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Budget Message, FY 1975-1976 TIGARD WATER DISTRICT BUDGET MESSAGE, FY 1975-76 May 13, 1975 As recommended in the last audit report, the Tigard Water District will change its accounting and budgetary method from a cash basis to an accrual basis for all revenues (except property taxes) and expenses. Depreciation will be computed on fixed assets for accounting purposes, however, capital outlay acquisitions appear as expenditures in this budget document to comply with the provisions of O.R.S. 294. The change from the cash to the accrual basis of accounting results in the following differences in this budget documents General_ Fund: Cash Basis Accrual Basis Beginning Fund Balance 100 $ 50,000 Net Unappropriated Ending Fund Balance -0- 50,000 Bonded Debt Requirements Matured but unredeemed coupons 9 500 -0- All existing funds and account groups, except Bond Sinking Fund, will be combined into a single enterprise fund (General Fund). This action will eliminate special funds, such as "Developers" and "Capital Projects Reserve". Furthermore, the district will consolidate all checking accounts into two checking accounts, as follows: General Fund and Bond Sinking Fund. The financial policies of the water district will remain the same as in past years. The district must be solvent and abide by the proposed budget document. Charges for water service have been distributed equitably and are considered fair and reasonable. While the majority of the revenue is derived from the consumer in water sales (71%), income is also generated from new meter installations (13,$), and developers (8%). It is believed that those residents who benefit from the water system, but are not connected to the system, should pay some portion of the bonded indebtedness of the district. These persons may benefit from a fire hydrant in close proximity, low fire insurance rates, etc. Their contribution is in the form of property taxes collected by Washington County for Tigard Water District. With an estimated increase in assessed valuation of 20% the district will realize about $79,600 in ad valorem taxes which accounts for -1- FY ?975-76 Budget Message (Continued) approximately 1/3 of the principal and interest on bonded indebtedness. The tax rate remains the same at 34¢ per $1,000 valuation. The out- standing debt will be reduced from $1,481,000 to $1,386,000 on July 1, 1976. No additional bond issues or indebtedness are planned during the next fiscal year. A consumer rate increase of about 25%, effective April 22, 1975, was deemed necessary to offset the higher cost of wholesale water charged by the City of Lake Oswego. These higher water costs by 78% result in an annual increase from $85,100 to $160,500 which is 56% of the entire Material & Services Account. Generally, a 10% cost-of-living increase in pay has been approved for all employees. Additionally,a draftsman will be hired on April 1, 1976. In the Capital Outlay Account, provisions have been made for an addition (upstairs) to the present administration office building. ($15,000). This additional space will provide an office for the Admin- istrator and a large meeting and hearing room for the Board of Commis- sioners. Major equipment consists of a new pumping station at the Hi Tor reservoir site, capable of providing adequate pressure to 500 homes. ($36,000). This will be the last pumping station to be purchased in the foreseeable future. After expending substantial sums in past years on pipe line replace- ments, the end is in sight for this account. Within 4 years all steel pipe lines will have been replaced with either cast or ductile iron pipe, adequately sized. Some cast iron pipe has been known to last for as long as 100 years. This program can be terminated with the following expendi- tures: Year Amount 1975-76 $ 80,200 1976-77 99,560 1977-78 84,800 1978-79 78,500 The proposed budget document accomplishes the desired goals and is fiscally responsible. Superior service can be continued to the customers with the lowest rates in Washington County of those water purveyors who must import water. Don W. Thomas Budget Officer -2-