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05/14/2007 - Packet TIGARD WATER DISTRICT BUDGET MEETING Serving the Unincorporated Area Tigard Public Library Second Floor Conference Room 13500 SW Hall Blvd. Tigard, Oregon AGENDA Monday, May 14, 2007, 6:30 p.m. 1. Call to Order, Roll Call and Introductions 2. Appointment of Budget Committee Members 3. Budget Message and Proposed Budget 4. 2007/2008 Fiscal Year Budget Discussion 5. Public Hearing and Discussion 6. Budget Recommendation and Approval 7. Adjournment Executive Session: The Tigard Water District Board may go into Executive Session under the provisions of ORS 192.660(2)(d), (e),&(h)to discuss labor relations,real property transactions,and current and pending litigation issues.If an Executive Session is called to order, the appropriate ORS citation will be announced identifying the applicable statute.All discussions within this session are confidential;therefore nothing from this session may be disclosed by those present.Representatives of the news media are allowed to attend this Session, as provided by ORS 192.660(4), but must not disclose any information discussed.No Executive Session'may be held for the purpose of taking any final action or making any final decision.Executive Sessions are closed to the public. FY 2006-07 Budget Message for the Tigard Water District The FY 2006-07 Proposed Budget of$111,836 is up 5.6% from the FY 2005-06 Adopted Budget. It should be noted that there is a significant increase in Professional/Contract Services line item related to Meeting/Staff Support. In the past, the City of Tigard has provided its staff as a resource to the Tigard Water District Board as the Board has no employees. The City staff maintains the Tigard Water District's Fund,pays bills on the District's behalf; advises the Board on state laws, and provides administrative support. There has been an increased demand on City staff's time over the last year and it has been discussed that the Board may want to contract with a management consultant for these types of services instead of using staff. The FY 2006-07 Proposed Budget includes $12,000 for a management consultant at a cost of$100.00 per hour for 120 hours of support. The Tigard Water District's resources are from its share of the water revenues(1%) generated within the District and interest earned on these revenues. It is anticipated that water revenues will increase about 7%,which is directly related to the approved water rate increase in October 2006. Overall, the FY 2006-07 Proposed Budget continues to provide the Tigard Water District Board with the most flexibility in accessing and using its resources. Tigard Water District Proposed Budget Fiscal Year 2007-08 Actual Actual Actual Actual Adopted Account# Est Actual Proposed Approved Adopted FY 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 Resources FY 2006-07 FY 2007-08 FY 2007-08 FY 2007-08 Revenues $13,125 $13,091 $13,310 $13,116 $14,500 One Percent Water Sales $15,475 $15,500 1,609 1,179 2,123 2,334 2,500 Interest Earnings 3,800 3,700 $14,734 $14,270 $15,433 $15,450 $17,000 Total Revenues $19,275 $19,200 $0 $0 57,794 67,851 79,217 89,815 94,836 Beginning Balance 90,076 86,568 $72,528 $82,121 194,650 $105,265 $111,836 Total Resources $109,351 $105,768 $0 $0 Expenditures $0 $0 $0 $0 $0 Total Personal Services $0 $0 $0 $0 Materials and Services $780 $0 $0 $3,362 $20,000 Attorney x$2,000 $20,000 O 0 0 0 10,000 Consultant Services 0 10,000 O 0 0 0 0 Financial Reveiw 0 0 O 0 0 0 0 Engineering Services 0 0 494 1,304 1,684 8,883 12,000 Meeting/Staff Support 14,573 12,000 1,274 1,304 1,684 12,245 42,000 601000 ProfessionaVContractual Svcs 16,573 42,000 0 0 1,152 0 1,442 0 0 Election Costs 3,500 0 0 0 0 0 0 0 63.316 Misc 0 56.998 1,152 0 1,442 0 63,316 613000 Special Department Expense 3,500 56,998 0 0 O 42 0 0 300 620000 Office Supplies&Expenses 50 300 777 100 150 155 150 Meeting Notice 200 200 O 0 0 500 2,500 Public Relations 500 2,500 777 100 150 655 2,650 621000 Advertising&Publicity 700 2,700 0 0 O 0 0 20 20 622000 Fees&Licenses 20 20 120 120 120 120 150 Special District Assoc Dues 120 150 120 120 120 120 150 623000 Dues&Subscriptions 120 150 0 0 54 38 49 59 600 624000 Travel/Food&Lodging 75 600 O 0 0 0 500 625000 SDAO Annual Conference 0 500 1,300 1,300 1,390 2,090 2,300 632000 Insurance 1,745 2,500 $4,677 $2,904 $4,835 $15,189 $111,836 Total Materials and Services $22,783 $105,768 $0 $0 O 0 0 0 Total Capital Outlay 0 0 $4,677 $2,904 $4,835 $15,189 $111,836 Total Expenditures $22,783 $105,768 $0 ' $0 O 0 0 0 0 Contingency 0 0 0 0 $4,677 $2,904 $4,835 $15,189 $111,836 Total Appropriations $22,783 $105,768 $0 $0 67.851 79.217 89,815 90,076 0 Ending Fund Balance 86,568 0 0 0 Total Appropriations and Ending $72,528 $82,121 $94,650 $105,265 $111,836 Fund Balance $109,351 $105,768 $0 $0 • 4/24/2007 12:38 PM Review of Proposed 2007-08 Budget. Done by Isador W. Morgavi on 5/14/2007 My starting point: The finance department of The City of Tigard provides a staff person to assist TWD commissioners in developing a budget. This person is currently Michele Wearing (spelling???). She will be leaving for a new job in Hillsboro and I believe that will happen soon; maybe before the budget meeting on 5/14. She was at the last meeting and gleaned what she thought was enough information to make up the needed budget. She then puts the numbers together and sends that info to Joy Cause (spelling??) who distributes it to the board members for approval. Once it is approved by the board members, it is formally submitted to the Citizens Budget Committee at the annual budget meeting. That budget committee is currently comprised of Ken Henschel, Julie Russell, Ginny Babcock, Phil Decker and myself Analysis: I reviewed the financial operation of the board to ascertain it's economic efficiency. To do this I ignored the beginning and ending balances and concentrated on the expenses in relation to the revenue. I developed the spreadsheet entitled "TWD BUDGET PROPOSAL 5/14/2007" based on the current budget being reviewed by board members. Methodology I rearrange the format of the budget I received from Michele but used all of her numbers. Except that I did not include any beginning and ending balances, as that was of no interest in the expense vs. revenue analysis. I grouped the expenses into two categories. The first is Professional Services, consisting of attorney fees, consulting services, financial review, and meeting staff support. These items are largely influenced by board decisions. The second group is what I chose to call Ordinary Cost Items, consisting of miscellaneous items that are largely routine and not effected very much by the board. Results of the Analysis The 2004-05 and earlier budgets showed an average in the 30% range (Ln 12, columns B, C, and D) for expenses vs. revenue. It should be noted that Charlie Radley joined the board in June'05. The Actual 2005-06 Budget (In 13, col C) shows a dramatic increase in expense vs. revenue; jumping from around 30% to 98% (a 300% plus increase). This increase is primarily due to increases in costs for Professional Service that jumped from $1,684 (ln 8, col D) in the prior year to $12,215; an increase of 725%. The Originally Proposed 2007-08 budget proposes expenses of 549% of expected revenue. Most of that is due to the increase up to $42,000 (ln 8, col H) for Professional Services from $1,684 (In 8, col D) spent in the 2004-05 budget, an increase of 249%. Another significant item in this budget is the $56,998 proposed for "Miscellaneous"; 296.8% of the expected revenue. Good fiscal management dictates that "Miscellaneous Expenses" be limited to 10% of expected expenses. This board does not have exposure to any unexpected emergency that would require resources that could not be immediately available. Therefore, I don't believe that such a large discretionary resource be allowed. To do so would totally undermine the basic principles of budget review by a citiizens' committee. Conclusion: This Original Proposed 2007 — 08 Budget (Column H) as submitted should not be approved. Instead, this committee recommends the budget shown in column I that limits expensed to revenues. Furthermore, I think it necessary and proper that the board review the causes(s) that have created exorbitant expenses that began in the Actual 2004-05 budget,without any benefit to the community. Additionally, I call attention to Section 1.07 (f) of the bylaws that states, "In the event of Board disagreement over the application, extent, or interpretation of a policy,the conflict will be decided by a majority of the Board". I ask that the Board conduct it's business in compliance with that direction; advising others who are not satisfied that they may pursue any channels they see fit, as long as such action is not at the expense of the Board. Specifically the Board should not incur any expense for outside assistance from any source unless the majority of the Board believes that such expenditure is appropriate and proper. TWD BUDGET PROPOSAL 5/14/2007 A B C D E F G H I 3 w , rY # K � ACTUAL ACTUAL ACTUAL ACTUAL ADOPTED EST ACT Ori Proposed PROPOSED Ln fx„. - Ms 0�� 2002-03 2003-04 2004-05 2005-06 2006-07 2006-07 2007-08 . 2007-08 1 1 %WATER SALES $ 13,125 $ 13,091 $ 13,310 1 $ 13,116 $ 14,500 $ 15,475 $ 15,500 $ 15,500 2 INTEREST EARNINGS $ 1,609 $ 1,179 $ 2,123 $ 2,334 $ 2,500 $ 3,800 $ oo $ 00 3 I $ 4,734 $147270 $ 5,433 $ 5,4 $ 7, $ 75 . . .._ . TOTAL REVENUE i 1. ..... 1 50 1 000 1� 2 4 ATTORNEY $ 78o $ - $ - $ 3,362.....$ 20,000 $ 2,000 $20,000 $ 3,000 5 CONSULTING SERVICES $ - $ - $ - $ - $ 10,000 $ - m0,o00 $ 1,160 6 FINANCIAL REVIEW $ - $ - $ - $ - $ - $ - $ - 7 MEETING STAFF SUPPORT $ 494 $ 1,304 $ 1,684 $ 8,853 $ 12,000 $ 14,753 $ 12,000 $ 10,000 8 PROFESSIONAL SERVICES $ 1,274 $ 1,304 $ 1,684 $ 12,215 $ 42,00o $ 16,753 $ 42,00o $ 14,160 9 MISCELLANEOUS $ - $ - $ - $ - $ 63,316 $ - $ 56,998 $ 1,920 10 ORDINARY COST ITEMS $ 3,403 $ 1,558 $ 3,151 $ 2,944 $ 6,22o $ 6,590 $ 6, 70 $ 3,12o 11 TOTAL EXPENSE $ 4,677 $ 2,862 $ 4,835 $ 15,159 $ 111,536 $23,343 12 EXPENSE\REVENUE 32% 20% 31% 98% 656% 121% 549% l00% 13 PROF SRVCS\REVENUE 9% 9% ii% 79% 247% 87% 219% ?4% 14 MISC\REVENUE 0% o% 0% o% 2533% 0% 1540% 10% 15 ORDINARY COST\REVENUE 23% 11% 20% 19% 37% 34% 34% 16% _E ,. .. ... :. ,, ...<,:-: . .. a •� .. .. .:. . . . . .. ORDINARY COST ITEMS 16 ELECTION COSTS $ 1,152 $ - $ 1,442 $ - $ - $ 3,50o $ - $ - 17 MEETING NOTICE $ 777 $ 10o $ 150 $ 155 $ 150 $ 200 $ 200 $ 150 18 PUBLIC RELATIONS $ - $ - $ - $ 500 $ 2,500 $ 500 $ 2,500 $ 250 19 FEES & LICENSES $ - $ - $ - $ 20 $ 20 $ 20 $ 20 $ 20 20 SPECIAL DISTRICT DUES $ 120 $ 120 $ 120 $ 120 $ 150 $ 120 $ 150 $ 150 21 TRAVEL\FOOD\LODGING $ 54 $ 38 $ 49 $ 59 $ 600 $ 75 $ 600 $ 50 22 SDOA ANNUAL CONF $ - $ - $ - $ - $ 500 $ - $ 500 $ - 23 INSURANCE $ 1,300 $ 1,300 $ 1,390 $ 2,090 $ 2,300 $ 2,175 $ 2,50o $ 2,500 34 TOTAL ORDINARY COST $ 3,403 I $ 1,558 I $ 3,151 I $ 2,944 I $ 6,22o I $ 6,590 I $ 6,470 I $ 3,12o Sign-in Sheet for Tigard Water District Budget Committee Meeting May 14, 2007 Name and Address Would you like to (Please Print) speak to the Board? /2/ / Tigard Water District Adopted Budget Fiscal Year 2007-08 Actual Actual Actual Actual Adopted Account# Est Actual Proposed Approved Adopted FY 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 Resources FY 2006-07 FY 2007-08 FY 2007-08 FY 2007-08 Revenues $13,125 $13,091 $13,310 $13,116 $14,500 One Percent Water Sales $15,475 $15,500 $15,500 $15,500 1,609 1,179 2,123 2,334 2,500 Interest Earnings 3,800 3,700 3,700 3,700 $14,734 $14,270 $15,433 $15,450 $17,000 Total Revenues $19,275 $19,200 $19,200 $19,200 57,794 67,851 79,217 89,815 94,836 Beginning Balance 90,076 86,568 86,568 86,568 $72,528 $82,121 $94,650 $105,265 $111,836 Total Resources $109,351 $105,768 $105,768 $105,768 Expenditures $0 $0 $0 $0 $0 Total Personal Services $0 $0 $0 $0 Materials and Services $780 $0 $0 $3,362 $20,000 Attorney $2,000 $20,000 $20,000 $20,000 O 0 0 0 10,000 Consultant Services 0 10,000 12,000 12,000 O 0 0 0 0 Financial Reveiw 0 0 5,000 5,000 O 0 0 0 0 Engineering Services 0 0 0 0 494 1,304 1,684 8,883 12,000 Meeting/Staff Support 14,573 12,000 10,000 10,000 1,274 1,304 1,684 12,245 42,000 601000 Professional/Contractual Svcs 16,573 42,000 47,000 47,000 1,152 0 1,442 0 0 Election Costs 3,500 0 0 0 O 0 0 0 63,316 Misc 0 56,998 998 998 1,152 0 1,442 0 63,316 613000 Special Department Expense 3,500 56,998 998 998 O 42 0 0 300 620000 Office Supplies&Expenses 50 300 300 300 777 100 150 155 150 Meeting Notice 200 200 200 200 O 0 0 500 2.500 Public Relations 500 2,500 2.500 2.500 777 100 150 655 2,650 621000 Advertising&Publicity 700 2,700 2,700 2,700 O 0 0 20 20 622000 Fees&Licenses 20 20 20 20 120 120 120 120 150 Special District Assoc Dues 120 150 150 150 120 120 120 120 150 623000 Dues&Subscriptions 120 150 150 150 54 38 49 59 600 624000 Travel/Food&Lodging 75 600 600 600 O 0 0 0 500 625000 SDAO Annual Conference 0 500 500 500 1,300 1,300 1,390 2,090 2.300 632000 Insurance 1,745 2,500 2.500 2,500 $4,677 52,904 $4,835 $15,189 $111,836 Total Materials and Services $22,783 $105,768 $54,768 $54,768 O 0 0 0 Total Capital Outlay 0 0 0 0 $4,677 $2,904 $4,835 $15,189 $111,836 Total Expenditures $22,783 $105,768 $54,768 $54,768 O 0 0 0 0 Contingency 0 0 8,000 8,000 $4,677 $2,904 $4,835 $15,189 $111,836 Total Appropriations $22,783 $105,768 $62,768 $62,768 67,851 79.217 89,815 90,076 0 Ending Fund Balance 86,568 0 43.000 43.000 Total Appropriations and Ending $72,528 $82,121 $94,650 $105,265 $111,836 Fund Balance $109,351 $105,768 $105,768 $105,768 6/25/2007 1 23 PM