Loading...
05/14/1974 - Packet TIGARD WATER DISTRICT 13B41 B. W. COMMERCIAL ST. TIGARD, OREGON 97223 PHONE (503) 639-1554 Near AGENDA BUDGET COMMITTEE May 14, 1974 8:00 p.m. BUDGET HEARING (FY1974-75) CALL TO ORDER 1. SELECTION OF BUDGET CHAIRMAN AND SECRETARY 2. PRESENTATION OF BUDGET MESSAGE BY BUDGET OFFICER 3. VISITORS 4. RESOLUTION TO APPROVE PROPOSED BUDGET FOR ALL FUNDS ADJOURNMENT low June 11, 1974 BUDGET HEARING (FY1974-75) 7:30 p.m. CALL TO ORDER 1. VISITORS 2. RESOLUTION TO APPROVE BUDGET FOR ALL FUNDS ADJOURNMENT TIGARD WATER DISTRICT seal S. W. COMMERCIAL GT. TIGARD, OREGON 97223 PHONE (503) 639-1554 '4100' BUDGET COMMITTEE Clarence F. Nicoli 9830 S.W. McKenzie Don W. Thomas 14940 S.W. 103rd John M. Wied 14835 S.W. 103rd R. Verne Wheelwright 14150 S.W. 144th Harold A. Myers 17243 S.W. El Dorado Dr. '" H. Dale Johnson 12245 S.W. Marion Neil Longfellow 14810 S.W. 141st George Marshall 14970 S.W. Hawk Ridge Rd. Michael D. O'Neil 13585 S.W. Fern St. William M. Stebbins 13273 S.W. Bull Mtn. Rd. TIGARD WATER DISTRICT BUDGET MESSAGE: FY1974-75 May 14, 1974 wow Introduction Since there are so many new members on the budget committee, a more detailed budget message is presented. The Tigard Water District is a non-profit municipal corporation, incorporated under the laws of the State of Oregon, and its operations are governed by law. In addition, the Oregon State Board of Health has statutory authority to publish administrative rules which are applicable to all public water utilities. As an aid in preparing the budget the Oregon State Department of Revenue has published a budget manual. It explains in detail the budget- ing process including a compilation of abstracts of opinions by the former Law Section of the State Tax Commission and the Attorney General, and of decisions of the Supreme Court regarding budgets and budgeting. Profes- sional guidance was also requested from Mr. James Savage, CPA with Coopers & Lybrand, Auditor for the district. Mr. Savage has seen the proposed budget document and has approved it as to form. Since the actual budget document is voluminous, a summarised document has been prepared for your review and approval. It is shown on the adjacent page and reflects the General Fund account including historical data, actual figures on March 31, 1974, projected figures for June 30, 1974, and the pro- posed FY1974-75 General Fund budget. Since all bond construction funds have been expended your primary deliberations will concern the General Fund budget. Upon approval of the proposed budget, and subsequent publication in the Tigard Times, a public hearing will be held on June 11, 1974. No public election or approval of the voters is required because the requested tax levy is not subject to limitation since the funds received will be used for the payment of bonded indebtedness principal and interest only. -1- General All water systems consist of three parts: r.. 1. Source 2. Storage 3. Distribution 1. Source Until 2 years ago the Tigard Water District was plagued with chronic water shortages at peak demand periods in the summer. Deep wells have been the main source of water since 1938 when the district was organized. Over the ensuing years as the water table dropped and as a result of population growth an ever-increasing demand was placed upon the system. Surface water had to be imported. The following table reflects the district's rapid growth during the past 5 years: 1268 1,272 Increase Meters in service 2,686 3,936 47% Water consumption (cu. ft.) 39,840,300 70,076,200 76% Assessed valuation $61,900,000 $157,037,000 154% During the past year the district has connected to two reliable surface sources of water with 16-inch mains: (1) Clackamas River (City of Lake Oswego) (2) Bull Run (City of Portland) The engineering firm of Stevens, Thompson & Runyan has estimated that these two sources, along with the deep wells, will provide adequate water to the district, including projected growth, until 1985. 2. Storage The Oregon State Board of Health requires that each water utility have at least 3 days average demand in storage. The average demand of the district is 1.6 million gallons per day; therefore, storage capacity should be about 5 million gallons. The district has 7.5 million gallons of storage on hand. -2- 3. Distribution For the past 5 years the district has been improving the distribution system by replacing steel mains with cast iron, increasing the capacity, completing circulation loops, and installing new pumps stations. These improvements provide the customers with better service, both quality and quantity, improved fire protection, and significantly reduces water losses from old pipe lines. During the past year Tualatin Rural Fire Protection District was awarded a fire insurance rating of Class 4 versus the previous Class 6. Tualatin Rural Fire District is the only rural fire district in the State of Oregon with such a high rating. Much of the credit for the high rating must be given to the water district as it accounts for 39% of this rating. Three years age the water losses of the district averaged 36% annually. This has been reduced to 8%. Water systems with less than 10% water loss are considered outstanding by the Oregon State Board of Health. *r If the present rate of pipe replacement is continued, within 4 years the entire system will consist of cast iron or ductile iron pipe, all adequately sized. Financial policies The financial policies of the water district will remain the same as in previous years. With sound fiscal management the Tigard Water District enjoys the lowest consumer water rates and meter installation charges in Washington County. Further, all other water purveyors in eastern Washington County intend to raise their rates on July 1st by at least 25%. There are no plans or pro- posals to increase water rates to our customers during the next fiscal year. In arriving at reasonable water rates, the Board of Commissioners has wor attempted to be fair to all segments of the population; namely: customers, developers, and tax payers. It is this fairness and openness in dealing with the public that has gained the district the trust and confidence of the people. -3- Other than a possible increase in water costs from the City of Lake Oswego, inflation will have the greatest effect upon the proposed budget. ""'' While the cost of living has risen 10%, cost of construction materials, such as cast iron pipe, copper, brass fittings, fuel, electricity, etc., has increased by as much as 25 to 40%. The policy of the water district is to "hold the line" on price increases, if possible. Proposed budget FY1974-75 A summary of the major items of the proposed budget is shown below: General Fund Income Meter installations $121,000 Water sales 425,800 Developer's »- overhead, engr., equipment & wage reimbursement 50,800 Miscellaneous 30,400 Total Income: $628,000 Expenses Salaries $152,000 Water costs, including electricity 112,100 Pipe replacements and extensions 75,000 Head Sinking Fund 111,840 Miscellaneous 175,060 Total Expenses: $628,000 Information on the above items is presented in succeeding paragraphs. Also, the method of deriving at the estimates is shown on the pages follow- ing the summarised budget document on the adjacent page. Income : Meter Installations Meter installation charges were increased by $145 each and standardized throughout the district, effective May 1, 1974. Fire sprinkler rates were also increased from $5 to $10 per month. This will result in a significant increase in revenue. -4- Water Sales Water sales account for 2/3's of the total income of the district. wow A 15% increase in water sales is estimated for the next fiscal year, however, the weather has a marked effect upon this projected figure. Developer's For all pipe construction projects, including those accomplished by private contractors, the district realizes 10% of the total cost for over- head, inspections, administration, water loss, etc., and 8% for engineering. John Miller, Foreman, performs the inspections and the Administrator does the engineering. When district field personnel perform the actual work for a developer the district is reimbursed for their wages plus equipment rental. Revenue from developers amounts to about 10% of the total income. Expenses: 'wr Salaries Salaries amount to 25% of the total expenditures for the fiscal year. This subject will be discussed in other paragraphs. Water Costs As the 4 wells continue to go dry, more water will have to be purchased from either Lake Oswego or Portland. It appears now that the State Engineer will officially prohibit pumping of wells #3 and #4, except in emergencies. In September 1973 pumping of well #4 was voluntarily curtailed due to the quality of the water and high cost of pumping. We are hopeful that Lake Oswego will not increase their wholesale rates during the next fiscal year. This could have a drastic effect upon the budget. Pipe Replacements and Extensions low In continuance of the pipe replacement and extension program, $75,000 has been earmarked for this account. Our goal is an all-cast iron system within a 4-year period, capable of lasting for 100 years. -5- Bond Sinking Fund 1974 is the first time since 1959 that a bond issue has not been required for the ensuing 3-year period. Bond issues and amounts were granted as follows: Year of Issue Amount Year of Maturity 1959 $ 160,000 1980 1962 250,000 1984 1965 250,000 1987 1968 300,000 1990 1971 980,000 1988 Total bonded indebtedness, July 1, 1974 - $1,574,000 No bond issue authority is contemplated for this fiscal year. Bonded indebtedness is paid off from advalorem taxes and revenue (Bond Sinking Fund). Funds to pay the indebtedness for this year are derived as follows: Estimated funds on hand, July 1 1974: $ 61,757 Bond Sinking Fond (General Fund: 116,029 Advalorem taxes: 60,000 $237,786 It is interesting to note that with an estimated assessed valuation of the district at $200,000,000, each 10 increase per $1,000 valuation results in $2,000 of revenue. During the last bond election the Board of Commissioners pledged not to increase the tax rate which is now at 300 per $1,000 valuation. Salaries (Again) To establish fair and reasonable salaries for the employees and to stay within the budget is always a difficult task for any budget committee. An employee's worth to the district and individual capability must be weighed against available funds. One factor is the cost-of-living index which has increased 10%. Awe. The Tigard Water District is not a union shop, and we would prefer to remain that way. Field employees of both Portland Bureau of Water Works and Metzger Water District belong to a union and it seems to create more problems than it solves. -6- Payroll changes are proposed as follows: 1. One additional fringe benefit 2. One additional field employee 3. Payroll increase 1. Fringe benefit This year the employee's have requested that the budget committee approve Blue Cross health insurance coverage for their eligible dependents. Presently, the district pays for the employee only. The additional coverage amounts to $1,680 annually. 2. Additional employee With growth comes added work load for the district. All hands are performing at full tilt and still work remains to be done. John Miller needs someone who can work without personal supervision to maintain the 7 reservoir sites, 4 pump stations, shop and storage area, in addition to work as a pipe fitter and read meters. Such a man has been working for the district on a part-time basis for 1 years. He is 36 years old `'ter and capable of performing these tasks for the district. Total costs $7,800 per year. Please note that field labor (part-time) has been reduced to account for this employee. 3. Payroll increases Office personnel Two girls normally work in the office and handle all bookkeeping, clerical work, billing, collecting, etc. The regular bookkeeper will become a mother in July and she will work only 2 weeks of every month thereafter. Part-time clerical help will be hired when the bookkeeper is not in the office. The net result will be a $40 savings in the budget. Field employees An important consideration in evaluating the district's field employees is the fact that they perform construction duties and should be compared with workers in that category. The current union scale for similar construction workers is shown below: -7- Backhoe Operator: $ 7.11/hr $ 14,789/ r Plumber: 7.68/hr 15,974/yr Pipe Fitter: 7.68/hr 15,974/yr Although the water district is not a union shop, the field employee's Aar wages should be high enough to adequately compensate these good men, and also retain their services. You will notice that our field employees will earn about $10,000 for the district in wage reimbursement from developers. A pay scale is proposed as follows: Pipe Fitter II: $ 4.70/hr $ 9,776 Pipe Fitter I: 5.66/hr 11,760 Leadman: 6.00/hr 12,480 The two Leadmen supervise the construction crews and are journeyman backhoe operative. In addition, one Leadman, Rusty Thomas, is an expert on fire hydrant repair, a very difficult position to fill. With these two highly qualified individuals serving in a dual supervisory and workman capacity, John Miller, Foreman, is able to inspect, supervise, and monitor several construction projects at the same time. Supervisors: Administrator/Enrineer and Foreman Substantial increases in pay are proposed for the Administrator and the Foreman. Rationale for these major adjustments is explained below. Administrator/Engineer As required by all municipalities and public utilities, the water district previously retained the professional services of a consulting engineer to design and supervise the installation of all pipe lines, pump stations, etc. In 1969 when the services of the previous Administrator were terminated the Board of Commissioners decided that substantial savings could be realized if the Administrator were also an engineer. None of the other 40 water districts surrounding the City of Portland has an engineer on its staff. Upon accepting the position of Administrator in October 1969 the Board „ a of Commissioners requested that I become registered in the State of Oregon so that I could practice engineering for the district. -8- I graduated from the University of Southern California in 1949 so it was no small task to regain the knowledge and skills to pass the required Oregon State engineering examinations after a lapse of 20 years. After l years of studying during off-duty hours I passed both the Eigineering-in-Training and Mechanical Engineering professional examina- tions in April 1971. A certificate of registration to practice engineering in the State of Oregon was issued in July 1971. When it came tine to prepare the next budget, FY1972-73, the budget committee firmly adhered to the federal limitation on wage increases after a long, heated discussion. Last year to avoid any disagreement I accepted a 4.0% increase in salary. It appears that a 1iajor adjustment in my salary is in order and overdue if the district's wage scale is to be fair and in consonance with compensation paid responsible persons in other public bodies. As a registered, professional engineer I draft, design, and supervise Nor all engineering work for the district. The district realizes 8% profit for engineering fees of all construction costs for projects within the district. During the past few years I have saved or earned significant amounts of money for the district as shown below: gineerina Fees Saved or Earned FY1971-72 FY1972-73 FY1973-74 Funds Saved Bond Construction $ 9,604 $ 31,037 $ 22,056 Pipe Replacement 4,227 3,435 4,168 Pipe Extensions 1,732 800 2,341 Funds Earned Developer's 8,479 10,160 13,439 Total: $ 24,042 $ 45,432 $ 42,004 3-year total: $111,478 -9- It is estimated that the district will save or earn $23,280 in engineering fees during the next fiscal year. Obviously, I am saving or earning for the district substantially more than I am compensated as the Administrator/Engineer. This arrangement is inequitable. In addition, I am responsible and accountable as an engineer to the Oregon State Board of Health that each project of the water system is installed as designed. My salary as Administrator has not kept pace with other public officials and administrators in comparable positions as shown below: Administrator, Washington County $27,600 Planning Director, Washington County 22,200 City Manager, Lake Oswego 22,500 City Manager, Tigard 19,500 Chief, Tualatin Rural Fire District 20,664 Maintenance Officer, Tualatin Rural F.D. 19,860 Administrator, Powell Valley Water Dist. 17,200 The Board of Commissioners will have to make the judgment if my past performance has been satisfactory. I believe the record shows that we have solved most of the many problems that previously existed. Instead of excuses, the customers have a water system that functions properly. Foreman In John Miller the district has a truly outstanding employee. He is the "honcho" that makes it all work. I call him "Mr. Tigard Water District" because he means so much to the success of the district. A very loyal, honest individual, John is dedicated to the water business. He has studied water works systems, is now a Water Works Operator #1, (State of Oregon), and is fully capable of assuming the duties of the Administrator. It is interesting to note that John Miller was fully cognizant and knowledgeable of the many deficiencies in the water system prior to the engineering study perfommed by ST&R in 1971. The study merely substantiated his understanding of the system. v„",,, John as the Foreman gets the maximum amount of work from each man, but does it in such a manner so that morale remains high. John ensures that the district obtains an hour's work for an hour's pay. We have team effort in our construction projects and each individual is a vital cog. -10- John Miller saves the district thousands of dollars annually with his skill and expertise of water systems. He inspects and approves the installation of all new water mains. In this regard he acts as my agent loor (engineer) in ensuring that pipe lines are installed in accordance with the plans and specifications which must be reported to the Oregon State Board of Health. His personal attention to detail ensures against con- tamination of the water system. John is generally available on a 24- hour basis. As a supervisor he receives no over-time pay. When one has such a competent, loyal employee an adequate salary is mandatory. He is worth every penny of it. Future Projects Much has been accomplished during the past 5 years, but to keep pace with growth, continued improvement must be made. Some of the major projects for the immediate future are listed below: Pipe Replacements: $75,000 per year for 4 years Reservoir: 5-million gallon terminal reservoir at 125th and Gaarde in 1978, including an extension of the 16- inch transmission main along MacDonald and Gaarde from Hall to the reservoir Developer's: Summerfield: 1,000 connections in 4 years Commonwealth: 360 connections in 2 years Major items required by the district which will have to wait until next year are: (1) Auxiliary power for pressurised systems on both Bull Mountain and Little Bull Mountain (2) Building addition to administrative office (3) Additional telemetry (4) Surge suppression manifolds for 132nd St. pump station -11- Conclusion The customers have a right to be proud of the water system and the `M. capital improvements made during the past 5 years. No longer is there a need to dispatch vehicles and men to announce "turn off your water, there is a water shortage". We have a first class water system "2nd to none" of those water districts which have to import water. The proposed budget is sound and fiscally responsible. Without an increase in either user rates or the tax rate it ensures the purchase of vital necessities and the accomplishment of required capital improvements in furtherance of the master water plan. This is a balanced budget taking into account the inflation spiral. Despite the many problems of serving the general public there is personal satisfaction in accomplishing the job to the best of one's ability and getting the most for the public's dollar. The district's employees are doing just that. Robert E. Santee Budget Officer w -12-