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SEWER DEPARTMENT FY 2008/09 BUDGET WORKSHOP April 9, 2008.

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Presentation on theme: "SEWER DEPARTMENT FY 2008/09 BUDGET WORKSHOP April 9, 2008."— Presentation transcript:

1 SEWER DEPARTMENT FY 2008/09 BUDGET WORKSHOP April 9, 2008

2 SEWER DEPARTMENT Mission Statement The mission of the Water and Sewer Department is to provide the highest possible water quality and customer service at the lowest possible cost, while continuing our commitment to improving the infrastructure and our community’s environment.

3 SEWER DEPARTMENT FY 2008/09 Budget Summary Expenditures Total Recommended Operating Budget - $6,222,121 Major factors influencing recommended operating costs:  The combined Personal Services and Employee Benefits objects provide a $78,106 increase (3.4%)  Increased cost of $6.5K in Professional & Technical Services to include improved security to network computers; also covers cost associated with Munis and other shared services  Electricity costs up $11K due to increased unit cost  Decreased natural gas cost by $13K due to less usage projected  Increased domestic water costs by $18K due to unit cost increase and adjusted usage projection  Sludge disposal fee from Sanitation Dept increased by $60K

4 SEWER DEPARTMENT FY 2008/09 Budget Summary Expenditures (Continued)  Repairs to buildings decreased by $7.8K as HVAC work was completed in FY07/08  Unclassified services increased by $11K; charges paid to other Towns for wastewater disposal  Energy up $10K due to unit cost increases of fuel oil  Chemicals up by $6.4K due to increased unit costs  Equipment repair materials up by $7K; costs associated with keeping vital equipment running at an aging facility  Gasoline & Diesel costs up by $8K due to unit costs  Nitrogen credits increased by $40K; State-mandated program for nitrogen removal  Interfund Transfers decreased by $275K; decrease in the use of retained earnings  Total Sewer Fund Budget decrease of $5,843

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6 SEWER DEPARTMENT FY 2008/09 Budget Summary Revenue Total Recommended FY 2008/09 Revenue - $6,222,121 Major factors influencing revenues:  Revenue from regular sewer service charges is estimated to be $4,538,980  This reflects a 8% rate increase and is based on a 5-year history of average usage  Economic downturn & weather-related effects have resulted in revenue shortfalls when compared to MFS model predictions; to reduce variables associated with these factors, a 5-year average was used  Revenues from Eighth Utilities District based on formula in District Agreement and values in recommended budget $935,079  Interest & lien fees are $65K  Water Department usage for discharge is $277,200  Outlet charges of $40,000 reflect a decrease of approximately $183K in revenue from the FY2007/08 Budget  MFS Cost Model anticipated 119 new connections; actual number will be about 21  Use of Retained Earnings decreased by $264,513  Need to work our way up to the desired 180 days of operating reserve through multi-year rate adjustments  Remainder of revenue, $98,078 is derived from the following:  Sludge (septage) disposal, repairs, review & inspection, interest, rent, miscellaneous and assessments

7 SEWER DEPARTMENT FY 2008/09 Recommended Transfer to Reserve Request Summary Recommended Cash-Funded Capital Improvement Projects 1. Vehicle Replacement $ 55, Manhole Rehabilitation $ 30, Public Works Projects $ 7, Raw Sewage Pump Rebuild $ 18, Pump Station RTU Upgrade $ 41, Oversized Pipe $ 20, Roof Replacements $115,000 Total $287,100 Note: Original FY08/09 Request totaled $1.2M; reduced by >$900K based on sewer priority list due to FY07/08 revenue shortfalls

8 SEWER DEPARTMENT FY 2008/09 Transfer to Reserve Request Summary Moved, Deleted or Deferred Items Project Name Amount Status SSS Improvements $400,000Reflected in note-funded GIS Updates $9,000Deferred SCADA System Upgrade $184,400Deferred Sanitary Sewer Extensions $175,000Deleted Anoxic Tank Mixers $85,000Deleted Vehicle Replacement – Engineering $25,000Deleted Chlorine Building Modifications $55,000Deleted Total request reduction $933,400

9 SEWER DEPARTMENT FY 2008/09 Recommended Transfer to Reserve Justification Details Vehicle Replacement - $55,000 Replace 1989 Stake Body Truck #450 with similar vehicle Manhole Rehabilitation - $30,000 Annual contribution that will result in the rehabilitation of ten (10) manholes; there are a total of approximately 3,200 system-wide Public Works Projects - $7,500 This is the Sewer Department’s share of the costs of projects that originate from the Public Works Department and/or the State of Connecticut Raw Sewage Pump Rebuild - $18,000 In-house refurbishment of 18-year old main raw sewage pump

10 SEWER DEPARTMENT FY 2008/09 Recommended Transfer to Reserve Justification Details (Continued) Pump Station RTU Upgrade - $41,600 Replace remote telemetry units (RTU’s) at pump stations with Programmable Logic Controllers; a more reliable and industry-standard methodology of control Oversized Pipe - $20,000 Sewer Department’s share of expense to reimbursement developers when we request they install larger lines than their project may require to benefit our future growth Roof Replacements - $115,000 Replace deteriorated and leaking 18-year old roofs on Primary Treatment Building & on Raw Sewage Pump Building to protect equipment & facility

11 SEWER DEPARTMENT FY08/09 BUDGET NOTE-FUNDED PROJECTS

12 SEWER DEPARTMENT FY 2008/09 Budget Note-Funded Capital Projects Summary Recommendations  Long-term biosolids disposal plan $331,000  This is the cost of engineering services for the Preliminary Design Phase based on the evaluation performed by our consultant  Based on the (draft) biosolids study performed by our consultants; alternate technologies will provide better and more cost-effective solutions  Age and condition of equipment & structures necessitate these improvements  New & improved technologies may provide a more efficient manner of biosolids handling than those previously considered  Anticipated closure of Town Landfill is also a significant factor  Once evaluation and preliminary design phases are complete, we will be able to define the long-term cost implications of the project Biosolids (Sludge) Design Total Cost

13 SEWER DEPARTMENT FY 2008/09 Budget Note-Funded Capital Projects Summary Recommendations  BNR Preliminary Design & Facility Plan $500,000  This is the cost of engineering services for the Preliminary Design Phase based on the BNR Study performed by a consultant  This also includes a comprehensive facility plan & preliminary design  Based on the (draft) nutrient removal study performed by our consultants; alternate technologies will provide better and more cost- effective solutions  Nitrogen credit program ends in 2014  Age and condition of equipment & structures necessitate these improvements  New & improved technologies, plus stricter effluent limitations are important driving factors as well  Once evaluation and preliminary design phases are complete, we will be able to define the cost implications of the project Denitrification Project Total Cost

14 SEWER DEPARTMENT FY 2008/09 Budget Note-Funded Capital Projects Summary Recommendations  Infrastructure Improvements $1,500,000  This is the annual recommended allocation of funds to implement collection system pipe replacement & lining based on the results of the Sewer System Evaluation Study (SSES)  The focus will be on sewer mains that are hydraulically deficient and/or have high inflow & infiltration (I/I) rates  These lines are problematic as they may cause sewer backups, flooding, increase pumping & processing costs, hydraulic overloads, organic under- loading, and create complex operating conditions that could jeopardize permit compliance  Long-term finance plan is to authorize $5M every three years ($1.5M/$1.5M/$2.0M) through the sale of notes Sanitary Sewer Improvement Program Total Cost

15 SEWER DEPARTMENT FY 2008/09 Budget Note-Funded Capital Projects Summary Recommendations  Devon Drive Project $250,000  This is to fund known problem areas that need immediate attention independent of the Sanitary Sewer Evaluation Study  This is the second phase of the Ridgewood Drive Pump Station Elimination Project  It will replace a problematic siphon line running beneath Bigelow Brook at the Parkade  Broad Street Streetscape Project $150,000  This fund contributes to the replacement and relocation of the sewer lines necessitated by the Broad Streetscape Project Sanitary Sewer System Improvements Total Cost

16 SEWER DEPARTMENT FY 2008/09 Budget Working Capital Projections  Adopting a 8% rate adjustment in FY08/09 is consistent with the recommendation in the cost model derived from the MFS rate study; and,  Continues a multi-year process of adjusting rates to cover future capital costs; and,  Results in a smaller draw-down from reserves than FY07/08

17 SEWER DEPARTMENT FY 2008/09 Budget Rate Comparisons  Sewer use cost based on average use of 2,200 cubic feet/per quarter  Current usage rate is $2.74/HCF (Hundred Cubic Feet)  Manchester’s average sewer use bill is currently $60.28 per quarter or $241 per year; this equates to $ per gallon  Calculation based on an 8% rate increase ($2.96/HCF)  If recommended rate is adopted the average sewer use bill would be $65.12 per quarter or $260 per year; this equates to $ per gallon  Based on a comparative analysis performed with data from 2005, the average sewer use cost was $261 per year for a typical Connecticut homeowner  A new survey which is due out later this month estimates that the average annual homeowner’s sewer cost was $290 in 2007


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