From: Jennifer Cline
Sent: Tue Dec 08 14:37:42 2015
To: Gerald Fisher
Subject: FW: Sewer Fund Analysis
Importance: Normal
Attachments: Sewer Analysis.xlsx; Not sure if I ever sent this to you??? Just FYI Jennifer Cline, P.E. | Public Works Director Licensed in OR, WA City of Molalla <http://www.cityofmolalla.com/> 117 N Molalla Ave. | PO Box 248 * |Molalla, OR 97038 O: 503.759.0218 | F: 503.829.3676 -----Original Message----- From: Dan Huff [mailto:dhuff@cityofmolalla.com] Sent: Wednesday, November 18, 2015 9:01 AM To: Heather Penni <hpenni@cityofmolalla.com>; Jennifer Cline <jcline@cityofmolalla.com> Subject: FW: Sewer Fund Analysis Jimmy Thompsons thoughts -----Original Message----- From: Jimmy Thompson [mailto:jthompson@cityofmolalla.com] Sent: Tuesday, November 17, 2015 11:07 AM To: Jennifer Satter <jsatter@cityofmolalla.com>; Stephen Clark <sclark@cityofmolalla.com> Cc: Dan Huff <dhuff@cityofmolalla.com>; Heather Penni <hpenni@cityofmolalla.com> Subject: Sewer Fund Analysis Councilors Clark and Satter: I mentioned to you that I would look a little closer at the financials for the water and the sewer funds. I will work on the water later, but I felt it important to get you some information on the Sewer Fund since we are considering rate increases tomorrow night. In the attached I have taken the actuals from our budget documents, the unaudited actuals from 2014-15 received from Heather, the budget amount for 2015-16, and the proposed amount for 2016-17 used in the rate analysis. I placed these figures side by side for comparison. I also have some notes on the sheet, but here are some highlights. Personal Services We are all aware of the issues facing PERS. The biggest percentage increase in this category was from PERS. Insurance also increased 5%, and the Assistant Plant Operator wages are 5% over 2015-16. There is not a one for one comparison for the previous years because we used the public works personnel services collector for them, but I do not see anything I would not expect or that I would question in this category. Materials and Services We have a training line which was not used previously. Legal Counsel indicated we needed training. There is a significant increase in Professional Services, but this may be engineering work needed for the master plans updates, capital improvements we intend to make, and further legal counsel needed to help us remain compliant with the consent decree and the NPDES Permit. Irrigation Fuel is significantly higher, I can't answer for why on this one, but it may just be us planning to do more irrigating since the other sites are now approved. The biggest changes in Materials and Services I see are due to Biosolids Removal, Effluent Monitoring, Inflow and Infiltration, a combined $190k increase compared to FY 12/13 & 13/14, and all required by the consent decree as well as being good business practices. These were not being done in FY 2013-14, a year in which our current revenues exceeded our current expenditures by only $14,749. We also had very little spent in the way of capital improvements in FY 2012-13, FY 2013-14, and FY 2014-15. The remainder of the changes come from moving the debt service from the SDC Fund into the Sewer Fund, and from making needed capital improvements. These changes actually amount to more than the additional revenue the proposed rate increase would provide, in my opinion making the rate change for sewer absolutely necessary. The rate increase takes us to break even on the proposed figures for 2016-17. To be in compliance with the consent decree, we have to do the biosolids removals, effluent monitoring, inflow and infiltration, and some of the capital improvements. If we do not begin to make the other needed capital improvements to the facility, we may very well find ourselves the defendant in yet another lawsuit. Our predecessors did not take the last lawsuit seriously, as we have all heard. As soon as it was over, it went back to business as usual. I hope that we do not make the same mistake. If you have questions or concerns, please feel free to let me know. Best Regards, Jimmy L. Thompson