WATER DEPARTMENT BUDGET WORKSHOP - Manchester,...

WATER DEPARTMENTBUDGET WORKSHOP

FY15 RECOMMENDED BUDGETMarch 19, 2014

Water DepartmentMission Statement

The mission of the Water and Sewer Department is toprovide the highest possible water quality andcustomer service at the lowest possible cost, whilecontinuing our commitment to improving theinfrastructure and our community’s environment.

Water DepartmentFY15 Recommended Budget

Expenditure Summary

• Total Recommended Expenditures: $8,731,567

• The net increase in recommended expenditures total $178,352 (2.1%) above FY14


Expenditure Summary Expense Overview

Major Drivers:

• Salaries & Benefits $79,828 (2.7%)

• Debt service $131,372 (6.4%)

• Capital -$21,000 (-4.5%)

• Electricity -$16,000 (-2.6%)

• Transfer to General Fund -$18,946 (-2.7%)

• Contingency increased by $35,000 to offset roughly

$70,000 in miscellaneous reductions


Revenue Summary

• Total Recommended Revenue: $8,731,567• Major factors influencing revenues:Revenue from the sale of water is estimated to be $6,653,887This reflects a 5.0% rate increase ($2.93/HCF to $3.08/HCF)Volume is based on current year projection with no growth

Connection fees estimated to be $28,000, down 77% from budget of $125,200; based on minimal development activity.

Use of Retained Earnings: $212,800The FY15 Budget is consistent with the BOD policy of

maintaining a level of working capital equal to 180 days of operating expense

1000

1200

1400

1600

1800

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FY10 FY11 FY12 FY13 FY14 FY15

Mill

ion

Gal

lons

Fiscal Year

Water Production and Sales

Million Gallons Produced

Metered Sales

Linear (Million Gallons Produced)

Linear (Metered Sales)


Cost Model ProjectionsProposed Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Expenses FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

O&M Costs 6,120,470 6,225,258 6,362,238 6,503,459 6,652,521 6,806,181 6,964,610 7,127,990

Projected Debt Service 2,163,597 2,320,518 2,178,460 2,228,171 2,693,858 3,572,800 3,627,422 3,824,873

Capital Cash Financed 447,500 978,000 585,000 215,000 215,000 215,000 215,000 215,000

Total Water Budget 8,731,567 9,523,777 9,125,698 8,946,631 9,561,380 10,593,981 10,807,033 11,167,863

Revenues

Sale of Water 6,653,887 6,848,759 7,063,909 7,214,281 7,364,893 7,515,749 7,666,855 7,818,215

Connection Fees 28,000 16,800 16,800 16,800 16,800 16,800 16,800 16,800

Misc Revenue 1,836,880 1,864,433 1,892,400 1,920,786 1,949,597 1,978,841 2,008,524 2,038,652

8,518,767 8,729,993 8,973,109 9,151,867 9,331,290 9,511,390 9,692,179 9,873,667

Opening Working Capital 4,582,607 4,369,807 3,576,023 3,423,434 3,628,670 3,398,581 2,315,990 1,201,136

Increase/(Decrease) Working Capital (212,800) (793,784) (152,589) 205,236 (230,090) (1,082,591) (1,114,854) (1,294,197)

Ending Working Capital 4,369,807 3,576,023 3,423,434 3,628,670 3,398,581 2,315,990 1,201,136 (93,060)

180-Day Target 3,060,235 3,112,629 3,181,119 3,251,730 3,326,261 3,403,090 3,482,305 3,563,995

Ending Working Capital - Target 1,309,572 463,394 242,316 376,941 72,320 (1,087,100) (2,281,169) (3,657,056)

Proposed Rate Increase 5.00% 3.00% 3.00% 2.00% 2.00% 2.00% 2.00% 2.00%


Transfer to Reserve Summary

Recommended Transfer to Water Reserve $447,500Priority List Cost Gate Valves at Howard $ 35,000 Effluent Pump Replacement $ 40,000 Water Audit $ 25,000 Filter Media $ 45,000 Well 7 & 8 Wire Replacement $ 20,000 Water Meters $ 50,000 Vehicle Replacement – Meters $ 35,000 Vehicle Replacement – Treatment $ 30,000 Engineering GPS Equipment $ 12,500 Tank Painting $ 75,000 Comprehensive Rate Study $ 25,000 Remote Telemetry Units (RTU’s) $ 30,000 Vegetative Control at Reservoirs $ 30,000 Oversized Pipe Fittings $ 15,000

WATER DEPARTMENTFY15 RECOMMENDED BUDGET

RECOMMENDED NOTE-FUNDED PROJECTS


Note-Funded Capital Projects

Water Quality Improvement Program Total Cost

Infrastructure Improvements $600,000

Well 7 Replacement $225,000

Middle Zone Interconnection $135,000

Charter Oak Retaining Wall $50,000

Watershed Land Acquisition $65,000

TOTAL $1,075,000


Rate Comparison Chart

LocationEqualized rateBased on average use, meter charge and surcharges where applicable

Quarterly cost per household for usage of 2,200 cubic feet/quarter based on equalized rate calculation

Manchester - current $3.23/HCF $71.09 (Current FY14)

Manchester - recommended (5%) $3.40/HCF $74.72 (Rec’d FY15)

Middletown $3.25/HCF $71.43 (2010 Rate)

New Britain $3.87/HCF $85.20 (2011 Rate)

MDC – Member (eff. Jan 2013)MDC – Outside Districts MDC – FarmingtonMDC – Glastonbury

$4.37/HCF$6.63/HCF$7.07/HCF$6.92/HCF

$ 96.10 (member town)$145.84 (outside district)$155.47 (Farmington)$152.17 (Glastonbury)

CWC (e.g.; Bolton, Coventry, Enfield, S. Windsor, Tolland, Vernon, etc.)

$6.80/HCF $149.63 (eff. 2010)

CWC (Redwood Farms) $7.11/HCF $156.47 (eff. 2010)


Some virtues of tap water vs. bottled

Tap water costs approx. $0.004 cents/gallon; bottled water is >$10/gallon

For $2.00, you can purchase 485 gallons of Manchester water

WATER DEPARTMENT BUDGET WORKSHOP - Manchester,...

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