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HomeMy WebLinkAbout08. Review Operations and Maintenance portion of draft Fiscal Year 2017-18 Budget (Presentation) r' DISTRICT BUDGET FISCAL YEAR 2017= 1 8 Presented by .. . -� . . Phil Leiber, Director of Finance & Administration Ed ar Lopez, Capital Pro ects Mana er � Board of May 18, 2017 �t Capital Presented to. Engineerin9 May 9,, 2017 O&M Presented to: Finance Committee May 15, 2017 r � j� per{ .. • } PRESENTATION OVERVIEW • Summary of Funding Sources & Uses • Operation and Maintenance = Capital Improvement Overview Self-Insurance Debt Service * Reserves • Detailed Capital Improvement Presentation ToTAL FUNDING SOURCES $100000,000 0pvzozs-z7euuge- �pv2o17-zge~ ` Budget $g0000000 $8g^1OOOOO $13113581481 $138,5321599 �O2,920,000 $80,000,000 $70,000,000 $ao'000000 $50,000,,000 $+o'000'000 $211200,000 $a000�000 $1587339 SEWER SERVICE CHARGE RATES AND REVENUES FY 201 5-1 6 THROUGH FY 201 7-1 8 FY FY FY SSC Rates 2015-16 2016-17 2017-18 Change % Increase Single $471 $5V%3 $530 $27 5.37% Multi 463 487 513 $26 5.37% Budget Budget Budget SSC Revenues FY 2015- FY 2016- FY 2017- ($Thousands) 16 17 18 Change * % Increase O & M $70,390 $71 ,100 $75,221 $4,121 5.8% Capital 8,110 11 ,820 $13,967 2,147 18.2% Total $78,500 $82,920 $89,188 $6,268 7.6% * Reflects total change in SSC from rate increase and all other factors. 4 � TOTAL FUNDING USES $100,0001000 $ 0,000,000 $89,810,918 $89,713,,587 a FY 2016-17 Budget ■FY 2017-18 Budget $131,358,481 $1381532.,599 $80,000,000 $70,000,000 $60,0000000 $50,000,000 $42,774,000 $40,000,000 $30,8081750 - $80,000,000 $20,000,000 $10,0001000 $3,790,807 $3,819,1099 $1,289,413 $948,000 $936,500 � , Operations and Maintenance Sewer Construction Debt Service Self-insurance Contribution to Reserves Increase of $7, 174, 118 O&M Budget spending reduced $0.1 mi llian Capital spending up million Debt service self insurance flat Contribution to reserves increases $1 .3 million OPERATING FUND REVENUES ($MILLIONS) FY 2016-1 7FY 2017=1 8 $89m8 $94m7 Hazardous Hazardous Household Household Waste $0.9 Other $3.0 Waste $0.9 Other $3.4 City of 1% 3% City of 1% 4% Concord Concord $14.8 17 $15.2 16°/a Sewer Sewer . Service Service Charge Charge $71.1 79% °$75.2 79/0 ,r R Ek'�tYl i4F11R1.','fit yfxr-h � � ,�, K'_ - rte---�1�► .74 OPERATING FUND XPENDITUREs FY 2017=18 $89m7 MILLIONS Repair&Maintenance, Outside Services, $3,453,4% Materials&Supplies, $53606% i $21059,2f° k r' I All Other, $5120216% Salaries&Wages,$34,798, Chemicals&Utilities, 39% $6.41221 7% Other Benefits/ Vacancies/Cap OH, 945,1% MENEM Unfunded Liability Contribution,$2,500,3% Retirement Normal Cost, . $5,121,5% Retirement UAAL,$11,679, ' ..,, 13°!° Medical,$12,536, 14% • Revenues of $94.7 less expenditures of $59.7 _ Contribution to Reserve of $4.94 million PRO 0 D O& M BUDG T FOR FY 2017=1 Adopted FY • Proposed A • ! . • Accounts Budget FY • FY 18/19 Administration $27 gg3 828► $27,261,866 $26,524,844 Engineering $15,899,140 $17,072,212 Collection System Operations $141472,053 $14,156,213 $16,123,023 Plant Operations Department $261807,1177 $31,220,694 Pumping Stations $3,001,836 $2,919,795p$3,637,057 Recycled Water $118011719 $1,031,330 r TOTAL O♦ $89,o810,s918 • $95.*60%960 y, t w � 14 .' a. 8 OPERATING EXPENSES COMPARISON ($ Thousands) $40.7000 $34.1798 N FY 2016-17 Budget a FY 2017-18 Budget $35,000 $33,159 $30,000 $25,000 $20,000 $12,536 $11,679 $15,000 $1107 $11,742 $10,000 $5,121 $6,122 $5,202 $5,300 $3,453 $51925 $6,236 6 $5,000 11 1 $2/500 945 - $5,346 $57223 $3j980 $2,059 $21500'� �I ;� 1,839 $2,100 $0 J`4ZZzC:, lb0�\\ e-jC7 e, spy CO :0 O Katie b\1 �J�a • O&M Budget spending is reduced $0. 1 million compared to FY 2016-2017 Salaries & Wages up 4.9% Medical up 6.6% (Kaiser down 4%, Healthnet up 10%) Retirement cost down 4.3% (normal cost reduced) Other benefits down 49% largely due to lower OPEB trust expense (ARC went down while pay-go expenses increased) Non-labor expenses down 3% overall 9 O&M BUDGET HIGHLIGHTS • Labor Related Costs. • Salaries: - MOU-Specified COLA: 3.3%+1% salary adjustment; other adjustments total 0.6% resulting in 4.9% increase in salaries overall. Health: - Kaiser premium decrease of 4% (increase last year of 6.907'01) Health Net premium increase of 10%(increase 7.6% last year) Delta Dental premium decrease 3% (decrease 8.2% last year) s Pension / OPEB: - CCCERA: decrease of 7.6%/11 .2% PEPRA; offset by higher wage base. Additional $2.5 million paid toward retirement/OPEB Employees paying full employee share of retirement contribution $7.5 million fundin for GASB 45 OPEB retiree health benefits ($5.9 million retiree health premiums, 01 .6 million contributed to trust toward unfunded liability) Other INV Employee Assistance Program increase of 3% (decrease by 2% last year) Worker's compensation: Estimated 10% increase. x 10 UNFUNDED ACTUARIAL ACCRUED LIABILITY (UAAL) TREND. LAST 5 YEARS Valuation Date 5-Year Average 12/31/2015 12/31/2014 12/31/2013 12/31/12 12/31/11 For Fiscal Year 2016-17 2015-16 2014-15 2013-14 2012-13 Total CCCSD Unfunded Liability $712,324,433 88,182,228 100,9553,188 120,792,362 142,523,585 109,168,803 District Funded%of URAL 75.32°0 70.40% 63.12% 56.38% 62.50% CCCERA Total Pool Funded%of UAAL 84.47% 81.69% 76.41% 70.64% 78.47% Source: Segal Actuarial Report Rate pages breaking out UAAL Component,then percent applied to Total Employer Contribution Rate Total CCCSD Unfunded Liability Five Most Recent CCCERA Valuations $1601000,000 - -----____----$140,0001000 $Zzo,000,000 $100,000"000 $801000,000 $60..000;000 $40,000,000 $20,000,000 -- ---- _ 5-Year 12/31/2015 12/31/2014 12/31/2013 12/31/12 12/31/11 Average [!!Total CCCSD Unfunded Liability $112,324,433 88,1821228 100,9551188 1201792,362 142,523,585 109,168,803 11 ___ OLI O&M BUDGET HIGHLIGHTS : PROVIDING NECESSARY STAFFING • Continuing with 290 full-time equivalent positions funded per Raftelis staffing analysis recommendation • Reallocations: - Management Analyst (Administration) replacing Human Resources Analyst - Management Analyst (Engineering) replacing Engineering Assistant III - Risk Management Analyst replacing Risk Management Technician s 12 C(�Il CAPITAL BUDGET HIGHLIGHTS0 : INFRASTRUCTURE INVESTMENT • CIB increases by $6 million, due primarily to the treatment plant funding increase of $4.9 million (37%) • Funding: - CIB revenues are budgeted at $39.3 million for FY 20,17-18 versus $34.9 million for FY 2016-17, an increase of $4.4 million: - SSC allocated to Capital increases $2.1 million or 18.2% - Ad-valorem taxes increase $1 million, or 9% - City of Concord increases $1 .5 million or 32% - Draw from reserves of $3.4 million _ 13�0IL CAPITAL IMPROVEMENT PROGRAM FUNDING SOURCES FY 2Q17-18 $39.3 ($MILLIONS) Other $1.4 City of Concord $6.0 Capacity Fees $5.9 Ad Valorem Tax $12.1 Sewer Service Charges $14.0 14 ___ ' CAPITAL IMPROVEMENT PROGRAM EXPENDITURES FY 2017=18 $42.7 ($MILLIONS) Contingency $1.5 Recycled Water $0.5 General Improvements $4.3 Collection System $18.5 Treatment Plant $18.0 • Revenues of $39.3 less expenditures of $42.7 = Draw from Reserve of $3.4 million 0 15 �C ' SELF INSURANCE BUDGET FY 2017= 1 8 Operating Revenue Operating Expense $727 $936.5 ($Thousands) ($Thousands) Expected Technical Legal HHW Contribution Other $67 Losses $265 Services Services $75 I $65 $22 Insurance Premiums O&M Fund Contrbution $575 $585 • Revenues of $727 less expenditures of $936.5 = Draw from Reserve of $209.5 16 - 1 DEBT SERVICE BUDGET FY 2017-1 8 Operating Revenue Operating Expense $39819 $35819 ($Thousands) ($Thousands) Interest Income Interest $46 Payments $1,232 I Principal Ad Valorem Payments Tax $3,773 $2,,587 17 ' RESERVE BALANCE PROJECTIONS s fl.'0-T V1 11 T(t. � A w s Projected Balance as of June 30, 2017 $39,223,778 $25,135,597 $61500,00-0; $70,859,375 Change in Reserve $4,945,113 ($3,446,200) ($209,500) $1,289,413 Transfers ($3,990,644) $3,990,644 $0 Projected Balance as of June 30, 2018 $40,178,247 $25,680,041 $6,290,500 $72,148,788 Reserve Policy Target end of June 30, 2017 $37,380,661 $21,387,060 $6,5+00,000 $65,267,721 Variance from Policy Target at June 30, 2017 $11843,117 $3,748,537 $0 $5,591,654 V +T Y witlTRll;.�f11 cTl t'. .: ., _ 18 JUNE 19 2017 PUBLIC HEARING Approve and Adopt Budgets 1 Operations & Maintenance 2 Ctapial Improvement 3 Self-Insurance Yet, 4 Debt Service a , 19 a.,i. r+r 1 l+ 1 * i f Additional ■ Informational i 21 +4 n ►s � Y 'i ,i r 4w BUDGET SUMMARY IFY 2016-1 7 FY 2015-1 6 IFY 2016-1 7 IFY 2017-1 8 to IFY 2017- Percent Budget Budget Budget 18 Variance Variance Operations and Maintenance $87,464,864 $89,810,918 $89,713,587 $ (979331 ) -0.1% Sewer Construction 30,790,000 36,808,756 $42,774,000 $5,965,244 16.2% Debt Service 3,822,330 3,790,807 $3,819,099 $28,292 0.7% Self-Insurance 1 ,917,000 948,000 $936,500 $(11 ,500) -1 .2% Total Budget $123,994,194 $131,358,481 $137,243,186 $5,884,705 4.5% TP U � _ 22����„ OPERATING EXPENSES FY 2016-17 Budget to FY 2017-18 Percent FY 2015-16 Budget FY 2016-17 Budget FY 2017-18 Budget Budget Variance Variance Salaries&Wages $ 30,943,085 $ 33,1581707 $34,797,628 1,638,921 4.9% Benefits&Cap O/H Credit 180823,521 19,525,611 18 601 155 ) 4 924 456 - 0 � .9/'0 Total Salary and Benefits 49,766,606 52,684,318 53,398,783 714,465 1.4% Retirement UAAL 11,900,700 1117411700 111679,261 (62,.439) -0.5% Additional URAL 21500,000 2500,000 21500,000 - 0.0% Total UAAL Payments 14,400,700 14,241,700 14,179,261 (62,439) -0.4% Chemicals 1,655,000 1,920,000 1,482,000 (438,000) -22.8°x`0 Utilities 4,780,250 4,3151790 4,639,790 3241000 7.5% Repair& Maintenance 51369,900 51222,852 51299,754 761902 1.5% Hauling& Disposal 998,550 941,050 1,023,975 82,925 8.8% Professional& Legal Fees 640,300 6301750 807,600 176,850 28.0% Outside Services 3,883,115 3,980,175 3,452 717 ) -13. xo 527 458 0 ( 3 Self Insurance Expense 1,500,000 920,000 585,000 (335,000) -36.4% Materials&Supplies 21210,045 21100,025 21059,325 (40.#700) -1.9% Other Expenses 21260,398 2,854,258 2,785,382 (68.,876) -2.4% t Total Other O&M 23,297,558 221884,900 22,135,543 (749,j357) -3.3% Total Expenditures $ 87,464,864 $ 89,810,918 $ 89 713 587 (97p331) -0.1% CEk'ffZ1L 4ti'►4ft,:;et tis ,' 23 - 5MY AR ACTUAL O& M EXP NS AND R V NU COMPA D TO FY 2017= 1 8 (BUDG $100,000,000 _--- — - $90,000,000 - _ $80,000,000 $70,000,000 $60,0001000 $50,0001000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $o - FY 2017-18 FY 2016-17 FY 2015-16 FY 2014-15 FY 2013-14 FY 2012-13 0 0&M Actual Expense $89,713,587 88,054,023 84,613,266 84,126,229 77,401,565 66 98153 3 ■0&M Actual Revenue $94,658,700 92,406,754 91,2691381 86,935,736 76,128,508 70,847,811 M 241 Sf.r O & M EX N & R V N TR ND LA 5 Y ARS Expense 5-Year Average FY 2016-17* FY 2015-16 FY 2014-15 FY 2013-14 FY 2012-13 O&M Budgeted Expense $82,3219219 895810,918 8794649864 88,1985895 7778249952 68,3067464 O&M Actual Expense $8092359323 :: 849613,266 84J 1269229 774019565 .. •; .1 1 m531 Variance $290859895 177561895 2,851,598 470727666' 423 387 17324,931 %Variance 2.5% 2.0% 3.3% 4.6% 0.5% 1.9% Revenue 5-Year Average FY 2016-17 FY 2015-16 FY 2014-15 FY 2013-14 FY 2012-13 O&M Budgeted Revenue $8157859884 8998177200 8774927300 867231,600 75,152,000 703236,300 O&M Actual Revenue $8395179698 92,406,754 91,2699381 86,9359736 769128,808 • Variance $19731,818 295897554 3,7771081 7041136 9769808 611,511 % Variance 2.1% 2.9% 4.3% 0.8% 1.3% 0.9% 5-Year Average FY 2016-17 FY 2015-16 FY 2014-15 FY 2013-14 FY 2012-13 O&M Budgeted Net Income (535,339) 61282 277436 (11967,295) (276727952) 17929,836 O&M Actual Net Income 37282,375 493527731 65656;l 15 2 809 272 757 , 507 1, ( , ) 3,8667278 ti• . Variance 39817,713 47346,449 676289679 497767802 11400,195 179367442 r� * Projected 7 .f : 25 u