Adopted Budget Fiscal Year 2020-2021
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ADOPTED BUDGET FISCAL YEAR 2020-2021 Budget Committee • Fiscal Year 2020-21 BOARD OF DIRECTORS MEMBERS Kathryn Harrington, At-Large, Chair Dick Schouten, District 1 Pam Treece, District 2 Roy Rogers, District 3 Jerry Willey, District 4 COMMUNITY MEMBERS Molly Brown Lori Hennings Mike McKillip Dave Waffle Tony Weller CLEAN WATER SERVICES • FY 2020-21 ADOPTED BUDGET i The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation award to Clean Water Services for its annual budget for fiscal year beginning July 1, 2019. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan and as a communications device. The award is valid for one year. We believe our current budget continues to conform to program requirements and we are submitting it to GFOA to determine its eligibility for another award. Clean Water Services has received both the Distinguished Budget Presentation and the Certificate of Achievement for Excellence in Financial Reporting every year it has applied. This represents 32 years for the budget award and 33 years for the financial report. ii CLEAN WATER SERVICES • FY 2020-21 ADOPTED BUDGET Table of Contents BUDGET IN BRIEF Budget Message & Budget Overview ...............................1 About Clean Water Services ............................................23 History: District Formation ..................................................23 The Organization ................................................................24 Regulatory History and Current Operating Environment ....25 Economic and Demographic Information ...........................25 District Map .........................................................................29 District Organizational Chart...............................................30 Strategic Planning ............................................................31 Mission, Vision, Promise, Values ........................................31 Business Planning ..............................................................33 Financial Policies .............................................................49 Budget Process ................................................................53 Budget Process Calendar...................................................55 Budget Overview ..............................................................57 Budget Sources & Uses ...................................................61 Sources of District Funds ...................................................61 Uses of District Funds ........................................................68 Departmental Summaries ...................................................73 District Summary of Positions ............................................80 Debt Service ......................................................................81 Debt Service Requirements................................................81 Capital Project Summary .................................................85 Major Sanitary Sewer Projects ..........................................87 Major Surface Water Management Projects .......................90 Financial Outlook .............................................................93 Strategies ...........................................................................93 Financial Forecast Assumptions .........................................94 CLEAN WATER SERVICES • FY 2020-21 ADOPTED BUDGET iii FUND AND PROGRAM DETAIL Funds Summary ...............................................................97 Resources and Requirements ............................................98 Fund Accounting Structure .................................................99 General Fund Program Codes .......................................100 Operating Funds .............................................................101 General Fund 101.............................................................102 Storm and Surface Water Management Fund 201 ...........104 Construction Funds .......................................................107 Sanitary Sewer System LID Construction Fund 108 ........109 Surface Water Management LID Construction Fund 208 . 110 Sanitary Sewer Construction Fund 112 ............................ 111 Surface Water Management Construction Fund 212 ....... 112 Tualatin Basin Water Supply Capital Project Construction Fund 115 ..................................................... 113 Reserve Funds ................................................................ 115 Liability Reserve Fund 102 ............................................... 116 Sanitary Sewer Capital Replacement Fund 106............... 117 Surface Water Management Capital Replacement Fund 206 .......................................................................... 118 Sanitary Sewer Capital Reserve Fund 107 ...................... 119 Surface Water Management Capital Reserve Fund 207 ..120 Debt Service Funds ........................................................121 Master Plan Update Debt Service Fund 111 ....................121 Revenue Pension Bond Fund 114 ....................................123 DEPARTMENTAL DETAIL Business Services ..........................................................125 Natural Systems Enhancement & Stewardship ...........155 Regulatory Affairs ...........................................................165 Utility Operations & Services ........................................179 Water Resource Recovery Operations & Services ......215 Appendix .........................................................................253 Chart of Accounts .............................................................255 Sanitary Sewer Capital Project List ..................................256 Surface Water Capital Project List ...................................272 Glossary ...........................................................................277 Abbreviations ....................................................................289 iv CLEAN WATER SERVICES • FY 2020-21 ADOPTED BUDGET Budget Message & Budget Overview Chair Kathryn Harrington Members of the Board of Directors Members of the Community Budget Committee Clean Water Services Customers and Partners: We are pleased to present Clean Water Services’ Adopted Budget for Fiscal Year (FY) 2020-21. This budget message is presented in accordance with Oregon Revised Statutes (ORS), Chapter 294, and is designed to present an overview that will help readers better understand this budget as a financial planning road map. Comparisons in this Budget Message are “budget to budget” to the adopted FY 2019-20 budget unless otherwise noted. The emergence of the COVID-19 pandemic in the fourth quarter of FY 2019-20 has brought about economic hardships that our community and ratepayers could not have anticipated. The abrupt threat to public health and resulting economic impact of the pandemic are challenging local and state governments, large and small businesses, and families in our community. As members of this community, we are cognizant of these challenges and have thoughtfully assembled this budget to anticipate and respond to the rapidly changing economic conditions. Although the sudden impact of this downturn is unprecedented, Clean Water Services (District) has a long history of being practical and pragmatic in financial planning, qualities that will help us navigate this challenge. Going forward, we need to be deliberate and measured with our investments, as well as forward-thinking and proactive in our financial planning while doing our part for the economic recovery in the region. Our priority is to ensure we are able to meet our obligations to protect the public health and the CLEAN WATER SERVICES • FY 2020-21 ADOPTED BUDGET PAGE 1 environment as well as protect our infrastructure assets and our employees during this crisis. The FY 2020-21 budget does this by: ● Deferring FY 2020-21 rate and fee increases until an economic recovery is underway. ● Delaying and sequencing capital investments. ● Prioritizing and sequencing hiring for current vacancies and new positions. ● Reducing travel and training and other operating costs that can be delayed or deferred. Clean Water Services has retained the experts at ECONorthwest to study the potential economic, fiscal, housing and utility rate impacts of COVID-19 on Washington County, our ratepayers and the District’s revenue sources. The ECONorthwest modeling and analysis will help the District identify economic indicators that can assist with rate setting, capital investments and relief programs for customers as Clean Water Services navigates an economy in recovery. Budget Summary The all funds budget for FY 2020-21 excluding interfund transfers is $489.1 million, compared to last year’s revised budget of $446.8 million. This is an increase of $42.4 million or 9.5%. The total budget includes operating expenditures, capital investments, debt service, other fund level outlays, contingency and unappropriated ending working capital and reserves. Primary ongoing budget revenues are rate revenues from sewer and surface water of $150.2 million and System Development Charges (SDCs) of $18 million. Rate revenues for sanitary sewer and surface water management (SWM) are projected to increase by $1.6 million or 1.1%, reflecting the effects of customer growth. Primary expenditures include $82.1 million for departmental operating expenses, $21.7 million for debt service