Budget Message Administrative Director's
Budget Message
April 13, 1993
Honorable Budget Committee:
I am pleased to present you with a hold-the-line budget for fiscal year 1993-1994 which has
slightly less General Fund departmental expenditures than the previous 1992-1993 budget. It
is not often that this happens, due to ever-increasing inflationary costs of labor, supplies and
materials. Staff has worked very hard to present you with a fiscally conservative budget that
safeguards public funds and ensures excellent quality water service.
I have also attempted to break the General Fund budget into two departments, Administration and
Operations. The intent is to give us a better picture of our costs in these two functional areas.
Since this is the first time this has been done, the prior year's history will not be shown for
each department where costs have been divided between the two. However, the General Fund
Expenditures Summary will show totals and prior year's history.
Major projects to be undertaken this year include:
1 . Assume sewer and storm drain billing for the City of Tigard and Unified Sewerage Agency.
2. Modernize office equipment and office procedures.
3. Complete the computerized SCADA system (Supervisory Control and Data Acquisition)
which will monitor all 12 reservoirs and 6 pump stations.
4. Obtain computerized hand-held meter reading devices that will allow downloading of water
usage into the computer rather than doing it manually.
5. Change to new computer software which offers integrated billing, general ledger, job
costing, inventory control, purchasing and equipment maintenance programs.
6. Complete 3 major construction projects (a line extension on 150th Ave., a pressure
reducing valve station on the north side of Bull Mountain, and a pipeline extension on SW
North Dakota Street).
7. Work with Lake Oswego to complete the design and construction bid process to build a new
main transmission line which will provide more water to TWD (we will pay half of the
costs).
8. Obtain a computer aided drafting system for Engineering.
9. Fund a public information program.
10. Implement an inverted block rate system to encourage conservation during the summer.
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11 . Convert the District to a joint water agency with a new governance structure composed of
appointees of the cities of Tigard, King City, Durham, and unincorporated Washington
County.
Although the budget we are submitting for FY93-94 has fewer expenditures than last year,
there are some critical trends which need to be addressed. In the 92-93 fiscal year budget,
$952,000 was moved from the surplus "unappropriated ending fund balance" to balance the
General Fund budget. The proposed 93-94 fiscal year budget requires a similar move.
Actual Actual Budgeted Proposed
1990 -91 1991 -92 1 992-93 1993 -94
Revenues + $3,285,552 $3,145,846 $3,709,000 $3,973,700
Expenditures - 2,895,987 3,134,432 4,083,600 4,003,910
Surplus or Deficiency Subtotal +$389,565 +$11 ,414 ($374,600) ($30,210)
Reserves - -0- - 0 - $300,000 $300,000
Contingency - - 0 - - 0 - 277,400 596,055
Total Surplus or Deficiency +$389,565 +$11 ,414 ($952,000) ($926,265)
"(Note: 34% of the FY93-94 deficit is due to an increase in contingency funds, which can be spent in
case of emergency. Contingency funds were budgeted at 15% of revenues.)
What this means is that our annual revenues are not sufficient to cover our annual expenses.
Our auditors would like us to increase the amount of our unappropriated ending fund balance,
but we are depleting it to take care of expenses. This is tantamount to living out of your savings
account--eventually it is gone.
Therefore, a 20% customer rate increase is included in the revenue estimates for metered
water sales. This will not cover the total amount of funds needed, but continues the phased
approach to rate increases began by the Board of Commissioners in 92-93 fiscal year. Prior to
that, rates had not been increased for nine years. Please note that the chart shown above
includes the 20% customer rate increase in FY93-94..
The reason for the increase in expenditures in last year's 92-93 fiscal year budget was an
increase in water rates from the City of Portland. Their rates are based on a scale that
increases when water is purchased at peak demand times (days and hours). For last year's
budget (FY92-93) Portland's rates increased from $1.535 to $3.23 per 100 cubic feet, a
110% increase. However, the summer water restrictions meant that we bought very little peak
season water. Consequently, our rate has dropped this year to $1.801 per 100 cubic feet. If
there are no restrictions this summer, our purchases will increase again and so will the price
for the following year. Consequently, the 94-95 fiscal year budget could have an even bigger
deficit, and the trend will continue. (Because we did not have to buy Portland water last
summer, our actual deficit in revenues will not be as large as projected.)
It is perfectly legal to use unappropriated funds to balance the following year's budget. As a
matter of fact, its purpose is to have funds available to begin the new fiscal year. If significant
amounts are used each year, however, it will soon be depleted.
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I would like to commend the following staff members for assisting in development of the budget
and for working so hard to keep expenditures down: Randy Valk, Operations Manager; Nancy
Johnson, Accounting Supervisor; Mike Miller, Senior Management Analyst; and Lorry
Christian, Administrative & Human Resources Coordinator.
I would also like to acknowledge the Board of Commissioners for their unflagging support of the
Tigard Water District and their constant efforts to do what is best for our patrons. The District
has an excellent reputation for quality service, as is attested by the many "thank you's" we
receive from our patrons. This would not be possible without the Board's initiative and support.
Special thanks to Chairman Robert C. Wyffels, Commissioner Audrey Castile, Commissioner
Clarence Nicoli, Commissioner John T. Haunsperger, and Commissioner Hill Hampton.
Respectfully Submitted,
Je ' L. Chenelle
Administrative Director
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