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16 - 3rd Quarter Budget Report FY2013-14. Costa Mesa Sanitary District …an Independent Special District Protecting our community’s health and the environment by providing solid waste and sewer collection services. www.cmsdca.gov Memorandum To: Board of Directors From : Scott Carroll, General Manager Via: Wendy H. Davis , Interim Finance Manager Date: April 24 , 201 4 Subject: Third Quarter Budget Report – FY 2013 -14 Summary Th is report serves as a summary of the District’s spending at the mid -year point as well as staff’s best estimate of projected balances for the year -ended June 30, 2014. Staff Recommendation That the Board of Directors receive and file this report. Analysis Based on the spending trends through March 31, 201 4 , staff is projecting small savings in both the Solid Waste and Liquid Waste Funds. As of March 31, 201 4 , a total of 69.2 % of the Solid Waste budget for the 2013 -2014 fiscal year has been expended . At this time, staff anticipates a budgetary sa vings in both Personnel and Special Programs. The Solid Waste Fund is projected to have a year -end budget surplus balance of $49 ,700 . A total of 59 .5 % of the L iquid Waste Fund’s operating budget has been expended as of March 31, 201 4. The percent expend ed is under staff’s estimates due to contracted work in progress but unbilled. Staff anticipates a budgetary saving s in Personnel costs due to vacancies , which is offset by greater than normal expenses in some of the M&O accounts. The Liquid Waste Fund c urrently reflects a projected year -end surplus budget of $1,2 44 . Please see the attached report for a more detail ed analysis. ITEM NO. 16 Board of Directors A pril 2 4 , 201 4 Page 2 of 2 Strategic Plan Element & Goal This item supports achieving the objective and strategy of Strategic Element No. 7.0, Finance , w hich states: “Objective: To ensure the short and long -term fiscal health of the District. Strategy: The District will forecast and plan revenue and expenditures and maintain appropriate reserves and investment to provide financial resources to fund curr ent and planned operations and projects.” Legal Review Not applicable. Environmental Review Subject activity is exempt from the requirements of the California Environmental Quality Act (CEQA) (Public Resources Code Section 21000 et. seq.). Section 1530 0.4 of CEQA allows an agency while establishing its own procedures “to list those specific activities which fall within each of the exempt classes”, and the District has adopted “CEQA Guidelines and Implementing Procedures” that state on page 6 “”Projects” does not include …. C. Continuing administrative or maintenance activities.” Financial Review See attached report. Public Notice Process Copies of this report are on file and will be included with the entire agenda packet for the April 2 4 , 201 4 Board of Directors regular meeting at District Headquarters and on District website. Alternative Actions 1. Refer the matter back to staff for additional information. Attachments A: FY 2013 -14 Third Quarter Budget Analysis COSTA MESA SANITARY DISTRICT Third Q uarter Budget Update Fiscal Year 2013 -14 E XECUTIVE SUMMARY Attached is the third quarter budget analysis of the Solid and Liquid Waste Fund s operating budgets for fiscal year (FY) 2013 -14 . This analysis uses the “Amended Budget”, which consists of the adopted budget plus any prior year carryover appropriations , as well as budget adjustments approved through March 31 , 201 4 . The projections in this analysis are based on “Run -Rate” calculations unitizing historical trends for some accounts , while others are based on known or anticipated sp ending by staff. The Costa Mesa Sanitary District (District ) Solid Waste and Liquid Waste F unds are both Enterprise Funds . These funds are operated as independent business ventures sharing one Board of Directors. Some ex penses of the District are charge d entirely to a specific fund , while other expenses may be allocated to both funds based on a percentage. For example, the costs a ssociated with the District’s Board of Directors will be split between the funds equally. However, the cost of the trash pickup will be charged only to the Solid Waste F und. Based on the attached Expenditure Analysis , both the Solid Waste and Liquid Waste Funds are projected to have a small budget surplus at J une 30, 2014 as described below: S OLID W ASTE F UND The annual operating budget for the Solid Waste fund is $5,386,565 . The total year -to -date expenses are $3,728,700 , and staff estimates the total year -end balance will be $5,3 36 ,865 resulting in a proje cted surplus of $49 ,700 . This projected surplus results primarily from unexpended funds in the Special Programs. The following sections are intended to provide a summary of the more significant budget to actual changes anticipated by staff a t year -end : PERSONNEL The District currently has three vacant positions, the Finance Man a ger, the Permit Technician and a part -time Maintenance Worker which all provide services to both funds . T herefore , only a portion of their costs are charged to the Solid Waste F u nd. In April, the part -time Code Enforcement Officer resigned from his position. The Code Enforcement position was charged 100% to the Solid Waste Fund. The projected expenses for FY 2013 -14 assume that all of t hese positions will remain vacant until th e end of the fiscal year, thus creating a substantial savings in the salary and benefit accounts. Additional ly , the District is realizing a savings in its “PERS Employee” account due to costs which w ere previously paid by the District , are now required to be paid by the employee for all new hires. The total projected savings in Personnel costs a t June 30, 2014 is $7 7 ,600 . M & O The M & O accounts are projected to exceed the amended budget by $72 ,400. The following is a summary of expenses not included i n the amended budget that are causing the variance: • Professional Services – This account is estimated to be over budget by $7,767 due to the BHI Consulting contract for teambuilding exercises, consultant services to perform the PERS actuarial required to be completed by June 30, 2014 , and the contract for the CMSD internet App. • Fiscal Services – T he projected overage in th is account of $28,000 is the result of the vacant Finance Man a ger duties , which are being contracted to CBIZ. These expenses are offse t by the budget surplus in salaries and benefits. COSTA MESA SANITARY DISTRICT Third Q uarter Budget Update Fiscal Year 2013 -14 • Contract Services – T he projected overage in th is account of $9,8 00 is the result of the vacant Permit Technician duties , which are being contracted to Wi l dan and Associates. These expenses are offset by the budget savings in the salary and benefits accounts. • Community Outreach – This account is projected to exceed the amended budget by $20,023 , due to unanticipated expenses for outreach for the organics recycling program. Board meetings and Town Hall meetings were held at rented offsite locations to accommodate an audience and necessitated the hiring of audio and video services. In addition, automated phone messages were used to notify the public of the Town Hall and Board meeting dates and locations. The quarterly newsletter was budget ed at 35% to the Solid Waste Fund . H owever , it was determined that a more appropriate allocation is 50%, which equates to an increase in expenses to this F und of $7,000. Additionally, Infosend was contracted to develop an organics program water bill insert. The Board approved advertising and booth sponsorships for Costa Mesa Community Run. • Professional Development/Training – Th is account is estimated to be over budget by $6,810 primarily due to the Occupational Safety Training Systems (O STS ) contract for safety consult ing . SPECIAL PROGRAMS The Household Hazardous Waste collection program, the Anti -Scavenging program and the Telephone Book Recycling program are projected to come in substantially unde r budget , resulting in a budget surplus of $44,500 even after reprogramming resources toward the new Battery Recycling C ollection program. CAPITAL OUTLAY The capital outlay budget of $1,500 h as been fully expen d ed on the exterior maintenance at the Distri ct Headquarters. COSTA MESA SANITARY DISTRICT Third Q uarter Budget Update Fiscal Year 2013 -14 LIQUID WASTE F UND The annual operating budget for the Liquid Waste fund is $3 ,652 ,717 , excluding Capital Improvement Projects. The total year -to -date expenses are $2 ,313 ,9 8 5 . S taff estimates the total year -end balance to be $3 ,651 ,475 , for a projected surplus of $1 ,2 44 . This projected surplus is being generated primarily from unexpended funds in Personnel , offset by cost overruns in M & 0 . The following sections are intended to provide a summary of the more significant budget to a ctual changes anticipated by staff at year -end: PERSONNEL The District currently has three vacant positions, the Finance Manager , the Permit Technician and a part -time Maintenance Worker. All three of these positions provide services to both funds . T her efore, only a portion of their costs are charged to the Liquid Waste F und. The projected expenses for FY 2013 -14 assume that these positions will remain vacant until the end of the fiscal year, thus creating a substantial savings in the salary and benefit accounts. Additional ly , the District is realizing a savings in its “PERS Employee” account due to costs which were previously paid by the District , are now required to be paid by the employee for all new hires. The total projected savings in Personnel costs a t June 30, 2014 is $1 4 3 ,7 00 . M & O The M & O accounts are projected to exceed the amended budget by $142 ,256 . The following is a summary of expenses not included in the amended budget that are causing the variance: • Professional Services – I ncluded in this account is the BHI Consulting contract for teambuilding exercises, consultant services to perform the PERS actuarial required to be completed by June 30, 2014 , and the contract for the CMSD internet App. The $40,000 internal parcel audit i s not anticipated to be started this fiscal year , which is keeping this account on target. • Plan Checking/Inspections Services – The projected overage in this account of $4 ,000 is the result of increased participation the SLAP program and increase building activity within the City. A portion of this increase should be offset by increased revenues. • Fiscal Services – T he projected overage in this account of $52,000 is the result of the vacant Finance Manager duties , which are being contracted to CBIZ. These expenses are offset by the budget surplus in salaries and benefits. • Contract Services – T he projected overage of $2 0 ,0 00 in this account is the result of the vacant Permit Technician duties , which are being cont racted to Wildan and Associates. These expenses are offset by the budget savings in the salary and benefits accounts. • Sewer Maintenance Claims – The $25 ,000 overage in this account is f rom a c laim for damage caused by a n unconnected sewer lateral which w as not budgeted. • Pump Station Maintenance – T he training provided by JIMNI to District staff to assume the ongoing maintenance of the pump station’s electrical systems is projected to cause this account to exceed the amended budget by $4 0,000 . COSTA MESA SANITARY DISTRICT Third Q uarter Budget Update Fiscal Year 2013 -14 • GIS Maintenance – This activity was budgeted prior to the determination of the scope of work and contractual agreement established . T his account will exceed the budget by $7 ,5 00. • Televising Sewer Lines – T his activity has been un der budgeted in the current and prior fiscal years. Staff is projecting that this account will exceed the adopted budget of $5,000 by $23,000. • Misc ellaneous Sewer Work – This activity is projected to be under budget by $110 ,767 based on the prior fiscal year actual and year to date expenses. • Sewer Lateral Program – This activity is projected to be over budget by $75 ,000. As of March 31, 2014 this entire budget has bee n expended. Staff has approved approximately another $75,000 SLAP applications and is asking for an additional appropriation in a separate staff report at the April 24, 2014 Board meeting. • Community Outreach – This account is projected to exceed the amended budgeted amount by $444 due to unanticipated expenses for outreach. Board meetings and Town H all meetings were held at rented offsite locations to accommodate an audience and necessitated the hiring of audio and video services. In addition, automated phone messages were used to notify the public of Town Hall and Board meeting dates and locations. The quarterly newsletter was budgeted at 65% to the Liquid Waste Fund. However, it was determined that a more appropriate allocation is 50%, which represents a decrease in expenses to this fund of $7,000. The Board approved the advertising and booth sp onsorships for Costa Mesa Community Run. • Small Tools/Equipment – T he unanticipated need to purchase gas monitoring equipment for Sewer staff was not budgeted , resulting in this account exceeding the budget by $4,000 . • Professional Development/Training – T he estimated $7 ,7 20 over budget in this account is mainly the result of the Occupational Safety Training Systems (OSTS ) contract for safety consult ing . CAPITAL OUTLAY The capital outlay budget of $372 ,47 5 is projected to be fully expen d ed by June 30, 2014 . The capital equipment outlay as of March 31, 2014 included the purchase of a Utility Crane Truck, Smart Covers, Manhole rings and covers. COSTA MESA SANITARY DISTRICT Third Q uarter Budget Update Fiscal Year 2013 -14 CAPITAL IMPROVEMENT PROJECTS The status of the capital improvement projects as of March 31, 2014 is shown below. All projects are expected to be fully expended as of June 30, 2014 . Through 3/31/2014 -Full Year--Full Year--Full Year-OriginalWorking Run-RateFinanceFinance BUDGETBUDGETYTDYTDYTD 12-13 toPercentFull YearProjectionFinanceProjectedProj. %as of July 1'13-'143/31/20143/31/2013YTD 13-14Change'12-'13Full YearProjections Balance 1 Remaining EXPENDITURES Personnel SALARIES FULL-TIME335,200335,200220,325188,63031,69517%245,458293,767300,00035,200 11%SALARIES PART-TIME34,30034,30019,78819,903(115)-1%26,63926,38424,00010,300 30%SALARIES BOARD14,40014,4009,9458,2211,72421%11,71313,26014,400- 0%OVERTIME800800160167(7)-4%293213400400 50%Benefits132,700132,70068,79562,4476,34810%80,95991,727101,00031,700 24%Sub-Total Personnel 517,400517,400319,014279,37039,64414%365,063425,352439,80077,60015%M & O PROFESSIONAL SERVICES 36,73336,73332,0259,89022,134224%34,29332,02544,500(7,767) -21%DISTRICT MANAGER 000000%000 LEGAL SERVICES 47,25047,25023,33923,545(206)-1%30,88031,11847,250- 0%FISCAL SERVICES 14,70014,70015,9115,84710,064172%11,94321,21442,700(28,000) -190%MEDICAL/EMPLOY SERVICES 20020084232(148)-64%284113200- 0%CONTRACT SERVICES 32,20032,2009,6324269,2062161%4,72412,84342,000(9,800) -30%COUNTY COLLECTION FEE 15,70015,7000000%186015,500200 1%TRASH HAULER (CR&R)2,370,0002,370,0001,774,0971,775,415(1,318)0%2,169,0422,365,4622,370,000- 0%RECYCLING/DISPOSAL (CR&R)2,081,0002,081,0001,406,2151,383,59922,6162%1,925,3921,874,9542,081,000- 0%CONTAINER COLLECTION COST 13,50013,5007,0447,030130%10,6659,39213,500- 0%ELECTIONS 00019,889(19,889)-100%19,88900- 0%MAINTENANCE 7,5407,5404,6574,04661015%5,6556,2097,540- 0%OFFICE SUPPLIES 800800252546(293)-54%692337800- 0%MISC COPY 2002000280(280)-100%2800200- 0%POSTAGE 3,5003002083,079(2,872)-93%9,665277300- 0%COMMUNITY OUTREACH 16,77719,97730,62113,79316,829122%22,35040,82940,000(20,023) -100%SMALL TOOLS/EQUIP 70702937(8)-22%373970- 0%EOC EQUIP SUPPLIES 400400300300%040400- 0%PROF DEVELOPMENT/TRAINING 26,39026,39017,14712,1405,00741%13,57122,86333,200(6,810) -26%LIABILITY INSURANCE 6,5006,5005,6926,508(816)-13%6,5087,5896,500- 0%TELEPHONE 70070066450815631%733885900(200) -29%UTILITIES - BLDG 1,1501,150627666(38)-6%8658371,150- 0%ASSET REPLACEMENT 30,00030,00022,5003,22519,275598%3,22530,00030,000- 0%CONTINGENCY 000000%000- 0%TRANSFER OUT 000000%000- 0%Sub-Total M & O 4,705,3104,705,3103,350,7743,270,70080,0742%4,270,8784,457,0234,777,710(72,400)-2%- 0%Capital Outlay EQUIPMENT1,5001,5001,9123,345 (1,434)-43%3,495 2,5491,500 - 0%Sub-Total Capital Outlay 1,5001,5001,9123,345(1,434)-43%3,4952,5491,500 - 0%Special Programs SHARPS PROGRAM 10,20010,2004,1605,875(1,715)-29%7,7455,54710,200- 0%HHW 50,00050,0002,9407,192(4,252)-59%8,7603,92010,00040,000 80%TELEPHONE BK RECYCLING 10,0002,5002,5007,600(5,100)-67%7,3003,3332,500- 0%ANTI-SCAVENGING 9,8009,8000000%008009,000 92%USED TIRE ROUNDUP 000000%000- 0%EDUCATIONAL TOURS 40,90040,9009,0916,0803,01150%8,56312,12140,900- 0%PHARMACEUTICAL 10,00010,0006,6135,4741,14021%7,8798,81810,000- 0%COMPOST GRANT 31,45531,45529,62233,872(4,250)-13%36,85139,49631,4550 0%BATTERY RECYCLING 07,5002,07502,0750%02,76712,000(4,500) -60%Sub-Total Special Programs 162,355162,35557,00166,093(9,092)-14%77,09876,002117,85544,50027%TOTAL EXPENDITURES5,386,565 $ 5,386,565 $ 3,728,700 $ 3,619,508 $ 109,193 $ 3%4,716,535 $ 4,960,926 $ 5,336,865 $ 49,700 $ 1%Notes % change from last year ==>>5%13%1 Finance Projections reflect the most recent quarterly update 04/11/14 8:47 10-000000 Solid Waste Expenditure Analysis ExpendituresChange Through 3/31/2014 -Full Year--Full Year--Full Year-OriginalWorking Run-RateAnalystAnalyst BUDGETBUDGETYTDYTDYTD 12-13 toPercentFull YearProjectionFinanceProjectedProj. %as of July 1'13-'143/31/20143/31/2013YTD 13-14Change'12-'13Full YearProjections Balance 1 Remaining EXPENDITURES Personnel SALARIES FULL-TIME686,700686,700434,491451,182(16,692)-4%566,648579,321600,00086,700 13%SALARIES PART-TIME7,5007,5006,1165,5995179%8,2938,1557,500- 0%SALARIES BOARD57,30057,30039,78032,8856,89521%46,85253,04057,300- 0%OVERTIME27,90036,60018,57913,8654,71434%18,33924,77336,600- 0%Benefits298,300298,300161,783163,418(1,635)-1%218,410215,710241,30057,000 19%Sub-Total Personnel 1,077,7001,086,400660,749666,949(6,200)-1%858,541880,998942,700143,70013%M & O PROFESSIONAL SERVICES 169,340166,03477,443103,476(26,033)-25%138,933103,257166,034- 0%DISTRICT MANAGER 000000%000- 0%LEGAL SERVICES 87,75087,75045,54265,806(20,264)-31%81,43060,72287,750- 0%ENGINEERING/ARCHIT SERV 90,00090,00041,88735,7116,17617%51,54355,84990,000- 0%PLAN CHECK/INSPECTIONS 112,000112,00081,72884,278(2,550)-3%119,821108,971116,000(4,000) -4%FISCAL SERVICES 27,30027,30034,81110,85923,952221%22,18246,41579,300(52,000) -190%MEDICAL/EMPLOY SERVICES 1,8001,8001,1131,418(305)-21%1,7541,4841,800- 0%CONTRACT SERVICES 78,80078,80046,6841,40445,2803226%16,13162,24598,800(20,000) -25%SEWER MAINTENCE CLAIMS 0024,125024,1250%0025,000(25,000) 0%COUNTY COLLECTION FEE 15,50015,5000000%1,676015,300200 1%PUMP STN MAINT CONTRACT 80,00080,00080,88216,71864,164384%21,428107,842120,000(40,000) -50%SEWER LINE MAINTENANCE 200,000200,00006,574(6,574)-100%127,3520200,000- 0%ELECTIONS 00019,889(19,889)-100%19,88900- 0%BLDG MAINTENANCE 36,27036,27014,04331,703(17,660)-56%38,10418,72436,270- 0%EQUIP MAINTENANCE 84,84083,84060,17745,78314,39431%59,92680,23583,840- 0%GIS MAINTENANCE 20,00020,00020,40917,8912,51814%19,94927,21227,500(7,500) -38%TELEVISING SEWER LINES 5,0005,00018,6157,30811,307155%14,12824,82028,000(23,000) -460%MISC SEWER WORK 220,000285,76793,909160,199(66,289)-41%183,361125,213175,000110,767 39%FOG PROGRAM 104,000104,00049,04865,177(16,129)-25%90,76565,397100,0004,000 4%RESIDENT FOG PROGRAM 000000%000- 0%SEWER LATERAL PROGRAM 200,000200,000200,131186,11014,0218%223,523266,841275,000(75,000) -38%INFLOW REDUCTION PROGRAM 10,00010,00001,644(1,644)-100%1,644010,000- 0%OFFICE SUPPLIES 9,2009,2002,2905,443(3,153)-58%6,7963,0538,259941 10%MISC COPY 1,8001,8001891,189(1,000)-84%1,5142521,800- 0%POSTAGE 31,5003,5002,1754,415(2,239)-51%13,0352,9003,500- 0%COMMUNITY OUTREACH 27,00059,55629,13614,24014,896105%30,15838,84860,000(444) -1%SMALL TOOLS/EQUIP 8,6808,68010,8213,6877,134194%3,79914,42812,680(4,000) -46%MAINT MATERIAL/SUPPLIES 25,00025,00020,02413,8946,13144%17,21526,69925,000- 0%EOC EQPT & SUPPLIES 3,6003,6002,83212,471(9,639)-77%13,5993,7763,600- 0%PROF DEVELOPMENT/TRAINING 122,440122,44071,22256,35314,86926%66,19694,963130,160(7,720) -6%LIABILITY INSURANCE 69,50069,50058,27668,912(10,636)-15%68,91277,70169,500- 0%TELEPHONE 11,80011,8008,1556,4361,71927%9,27510,87411,500300 3%UTILITIES 17,25017,25010,60510,813(208)-2%13,60814,13917,250- 0%WATER PUMP MAINTENANCE 2,0002,0001,08596312213%1,3061,4472,000- 0%ELECTRIC PUMP MAINTENANCE 80,00080,00048,34340,7587,58419%61,33864,45780,000- 0%ASSET REPLACEMENT 175,000175,000131,25033,17598,075296%33,175175,000175,000- 0%CONTINGENCY 33,4304550000%00455- 0%Sub-Total M & O 2,160,8002,193,8421,286,9511,134,696152,25513%1,573,4631,683,7672,336,298(142,456)-6%Capital Outlay EQUIPMENT13,50046,47517,20518,008(804)-4%31,35822,93946,475- 0%EQUIPMENT 326,000326,000210,134494,332(284,198)-57%495,279280,179326,000- 0%Sub-Total Capital Outlay 339,500372,475227,339512,340(285,001)-56%526,638303,118372,4750 0%TOTAL EXPENDITURES3,578,000 $ 3,652,717 $ 2,175,038 $ 2,313,985 $ (138,947)$ -6%2,958,642 $ 2,867,884 $ 3,651,473 $ 1,244 $ 0%Notes % change from last year ==>>-3%23%1 Finance Projections reflect the most recent quarterly update 04/11/14 8:47 20-000000 Liquid Waste Expenditure Analysis ExpendituresChange