1. Oak Lodge Sanitary District 2016- 2017 FY Budget OLSD Budget Committee Preliminary Budget Meeting April 21, 2016 1

2. Preliminary Budget Committee Meeting AGENDA – Budget Calendar – Present proposed budget Budget Message Budget Highlights Rates Debt Service Capital Improvement Program – Sanitary Sewer System – Surface Water Management – Budget Committee Discussion – Next Steps 2

3. Budget Calendar Budget Committee Orientation1/28/16 Budget Committee Workshop3/28/16 Preliminary Budget Committee Meeting4/21/16 Budget Committee Meeting5/10/16 Budget Hearing by Board6/14/16 Board Approval of Budget & Rates6/14/16 FY17 and New Rates Effective7/01/16 3

4. FY 17 Proposed Budget Budget Book – Fund Accounts: 100-XXX-XXXX General Fund Accounts 200-XXX-XXXX SSS Capital Fund Accounts 201-200-XXXX SDC Fund Accounts 202-200-XXXX State Debt Service Accounts 203-200-XXXX GO Bond Debt Service Accounts 300-XXX-XXXX SWM Capital Fund Accounts 4

5. FY 17 Proposed Budget Budget Book – Fund Accounts: 100-100-XXXX Administration General Fund Accounts 100-200-XXXX SSS General Fund Accounts 100-300-XXXX SWM General Fund Accounts 200-100-XXXX Administration SSS CIF Accounts 200-200-XXXX SSS CIF Accounts 300-100-XXXX Administration SWM CIF Accounts 300-300-XXXX SWM CIF Accounts 5

6. FY 17 Budget Book Tab 1 - Budget Message: Executive Summary Environmental & Regulatory Issues Capital Finance Issues Debt Financing Budget Overview Financial Management Revenue Capacity and Customer Information Budget Highlights Summation 6

7. FY 17 Budget Book Tab 2 – Resolutions, Public Notice, Forms: Resolutions to Adopt & Appropriate Public Notices Forms: – LB-1 Notice of Budget Hearing (Published) – LB-4 Financial Summary - Requirements – LB-20 Resources – LB-30 Requirements Summary – LB-31 Detailed Requirements – LB-40 Personnel Services Summary – LB-10 Special Fund Resources & Requirements – LB-35 Bonded Debt Resources and Requirements 7

8. FY 17 Budget Book Tab 3 – Historical Financial Data & Proposed Actual/ 5-year historical budget by line item FY17 proposed Tab 4 – General Fund Account Detail Resources Requirements Tab 5 – SSS Capital Improvement Fund Resources Requirements 8

9. FY 17 Budget Book Tab 6 – SSS System Development Charge Resources Expenditures Tab 7 – SSS Debt Service – State Loans Resources Expenditures Tab 8 – SSS Debt Service – GO Bond Resources Expenditures 9

10. FY 17 Budget Book Tab 9 – SWM Capital Improvement Fund Resources Expenditures Tab 10 – Oregon Local Budgeting Manual 10

11. 11 General Fund Resources Sanitary Sewer Program  Fund Balance (Carryover)= $1,588,124  Operating Income (Rates)= $7,603,265  Non-operating Income = $ 2,938  Sundry Revenues= $ 32,711  Total SSS Resources= $ 9,237,868 SSS Budget is based on 3.29% rate revenue increase  Rate Revenue over FY16 = $ 242,412

12. 12 General Fund Resources Sanitary Sewer Rate Changes: Fixed/Variable Split – Debt Service is in Fixed portion of rate – All other expenses split 60% Fixed/40% Variable – Budget base average water consumption = 5.56 ccf/month – FY17 split = 77.1% Fixed/22.9% Variable – Fixed = $36.62/month ($36.10 in FY16) + 1.44% – Variable = $1.96/ccf/month ($1.76/ccf in FY16) + 11.36% Impacts: Average residential customers use 6.0 ccf/month – FY17 = $48.38 FY16 = $46.66 – Rate increase for them = $1.72/month or 3.69%

13. 13 General Fund Resources Surface Water Program  Fund Balance (Carryover)= $ 407,314  Operating Income (Rates)= $1,298,914  Sundry Revenue= $ 23,294  Non-operating Income = $ 5,225  Total SWM Resource= $1,758,141 $.75 Rate Increase for SWM  Rate revenue over FY 16=$ 113,468

14. 14 Rate Revenue Sanitary Sewer Program (Budget Base) – 13,349 Budgeted Equivalent Dwelling Units (EDU) in FY16 – $43.65 Budgeted Average Monthly Rate per EDU in FY16 – $7,360,853 SSS Budgeted Rate Revenue in FY16 – 13,349 Budgeted EDU in FY17 – $47.46 Budgeted Monthly Revenue per EDU in FY17 If we had a flat rate, it would be $47.46 per EDU – $7,603,265 Budgeted Rate Revenue in FY17

15. Sanitary Rates Based on 6.0 ccf 15

16. Customer CCF Profile 16

17. 17 Rate Revenue Surface Water Program – 13,516 Budgeted ESU in FY16 – $7.25 Budgeted Monthly Fee per ESU – $1,137,017 Budgeted SWM Fee Revenue in FY16 – 13,529 Budgeted ESU in FY17 – $1,298,914 Budgeted SWM Fee Revenue in FY17 Total Rate Revenue – $8,902,179 from Sanitary Sewer and SWM Rates Includes Rate Penalties – Past Due fees; NSF fees; Certification fees 6 ccf Customer will pay $56.38/month SSS+SWM 6 ccf Customer will pay $2.47 more/month SSS+SWM 6 ccf Customer will pay $29.64 more/year

18. Bi-Monthly Bill Profile SSS + SWM 18 CCF/MthFY16FY17% Increase 3.0$ 97.26$ 101.003.70% 4.0$100.78$ 104.923.95% 5.0$104.30$ 108.844.17% 6.0$107.82$ 112.764.38% 7.0$111.34$ 116.684.58% 8.0$114.86$ 120.604.76%

19. 19 General Fund Expenditures Personnel Services  2.75% increase in budget  2.0% COLA per Labor Agreement  Pay Step increases  PERS costs went up slightly  Medical/Dental/Disability costs are up 4.6% Materials & Services  9.0% increase in budget (+$173K to $2.09M)

20. Capital Improvement Program Capital Outlay SSS  110.19% increase SSS (+$173,034K to $1.23M) Capital Outlay SWM  44.26% decrease SWM (-$748K to $942K) 20

21. 21 Budget Committee Meeting Questions

22. Debt Service Coverage Coverage: (DEQ wants 105%) – Income minus expenses $ 10,974,772 Revenue $5,081,600 Expenses $3,590.676 Net Income $3,502,957 Debt Service Net Revenue is 104% of Debt Service – Only if 100% of budget is spent – If expenditures are normal & contingency is not spent Net Revenue will exceed 105% of Debt Service DEQ requires us to build capital reserves 22

23. Debt Service WRF Financing - $51 million: – $24 million GO Bond – $ 8 million IFA Loan – $14 million CWSRF – $ 5 million CWSRF (Interest free) FY16 Debt Service $1,715,550 GO Bond $ 529,848 IFA – (After IRS $138,268 Subsidy) $1,260,230 CWSRF $3,505,628 Total (After subsidy) 23

24. 24 Budget Comments FY16 SSS Program – Fine tuning of WRF to improve efficiency Focus on solids treatment & handling – Meet Requirements of new NPDES Permit Studies: – Mixing Zone Study – Effluent Characterization – Continue sewer cleaning and evaluation as a major element of Asset Management Program – Digester Refit the only major capital work

25. 25 Budget Comments FY16 SWM Program – Focusing on implementation of the Watershed Strategic Plan – Meet 2012 MS4 Permit Requirements – Continue Boardman Watershed Initiative Boardman Wetland Complex Walta Vista, River Road, Naef Road Bridges – Better tracking and allocation of budgeted resources to the SWM program