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FY2022 JCSA Proposed Budget

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FY2022 JCSA Proposed Budget FY 2022 PROPOSED BUDGET FY 2022 – 2026 CAPITAL IMPROVEMENT PROGRAM This page intentionally left blank Budget Proposed Capital Improvement Program FY2022 - FY2026 Prepared by M. Douglas Powell General Manager Stephanie Luton Assistant General Manager This page intentionally left blank INTRODUCTION This page intentionally left blank JAMES CITY SERVICE AUTHORITY Table of Contents FY2022 PROPOSED BUDGET Introduction Page Organization Chart I Board of Directors and Authority Officials II Authority Profile III-XI Budget Overview XII-XV Financial Policy XVI-XIX Section A - Budget Message and Financial Summaries Budget Message A-1-7 Financial Summaries A-8 Section B - Budget Budget Introduction B-1-5 Water Fund B-6-13 Sewer Fund B-14-19 Section C - Supplementary Information Budgeted Employment Data C-1 Authorized Positions C-1 Population Change C-2 Median Household Income C-3 Unemployment Rate C-4 Education C-5 Glossary C-6-7 Acronyms C-8 Debt to Maturity Schedules C-9 This page intentionally left blank I BOARD OF DIRECTORS Ruth Larson, Chairman, Berkeley District, Top Row Right John J. McGlennon, Vice Chairman, Roberts District, Top Row Middle Sue Sadler, Stonehouse District, Top Row Left Michael J. Hipple, Powhatan District, Bottom Row, Left Jim O. Icenhour, Jr., Jamestown District, Bottom Row, Right AUTHORITY OFFICIALS M. Douglas Powell, General Manager & Secretary Stephanie Luton, Assistant General Manager & Treasurer II JAMES CITY SERVICE AUTHORITY PROFILE Organization & Governance The James City Service Authority (JCSA) is a public body politic and corporate of the Commonwealth of Virginia. The JCSA was created in 1969 by the James City County Board of Supervisors pursuant to the Virginia Water and Sewer Authorities Act (Code of Virginia, 1950, as amended) to acquire, construct, operate and maintain, to the extent determined by the JCSA to be financially feasible, an integrated water system and an integrated sewer collection system in James City County (County). Operational and maintenance responsibilities include wells, water distribution lines, sewage pumping stations, and sewage collection lines. Located on the Virginia Peninsula, the County covers 144.1 square miles and has a strong, diverse, and growing economic base. Major employers within commuting distance include Busch Gardens, Anheuser-Busch, Owens-Illinois, Ball Metal, Newport News Shipbuilding, Langley Air Force Base, Fort Eustis, the Colonial Williamsburg Foundation, and the National Aeronautics and Space Administration. The County’s population grew 14.1 percent from 2010 to 2020 while the Commonwealth of Virginia’s population increased 7.3 percent during the same time period. The Weldon Cooper Center for Public Service estimated the County’s 2020 population at 76,484. The Center’s 2030 and 2040 population forecasts for the County are 92,210 and 104,915. The historically fast-growing population and expanding commercial base enhance the JCSA’s long- term economic outlook. The JCSA Board of Directors is appointed by the County Board of Supervisors, although JCSA is legally separate. The Board of Supervisors has appointed its members as Directors of the JCSA to more fully coordinate JCSA activities with those of the County in the planning and development of utility systems. The JCSA General Manager serves as the Chief Executive Officer of JCSA and III reports to the Board of Directors. The JCSA has 95 full-time and 1 part-time employees with the responsibility to operate and maintain its utility facilities and lines. The JCSA’s operating funds are self-supporting and receive no share of any local or property tax levies. Accounting, legal, purchasing, fleet and some information technology services are provided by the County and billed to the Authority. The County cannot impose its will over the Authority, nor does a financial benefit or burden exist between the County and the Authority. The County does not have access to the resources of the Authority, nor does it have responsibility to provide financial support for the debt or other obligations of the Authority. However, the Authority is considered to be financially integrated with the County based on the nature and significance of its relationship with the County. The County’s Strategic Plan includes a sustainable long-term water supply as a primary goal, which is to be achieved through the efforts of the Authority. In addition, the Authority has adopted other Strategic Plan goals in developing its initiatives. As a result, the County’s Strategic Plan impacts the budgetary and operational decisions of both the County and the Authority and financially integrates these entities. Service Area The Board of Supervisors has authorized water and sewer operations for the JCSA within the Primary Service Area (PSA) in the County, making water and sewer availability an important growth management and economic development consideration. With the approval of the County, the JCSA has extended services beyond the PSA to several public sites in the County, including three public schools, Freedom Park, and the major planned communities of Greensprings West and Governor’s Land. The JCSA also provides water and/or sewer service to limited sections of York County and the City of Williamsburg with the concurrence of the appropriate governing bodies. The map below shows the JCSA service area of approximately 60.3 square miles in gray and the PSA boundary. The JCSA serves approximately 80% of the County’s population. IV V Water & Wastewater Systems The JCSA’s water system includes the central water system with ten water production facilities and eight independent water production facilities that are located outside the PSA. The main water production facility is the 5 million gallons per day (MGD) reverse osmosis Five Forks Water Treatment Plant that was constructed in 2005. There are approximately 416 miles of water transmission and distribution lines throughout the entire system and 2,776 fire hydrants. The water system facilities supply approximately 4.7 million gallons of water per day to approximately 23,303 water customers. The JCSA’s sewer system includes 77 pump stations with approximately 447 miles of sewer collection lines and 10,136 manholes. The sewer system facilities collect and move approximately 5.1 million gallons of sewage per day for approximately 25,064 sewer customers. JCSA has no sewage treatment facilities. Sewage treatment for areas served by the JCSA, as well as for other Hampton Roads communities, is provided by the Hampton Roads Sanitation District (HRSD). Approximately 95% of customers are residential and 5% are commercial. Residential customers account for roughly 80% of billed consumption revenue for both water and sewer service. VI Utility Rates The Board of Directors sets water and sewer utility rates and related fees. All rates and fees are contained in the JCSA Regulations Governing Utility Service. The Board of Directors adopted an increasing block rate structure in 1996 for single-family residential customers which incorporates a unit charge that increases with increasing consumption. The primary objective of establishing the increasing block rate structure was to promote water conservation, particularly from large- volume residential customers. The number and volumes of the single-family residential tiers were updated in fiscal year 2021 to better reflect current usage patterns while promoting water conservation. The current structure contains four tiers sized as follows: Tier 1 (up to 4,000 gallons monthly), Tier 2 (4,001-8,000 gallons monthly), Tier 3 (8,001-12,000 gallons monthly), and Tier 4 (greater than 12,000 gallons monthly). Sewer collection charges are based on water meter readings billed at a per thousand gallon rate. In fiscal year 2016 the Board of Directors adopted a fixed charge for water and sewer service based on meter size. The philosophy of the fixed charge is JCSA incurs significant fixed costs to maintain infrastructure regardless of usage, and should not be completely reliant on variable, consumption based revenue to cover fixed costs. Approximately 88% of JCSA’s water costs and 95% of its sewer costs are fixed. Water and sewer facility fees were updated in fiscal year 2021 as a result of the comprehensive rate study completed in early 2020. Facility fees are charged to new development in the JCSA’s service area to cover the cost of system expansion. System facility fees are assessed for major backbone infrastructure and local facility fees are assessed for smaller water distribution and sewer collection mains. The system facility fee structure is based on meter size and the local facility fee structure is a flat charge. VII Billing JCSA’s multi-year meter replacement project was completed in fiscal year 2020 with over 22,800 touch-read meters converted to radio read technology. Readings are now collected with a vehicle- mounted mobile data collector that has significantly reduced meter reading time. This operational efficiency allowed JCSA to move from quarterly billing to monthly billing in May 2020 to better serve customers and promote water conservation. Monthly billing benefits include more efficient household budgeting, more frequent and timely information about usage, and the ability to detect leaks sooner. All water meters are read monthly. HRSD issues a combined billing for these accounts through its Oracle Customer Care and Billing (CC&B) software. Meters for approximately 3,239 sewer only residential and commercial customers in the southern portion of the PSA are read monthly by Newport News Waterworks (NNWW) with bills issued through CC&B. Approximately 6,225 sewer system customers have irrigation submeters and can obtain credit on the sewer and wastewater treatment portions of their bill by submitting monthly readings. The grinder pump maintenance program serves 753 JCSA sewer system customers at an annual fee of $350. An outside contractor provides the service for this program. Financial Information As of June 30, 2020 the JCSA’s Unrestricted Net Position was $43.8 million, outstanding debt was $29 million and debt service coverage was 4.94.
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