500) $ Homeowners Exemption $500 $402 $500 $0 $ Annexation Processing Fee $1,000 $200 $267 ($733) $1, **RFOGA - Running Expense $24,461 $2,200 $2,933 ($21,528) $22, Other Revenue - Running Exp. $45,000 $80,093 $83,000 $38,000 $45,000 Subtotal $6,141,519 $3,370,450 $5,772,411 -$369,108 $6,466, Connection Fees $40,000 $15,487 $31,000 ($9,000) $40,000 Capital 3200 Annexation Charges $3,810 $90,916 $90,916 $87,106 $3,810 Reserve Subtotal $43,810 $106,403 $121,916 $78,106 $43, *Sewer Service Charges $1,752,592 $1,006,748 $1,754,000 $1,408 $1,758,156 Replacement 3220 Property Tax Revenue $118,012 $72,288 $123,000 $4,988 $122,416 Reserve 3260 **RFOGA - Capital Projects $84,623 $0 $0 ($84,623) $380,288 Subtotal $1,955,228 $1,079,036 $1,877,000 -$78,228 $2,260, *Sewer Service Charges $210,646 $131,312 $210,646 $0 $240,646 Retirees Ins Subtotal $210,646 $131,312 $210,646 $0 $240, *Sewer Service Charges $84,919 $43,773 $84,919 $0 $84,919 Outfall 3245 **RFOGA - Outfall SRF Loan $67,238 $67,238 $67,238 $0 $67,238 Project Fund Subtotal $152,157 $111,011 $152,157 $0 $152, *Sewer Service Charges $2,448,098 $1,400,694 $2,449,073 $975 $2,447,744 Facilities 3250 **RFOGA-Plant Upgrading Proj. $417,040 $1,167,164 $1,187,800 $770,760 $52,130 Upgrade Subtotal $2,865,138 $2,567,858 $3,636,873 $771,734 $2,499,874 All Funds Interest Earnings Running Expense Fund $10,036 $6,177 $8,236 ($1,800) $7, Plant Reserve Fund $83 $63 $84 $1 $ Capital Reserve Fund $2,638 $2,441 $3,255 $617 $7, Replacement Reserve Fund $8,329 $6,852 $9,136 $807 $13, Retiree Health Insurance Fund $497 $23 $30 ($467) $ Plant Upgrading Fund $93 $417 $557 $464 $ District Emergency Fund $1,375 $1,041 $1,388 $13 $1,268 Subtotal $23,051 $17,015 $22,686 -$365 $28,991 Total Revenue $11,391,549 $7,383,085 $11,793,689 $402,139 $11,693,333 *Sewer Service Charges are deposited directly to the respective funds and no longer shown as a transfer from the 4640 Running Expense Fund. Values shown under Revenue Estimate have been pro-rated accordingly. **RFOGA = Revenue From Other Gov't Agencies Goleta Sanitary District 21 Fiscal Year

26 Revenues by Fund Running Expense 46.11% Capital Reserve 0.29% Emergency Fund 0.03% Plant Upgrading Project 17.80% Retiree Insurance 0.87% Plant Reserve 0.002% Outfall Rerocking 0.84% Replacement Reserve 20.91% Goleta Sanitary District 22 Fiscal Year

27 Running Expense Revenues Permits & Inspections 0.54% Admin Chgs Treatment 1.40% Admin Chgs Reclamation 0.32% Treatment & Disposal 24.21% Service Charges 56.43% Other Revenue 1.08% WWRec O&M Reimb. 6.56% Goleta Sanitary District 23 Fiscal Year

28 EXPENDITURES FISCAL YEAR

29 DISTRICT COMBINED EXPENDITURES IN FISCAL YEAR The combined expenditures for the District s operating departments are shown in a combined expenditure sheet with comparisons to the previous fiscal year s expenditures. The budget expenditures are shown under various categories such as personnel expenses, operating expenses, depreciation reserves funding, debt service and capital outlay. The total operating and personnel expenses proposed for FY are anticipated to be 8% more than last year s budget and the capital outlay projects are anticipated to be about 63% less than last year s expenditures. The main categories of expenditures in the combined budget are as follows: DESCRIPTION EXPENDITURES % OF TOTAL EXPENDITURES Personnel Cost: $ 4,661,639 28% Operating Expenses: $ 3,017,567 18% Sub-Total: $ 7,679,206 46% Depreciation Funding: $ 3,185,505 19% Annual Debt Service: $ 152,157 1% Capital Outlay: $ 5,796,344 34% TOTAL EXPENDITURES: $ 16,813, % The enclosed graph shows the above distribution of expenditures for FY The District has separated accounting of its expenses under seven separate service categories. These categories are mostly associated with specific service programs and/or facilities shared by separate groups of users. The main purpose of segregating expenses is to appropriately charge the customer base served by each program and/or facility. The District s seven service categories and corresponding customer base are described below. Administration Expenses All District users share these expenses. The District s contractual users pay, as administrative costs, a fixed percentage of their respective operating costs in the treatment and disposal facilities. Collection System All users in the Goleta Sanitary District s service area share the expenses associated with the collection system. The District s contractual users do not share in the cost of the collection system. Main and Firestone Pump Stations All users in GSD s service area share the expenses associated with the main pump station. The Santa Barbara Municipal Airport and the County of Santa Barbara are the only contractual users of the District that share in this cost. All other contractual users do not use the main pump 25

30 station. The District and the Airport only share the costs of the Firestone Pump Station in accordance with an agreement between the two agencies such that the Airport s share is based upon flow through the station. Industrial Waste Control Program Similar to the collection system, the expenses associated with the Industrial Waste Control program are shared by all users in the Goleta Sanitary District s service area. The District s contractual users do not share in the cost of this program. Wastewater Treatment Facilities All District users share in the cost of the treatment of wastewater, including all contractual users. The contractual users share in the operating costs based on a corresponding percentage of their flows compared to the total flow into the treatment facilities. Fixed assets are charged based on the respective percentage of the treatment facilities capacity allocation to each contractual user. Wastewater Disposal Outfall All District users share in the cost of wastewater disposal including all contractual users. The contractual users share in the operating costs and fixed assets based on the corresponding percentage of their outfall capacity allocation to each contractual user. Reclamation Facilities The operating costs, including a 10% administration cost, are invoiced to the Goleta Water District monthly. Fixed assets are invoiced without the administrative charge. Summary Enclosed in the budget is a graph showing the distribution of the expenditures by each of the service categories described above. Details of each category s proposed expenditures are also included in this budget with a narrative explanation of the purposes of these expenditures. 26

31 Fiscal Year EXPENDITURES Projected Under(Over) Proposed Percent Budgeted To Date Actual Budget Budget Change Description /31/ PERSONNEL Basic Salaries 2,596,183 1,686,740 2,249, ,062 2,747,703 6% Overtime 38,600 18,775 25,047 13,553 25,250-35% Temporary 24,240 12,278 15,147 9,093 20,000-17% Directors Fees 76,000 35,250 48,000 28,000 76,000 0% Worker's Compensation 68,848 43,865 68, ,536 13% Retirement 538, , ,192 65, ,612 7% Active Employee Health Insurance 707, , , , ,119-3% Retiree Health Insurance OPEB Funding 199,246 49, , ,246 21% FICA 154, , ,399 16, ,844 6% Medicare 38,498 24,342 33,891 4,607 40,407 5% Unemployment Insurance 8,818 6,963 8,917 (100) 7,921-10% Subtotal 4,450,792 2,785,944 3,858, ,135 4,661,639 5% OPERATING EXPENSES Public Education 50,000 22,977 27,233 22,767 50,000 0% Janitorial Service 31,500 28,313 36,035 (4,535) 42,300 34% Uniforms 12,425 8,232 10,977 1,448 12,425 0% Licenses & Permits 50,500 56,673 61,290 (10,790) 70,500 40% Freight & Postage 2, ,111 1,804 2,815-3% Subscriptions 4,900 4,552 4,982 (82) 5,050 3% Vehicle Repairs & Maintenance 48,000 31,788 46,967 1,033 50,000 4% Liability & Property Insurance 130,301 91, ,761 8, ,834 7% Dues & Memberships 31,400 27,932 30, ,400 3% Office Supplies 16,150 10,357 12,864 3,286 16,050-1% Analysis & Monitoring 165, , ,288 (1,488) 176,600 7% Operating Supplies 719, , , , ,725-3% Attorney Fees 114,500 54,983 76,394 38, ,000-13% Printing & Publications 5,068 2,557 4, ,068 39% Repairs and Maintenance 325,500 88, ,800 17, ,500 2% Travel 48,950 35,503 44,357 4,593 48,950 0% Seminar & Conference Registration 26,000 17,941 26,215 (215) 28,000 8% Utilities 600, , ,879 (4,579) 618,700 3% Election Expense ,000 0% Computer Service & Maintenance 123,000 39, ,000 1,000 97,000-21% Lease/Rentals 8,350 6,952 10,076 (1,726) 8,350 0% Consulting Services 44, ,900 37,500 30,400-32% Biosolids Hauling 250, , ,896 88, ,000 41% Other Professional Services 40,700 16,802 45,299 (4,599) 65,700 61% Other Expense 10,200 8,805 8,000 2,200 10,200 0% Subtotal 2,860,684 1,684,322 2,498, ,598 3,017,567 5% Total Personnel and Operating Expenses 7,311,476 4,470,266 6,356, ,733 7,679,206 5% DEPRECIATION FUNDING Replacement Reserve 2,417,792 1,601,530 2,532,568 (114,776) 3,185,505 32% Subtotal 2,417,792 1,601,530 2,532,568 (114,776) 3,185,505 32% DEBT SERVICE GSD SRF Payment 84,919 84,919 84, ,919 0% RFOGA SRF Payment 67,238 67,238 67, ,238 0% Subtotal 152, , , ,157 0% CAPITAL OUTLAY Machinery and Equipment 311, , , , ,600 44% Capital Projects 1,340,464 10,900 58,900 1,281,564 2,902, % Plant Upgrading Project 800,000 1,225,840 1,317,756 (517,756) 100,000-88% Plant Upgrading Project Interfund Loan payments 1,648,098 1,358,309 2,730,252 (1,082,154) 2,347,744 42% Subtotal 4,099,562 2,738,049 4,311,208 (211,646) 5,796,344 41% Total Operating & Non-Operating Expenses 13,980,987 8,962,003 13,352, ,310 16,813,212 20% Goleta Sanitary District 27 Fiscal Year

32 District's Combined Expenditures Personnel Cost 27.7% Operating Expenses 17.9% Capital Outlay 34.5% Annual Debt Service 0.9% Depreciation 18.9% Goleta Sanitary District 28 Fiscal Year

33 Distribution of Operating Costs Plant Operations 68.5% IWC 1.4% Main P/S 3.0% Firestone P/S 1.3% Collection System 8.7% Administration 9.9% WWRec 6.8% Outfall 0.4% Goleta Sanitary District 29 Fiscal Year

34 Distribution of Personnel Cost Plant Operations 52.4% IWC 3.7% Main P/S 1.7% Firestone P/S 0.3% Collection System 19.0% Administration 19.1% WWRec 3.9% Outfall 0.0% Goleta Sanitary District 30 Fiscal Year

35 Distribution of Personnel & Operating Costs Outfall 0.2% WWRec 5.0% Administration 15.5% Collection System 14.9% Firestone P/S 1% Main P/S 2.2% IWC 2.8% Plant Operations 58.7% Goleta Sanitary District 31 Fiscal Year

36 Reclamation 5.9% Distribution of Total Expenditures by Service Category Administration 8.3% Collection System 21.6% Firestone P/S 0.8% Main P/S 1.0% Outfall 1.6% IWC 1.3% Plant Operations 59.5% Goleta Sanitary District 32 Fiscal Year