1. South Kitsap Water Reclamation Facility Proposed 2015-16 Biennial Budget

2. Budget Format
Prepare Biennial Budget – parallels the Budget
Program Budget Format - strong “policy document” that sets forth programs, objectives and priorities to be achieved in Improves long-range programming and financial planning.
Framework of this Budget follows Government Finance Officer’s Association’s (GFOA) standards:
Establishes a Plan of Policy and Operation
Facilitates the Evaluation of District/City Programs
Provides Management Information
Establishes Financial Control

3. SKWRF Goals and Priorities
Provide efficient and cost-effective maintenance and operation of SKWRF
Ensure compliance with regulatory mandates 4
Continue maintenance and equipment upgrades
Obtain adequate funding for capital projects & service capital facility debt obligations
Provide responsible environmental stewardship
Provide rate payers with responsible fiscal management
Improve and maintain a positive public image
Provide community education and awareness

4. SKWRF 2015-16 Budget Overview
Budget comprised of three funds: 1) SKWRF Operating Fund, 2) Capital Improvement Fund, 3) Equipment Repair Replacement (ER&R) Fund
SKWRF 2015 combined budgets are nearly the same as the 2014 budget; combined budgets are 13% less than 2015
PWTF loans total outstanding balance – approx. $8 million
Loans will not be retired until 2022 and 2024
Annual debt payments are in excess of $950,000
Increase City/District contributions to $200,000 of “GFCs” in 2015 for debt, and increase to $250,000 in 2014
City’s portion of 2015 SKWRF operating revenue - $1,375,700; District’s portion - $1,474,200 (same formula used in 2014 Budget -$21.50/ERU, increase to $22.00/ERU in 2016)
Fund
2014 Budget
2015 Budget
2016 Budget
SKWRF Operating
3,651,200
3,422,150
3,445,700
SKWRF Capital Improvement
713,500
947,000
305,000
SKWRF Equip Repair/Replace
34,000
Total SKWRF Funds
$4,364,700
$4,369,150
$3,784,700

5. SKWRF 2015-16 Objectives Budget/Finance
Balanced Budget: Balance the SKWRF Operating Budget with actual revenues used to cover expenditures.
Fund Balance: Decrease fund balance sufficient to support Operating Budget cash flow needs. Maintain minimum level of 15% of annual expenditures.
Budget Planning: Focus on preparing long-term funding options for future capital project needs.
Budgeting/Financial Management/Accountability: Continue use of biennial budget; improve “program budget” format; sound accounting, annual reports, budget status reports and state audits.
Capital Improvement Program: A 20-year capital project plan was prepared to evaluate long-term capital funding.
Debt Service Program: 28% of Operating Budget is used to pay annual debt financing obligations.
Financial Management Policies: Maintain comprehensive financial management policies.

6. SKWRF 2015-16 Objectives Plant Operations
Personnel/staffing: implement a 2% “cost of living” salary increase; no increases in the contribution toward employees’ medical benefit programs – changed to PEBB plan this year.
Biosolids program: re-evaluate current process used to create Class A biosolids to determine if the program is cost effective. Assess benefit of SKWRF coordinating with other municipalities on potential acquisition of property for biosolids spray application, or continue to transport biosolids to Eastern Washington.
MBR system will be evaluated to determine its long-term cost and benefits. The potential of adding a new secondary clarifier will also be examined
Reclaimed Water program: provide reclaimed water to Veterans Home through 2015 and suspend the service.

7. Personnel/Staffing
Staffing: nine (9) full time employees for SKWRF operation, plus summer help
Admin. Support: 20% of General Manager’s time funded by SKWRF
Finance Support: equivalent FTE for District Finance Dept. to process claims, payroll, budgeting and financial reports
Medical Benefits: Maintain $950 monthly contribution per employee
Salary Structure: Implement changes to salary schedule (2% CPI increase)
Positions
Current
Pay Grade
Top Step
Proposed
Top Step
Plant Manager 22
7,552
7,703
Senior Plant Operator 17
5,661 18
5,944
Maintenance Supervisor
6,213
6,337
Plant Operator (2FTE) 15
5,367
5,474
Operator Trainee 10
4,205
4,289
Maintenance Tech (2 FTE) 13
4,868
4,965
Laboratory Tech
Electronics Tech 16
5,635
5,748
Summer/Temporary Help
$12/hr. – $22/hr.

8. SKWRF Operating Fund
Funding Formula: $21.50 per ERU in 2015 – same as 2014 Budget; increase to $22.00 per ERU in 2016.
District - $1,474,200 budgeted revenue (5,714 ERUs). $200,000 in GFCs revenue in 2015 for debt payments, increase to $250,000 in 2016.
Port Orchard - $1,375,700 budgeted revenue (5,332 ERUs). $200,000 in GFCs revenue in 2015 for debt payments, increase to $250,000 in 2016.
Operating Fund Programs:
Education Program: Provide adequate resources to fund training and continuing education for SKWRF staff to ensure staff certifications are maintained.
Transfers: Budgeted $40,000 transfer into the ER&R Fund and $350,000 into SKWRF Capital Fund in 2015 and $400,000 in 2016.
Debt Service: Annual debt payments of approximately $950,000.

9. SKWRF Capital Improvement Fund
Prepared a 20-year comprehensive capital improvement plan.
City/District contribution from sewer rates calculated based on $1.00/ERU. Increased funding from SKWRF Operating Fund.
Five (5) capital projects proposed in 2015 totaling $942,000, and four (3) capital projects in 2016 totaling $300,000.
Annual Capital projects/debt obligations over the next twenty (20) years are estimated at $1.5 million or approx. 45% of SKWRF Operating Fund revenues

10. SKWRF Capital Improvement Fund (continued)
Capital Projects
2015
2016
Storage Building
102,000
Digester Cover Replacement (#1)
350,000
Digester Cover Replacement (#2)
Deck Coating
45,000
Exterior Coating
95,000
65,000
Boiler Replacement (North & South)
150,000
Admin. HVAC Replacement
85,000
TOTAL PROJECT EXPENDITURES
942,000
310,000

11. SKWRF Equipment Repair & Replacement Fund
This Fund accounts for repair and replacement of SKWRF vehicles and ancillary equipment
Budgeted $40,000 to be transferred into the ER&R Fund from SKWRF Operating Fund in 2015 and 2016.
Conducted inventory of vehicles and ancillary equipment showing a combined value of $165,000.
$34,000 budgeted to replace 1983 five-yard dump truck in 2016.
Primary objective of this Fund - accumulate sufficient resources to fund replacement of vehicles/equipment based on an equipment depreciation schedule.

12. South Kitsap Water Reclamation Facility Proposed 2015-16 Biennial Budget