HomeMy WebLinkAboutPP_FY20-21_Budget_Rates_03-13-20MWMC Regional Wastewater Program
Preliminary
Budget and Rates
for Fiscal Year 2020-21
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MWMC Preliminary Budget & Rates FY 20-21
Matt Budget Schedule Review
Budget and Capital Programs Overview
Proposed FY 20-21 Operating Budget
Katherine Springfield Proposed FY 20-21 Budget
Dave Eugene Proposed FY 20-21 Budget
Regional Operating Budget Comparison
Katherine User Rates
Rate Comparison
Commission Comments and Direction
Presentation Format
Preliminary Budget and Rates FY 20-21
Matt
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MWMC Preliminary Budget & Rates FY 20-21
January 10 Budget Kick-Off
February 14 Draft Capital Programs
March 13 Preliminary FY 20-21 Budget and Rates
Presentation and Discussion
Action Requested:
Commission comments and direction
April 10 MWMC Public Hearing: Option to Adopt
FY 20-21 Budget & User Rates
MWMC Budget Schedule
FY 20-21
Matt
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MWMC Preliminary Budget & Rates FY 20-21
MWMC Budget & CIP Ratification
May 4 - Springfield City Council
May 11 - Eugene City Council
May 12 - Lane County Board of Commissioners
June 12 Final Adoption of FY 20-21 Budget & CIP
MWMC Budget Schedule
FY 20-21
Matt
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MWMC Preliminary Budget & Rates FY 20-21
Driven by MWMC Key Outcomes:
High Environmental Standards
Effective and Efficient Fiscal Management
Successful Intergovernmental Partnership
Maximize Reliability and Useful Life of Capital Assets and Infrastructure
Public Awareness and Understanding
Work Plan and Budget
FY 20-21
Details on pages 5-8 of the Preliminary Budget Document
Matt
Discussed in detail at the January meeting
Budget document additions:
Page 7 –
Outcome 4 “regional assets/infrastructure” – added Asset Management Plan target for annual update of the AM Plan, and begin Resiliency Plan implementation
Page 8 –
Outcome 5 “public awareness” – completed Community Survey in Fall 2019, will implement the 2020 Communications Plan in FY 20-21, and strategies and tactics to increase contact with a
greater number of community members in our service area
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MWMC Preliminary Budget & Rates FY 20-21
Capital Programs
Budget
Matt
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MWMC Preliminary Budget & Rates FY 20-21
Capital Program
FY 20-21
Capital Program Plan
Planned Capital Budget: Almost $24M in FY 20-21
Continue study, design and construction of CIP
Asset Management: Equipment Replacement, and Major Rehabilitation
Coordinating capital projects with plant operations
Details on page 45 of the Preliminary Budget Document – Exhibit 13
Matt
February meeting included the 5-year Capital Plan program presentation
$23,955,000 capital budget in FY 20-21 includes
$7.4M in budget carryover, $13.5M in new funding, and about $3.1M in Asset Management
Significant capital projects include:
$8.57MM Renewable Natural Gas (RNG) Upgrade
$7.75M Class A Disinfection Facilities
$1.55M Aeration Basin Improvements – Phase 2
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MWMC Preliminary Budget & Rates FY 20-21
FY 2021 Capital Budget
and 5-Year Plan
Details on page 45 of the Preliminary Budget Document – Exhibit 13
Matt
Proposed Capital Improvement budget is $23,955,000 in FY 20-21
Regional 5-year Capital PLAN includes almost $85.2M in capital improvements
Capital Projects $74.7M
Asset Management $10.5M
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MWMC Preliminary Budget & Rates FY 20-21
Capital Budget Comparison
Recent 5-Years
Matt
Adopted Capital Budget trend looking back
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MWMC Preliminary Budget & Rates FY 20-21
Regional Operating
Expenditure Budget
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MWMC Preliminary Budget & Rates FY 20-21
Regional Operating Budget
Recent 5-year Comparison
Eugene and Springfield Combined
Matt
The proposed FY 20-21 operating budget PLAN includes an increase of 5.9% or about $1.1M when compared to the prior year Adopted Budget.
When comparing the proposed FY 20-21 operating budget Plan to the prior year’s Amended Budget, the increase is 4.9% or about $922,500
When looking back at the Adopted Regional operating budget trend and comparing the proposed FY 20-21 budget to the FY 16-17 budget, the recent 4-years combined reflects an 11.7% increase,
resulting in an average annual budget increase of 2.9%
Actual expenses at year-end are less than budgeted amounts.
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MWMC Preliminary Budget & Rates FY 20-21
Regional Operating Budget Summary
Details on page 14 of the Preliminary Budget Document – Exhibit 3
Springfield and Eugene Combined
Matt
Combined FTE staffing includes an increase of 1.22 FTE or 1.3%
Eugene staffing includes an increase of 1.0 FTE from 78.36 to 79.36
Springfield staffing increased by 0.22 FTE from 16.56 FTE to 16.78 FTE
Personnel Budgets when combined reflects 2.2% increase
Materials & Services Budget combined reflects a net increase of 10.9%
Capital Outlay includes one-time expenses.
Will be discussed in greater detail
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MWMC Preliminary Budget & Rates FY 20-21
Springfield
Budget Summary
Katherine
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MWMC Preliminary Budget & Rates FY 20-21
Budget Comparison
Springfield
Katherine
Proposed FY 20-21 operating budget PLAN for Springfield includes a budget increase of 5.1% or $211,350, when compared to the prior year’s Adopted Budget, which included
Or, an increase of 2.4% or about $104,800 when compared to the prior year’s Amended Budget, which includes the carryover dollars for Small Home SDC reimbursements
When looking back at the Springfield operating budget trend, over the recent 4-years combined equals 15.6%, resulting in an average annual budget increase of 3.9%
Actual expenses at year-end are less than budgeted amounts.
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MWMC Preliminary Budget & Rates FY 20-21
Budget Summary
Springfield
Details on page 29 of the Preliminary Budget Document – Exhibit 8
Administration
Katherine
The FY19-20 adopted budget column is the budget the Commission approved for the current fiscal year. The FY19-20 amended budget is the current year’s budget as of Feb 2020 with a slight
increase.
The FY 20-21 proposed budget column includes the proposed Regional Administration operating budget for the upcoming fiscal year.
The first row includes FTE staffing levels, with a net increase of 0.22 FTE to 16.78 FTE a 1.3% change for Springfield. A restructure of a vacant Managing Civil Engineer position that
was 0.75 FTE Regional/0.25 Stormwater (returned to base level), plus the vacant DPW Director allocation was reduced from .08 to .05 = .02 resulted in a 0.22 FTE (resulted in the upgraded
Enviro Services Supervisor position – Todd Miller)
Personnel related costs reflect an increase of $26,675 or about 1.3%, includes changes in Springfield’s regular salaries and employee related benefits. Design & Construction Coordinator
authorized position is funded at a lower level and held vacant for a period of time based on future construction activity.
Materials & Services budget includes a budget increase of $184,673 or 8.9%.
Resulting in a Total budget increase of about $211,350 or 5.1% when compared to the prior year’s Adopted Budget or $106,816 or 2.4% when compared to the Amended Budget . Amended budget
includes the carryover funding for qualifying Small Homes SDC’s
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MWMC Preliminary Budget & Rates FY 20-21
Significant Budget Changes
Springfield
Personnel Services – 1.3% or $26,675 increase
Regular Salaries and Overtime: 0.7% increase
Employee Benefits including PERS/OPSRP: 2.1% increase
Health Insurance: 2.5% increase
Materials & Services – 8.9% or $184,673 increase
Billing & Collection Expenses: 11.0% increase
Contractual Services: -21.9% net decrease
WPCF/NPDES Permits Fees: 21.0% increase
Internal and Indirect Charges: 21.3% increase
Details on page 30 of the Preliminary Budget Document – Exhibit 9
Katherine
PS
Salaries & Overtime 0.7% or about $9,731
Employee Benefits 2.1% or $8,743
Health Insurance 2.5% or $8,201
Materials and Services
Billing & Collection EXP (EWEB / SUB) an 11.0% increase of $71,000 to $716,000
Increase reflects growth in customer transactions & associated billing service contracts.
Contractual Services – a 21.9% net decrease of $38,500, reflects completion of the updated Market Research – Community Survey conducted this FY.
WPCF/NPDES Permit Fees – 21% increase in FY21
Internals Charges - a 61.4% increase of $83,264, from $135,710 to $218,974.
Indirect Charges – a 4.8% increase of $15,696 = resulting in a combined 21.3% increase of $98,960 to $562,750.
Springfield Administration – Operating Budget change of 5.1% or $211,348 when compared to prior year’s Adopted (2.4% or $104,816 when compared to Amended).
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MWMC Preliminary Budget & Rates FY 20-21
Eugene
Budget Summary
Dave
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MWMC Preliminary Budget & Rates FY 20-21
Budget Comparison
Eugene
Dave
The proposed FY 20-21 operating budget PLAN for Eugene O&M includes a budget increase of 6.2% or about $894,750, when compared to the prior year’s Adopted Budget.
Or a budget increase of 5.6% or about $817,650 when compared to the Amended Budget.
When looking back at the Eugene operating budget trend and comparing the proposed FY 20-21 budget to the FY 16-17 budget, the recent 4-years combined reflects a 10.6% increase, resulting
in an average annual budget increase of 2.7%
Actual expenses at year-end are less than budgeted amounts.
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MWMC Preliminary Budget & Rates FY 20-21
Budget Summary
Eugene
Details on page 35 of the Preliminary Budget Document – Exhibit 10
Operations and Maintenance
Dave This is an overview of the Eugene O&M budgets, adopted, amended and shows the percent increases from the original adopted budget. I will discuss the increases with the next slide.
Capital Outlay includes one-time expenses.
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MWMC Preliminary Budget & Rates FY 20-21
Significant Budget Changes
Eugene
Personnel Services – 2.4% or $234,098 increase
Regular Salaries: 1.5% increase
Staffing - Custodial Services: 1.0 FTE addition
Employee Benefits including PERS/OPSRP: 3.1% increase
Health Insurance: 1.9% increase
Materials & Services – 11.8% or $558,645 increase
Utilities: 27.1% increase
Fleet Operating Charges: 31.9% increase
Maintenance-Equip & Facilities: -9.5% net decrease
Risk Insurance/Liability – EOC: 140.5% increase
Capital Outlay – $122,000 increase
Details on pages 37 of the Preliminary Budget Document – Exhibit 11
Dave
Staffing …Notable changes in proposed O&M for personnel services include an overall 2.4% increase including an additional full time custodian, a 3.1% increase to cover employee benefits,
and 1.9% increase for health insurance.
The need for additional custodial services was driven by an increase in overall building space and overall higher labor demands to maintain capital improvements that were added in recent
years. This need was also determined with a review of the industry standard which is 1 FTE per 16,700 square feet. We have been operating with one custodian maintaining 34,000 square
feet and have added 18,000 additional square feet with the laboratory and maintenance building expansions.
The determination that the need could best be met with an additional custodian position was made with consideration of contractual services. Contractual service is problematic and not
the desired approach for multiple reasons.
The City has a labor agreement with AFSCME which includes custodial work. AFSCME is a wall to wall union meaning their position would be that they own this work. The agreement does
not allow us to use contractual services for the additional volume of work needed without a full competitive service delivery assessment for all custodial services performed.
Materials & Services….Increases in Materials & Services includes a 27.1 % increase in utilities in anticipation of RNG system coming on line which will result in an increase in natural
gas use for generation of power and heat. These costs will be offset by an increase in revenues of RNG production. The increase is fleet operating charges was determined by 3 year
averaging for the experience estimate. These costs can fluctuate substantially from year to year so if we do not need it, it will not be spent. The decrease in maintenance for facilities
and equipment was because the current budget included extra dollars for furnishings associated with the recent building projects which will not be repeated next year. The risk insurance
and liability budget would have declined by 1% if not for the City of Eugene’s needs to fund construction of a new EOC. The funding of the EOC is being supported by a one time surcharge
across all City operations, which amounts to $70,458.
Capital Outlay…Capital outlay includes funding for 3 projects. Fall prevention system at pretreatment including platforms, safety railing, and harness connection points. Fencing of
the Brown Lane property. And the third and final phase of the LIMS software upgrade.
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MWMC Preliminary Budget & Rates FY 20-21
Eugene and Springfield Combined
Regional Operating Budget
Comparison
Dave
The proposed FY 20-21 operating budget PLAN includes an increase of 5.9% or about $1.1M when compared to the prior year Adopted Budget.
When comparing the proposed FY 20-21 operating budget Plan to the prior year’s Amended Budget, the increase is 4.9% or about $922,500
When looking back at the Adopted Regional operating budget trend and comparing the proposed FY 20-21 budget to the FY 16-17 budget, the recent 4-years combined reflects an 11.7% increase,
resulting in an average annual budget increase of 2.9%
Actual expenses at year-end are less than budgeted amounts.
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MWMC Preliminary Budget & Rates FY 20-21
User Rates
Katherine
Regional wastewater user rates
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MWMC Preliminary Budget & Rates FY 20-21
Proposed Rate Change
5-Year Comparison
Proposed 2.0% Rate Change - effective July 1, 2020
Residential increase $0.54 monthly for 5,000 gallons of wastewater treated
Katherine
Assumes 5,000 gallons of wastewater treated
$0.54 monthly increase from $27.02 to $27.56
$6.48 annual increase
Increase is $0.0177 (less than $0.02 cents daily) or about $0.12 per week
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In the current FY 19-20 Mobile Waste Hauler - Septage fees were increased by 4%, from $127.00 per 1,000 gallons to $132.00, an increase of $5 per kgal
Mobile Waste Hauler - Septage fees were evaluated by Eugene staff (John Huberd) based on cost of services, and a fee comparison to other sites for FY 20-21. Resulting in the Septage
fees remaining level.
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MWMC Preliminary Budget & Rates FY 20-21
Based on 5,000 gallons or 6.684 units
Rate Comparison
Adopted Rates
Katherine
Residential Monthly – When assuming 5,000 gallons or 6.684 units with currently adopted rates as of January 15, looking back.
$52.01 AVG ($51.97 Median)
$50.93 SPRINGFIELD increase 2.0% or $1.00
$39.25 EUGENE increase 2.2% or $1.00
When applying the current rates and assuming 5,000 gallons
Rate Changes compared to prior year, range from: 0% for Coburg, Wilsonville and Corvallis, up to a 7.40% or $4.66 increase in McMinnville
Average rate change reflects a 3.3% increase
Median rate change reflects a 2.9% increase
Maximum rate change 7.4% increase
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MWMC Preliminary Budget & Rates FY 20-21
Financial Work Plan
Multi-Year Work Plan
2016 Payoff of 2006 Revenue Bond
2016 Advance Refunding of 2008 Bonds
2017 System Development Charges Update
2018-19 Accelerated Payoff of two SRF Loans
2019 MWMC Financial Plan Update
2019-20 Accelerated Payoff of third SRF Loan
Review MWMC Property Leases
Contract language and insurance standards
Cost of Services Review
Base charge and volume charges
Katherine
Property Leases
Farm Leases
Sprint Cellular Lease on MWMC owned tower
1996 agreement will be up for renewal in May 2021 (25-year agreement)
AT&T ground lease at the plant, AT&T owned tower
(30-year agreement on site), renewal June 2024
Cost of Services Review
Review base and volume charges, compared to other agencies
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MWMC Preliminary Budget & Rates FY 20-21
Prior Year Forecast
Point 1: Allows for significant capital transfers to fund capital improvements and to maintain capital reserves
Point 2: Supports pay-as-you-go investments in capital infrastructure
Point 3: Results in a greater impact to customer bills
Katherine
Prior Year Rate Forecast– as presented to the Commission a year ago
Explain rows
3% projected rate change in FY 20-21
$0.81 monthly increase from $27.02 to $27.83 monthly for a Typical Residential account with 5,000 gallons of wastewater treated an increase of $9.72 annually
When applied to Eugene’s average usage, is currently 3,600 gallons = $23.95 (3.88) less
Springfield’s average residential usage 4,300 gallons = $25.89 (1.94) less
Regional average 4,000 gallons = $25.06 (2.77) less
Higher/lower customers usage varies
One component of the EWEB/SUB Utility Bill
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MWMC Preliminary Budget & Rates FY 20-21
Proposed Rates
Point 1: Lower rate change at 2%, than prior year projection of 3%
Point 2: Lowest responsible rate in FY 20-21, and projections overall
Point 3: Results in a lower impact to our customers
Point 4: FY 21-22 projection is reduced from 3.5 to 3.0%
Katherine
Proposed Rate Plan - includes a 2% rate change in FY 20-21, followed by a 3% in FY 21-22, and 3.5% in FY 22-23 projected in the forecast
The FY 20-21 Preliminary Budget Doc is based on a 2% rate change to be effective July 1
$0.54 monthly increase from the current $27.02 to $27.56 monthly for Residential with 5,000 gallons of wastewater treated.
The proposed $6.48 annual increase, reflects an annual variance to the prior year forecast at $3.24 less annually than previously forecasted
With the 2% rate increase the monthly cost for 5,000 gallons is $27.56, resulting in a total annual costs of about $331/year or $0.91 cents per day ($6.37/week)
Eugene 3,600 gallons = $23.71 mo. / ($3.85 less mo.) / $285 annual bill or $0.78 cents per day
Springfield 4,300 gallons = $25.64 mo. / ($1.92 less mo.) / $308 annual bill or $0.84 cents per day
Regional AVG 4,000 gallons = $24.81 mo. / ($3.02 less mo.) / $294 annual bill or $0.81 cents per day
Higher/lower customers usage varies
One component of the EWEB/SUB Utility Bill
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MWMC Preliminary Budget & Rates FY 20-21
Optional Scenario A
Point 1: 2.5% in FY 20-21, slightly above the proposed 2%
Point 2: Allows for an slightly increased transfers from user fees to capital reserves reserves
Point 3: Projections include incremental increases annually
Katherine
Scenario– includes a 2.5% rate change in FY 20-21, with a 3% projected in FY 21-22, followed by incremental increases projected annually in the forecast
$0.68 monthly increase from the current $27.02 to $27.70 monthly for Residential with 5,000 gallons of wastewater treated
$8.16 annual increase, resulting in a total annual bill of $332 or
When applied to
Eugene 3,600 gallons = $23.83 monthly / annual bill $286 / $0.78 cents per day
Springfield 4,300 gallons = $26.59 mo. / annual bill $319 / $0.87 cents per day
Regional AVG 4,000 gallons = $24.93 mo. / annual bill $299/ or $0.82 cents per day
Higher/lower customers usage varies
One component of the EWEB/SUB Utility Bill
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MWMC Preliminary Budget & Rates FY 20-21
Point 1: 3% in FY 20-21 is greater than the Proposed 2% and greater than Scenario A at 2.5%
Point 2: Greater impact to our customers
Point 3: Highest rate scenario in FY 20-21 and projections overall
Optional Scenario B
Katherine
3% rate change in FY 20-21, followed by a projected 4% annually in the following two years, with increases stepping up
$0.81 monthly increase from $27.02 to $27.83 monthly for a Residential customer with 5,000 gallons of wastewater treated
$9.72 increase annually, resulting in a total annual bill of $334 or $0.92 cents per day.
When applied to
Eugene’s average residential usage 3,600 gallons = $23.95 / monthly ($3.88 less) / (annual bill $287) or $0.79 cents per day
Springfield’s average 4,300 gallons = $25.89 / monthly ($1.94 less) / (annual bill $311) or $0.85 cents per day
Regional AVG 4,000 gallons = $25.06 / monthly ($2.77 less) / (annual bill $300) or $0.82 cents per day
Higher/lower customers usage varies
One component of the EWEB/SUB Utility Bill
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MWMC Preliminary Budget & Rates FY 20-21
Residential Trend Data
Katherine
Residential Average
With proposed 2.0% rate increase
EUG AVG 3,600 gallons increase $0.46 from $23.25 to $23.71
SPR AVG 4,300 gallons – increase of $0.51 from $25.13 to $25.64
Regional SFR AVG gallons remains close to 4,000 gallons at $24.81
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MWMC Preliminary Budget & Rates FY 20-21
Proposed Rates
Point 1: Lower rate change at 2%, than prior year projection of 3%
Point 2: Lowest responsible rate in FY 20-21, and projections overall
Point 3: Results in a lower impact to our customers
Point 4: FY 21-22 projection is reduced from 3.5 to 3.0%
Katherine
Proposed Rate Plan - includes a 2% rate change in FY 20-21, followed by a 3% in FY 21-22, and 3.5% in FY 22-23 projected in the forecast
The FY 20-21 Preliminary Budget Doc is based on a 2% rate change to be effective July 1
$0.54 monthly increase from the current $27.02 to $27.56 monthly for Residential with 5,000 gallons of wastewater treated.
The proposed $6.48 annual increase, reflects an annual variance to the prior year forecast at $3.24 less annually than previously forecasted
With the 2% rate increase the monthly cost for 5,000 gallons is $27.56, resulting in a total annual costs of about $331/year or $0.91 cents per day ($6.37/week)
Eugene 3,600 gallons = $23.71 mo. / ($3.85 less mo.) / $285 annual bill or $0.78 cents per day
Springfield 4,300 gallons = $25.64 mo. / ($1.92 less mo.) / $308 annual bill or $0.84 cents per day
Regional AVG 4,000 gallons = $24.81 mo. / ($3.02 less mo.) / $294 annual bill or $0.81 cents per day
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MWMC Preliminary Budget & Rates FY 20-21
Discussion / Questions
Action Requested:
Comments and direction for finalization of the Regional Wastewater Program Budget and Capital Program for FY 2020-21
Katherine
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MWMC Preliminary Budget & Rates FY 20-21
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Discussion / Questions
Action Requested:
Comments and direction for finalization of the Regional Wastewater Program Budget and Capital Program for FY 2020-21
Katherine
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MWMC Preliminary Budget & Rates FY 20-21
Financial Plan Strategy
Continued use of SDC revenues for debt service
Positioning financially for future permit renewal
Working towards pay-as-you-go capital investments
Maintaining responsible rate changes:
Moderate and incremental rate changes
Avoiding future rate spikes
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