Budget Message r'
BUDGET MESSAGE
FY 1976-77
TIGARD WATER DISTRICT
During the present fiscal year the water district has been on the
accrual versus a cash basis in its accounting and budgetary method.
This method of accounting was recommended by the auditor and was approved
for implementation on July 1, 1975. The accrual method of accounting is
utilized for the new fiscal year 1976-77.
The financial policies of the water district will remain the same
as in past years.
The proposed budget recommends no increase in consumer rates, tax
rates, or meter charges. Consumer rates were increased 25% in April
1975. Meter installation charges were increased substantially on Jan-
uary 1, 1976. While it is proposed that the tax rate will not be
revenue of $17,800
changed from 384 per $1,000, additional/for bonded indebtedness will
be realized due to higher assessed valuations of real property. Also,
more revenue will be received from a larger volume of water sales.
On May 25, 1976 the constituents of the water district will be
afforded the opportunity to vote for a General Obligation bond issue
of $1.9 million. These funds are programmed to provide a 10 million
gallon terminal reservoir, transmission mains, pipe replacements, and
land for future reservoir sites. The proposed budget assumes that this
bond issue will pass and funds have been appropriated accordingly. If
the bond issue fails, the Budget Committee or Board of Commissioners
has two alternatives. Either the measure should be resubmitted to the
voters later in the fiscal year or deleted. While the water district
is in no crisis situation at the present time it could well be by 1978
when the reservoir capacity is needed and required by the Oregon State
Health Division. A 10 MG reservoir will provide adequate storage capacity
until about 1990.
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BUDGET MESSAGE (Continued)
It should be noted that if the budget is approved and the bond
issue subsequently fails, a simple transfer of $170,000 from the Bond
Sinking Fund to "Pipe Replacements and Extensions" would reestablish
an accurate budget. This could be accomplished by either the Budget
Committee or the Board of Commissioners.
Summarized preliminary budget documents for the General Fund and
the proposed Bond Construction Fund have been prepared for the next
fiscal year and are shown on the opposite side of this folder. Sup-
porting documents are also enclosed following this budget message.
It should be emphasized that the budget document is a financial guide
only and, when approved, legally authorizes the Board of Commissioners
to expend funds in certain categories. It does not authorize the staff
to expend any funds. Approval of individual appropriations is accom-
plished at regular monthly meetings by the Board of Commissioners.
There are certain "built-in" expenses that one cannot do much about,
such as costs for basic salaries, maintenance, insurance, elections,
gasoline, office supplies, electricity, bond sinking fund, etc. Sup-
porting documents to justify incomes and expenditures which have a
marked effect upon the budget, as a whole, are enclosed. These are:
GENERAL FUND
Income
Meter Installations 20%
Water Sales 65%
Miscellaneous 15% 100%
Expenditures
Now, Salaries 22%
Water Costs 18%
Equipment 6%
Bond Sinking Fund 28%
Miscellaneous 26% 100%
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BUDGET MESSAGE (Continued)
Approval of fair and equitable salary increases is usually a con-
troversial issue. A review of the procedures is considered appropriate.
Employee's salaries are reviewed only once a year at budget time. Each
individual is provided an opportunity to express an opinion on the
amount he or she should receive for the next fiscal year. Realistic
and
salary recommendations are requested from each employee/it is emphasized
that the Budget Committee does not care to play the "cat and mouse" game
where an employee asks for a very large increase in pay, hopeful of
obtaining perhaps half of the requested amount. These salary requests
are reviewed by John Miller, Foreman, except for office employees. He
usually reduces the requested amount. These recommendations are then
forwarded to the Administrator where the salaries are adjusted (usually
VOW reduced again) to the final amounts deemed truly acceptable for the pro-
per administration of the district, and fair to both the public and the
individual. In summary, the salaries recommended have been "whacked"
twice already prior to submission to the Budget Committee.
The employees of the water district are not unionized and they do
not have representation before the Budget Committee. The Budget Commit-
tee must, therefore, ensure that the employee's needs are considered as
as
well/those of the public.
Generally, an 8% cost-of-living increase in basic pay has been pro-
posed for all employees. Very little consideration was given to additional
pay for merit and outstanding performance which the Budget Committee may
desire to pursue. The public can be assured that they are obtaining their
money's worth from the water district employees. All employees do a
creditable job and morale is very high.
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BUDGET MESSAGE (Continued)
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A factor that could have a major impact upon the proposed budget
is the pending lawsuit with the City of Lake Oswego pertaining to the
cost of wholesale water. It is due for a hearing on April 29, 1976
in the Multnomah County Courthouse. This budget has been prepared for
the worst possible condition in which the Tigard Water District loses
the lawsuit. My opinion as to the outcome is contrary to this posi-
tion.
The most significant capital improvement from the General Fund
for the next fiscal year will be the drilling of a 5th deep well.
This appears to be a sound financial investment as well as providing
more independence for a water supply.
The existing outstanding debt will be reduced from $1,386,000
to $1,285,000 on July 1, 1977. The new $1.9 million bond issue will
accrue an additional liability of about $170,000 per year for 20 years.
About one-half of this annual payment of $170,000 will be derived from
funds in the General Fund normally used for pipe replacements. In lieu
thereof, a portion of the bond issue will support the pipe replacement
program which will be completed within 3 years.
The Tigard Water District is presently a first class water district
and is fast becoming outstanding in every respect. The customers can be
assured of continued excellent service with the lowest rates in Washington
County of those water purveyors who must import water.
The proposed budget document is fiscally responsible and is a
significant step toward achieving the long range goals of the district.
Respectfully submitted:
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Gene H. Chamberlin
Budget Officer
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