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Home My WebLink About03. Receive November 2020 Budget-to-Actual Financial Overview Page 1 of 7 Item 3. CENTRALSAN SANITARYJdf A- hom CENTRAL CONTRA COSTA , . February 4, 2021 TO: HONORABLE BOARD OF DIRECTORS FROM: CHRISTOPHER THOMAS, FINANCE ADMINISTRATOR KEVIN MIZUNO, FINANCE MANAGER REVIEWED BY: PHILIP LEIBER, DIRECTOR OF FINANCE AND ADMINISTRATION ROGER S. BAILEY GENERAL MANAGER SUBJECT: RECEIVE NOVEMBER 2020 BUDGET-TO-ACTUAL FINANCIAL OVERVIEW Attached for review is the Financial Overview Report summarizing the Fiscal Year(FY) 2020-21 financial results for the Running Expense (O&M) and Sewer Construction (Capital)funds through the month of November 2020. The O&M Fund expenditure results are favorable at approximately$6.3 million (16.4%) under the year-to- date budget estimates. Through November 2020, approximately 35.0% of total adopted FY 2020-21 O&M Fund appropriations have been expended. O&M Fund revenues are slightly ahead of the year-to- date budget projections by 6.1%. As of the month ended November 2020, only 3.6% of total estimated FY 2020-21 O&M Fund revenues have been recognized, which is in-line with projections reflecting the fact that the bulk (generally 55%) of sewer service charge revenues are allocated by the Contra Costa County Auditor-Controller's Office in December each year. The Sewer Construction Fund has spent$22.7 million through November 2020, representing 54.8% of the estimated year-to-date budget for capital project expenditures. As of the month ended November 2020, the Sewer Construction Fund is reporting a negative year-to-date revenue variance of $0.8 million (- 21.2%). This negative variance is primarily attributable to year-to-date facilities capacity fees coming in lower than projected at$1.2 million, or 19.0% of the annual budget for this line item (which would have been 42% of the annual budget if revenue was allocated evenly by month). However, this is not yet of particular concern, as the timing of receipt of this particular revenue source is difficult to predict and based on development activity. Further, staff is aware of a large $1.2 million capacity fee that was collected in December 2020, after the completion of the November 2020 financial overview report report, that offset this year to date variance. I n the aggregate, Sewer Construction fund revenues still appear to be on target overall with FY 2020-21 projections. Staff will continue to monitor capital program revenue sources and report on any significant new developments as new monthly data becomes available. Refer to the attached Financial Overview for additional details on O&M and Sewer Construction fund budgetary results. February 4, 2021 Regular Board Meeting Agenda Packet- Page 25 of 104 Page 2 of 7 GOAL THREE:Fiscal Responsibility Strategy 1—Maintain financial stability and sustainability, Strategy 2—Ensure integrity and transparency in financial management ATTACHMENTS: 1. Financial Overview- Nov 2020 February 4, 2021 Regular Board Meeting Agenda Packet- Page 26 of 104 Wednesday,December 23,2020 To:The Board of Directors CENTRAL SIAM From:Finance Division Subject:0&M Fund Budget-to-Actual Overview sofa IMHOWPUCLK"MME74G194M-sem! Timeframe:FY 2020-21 Year-to-Date(Through November 2020) YTD YTD Fav/(Unfav) Total YTD YTD Fav/(Unfav) Variance FY Budget Budgeted Actual Variance (%) Significant Variance Explanations Revenue: Operating Revenues $ 62,464,762 $ 995,280 $ 1,222,732 $ 227,452 22.9% Annual sewer service direct bills as well as quarterly recycled water bills higher than projected through Nov. Non-Operating Revenues 2,967,400 1,236,417 1,144,220 (92,197) -7.5% Insignificant variance Total Revenue $ 65,432,162 $ 2,231,697 $ 2,366,951 $ 135,255 6.1% Expenses: Salaries&Wages $ 39,543,191 $ 16,476,330 $ 14,787,147 $ 1,689,183 10.3% Savings result from higher than normal vacancy factor ranging from 6.5%-7.8%through Nov 2020. Positive variance projected to shrink following COLA increases in second half of FY. Employee Benefits 11,545,173 4,810,489 3,933,590 876,898 18.2% Savings result from higher than normal vacancy factor ranging from 6.5%-7.8%through Nov 2020. Positive variance projected to shrink following COLA and benefit premium increases in second half of FY. Retiree&Unfunded Liabilities 15,827,016 6,594,590 5,662,380 932,210 14.1% Savings result from higher than normal vacancy factor ranging from 6.5%-7.8%through Nov 2020. Positive variance projected to shrink following COLA and benefit premium increases in second half of FY. Purchased Property Services: Repairs&Maintenance 4,090,401 1,704,334 1,637,500 66,834 3.9% Insignificant variance Hauling&Disposal 1,014,425 422,677 123,953 298,725 70.7% Temporary HHW hauling cost delays arising from disputed charges. Expected to normalize later in FY. Security 650,800 271,167 148,375 122,791 45.3% Expanded security during required solids handling and other on-premise treatment plant capital projects now expected to be pushed to next fiscal year. Rentals 190,701 79,459 89,882 (10,424) -13.1% Insignificant variance Cleaning 388,250 161,771 179,243 (17,472) -10.8% Insignificant variance Abbreviations Legend, FY=Fiscal Year PY=Prior Year UAAL=Unfunded Actuarially Accrued Liability SSC=Sewer Service Charges February 4, 2021 Regular Board Meeting Agenda Packet- Page 27 of 104 Wednesday,December 23,2020 To:The Board of Directors CENTRAL SIAM From:Finance Division Subject:0&M Fund Budget-to-Actual Overview sofa IMHOWPUCLK"MME74G194M-sem! Timeframe:FY 2020-21 Year-to-Date(Through November 2020) YTD YTD Fav/(Unfav) Total YTD YTD Fav/(Unfav) Variance FY Budget Budgeted Actual Variance (%) Significant Variance Explanations Purchased Professional,Technical& Other Services: Professional Services 728,200 303,417 385,398 (81,981) -27.0% Insignificant variance Technical Services 3,236,580 1,348,575 534,104 814,471 60.4% Spending on contracted technical services lower than projected in various divisions,including:Planning& Development Services,Environmental&Regulatory Compliance,and CSO. Other Purchased Services 2,340,697 975,290 366,093 609,197 62.5% Largely a timing issue arising from:election services costs to be incurred in Jan-Feb 2021,student education programs expected to roll out virtually in 2nd half of FY, etc. Supplies&Materials: Utilities&Fuel 4,689,650 1,954,021 1,633,247 320,774 16.4% Primarily attributable to savings in Treatment Plant Operations Division where YTD energy consumption(i.e. natural gas,landfill gas,electrical)is lower than projected. Chemicals 1,534,000 639,167 726,269 (87,102) -13.6% General Supplies 3,242,650 1,351,104 687,663 663,442 49.1% Primarily attributable to savings in Treatment Plant Maintenance Division where YTD general supplies for repairs and maintenance are lower than projected. Other Expenses: Insurance&Risk Management 450,000 450,000 450,000 0.0% Insignificant variance Memberships 628,279 261,783 411,298 (149,515) -57.1% Timing issue as BACWA,NACWA,and other membership costs incurred in the first half of the fiscal year. Training&Meetings 515,075 214,615 30,011 184,604 86.0% Lower costs incurred to-date while COVID-19 risk mitigation measures remain in place. Miscellaneous Other 51,250 21,354 (1,778) 23,133 108.3% Insignificant variance Total Expenses $ 90,666,338 $ 38,040,141 $ 31,784,374 $ 6,255,767 16.4% Abbreviations Legend, FY=Fiscal Year PY=Prior Year UAAL=Unfunded Actuarially Accrued Liability SSC=Sewer Service Charges February 4, 2021 Regular Board Meeting Agenda Packet- Page 28 of 104 Running Expense Fund(0&M)Total Expense YTD FY 20-21(Millions) $40 $38.0 $35 $31.784 $30 $30.5 $25 5.624 $23.0 $20 18.652 $15 $15.1 12.211 $10 $7.556 .460 $5 July August September October November -Budget -Actual February 4, 2021 Regular Board Meeting Agenda Packet- Page 29 of 104 Wednesday,December 23,2020 CENTRAL SAN To:The Board of Directors From:Finance Division Subject:Sewer Construction(Capital)Fund Budget-to-Actual Overview Timeframe:FY 2020-21 Year-to-Date(Through November 2020) YTD Total YTD YTD YTD Fav/(Unfav) Fav/(Unfav) FY Budget Budgeted Actual Variance Variance(%) Significant Variance Explanations Revenue: Sewer Service Charges-Capital $ 56,673,402 $ 697,665 $ 1,054,848 $ 357,183 51.2% Sewer service direct bill and over-the-counter revenues higher than projected through Nov. Other Revenues 22,979,500 2,933,125 1,807,621 (1,125,504) -38.4% Attributable to facilities capacity fees coming in lower than projected through Nov. Capital Contributions 15,300,000 - - Concord share of treatment plant capital billed at end of the FY. Total Revenue: $ 94,952,902 $ 3,630,790 $ 2,862,470 $ (768,320) -21.2% Expenses by Program: Collection System $ 49,686,784 $ 23,556,221 $ 12,962,389 $ (10,593,832) -45.0% Treatment Plant 39,194,584 11,908,656 6,602,297 (5,306,359) -44.6% General Improvements 6,108,365 2,282,163 2,718,338 436,175 19.1% Recycled Water 11,506,037 3,596,244 386,622 (3,209,622) -89.2% Contingency 2,100,000 - - Total Expenses: $ 108,595,770 $ 41,343,284 $ 22,669,646 $ (18,673,638) -45.2% * ** *Includes rollover of unspent capital project appropriations from prior year of$21.0 million. **Spent 54.8%of projected YTD budget. Abbreviations Legend: FY=Fiscal Year PY=Prior Year UAAL=Unfunded Actuarially Accrued Liability SSC=Sewer Service Charges February 4, 2021 Regular Board Meeting Agenda Packet- Page 30 of 104 Sewer Fund(Capital)Spending FY 20-21(Millions) $45 $40 $37.209 $35 $30 $25 ...... 215 704 $22.670 — $20 $70.3 ................................... 8.339 $15 .............. $10 9.799 ..... '..o — ..... 7.699 $5 $3.632 ...... .944 July August September October November —Projected(100%spend) Actual 90%Target .........Linear(90%Target) February 4, 2021 Regular Board Meeting Agenda Packet- Page 31 of 104