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Agenda Packets - Board - 2007-05-29�S�$ANIPgjp rict Costa Mesa SanitarN Dist V y p'�POR )XI � ... an Inbepenbent Special District Board of Directors Art Perry Arlene Schafer Bob Ooten James Ferryman Gary Monahan. Staff Robin B. Hamers Manager District Engineer (949) 631 -1731 Thonas A. Fatrth Assistant Manager Joan Revak Board Secretary •ogram Manager Jerk of the District Alan R. Burns Legal Counsel Marcus D. Davis Treasurer /Director of Finance Phone (949) 645 -8400 Fax (949) 650 -2253 Address 628 W. 19th Street Costa Mesa, CA 92627 -2716 U es Printed on Recycled Paper NOTICE OF SPECIAL MEETING COSTA MESA SANITARY DISTRICT BOARD OF DIRECTORS May 29, 2007 The Board of Directors of the Costa Mesa Sanitary District will meet on Tuesday, May 29, 2007 at 6:00 p.m., in the Board Conference Room at the Costa Mesa Sanitary District, 628 W. 191h Street, Costa Mesa, California to consider the following: ,"'I. Proposed CMSD Fiscal Year 2007 -2008 Budget II. Proposed 5 -Year Sewer System Financial Master Plan VIII. Potential Impact of Budget and Sewer System Financial Master Plan on Yearly Sewer and Trash Charges IV. Select date for Sewer & Trash Public Hearing (Thursday, August 2 or Monday, August 6, 2007 @ 6:00 p.m.) /VZVPossible Change of Date for Regular July 2007 Board Meeting Board Approval for Director Schafer to run for Three -Year Term as CSDA Director (CSDA Director since August 2000) /VII. Public Comments ; Dated: May 22, 2007 Clerk of the District Protecting our community is bea[tb 6N providing so(ia waste anb sewer co[[ection services. crosaca.gov BASIS FOR INCREASE IN 2007 -2008 YEARLY SEWER CHARGES 1. Necessity for increased operations and maintenance (O &M). The gravity sewer lines have above - normal amounts of grit and debris in the lines due to substandard cleaning practices by the previous maintenance contractor. The cleaning process is now slower, requires more water, and is costlier. The pumps and equipment in the 20 sewer pumping stations were not maintained on a regular schedule and increased maintenance and replacement equipment is required. 2. State Water Resources Control Board Requirements The State of California Water Resources Control Board adopted the General Waste Discharge Requirements (GWDR) under Order No. 2006 -0003. The order mandates comprehensive sewer system management in order to eliminate sewer spills and overflows. The order requires • Preventative Maintenance • Capacity Assurance • Televising Sewer Mains • Repair Program • Fats, Oils and Grease (FOG) Control Program • Education and Outreach Program • Emergency Response Sewer rate increases are necessary to cover the cost of increased work in each of these categories. 3. Higher Energy Costs Higher energy costs in the form of higher gasoline costs and higher electricity costs for the District's 20 pumping stations is also causing sewer rates to increase. W. BASIS FOR NO INCREASE IN 2007 -2008 TRASH COLLECTION CHARGES 1. The Sanitary District negotiated a freeze in the 2006 -2007 trash collection charge with its contractor CR &R of Stanton, California. The District also negotiated limited increases in future years' rates by tying the rate to rates of other local agencies and cities in Orange County. 2. The District instituted an "extra container charge" program where residents pay $8 per month for each container above the first two containers. This prevents residents who leave out average amounts of trash from subsidizing those who leave out above - average amounts of trash. The revenue collected from this program is being used as a rate stabilization fund for the trash collection program. 3. The County of Orange Integrated Waste Management Department (IWMD) is holding the landfill charge at the existing rate of $22 per ton. Therefore, the landfill charge is not causing the CMSD trash collection charge to rise. 4. The CMSD and CR &R have kept expenses at a reasonable level and are absorbing increases to maintain the trash collection rate at the current level. i 10 CMS0 ff: 1- 949 - 645 8400 • EFFECE 7 -1 -07 FY07 -08 CMSD CREW AND CONTRACT RATES - BACKCHARGES Prepared 5 -18 -07 A B C D E F G 24 CONTRACTOR RESOURCE - CONDITION ANNUAL COST MONTHLY HOURLY 25 JIMNI Non - Scheduled Emergency Rates - 7AM - 5PM Regular Time - Per Rate Sheet 26 One -Man $ 306,321.60 $ 432,432.00 $ 25,526.80 $ 147.27 27 Two -Man $ 36,036.00 $ 207.90 28 JIMNI Non - Scheduled Emergency Rates - 5PM - 7AM & Holidays Time - Per Rate Sheet 291 One -Man $ 340,704.00 $ 28,392.00 $ 163.80 301 Two -Man $ 466,835.20 $ 38,902.93 $ 224.44 31 National Plant Non - Scheduled Emergency Rates - Regular Time $ 343,200.00 $ 28,600.00 $ 561,600.00 $ 46,800.00 $ 343,200.00 $ 28,600.00 32 Jet -Vac Unit w / Operator $ 165.00 33 Jet Vac Unit w / Operator & Tech w/ Utility Truck $ 270.00 34 CCTV Unit w/ Operator $ 165.00 35 National Plant Non - Scheduled Emergency Rates - OT $ 405,600.00 $ 33,800.00 $ 686,400.00 $ 57,200.00 $ 405,600.00 $ 33,800.00 36 Jet -Vac Unit w/ Operator $ 195.00 37 Jet Vac Unit w/ Operator & Tech w/ Utility Truck $ 330.00 38 CCTV Unit w/ Operator $ 195.00 39 National Plant Non - Scheduled Emergency Rates - Holiday (Premium) Time $ 468,000.00 $ 39,000.00 $ 811,200.00 $ 67,600.00 $ 468,000.00 $ 39,000.00 40 Jet -Vac Unit w/ Operator $ 225.00 41 Jet Vac Unit w/ Operator & Tech w/ Utility Truck $ 390.00 42 CCTV Unit w/ Operator $ 225.00 43 rains - A" ours Costs - 5PM - 6AM 17 44 ours Hol ' -.osts - 5PM -6AM 46 FY 2007 -08 BURDENED (172% BURDENED BURDENED BURDENED 47 CMSD RESOURCE - CONDITION ANNUAL COST ANNUAL COST MONTHLY HOURLY SUBTOTALS 49 GIVEN: (RED =150 %) 50 CMSD Supervisor - FY2007 -08 $ 73,917.00 $ 127,137.24 $ 10,594.77 $ 61.12 51 CMSD Maintenance Worker - FY2007-08 - Step 3 $ 43,588.00 $ 74,971.36 $ 6,247.61 $ 36.04 52 CMSD Maintenance Worker - FY2007 -08 - Ste 3 $ 43,589.00 $ 74,973.08 $ 6,247.76 $ 36.04 $ 133.21 53 CMSD Service Truck Rental Rate " ($39,000 Cost + $3038 Xfer Tax)#S yrs Life 3 for VRF $ 25,222.80 $ 37,834.20 $ 3,152.85 $ 18.19 54 Insurance, Admin, Other OverHead (41 %)--(Material (26 %) + Indirect Costs (15 %)) $ 15,512.02 $ 1,292.67 $ 7.46 55 Fuel Charge - $3.50 /gal' 3 gaVhr $ 21,840.00 $ 1,820.00 $ 10.50 56 Weighted Maint Services (Tires, Oil, Maint, Tools, Align, Repairs = $600/mo) $ 7,200.00 $ 7,200.00 $ 600.00 $ 3.46 $ 39.61 57 CMSD Combo Vector 2110 Unit Rent Rate ($85K Cost +$7247 Xfer Tax)/10 Yr Life `3 VRF $ 27,678.90 $ 41,518.35 $ 3,459.86 $ 19.96 58 Insurance, Admin, Other OverHead (41 %) -(Material (26 %) + Indirect Costs (15 %)) $ 17,022.52 $ 1,418.54 $ 8.18 59 Fuel Charge = $3.50 /gal . 3 gat/hr $ 21,840.00 $ 1,820.00 $ 10.50 60 Weighted Maint Services (Tires, Oil, Maint, Tools, Align, Repairs - $6001mo) $ 7,200.00 $ 7,200.00 $ 600.00 $ 3.46 $ 42.11 61 CMSD Water Truck Unit Rent Rate " ($39,000 Cost + $3038 )fer Tax )f10 yrs Life' 3 for VRF $ 13,738.20 $ 20,607.30 $ 1,717.28 $ 9.91 62 Insurance, Admin, Other OverHead (41 %) .(Material (26 %) + Indirect Costs (15 %)) $ 8,448.99 $ 704.08 $ 4.06 63 Fuel Charge = $3.50 /gal . 3 gal/hr $ 21,840.00 $ 1,820.00 $ 10.50 64 Weighted Maint Services (Tires, Oil, Maint, Tools, Align, Repairs = $600 /mo) $ 7,200.00 _ $ 7,200.00 $ 600.00 $ 3.46 $ 27.93 66 CMSD Non - Scheduled Emergency Rates - Regular Time (' 1.33 for Maint Super 1/3 of time) $ 187,295.07 $ 15,607.92 $ 344,652.65 $ 28,721.05 67 Jet -Vac Unit w / Operator $ 90.05 68 Jet Vac Unit w / Operator & Tech w/ Utility Truck $ 165.70 69 CMSD Non - Scheduled Emergency Rates - OT (' 1.33 for Maint Super 1/3 of time) $ 237,152.17 $ 19,762.68 $ 431,995.43 $ 35,999.62 _ 70 Jet -Vac Unit w/ Operator $ 114.02 71 Jet Vac Unit w/ Operator & Tech w/ Utility Truck $ 207.69 72 CMSD Non- Scheduled Emergency Rates - Holiday (Premium = Standard OT) Time ('1.33) $ 237,152.17 $ 19,762.68 $ 431,995.43 $ 35,999.62 73 Jet -Vac Unit w/ Operator $ 114.02 74 Jet Vac Unit w/ Operator & Tech w/ Utility Truck $ 207.69 75 CMSD - After Hours Costs - 5PM - 6AM = Jet Vac Unit w/ Operator & Tech w/ Utility Truck $ 176.00 76 CMSD - After Hours OT Costs - 5PM - 6AM = Jet Vac Unit w/ Operator & Tech w/ Utility Truck $ 220.00 Prepared 5 -18 -07 • COSTA ME-45A SANTqXy DisqRICT Memorandum To: Board of Directors ... an Independent Specia(District From: Robin B. Harriers, Manager /District Engineer Date: June 13, 2005 Subject: Preliminary 2005 -2006 Sewer Rates 0 Shown below are approximate sewer rates for selected agencies for the 2005 -2006 fiscal year. The information was obtained from OCSD's ongoing sewer survey and was not verified with each agency. Some agencies base their sewer charges on water consumption while others have flat rates. Only the agencies with flat rates are shown below. Midway City Sanitary District was excluded due to the unknown impact of the State budget. Please call if there are any questions: 949/631 -1731 office or 714/293 -2727 cell. A -enc City of Stanton Costa Mesa Sanitary District City of Anaheim Yorba Linda Water District City of Fountain Valley City of Newport Beach Garden Grove Sanitary District Sunset Beach Sanitary District City of Huntington Beach Irvine Ranch Water District Monthly Single Family Residential Sewer Rate $2.35 2.81 2.99 3.50 4.00 4.50 4.64` 6.00 6.48 7.50 % Above or Below CMSD Rate -16% 0 +6% +24% +42% +60% +65% +113% +130% +167% Notes Includes FOG Charge Last year's middle rate * Prior to Coastkeepers lawsuit which will cause rates to increase Protecting our community's Health by providing soCid waste and sewer collection services. crosdcagav COSTA �ESA,$A7�/I7AI�'DI,SZ'RIC7 5 -YEAR CAPITAL IMPROVEMENT PROGRAM FY 2007 -08 THROUGH FY 2011 -12 Fiscal Year 2007 -2008 #101 West Side Pumping Station Abandonment $250,000 #149 Sinking Fund 100,000 #159 Televising 25,000 #164 Miscellaneous Sewer Work 190,000 #168 Irvine Pump Station Relocation 500,000 #180 FOG Program 100,000 #182 Analysis of CCTV Results 125,000 #183 System Wide Repair Program 450,000 #186 Lateral Assistance Program 100,000 $1,840,000 • Fiscal Year 2008 -09 #101 West Side Pumping Station Abandonment $250,000 #149 Sinking Fund 100,000 #159 Televising 25,000 #164 Miscellaneous Sewer Work 125,000 #171 Irvine P.S. Force Main 440,000 #180 FOG Program 100,000 #183 System Wide Repair Program 700,000 #186 Lateral Assistance Program 100.000 $1,840,000 Fiscal` Year 2009 -10 #101 West Side Pumping Station Abandonment $250,000 #149 Sinking Fund 100,000 #159 Televising 25,000 #164 Miscellaneous Sewer Work 125,000 #171 Irvine P.S. Force Main 440,000 #180 FOG Program 100,000 #183 System Wide Repair Program 700,000 • #186 Lateral Assistance Program 100,000 $1,840,000 Rev. 5/22/07 r Fiscal Year 2010 -2011 #101 West Side Pumping Station Abandonment $250,000 #149 Sinking Fund 100,000 #159 Televising 25,000 #164 Miscellaneous Sewer Work 125,000 #180 FOG Program 100,000 #183 System Wide Repair Program 700,000 #184 Force Main Replacement 440,000 #186 Lateral Assistance Program 100.000 • Note: All projects are Capital Replacement Projects. Rev. 5/22/07 $1,840,000 $1,840,000 Fiscal Year 2011 -2012 #101 West Side Pumping Station Abandonment $250,000 #149 Sinking Fund 100,000 #159 Televising 25,000 #164 Miscellaneous Sewer Work 125,000 #180 FOG Program 100,000 #183 System Wide Repair Program 700,000 #185 Force Main Replacement 440,000 #186 Lateral Assistance Program 1001000 • Note: All projects are Capital Replacement Projects. Rev. 5/22/07 $1,840,000 $1,840,000 Ir RECEIVED MAY 2 9 2007 CALIFORNIA SPECIAL DISTRICTS ASSOCIATION BOARD OF DIRECTORS - CALL FOR NOMINATIONS SEAT B — TERM WILL EXPIRE IN 2010 © ®�� The California Special Districts Association (CSDA) Board of Directors is the governing body responsible for all policy decisions related to CSDA's member services, legislative programs, education and resources. Its functions are crucial to the operation of the Association and to the representation of the common interests of all California's special districts before the Legislature and the State Administration. Serving on the Board requires one's interest in the issues confronting special districts statewide. In addition, it means traveling to all Board meetings, usually six to eight per year. CSDA reimburses directors for all related travel expenses as outlined in Board policy. Election Rules Each of CSDA's six (6) regional divisions has three seats on the Board. Candidates must be affiliated with a member district located within the geographic region that they seek to represent. Directors are nominated and elected by region. In 1999, the CSDA membership passed an amendment changing the election from in- person at the annual meeting to an all -mail ballot. The officers of the Board of Directors are elected from the Board membership. Directors elected from the six (6) regions will hold staggered, three (3) year terms. Individuals elected to fill an unexpired term, will be up for reelection when original seat term expires. Nomination Procedures Any independent special district with current "Regular Member" status in CSDA is eligible to designate one person, such as a board member or managerial employee (as defined by that district's Board of Directors) for election as a director of CSDA. A copy of the member district's resolution or minute action must accompany the nomination form. The deadline for receiving nominations is Monday. July 30, 2007. Nominations and supporting documentation can be mailed or faxed. Election ballots will be mailed out by August 6, 2007 and must be returned and received in the mail by CSDA no later than 5:OOpm on September 26 2007. Successful candidates will be notified after ballot counts and announced at CSDA's Annual Conference, October 1 -4 in Monterey. Watch your mailbox for registration materials. Nominees will receive a candidates' packet in the mail once the nominations deadline has passed. The packet will include campaign guidelines. If you have any questions, please contact Nicole Dunn at (877) 924 -CSDA, nicoled @csda.net Expiring Terms (see enclosed map for regional breakdown) Region 1 Seat B Catherine Young, McCloud CSD Region 2 Seat B Wayne Kuntz, Rancho Murieta CSD Region 3 Seat B Sherry Sterrett, Pleasant Hill Rec. & Park District Region 4 Seat B Sandy Young, Stallion Springs CSD Region 6 Seat B John Fox, Goleta Sanitary District Region 6 Seat B Arlene Schafer, Costa Mesa Sanitary District CSDA 1112 1 Street, Suite 200 Sacramento, CA 95814 (916) 442 - 7887/(916) 442 -7889 fax (877) 924 -CSDA • www.csda.net CALIFORNIA SPECIAL DISTRICTS ASSOCIATION BOARD OF DIRECTORS ..° �N 1NA€ :101 FEORMs , `i Name of Candidate: District: Mailing Address: Region: (see attached map) Telephone: E -mail: Nominated by (optional): Fax: • Return this form and a Board resolutioniminute action supporting the candidate • by fax or mail to: CS DA Attn: Nicole Dunn 1112 1 Street, Suite 200 Sacramento, CA 95814 (916) 442 - 7887/(916) 442 -7889 fax DEADLINE FOR RECEIVING NOMINATIONS — JULY 30, 2007 • c� F 7 �t • 0 2006 -07 CSDA BOARD OF DIRECTORS TERMS REGION ONE Mark Bryant (2000) Catherine Young ( *2005) Phil Schoefer (2005) REGION TWO Larry Brilliant (2006) Wayne Kuntz (2004) Pete Kampa (2005) REGION THREE Peggy Shirrel (2003) Sherry Sterrett ( *1997) Joan Gallegos ( *2002) REGION FOUR Ann Mathews ( *2005) Sandy Young (2006) Thomas LeClair (2005) REGION FIVE Jack Curtis (2003) John Fox (2001) Jim Acosta (2002) REGION SIX Jo MacKenzie (2003) Arlene Schafer ( *2000) Dewey Ausmus ( *2007) *appointed (year) = service began 2007 Current Elections Timeline SEAT Seat Expires A 2009 B 2007 C 2008 A 2009 B 2007 C 2008 A 2009 B 2007 C 2008 A 2009 B 2007 C 2008 A 2009 B 2007 C 2008 A 2009 B 2007 C 2008 May 23; Call for nominations mailed out. July 30; Deadline for receiving nominations. August 6; Mail ballots and committee interest forms. September 26; Ballots are due at CSDA by 5pm. September 27; Ballots counted and candidates notified. 100.1. Doratlq '.Plpirle Sonoma Napa Sacramento Solano Ttiolum Calaveras Marin yen `,, ne; ' Joaquin . '. •,.Mgno Contra Costa Alameda San Francisco °Mariposa`"`t. San Mateo Santa x� gve xtr��rx�a�s= Clara RIiAerced' '` „�t Santa Cruz 3 Monterey Santa Barbara Ventura Los Angeles 5 Orange -� CSDA fi � San Bernardino E DA lr1 u • K . ' `Siskiyau \ hasta Yiumboy , Trinity IAssenI Tgham - - Wumas_ \ Yuba Mendocino Glenn. : $tatte Sierta :• Sutter � . '• Nevac3a�' 'CoJu §er . ' Lake ,, Pi acet ; Amador 100.1. Doratlq '.Plpirle Sonoma Napa Sacramento Solano Ttiolum Calaveras Marin yen `,, ne; ' Joaquin . '. •,.Mgno Contra Costa Alameda San Francisco °Mariposa`"`t. San Mateo Santa x� gve xtr��rx�a�s= Clara RIiAerced' '` „�t Santa Cruz 3 Monterey Santa Barbara Ventura Los Angeles 5 Orange -� CSDA fi � San Bernardino E DA lr1 u • K Costa Mesa Sanitary District Preliminary Budget Fiscal Year 2007 -08 REVISION #2 (5/24107) ANfr4 :A1 Vo Protecting oar camomanity'g ReaBta dy pravidimg BOOM waste and sewer ca@@ection Services 1� Costa Mesa Sanitary District Preliminary Budget Fiscal Year 2007 -08 REVISION #2 (5/24/07) Profectime ear comomhnity's Aead(A 6y pravidimg saeid waste aad Sower ca88ection services 19 Costa Mesa Sanitary District Jim Ferryman Board Member Preliminary Budget Fiscal Year 2007 -08 REVISION #2 (5/24/07) Board of Directors Art Perry President Arlene Schafer Vice President Bob Ooten Secretary Rob Hamers Manager /District Engineer Prepared by, Marc Davis Treasurer /Director of Finance Sherry Kallab Accountant Gary Monahan Board Member Iw 1 COSTA MESA SANITARY DISTRICT Preliminary Budget Fiscal Year 2007 -08 REVISION #2 (5/24/07) Table of Contents Page Treasurer /Director of Finance Budget Message 1 Budget Overview: Solid Waste Fund 4 Liquid Waste Fund g Preliminary Line Item Budget g Budget Details for Selected Accounts 12 Details of Memberships /Dues 15 5AHITA ORA'CB���a Treasurer /Director of Finance Budget Message May 24, 2007 To the Board of Directors Costa Mesa Sanitary District Submitted herewith is the preliminary budget document for the Costa Mesa Sanitary District (District) for fiscal year 2007 -08 for your review and comment. A special meeting has been scheduled for May 29, 2007 to provide a forum for Board input into the preliminary budget. An integral component of the preliminary budget is the draft Sewer Financial Master Plan, which will be submitted as a separate document to the Board for review and comment. These two documents will form the basis of the Board's direction to staff in the preparation of the 2007 -08 fiscal year budget document to be considered for adoption by the Board at their June 2007 regular meeting. I am pleased to report that the preliminary budget document represents a balanced budget which requires an increase in the liquid waste charge and no change in the solid waste annual charge. The total preliminary budget for the District is as follows: Prelimina ry Amended Budget Budget Increase (Decrease) Description FY2007 -08 FY2006 -07 Amount Percent Revenues: Annual charges $9,355,400 7,795,000 1,560,400 20.01% Investment earnings 340,000 300,000 40,000 13.33% Other 310,000 197,500 112,500 56.96% Total revenues 10,005,400 8,292,500 1,712,900 20.66% Expenses: Salaries & benefits 1,097,300 769,866 327,434 42.53% Operations & maintenance 7,009,000 6,680,969 328,031 4.91% Programs 56,800 61,500 -4,700 -7.64% Capital improvement projects 1,840,000 775,000 1,065,000 137.42% ITotal expenses 10,003,100 8,287,335 1,715,765 20.70% Net income (loss) $ 2,300 5,165 -2,865 - 55.47% 1 Board of Directors Costa Mesa Sanitary District May 24, 2007 Highlights of Preliminary Budget Included in the preliminary budget for fiscal year 2007 -08 are the following changes from the prior year's amended budget. Variable Rate Container Program Fiscal year 2007 -08 will be the first full year of the variable rate container program. This program was established in October 2006 with the revenue generated by the program being split between CR &R and the District at 90% and 10 %, respectively. The preliminary budget for fiscal year 2007 -08 estimates the total revenue from the program to be approximately $150,000. with 100% of the revenue being retained by the District. Should CR &R continue to generate the invoices on behalf of the District, the estimated cost for these services is approximately $20,000. � TTt -% Cp k Addition of Management Analvst The preliminary budget includes the addition of a Management Analyst position effective October 1, 2007. This new position will be responsible for such functions as: spill reporting; website management; information systems database management; scheduling and making presentations on vermicomposting and recycling, among other topics; used tire roundup; data lieanalysis; equipment acquisition; building security; and facility improvements. This will aid in redistributing the workload in an effort to reduce overtime. Based upon the job responsibilities for the Management Analyst position, the cost of the position will be split equally between the Solid Waste and Liquid Waste Funds. The total cost of the Management Analyst position for a period of 9 months of the fiscal year is approximately $67,700. On an annualized basis, this equates to approximately $90,300. Addition of 2- Person Maintenance Crew The preliminary budget includes the addition of two Maintenance Worker positions effective January 1, 2008. National Plant has been performing sewer televising, production and hot spot cleaning of the entire system. Their current estimate is that the entire District will have been televised and cleaned by June 30, 2008. In anticipation of this completion, staff is recommending the addition of a 2- person maintenance crew to assume responsibilities for hot spots and pump station maintenance. Beginning July 1, 2008, National Plant will only be used for production cleaning, thus the cost of the crew will be partially offset by the savings in contractor costs. Additionally, the addition of a 2- person crew will reduce the amount of overtime that has been required by the Maintenance Supervisor. Furthermore, the Directors have commented that the Maintenance Supervisor should have assistants in order to reduce the overtime and to. provide more effective emergency response. The total cost of the 2- person crew for a period of 6 months of the fiscal year is approximately $72,300. On an annualized basis, this equates to approximately $144,600. mar i 36 Pa W47 2 f Board of Directors Costa Mesa Sanitary District May 24, 2007 Elimination of Trash Containers With the transfer of the administration and maintenance of the trash containers to CR &R, the District reduced its interest expense by approximately $44,000 as the container lease was Lpaid -off in fiscal year 2006 -07. No Election Expense Elections are required'by the District every two years. An election was held durin g fiscal Y ear 2006 -07. The next election will be held in fiscal year 2008 -09. This resulted in a reduction of expenses in the amount of approximately $45,000. Purchase of Software Applications and Updates The preliminary budget for equipment maintenance costs has increased approximately $40,700 over the prior fiscal year. This increase represents the cost of acquiring two new financial modules, accounts receivable and fixed assets, as well as an ad hoc reporting module. The accounts receivable module will allow the District to better track its receivables. The fixed asset module will allow the District to track its fixed assets in a fashion acceptable to the auditors. The ad hoc reporting module will allow the District to generate special reports for internal or Board use on an as- needed basis. Currently, if a special report is needed, the District pays the financial software company and /or a contractor to write the report. Thus, the cost of the ad hoc reporting module will be partially offset by the reduced professional services. Also included in the increase in equipment maintenance costs is the purchase of hardware and software for maintaining and using the DVDs produced as part of the televising of the sewer lines. X'#-C4N ~% V Staff will be available at a special meeting to discuss the preliminary budget in more detail. The date of the meeting will be determined by the Board. Respectfully submitted, Marcus D. Davis, CPA ' Treasurer /Director of Finance I• 3 COSTA MESA SANITARY DISTRICT Preliminary Budget Fiscal Year 2007 -08 Budget Overview This Preliminary ry Budge t document contains the operating an d capital spending g plans for the Solid Waste and Liquid Waste Funds of the Costa Mesa Sanitary District (District) for fiscal year 2007 -08. The following subsections discuss the preliminary budget for each fund, as well as the highlights of proposed changes from the amended budget for fiscal year 2006 -07. ' Solid Waste Fund: The preliminary budget for the Solid Waste Fund as compared to the amended budget for the prior fiscal year is as follows. Preliminary Amended Budget Budget Increase (- Decrease) FY2007 -08 FY2006 -07 Amount Percent Revenues: Annual charge $5,106,000 5,070,000 36,000 0.71% Secured property tax 50,000 50,000 - 0.00% Variable container fee 150,000 - 150,000 100.00 % Investment earnings 75,000 50,000 25,000 50.00% Contributions 25,000 25,500 -500 - 1.96% ' Other reimbursements - 1,000 -1,000 - 100.00% Total revenues 5,406,000 5,196,500 209,200 4.02% Expenses: Salaries & benefits 169,400 131,171 38,229 29.14% ' Operations & maintenance 5,179,050 5,002,297 176,753 3.53% Programs 56;800 61,500 -4,700 - 7.64% Totals 5,405,250 5,194,968 210282 4.05% Net income (loss) $ 750 1,532 -782 - 51.04% ' The following subsections highlight the more significant changes in the preliminary budget for fiscal year 2007 -08 as compared to the prior year's amended budget. Annual Charge 1 In order to provide adequate revenue to support the Solid Waste Fund operations, the annual charge is projected to increase by $36,000, or 0.71%, over the prior year. This increase is primarily attributable to an estimated increase in the occupancy count and does not represent 4 COSTA MESA SANITARY DISTRICT ' Preliminary Budget Fiscal Year 2007 -08 Budget Overview increase trash rate which is current) set at 239.41 per ear, or 19.95 per month. an ease in the tra y $ p y $ p This monthly rate places the District with the second highest rate in the County. As such, CR &R is not eligible for a rate increase per the terms of their contract with the District. Variable Container Fee This line item represents 100% of the variable container fee for the 2007 -08 fiscal year. Currently, the District splits this fee with CR &R 10% and 90 %, respectively. Investment Earnings Investment earnings are expected to increase by $25,000, or 50.00 %, over the prior year. This increase is attributable to greater average monthly cash balances, as well as an increase in short -term interest rates. Salaries & Benefits Ila Salaries and benefits are proposed to increase by $38,229, or 29.14 %, over the prior year's amended budget. This increase is primarily attributable to the Fund's share of the cost of the Inew Management Analyst position. Operations & Maintenance Operations and maintenance costs are proposed to increase by $176,753 or 3.53 %, from the prior year's budget. This increase is primarily attributable to the projected increases in ' tonnage and occupancy, which translates to projected increases in trash hauler and recycling costs. iPrograms Programs are projected to be reduced by $4,700, or 7.64 %, from the prior year's budget. This ' is due to a reduction in the cost of purchasing new trash containers. This program is no longer necessary since CR &R assumed responsibility for the containers on October 1, 2006. 5 Annual Charge The total cost of operations of the Liquid. Waste Fund is projected to increase due to the addition of personnel and an increase in funding for capital replacement projects. Based upon these changes, the annual charge required to fund the operations of the Liquid Waste Fund must be increased as follows. This represents an increase of approximately 50% to all service ' types. 1 N. COSTA MESA SANITARY DISTRICT Preliminary Budget • Fiscal Year 2007 -08 Budget Overview Liquid Waste Fund: Preliminary Amended Budget Budget Increase (Decrease) FY2007 -08 FY2006 -07 Amount Percent Revenues: Annual charge $4,249,400 2,725,000 1,524,400 55.94% Investment earnings 265,000 250,000 15,000 6.00% Charges for services 10,000 50,000 - 40,000 - 80.00% Sewer permits 25,000 10,000 15,000 150.00% From other agencies - 10,000 - 10,000 - 100.00% Permits /inspection fees 50,000 50,000 - 0.00% Other reimbursements - 1,000 -1,000 - 100.00% Total revenues 4,599,400 3,096,000 1,503,400 48.56% Expenses: Salaries & benefits 927,900 638,695 289,205 45.28% Operations & maintenance 1,829,950 1,678,672 151,278 9.01% Capital improvement projects 1,840,000 775,000 1,065,000 137.42% Total expenses 4,597,850 3,092,367 1,505,483 48.68% Net income (loss) $ 1 X550 3,633 -2,083 - 57.34% The following subsections highlight the more significant changes in the preliminary budget for fiscal year 2007 -08 as compared to the prior year's amended budget. Annual Charge The total cost of operations of the Liquid. Waste Fund is projected to increase due to the addition of personnel and an increase in funding for capital replacement projects. Based upon these changes, the annual charge required to fund the operations of the Liquid Waste Fund must be increased as follows. This represents an increase of approximately 50% to all service ' types. 1 N. COSTA MESA SANITARY DISTRICT Preliminary Budget Fiscal Year 2007 -08 Budget Overview Annual Charge Increase ' Service Type FY2007 -08 FY2006 -07 Required Single family residence $56.46 37.64 18.82 Multi- family residence 43.49 28.99 14.50 Commercial (1) 32.85 21.90 10.95 Industrial (1) 96.76 64.51 32.27 Other (1) 29.10 19.40 9.70 t(1) This annual charge is on a per 1,000 square foot basis. The . current FOG rates are adequate to meet our FOG requirements and no change is required. Our current FOG rates are: ' Service Type FOG Rate Commercial without food service $ 2.77 Commercial with cold food service 72.00 Commercial with hot food service 180.00 ' Salaries & Benefits Salaries and benefits are proposed to increase by $289,205. or 45.28 %, over the prior year's amended budget. This increase is primarily attributable to the Fund's share of the cost of the new Management Analyst position and the addition of a 2- person maintenance crew. Operations & Maintenance Operations and maintenance costs are proposed to increase by $151,278, or 9.01 %, over the prior year's budget. The significant components of this increase are: • Increase of $38,000 in equipment maintenance costs as a result of upgrading the 1 District's SpringBrook financial software, as well as purchasing hardware and software to maintain and use the results of televising the sewer system. Increase of $14,000 in staff development costs as a result of additional training required for the new software upgrades and applications. ' • Increase of $47,000 in contingency to provide for a reasonable cushion for potential cost overruns and unanticipated expenses. The total amount of proposed contingency 7 j COSTA MESA SANITARY DISTRICT Preliminary Budget • Fiscal Year 2007 -08 Budget Overview is $70,000 and represents approximately 2.3% of the prelimina ry budget et for the Liquid q Waste Fund. Capital Improvement Proiects New capital improvement projects are proposed to increase $1,065,000 or 137.42 %, over the prior year's budget. The proposed capital improvement projects represent the first year of the District's five -year capital improvement program, as well as the inclusion of $100,000 for a Lsewer lateral program. The five -year capital improvement program has been included in the Sewer Financial Master Plan, which is a separate document. Ile 0 COSTA MESA SANITARY DISTRICT Preliminary Line Item Budget Fiscal Year 2007 -08 �. REVISION #2 (5/24/07) iSolid Liquid Waste Waste Fund Fund Total Revenues: Annual charge $ 5,106,000 4,249,400 9,355,400 Variable container fee 150,000 150,000 Secured property tax 50,000 _ 50,000 Investment earnings 75,000 265,000 340,000 Contributions 25,000 - 25,000 Charges for services 10,000 10,000 Sewer permits - 25,000 25,000 Inspection fees - 50,000 50,000 Total revenues 5,406,000 4,599,400 10,005,400 Expenses: Salaries and benefits: Regular salaries 63,200 521,90 Part-time salaries 49,800 23,70( 10 Board salaries Overtime 7,200 5,800 64,50(, 57,201 Compensated absences 3,000 26,401 Cafeteria plan 8,900 72,101 ' Medicare 2,100 11,401 Social security 500 4700, Retirement - employer 17,400 80,801 Retirement - employee 8,500 - 39,60 Deferred medical 700 5,10 Benefits administration 300 1,70 Workers' compensation 2,000 19,50 L -- - Total salaries and benefits 169,400 927,900 -- 1,097;300`°` Operations and maintenance: Professional services 2,500 32,500 35,000 District manager 31,900 59,200 91,100 Engineering /architectural services 16,100 16,100 ' Plan check/inspection - inside _ 96,000 96,000 Plan check /inspection - outside - 50,000 50,000 Legal services 21,100 51,000 72,100 Fiscal services 35,800 66,300 102,100 ■ Medical /employment services 500 1,000 1,500 i COSTA MESA SANITARY DISTRICT Preliminary Line Item Budget Fiscal Year 2007 - -08 REVISION #2 (5/24/07) ' S Solid L Liquid Waste W Waste Fund F Fund T Total Contract services 2 2,800 5 57200 8 8,000 Contract labor - - 3 3,000 3 3,000 County collection fee 1 14,500 9 9,900 2 24,400 Trash hauler 2 2,400,000 2 2,400,000 Recycling /disposal 2 2,450,000 - - 2 2,450,000 Pump station contract _ 200,000 2 200,000 ' P _ 2 500,000 5 500,000 Trash container collection fee 2 20,000 - - 2 20,000 ' Property lease - - 1 15,000 1 15,000 Building maintenance 1 1,220 1 10,980 1 12,200 Equipment maintenance 4 4,710 7 78,390 8 83,100 ' Office supplies 2 2,000 1 12,000 1 14,000 Multi media /copy /blueprint 9 900 7 7,500 8 8,400 Postage 6 6,900 1 13,400 2 20,300 Public info /education /promo 1 14,400 1 15,700 3 30,100 Small tools /equipment 5 500 4 48,800 4 49,300 Materials and supplies - - 4 46,800 4 46,800 1 Water pumps - - 1 1,200 1 1,200 Electric pumps - - 9 95,000 9 95,000 Memberships /dues 1 10,000 3 36,600 4 46,600 tStaff development 2 2,820 2 25,380 2 28,200 Travel /meals /lodging 1 1,500 2 21,000 2 22,500 Mileage reimbursement 1 1,400 2 200 1 1,600 ' M 6,500 8 83,000 8 89,500 Telephone 7 700 5 5,500 6 6,200 Cellular service 6 600 9 9,000 9 9,600 ' Gas - building 1 100 5 500 6 600 Water - building 2 200 1 1,500 1 1,700 Electric - building 1 1,000 7 7,300 8 8,300 Contingency 1 144,500 7 70,000 2 214,500 Operating reserve - - 1 135,000 1 135,000 Total operations and maintenance 5 5,179,050 1 1,829,950 7 7,009,000 ' Programs: Sharps Program 1 10,000 - - 1 10,000 _ Household hazardous waste 2 20,000 - - 2 20,000 10 0 i 10 COSTA MESA SANITARY DISTRICT Preliminary Line Item Budget Fiscal Year 2007 -08 REVISION #2 (5/24/07) Solid Liquid Waste Waste Fund Fund Total Telephone book recycling 16,000 - 16,000 Large item pickup 5,000 - 5,000 Used tire roundup 800 - 800 Educational tours 5,000 - 5,000 Total programs 56,800 - 56,800 Capital improvement projects: #149 - Sinking fund - 100,000 100,000 #159 - Televising sewer - 25,000 25,000 #164 - Miscellaneous sewer work - 190,000 190,000 #168 - Irvine pump station - 500,000 500,000 #101 - Westside abandonment - 250,000 250,000 #180 - FOG program, - 100,000 100,000 #JB-f- Newport/19th sewer JkGlyz,ro - 125,000 125,000 #183 - System Wide Repair Program - 450,000 450,000 #186 - Sewer Lateral Program - 100,000 100,000 Total capital improvement projects - 1,840,000 1,840,000 Total expenses 11 $ 5,405,250 4,597,850 10,003,100 COSTA MESA SANITARY DISTRICT Budget Details for Selected Accounts Fiscal Year 2007 -08 ® REVISION #2 (5/24/07) Solid Liquid Waste Waste Description Fund Fund Total Professional services: TRC computer consulting /maint contract $ 2,000 18,000 20,000 TRC telemetry computer /maint contract - 10,000 10,000 Website maintenance 500 4,500 5,000 Total professional services Fiscal services: Treasurer /Financial services contract Audit contract Total fiscal services Contractual services: Transcription services Total contractual services Building maintenance: Janitorial contract Janitorial supplies Storage unit rental Building security Backflow testing Landscape maintenance Miscellaneous Total Building Maintenance • 12 $ 2,500 32,500 35,000 $ 31,400 58,200 89,600 4,400 8,100 12,500 $ 35,800 66,300 102,100 $ 2,800 5,200 8,000 $ 2,800 5,200 8,000 $ 500 4,500 5,000 50 450 500 200 1,800 2,000 40- 360 400 10 90 100 270 2,430 2,700 150 . 1, 350 1,500 $ 1,220 10,980 12,200 COSTA MESA SANITARY DISTRICT 1,350 1,500 Budget Details for Selected Accounts 11,700 13,000 Fiscal Year 2007 -08 630 700 450 • REVISION #2 (5/24/07) 500 500 4,500 5,000 Solid Liquid 200 100 Waste Waste 30 Description Fund Fund Total Equipment maintenance: 60 540 600 Konica Minolta copier maint & copies $ 450 4,050 4,500 Phone updates /maintenance 50 450 500 Telephone equipment (bluetooth, cases, etc) 20 180 200 Book hard drive backup TB (4) - 1,000 1,000 SpringBrook annual maintenance fees 1,200 10,800 12,000 SpringBrook database maintenance 100 900 1,000 SpringBrook AR /fixed asset modules 1,590 14,310 15,900 SpringBrook upgrade version 6.5 800 7,200 8,000 Sewer database software - 10,000 10,000 HP color printers maintenance 500 4,500 5,000 Total equipment maintenance Staff development: Miscellaneous staff development SpringBrook training Excel training Penal Code 853.6 training Personnel agency costs CCAC meetings (Revak) CCAC conference (Palm Springs - Revak) Diehl Evans tax seminar (Kallab) CAPPO meetings (Gilbert, Kallab) CSMFO meetings (Kallab) CSMFO conference - south (Kallab) Miscellaneous financial periodicals Total staff development • 13 $ 4,710 53,390 58,100 $ 150 1,350 1,500 1,300 11,700 13,000 70 630 700 450 50 500 500 4,500 5,000 20 180 200 100 900 1,000 30 270 300 30 270 300 60 540 600 100 900 1,000 10 90 100 $ 2,820 21,380 24,200 COSTA MESA SANITARY DISTRICT Budget Details for Selected Accounts Fiscal Year 2007 -08 REVISION #2 (5/24/07) Solid Liquid Waste Waste Description Fund Fund Total Staff development - sewer maintenance: Miscellaneous staff development $ - 500 500 Flyg)6 pump training - 2,500 2,500 CWEA renewal (Fauth, Dulak) - 200 200 CWEA training - 700 700 Misc sewer periodicals - 100 100 Total sewer maintenance staff development Travel /Meetings /Lodging: CASA - mid -year (Palm Springs - 3) CASA - spring (Squaw Creek - 2) CASA conference (San Diego - 3) CSDA GAD (Sacramento - 2) CSDA conference (North - 2) ISDOC quarterly meetings (9) Chamber breakfast (8) Refreshments - strategic plan Refreshments - Board meetings (12) Refreshments - special Board Meetings (8) Miscellaneous unidentified meetings Total travel /meetings /lodging 14 $ - 4,000 4,000 $ - 2,000 2,000 - 2,500 2,500 - 3,000 3,000 200 1,800 2,000 200 1,800 2,000 50 450 500 50 450 500 200 1,800 2,000 200 1,800 2,000 400 3,600 4,000 200 1,800 2,000 $ 1,500 21,000 22,500 • • COSTA MESA SANITARY DISTRICT Details of Memberships /Dues Fiscal Year 2007 -08 REVISION #2 (5/24/07) Total Professional Memberships /Dues 15 $ 10,000 36,600 46,600 Solid Liquid Waste Waste Description Fund Fund Total Local Agency Formation Commission (LAFCO) $ 6,300 16,200 22,500 Santa Ana River Flood Protection Agency (SARFPA) - 1,000 100 California Special Districts Association (CSDA) 1,450 1,450 2,900 CSDA - Local Ballot Initiative 150 150 300 Costa Mesa Chamber of Commerce 230 230 460 California Association of Sanitation Agencies (CASA) - 7,600 7,600 Independent Special Dist of OC (ISDOC) 25 25 50 Costa Mesa Historical Society 75 75 150 National Notary Association 50 50 100 Calif Society of Municipal Finance Officers (CSMFO) 6 54 60 Government Finance Officer Association (GFOA) 13 122 135 Calif Assoc of Public Purchasing Officers (CAPPO) 15 135 150 Liebert Cassidy 260 2,340 2,600 WDR Annual Permit Fee - 5,000 5,000 City Clerks Association of Calif (CCAC) 100 100 200 Calif Municipal Treasurer Association (CMTA) 63 117 180 OC Tax Assessor 35 35 70 CWEA - 100 100 SpringBrook Users Group 25 25 50 Other 1,203 1,192 2,395 Total Professional Memberships /Dues 15 $ 10,000 36,600 46,600 • is SEWER SYSTEM FINANCIAL MASTER PLAN Prepared by, Marc Davis Treasurer /Director of Finance May 29, 2007 • COSTA MESA SANITARY DISTRICT Sewer System Financial Master Plan As of May 29, 2007 Table of Contents Transmittal Letter Executive Summary Fund Structure Liquid Waste Fund: Staffing Levels Operations and Maintenance Contracted Sewer Maintenance Services Capital Improvement Projects Annual Charges Exhibit A: 5 Year Revenue and Expense Projections i is Page 1 2 3 4 5 5 6 7 9 �S�,sAxsrs�,f � a F.K. � 0 V, y _i • l�r��pORAT4��b� TRANSMITTAL LETTER May 29, 2007 To the Board of Directors Costa Mesa Sanitary District Submitted herewith is the Sewer System Financial Master Plan (Plan) for the Costa Mesa Sanitary District (District). This Plan is as of May 29, 2007 and is initially based upon Revision #2 to the Preliminary Budget for the 2007 -08 fiscal year. Should the Board make changes to the Preliminary Budget, these changes will have an impact upon this Plan. The purpose of this Plan is to document the long -term financial issues facing the District's sewer system and the impact of those issues on the sewer rates. The accompanying report is intended to serve as a tool in providing the Board with a short-range look into the future of the sewer system's financial condition. Staff will be available at the Board's special meeting eetmg of May 29, 2007 to discuss the Plan and answer questions the Board may have. Respectfully submitted, _. Marcus D. Davis, CPA Treasurer /Director of Finance COSTA MESA SANITARY DISTRICT Sewer System Financial Master Plan As of May 29, 2007 EXECUTIVE SUMMARY This Sewer System Financial Master Plan (Plan) provides a framework to allow the Board to discuss sewer system issues and their impact on the long -term financial condition of the Liquid Waste Fund of the Costa Mesa Sanitary District (District). In order to develop this Plan, certain assumptions were made as follows: The base year revenues and expenses are those of the preliminary budget for fiscal year 2007 -08; ➢ A yard will be acquired during fiscal year 2007 -08; ➢ A 2- person maintenance crew will provide hot spot and emergency work beginning July 1, 2008; and ➢ The contract with National Plant Services, Inc. provides for televising and production cleaning of all lines within the District over a two -year period. Included in Exhibit A are the projected revenues and expenses of the Liquid Waste Fund over •the next 5 fiscal years. The 5 -year projections were developed by establishing the expenses first for a given fiscal year, then setting the annual charge at a level necessary to fund the required expenses. • The sections that follow detail the fund structure of the sewer system, the expenses applicable to the Liquid Waste Fund and the annual charges necessary to fund the expenses. 2 • COSTA MESA SANITARY DISTRICT Sewer System Financial Master Plan As of May 29, 2007 FUND STRUCTURE The District's sewer system operates with a 3 -fund structure as follows: rel • Liquid Waste Fund — This fund accounts for the annual sewer charge and associated expenses. Allowable expenses charged to this fund include salaries and benefits, operations and maintenance, sinking fund contributions, capital replacement or repair and reconstruction. • • Facilities Revolving Fund — This fund accounts for acquisition of sewer facilities, construction of new sewer lines and reconstruction. This fund cannot be used to account for repairs, maintenance and administrative expenses. The source of revenue to fund expenses charged to this fund are the District's fixture fees. The current balance available in the Facilities Revolving Fund is approximately $3.1 million. Given the limitations on the use of this fund, Staff plans to utilize the existing balance as the primary source for acquiring a District Yard and any associated improvements. Staff anticipates that the cost of the yard will be incurred during the 2007 -08 fiscal year. Once the yard has been acquired, all future maintenance and other ongoing expenses will be the responsibility of the Liquid Waste Fund. Staff is in the process of identifying future new construction projects from which fixture fees collected in the future will be used to fund. Once this list of projects has been developed, Staff will discuss the items with the Board and propose the necessary adjustments to the fixture fees. At that time, we will also be providing the Board with ordinances properly classifying this revenue source as capacity charges. • Sewer Construction Fund — This fund was established in 1989 to account for deposits from developers for the construction of new sewer lines associated with a specific development. The District requires developers to construct sewer facilities at no cost to the District before the District will authorize connection to the sewer system. In lieu of construction of the facilities, developers may pay a fee to the District representing the reasonable cost of construction of the improvements. y �wrr& U An annual budget is only adopted for the Liquid Waste Fund. As such, this Plan only addresses the revenue and expenses necessary to fund the required expenses of the Liquid Waste Fund. 3 COSTA MESA SANITARY DISTRICT Sewer System Financial Master Plan As of May 29, 2007 LIQUID WASTE FUND Staffing Levels As discussed in the preliminary budget for fiscal year 2007 -08, staff recommends adding 3 positions during the fiscal year. The first position to be added is a Management Analyst effective October 1, 2007. This new position will be responsible for such functions as: spill reporting; website management; information systems database management; scheduling and making presentations on vermicomposting and recycling, among other topics; used tire roundup; data analysis; equipment acquisition; building security; and facility improvements. This will aid in redistributing the workload in an effort to reduce overtime. The purpose for adding this position is to reduce the overtime incurred by the Assistant Manager and the Board Secretary/Program Manager /Clerk of the District. The total cost of the Management Analyst position for a period of 9 months of the fiscal year is approximately $67,700. On an annualized basis, this equates to approximately $90,300. Based upon the job responsibilities for the Management Analyst position, the cost of the position will be split equally between the Solid Waste and Liquid Waste Funds. As such, the cost to the Liquid Waste Fund of this position is approximately $33,850 for fiscal year 2007 -08, and $45,150 on an annualized basis. •Also during fiscal year 2007 -08, staff is recommending adding a 2- person maintenance crew effective January 1, 2008. National Plant has been performing sewer televising, production and hot spot cleaning of the entire system. Their current estimate is that the entire District will have been televised and cleaned by June 30, 2008. In anticipation of this completion, staff is recommending the addition of a 2- person maintenance crew to assume responsibilities for hot spots and emergencies. Beginning July 1, 2008, National Plant will only be used for production cleaning, thus the cost of the crew will be partially offset by the savings in contractor costs. Additionally, the addition of a 2- person crew will reduce the amount of overtime that has been required by the Maintenance Supervisor. Furthermore, the Directors have commented that the Maintenance Supervisor should have assistants in order to reduce the overtime and to provide more effective emergency response. The total cost of the 2- person crew for fiscal year 2007 -08 is approximately $72,300. On an annualized basis, this equates to approximately $144,600. This entire cost will be borne by the Liquid Waste Fund. During the remainder of the 5 -year period covered by this Plan, no additional staffing is anticipated. Once the full staffing levels are reached, total salaries and benefits costs are estimate to increase approximately 7.00% per year, on average, for merit and cost of living increases. • 4 COSTA MESA SANITARY DISTRICT Sewer System Financial Master Plan As of May 29, 2007 LIQUID WASTE FUND Operations and Maintenance Operations and Maintenance costs within the Liquid Waste Fund include the Fund's share of general administrative expenses plus all sewer maintenance expenses. Since the District separated from the City in July 2004, there .are only two complete years of expense experience from which projections can be made. Additionally, the first year should be discounted as it represents a year of transition and does not reflect normal ongoing operations. The accompanying 5 -year projections include estimated increases in professional services of approximately 4% per year. These professional services include the Liquid Waste Fund's portion of the District Manager, legal services, fiscal services, transcription services, information systems services and other miscellaneous professional services. All other ongoing expenses were adjusted to increase approximately 5% per year. It is anticipated that the District will acquire a yard during fiscal year 2007 -08. As previously discussed, the initial acquisition of the yard will be funded by the Facilities Revolving Fund. Subsequent to the acquisition of a yard, the District will incur costs to maintain the yard and associated equipment. These ongoing costs will become part of the Liquid Waste Fund. Staff anticipates these ongoing costs will begin to occur during the 2008 -09 fiscal year. The line items affected by the acquisition of a yard include building maintenance, equipment maintenance, office supplies and utilities costs. Contracted Sewer Maintenance Services ��s r; CA- Prior to July 2004, the District was dependent on the City of Costa Mesa (City) to provide all administrative and operations and mainte nce functions of the District. Effective July 1, 2004, the District separated from the Cit and hired its own administrative employees. The District continued to utilize City em I yees to provide sewer maintenance services until December 2005. At that time, th ity gan to contract with National Plant Services, Inc. to provide televising of sewer lines, on cleaning and hot spots. National Plant Services, Inc. is on target to complete the televising of the sewer lines and cleaning of the entire system by June 30, 2008. At that time, the new 2- person maintenance crew will assume responsibility for hot spots and emergency cleaning. National Plant Services, Inc. will only be responsible for production cleaning. Under this configuration, the current contracted costs will be reduced from $500,000 to approximately $360,000. Also upon termination of the contract with the City, the District contracted with Jimni Systems, Inc. to provide pump station repairs and maintenance. The annual cost for this contract has been approximately $200,000. With the work performed to date, it is Staffs belief that the level 19 • • COSTA MESA SANITARY DISTRICT Sewer System Financial Master Plan As of May 29, 2007 LIQUID WASTE FUND of effort required of Jimni Systems, Inc. in the future will be reduced. However, for projection purposes, the annual cost of $200,000 has been maintained. This provides for contracted increases over the course of the 5 -year period, taking into account the reduced level of effort. Capital Improvement Projects The Manager /District Engineer has developed a 5 -year capital improvement program (CIP) which has been incorporated into the accompanying 5 -year revenue and expense projections. The primary goal of the CIP is to obtain adequate funding for large replacement, repair and reconstruction projects. The 5 -year CIP also provides for continuing to seed a sinking fund and the establishment and initial funding of a sewer lateral program. I• � LJ C F_ -I LJ COSTA MESA SANITARY DISTRICT Sewer System Financial Master Plan As of May 29, 2007 ANNUAL CHARGES As previously discussed, the Liquid Waste Fund accounts for the annual sewer charge levied as part of the property tax bill in order to fund administration, operations and maintenance, and planned capital replacements and repairs. This charge is calculated on an annual basis and can only be used to fund the actual cost of providing service for the year in which the charge is levied. The current sewer charges and projected sewer charges for the fiscal year. 2007 -08 preliminary budget are as follows. These adjustments represent an increase of approximately 50 %. Service Type Single family residence Multi- family residence Commercial (1) Industrial (1) Other (1) Annual Charge Increase FY2007 -08 FY2006 -07 Required $56.46 37.64 18.82 43.49 28.99 14.50 32.85 21.90 10.95 96.76 64.51 32.27 29.10 19.40 9.70 (1) This annual charge is on a per 1,000 square foot basis. In order to adequately fund the ongoing administration, operations and maintenance, and capital improvements of the District, the annual sewer charges would be as follows for the five year period. Service Type Single family residence Multi- family residence Commercial (1) Industrial (1) Other (1) Fiscal Year 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12 $56.46 60.41 61.54 63.80 66.06 43.49 46.52 47.39 49.13 50.87 32.85 35.15 35.81 37.12 38.43 96.76 103.53 105.47 109.33 113.21 29.10 31.14 31.72 32.88 34.05 (1) This annual charge is on a per 1,000 square foot basis. 7 • ANNUALCHARGES COSTA MESA SANITARY DISTRICT Sewer System Financial Master Plan As of May 29, 2007 The above annual sewer charges equate to the following percent increases by fiscal year. Fiscal Year Percent Increase 2007 -08 50.0% 2008 -09 7.0% 2009 -10 1-ea/0 S1 2010 -11 31-70/o �/ 2011 -12 S:51% S"lb The current FOG rates are adequate to meet our FOG requirements and no change is required for fiscal year 2007 -08. Our current FOG rates are: Service Type Commercial without food service Commercial with cold food service Commercial with hot food service r � E:3 FOG Rate $ 2.77 72.00 180.00 IIA:117-11111110' F41 COSTA MESA SANITARY DISTRICT • 5 Year Revenue and Expense Projections As of May 20, 2008 Fiscal Year 2007 -08 .2008 -09 2009 -10 2010 -11 2011 -12 Revenues: Annual charge 4,249,400 4,287,000 4,404,000 4,582,000 4,714,000 Investment earnings 265,000 250,000 235,000 220,000 205,000 Charges for services 10,000 10,400 10,800 11,200 11,600 Sewer permits 25,000 26,000 27,000 28,100 29,200 Inspection fees 50,000 52,000 54,100 56,300 58,600 Total revenues 4,599,400 4,625,400 4,730,900 4,897,600 5,018,400 Expenses: Salaries and benefits: Regular salaries 521,900 577,000 617,400 660,600 706,800 Part-time salaries 23,700 24,900 26,100 27,400 28,800 Board salaries 64,500 67,700 71,100 74,700 78,400 Overtime 57,200 60,100 63,100 66,300 69,600 Compensated absences 26,400 28,200 30,200 32,300 34,600 Cafeteria plan 72,100 77,100 82,500 88,300 94,500 Medicare 11,400 12,200 13,100 14,000 15,000 Social security 4,000 4,300 4,600 4,900 5,200 Retirement - employer 80,800 86,500 92,600 99,100 106,000 Retirement - employee 39,600 42,400 45,400 48,600 52,000 Deferred medical 5,100 5,500 5,900 6,300 6,700 Benefits administration 1,700 1,800 1,900 2,000 2,100 Workers' compensation 19,500 20,900 22,400 24,000 25,700 Total salaries and benefits 927,900 1,008,600 1,076,300 1,148,500 1,225,400 Operations and maintenance: Professional services 32,500 34,100 35,800 37,600 39,500 District manager 59,200 61,600 64,100 66,700 69,400 Engineering /architectural services 16,100 16,700 17,400 18,100 18,800 Plan check/inspection - inside 96,000 99,800 103,800 108,000 112,300 Plan check/inspection - outside 50,000 52,000 54,100 56,300 58,600 Legal services 51,000 53,000 55,100 57,300 59,600 Fiscal services 66,300 69,000 71,800 74,700 77,700 Medical /employment services 1,000 .1,000 1,000 1,000 1,000 Contract services 5,200 5,400 5,600 5,800 6,000 Contract labor 3,000 3,100 3,200 3,300 3,400 County collection fee 9,900 10,400 10,900 11,400 12,000 Election expense - 25,900 - 27,200 - Pump station contract 200,000 200,000 200,000 200,000 200,000 Sewer line maintenance contract 500,000 360,000 378,000 396,900 416,700 Property lease 15,000 - - - - Building maintenance 10,980 20,000 21,000 22,100 23,200 F41 • 4) • EXHIBIT A COSTA MESA SANITARY DISTRICT 5 Year Revenue and Expense Projections As of May 20, 2008 Total operations and maintenance Capital improvement projects: #101 - Westside abandonment #149 - Sinking fund #159 - Televising sewer #164 - Miscellaneous sewer work #168 - Irvine pump station #171 - Irvine P.S. force main #180 - FOG program #181 - Newport/19th sewer #183 - System Wide Repair Program #184 - Force main replacement #186 - Sewer Lateral Program Total capital improvement projects Total expenses Net revenue over (under) expenses 1,829,950 1,775,800 1,814,200 1,908,800 1,952,000 250,000 250,000 250,000 Fiscal Year 250,000 100,000 100,000 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12 Equipment maintenance 78,390 100,000 105,000 110,300 115,800 Office supplies 12,000 14,000 14,700 15,400 16,200 Multi media /copy /blueprint 7,500 7,900 8,300 8,700 9,100 Postage 13,400 14,500 15,700 17,000 18,400 Public info /education /promo 15,700 16,500 17,300 18,200 19,100 Small tools /equipment 48,800 51,200 53,800 56,500 59,300 Materials and supplies 46,800 49,100 51,600 54,200 56,900 Water pumps 1,200 1,300 1,400 1,500 1,600 Electric pumps 95,000 99,800 104,800 110,000 115,500 Memberships /dues 36,600 38,400 40,300 42,300 44,400 Staff development 25,380 26,600 27,900 29,300 30,800 Travel /meals /lodging 21,000 22,100 23,200 24,400 25,600 Mileage reimbursement 200 200 200 200 200 Liability insurance 83,000 87,200 91,600 96,200 101,000 Telephone 5,500 8,000 8,400 8,800 9,200 Cellular service 9,000 10,000 10,500 11,000 11,600 Gas - building 500 1,000 1,100 1,200 1,300 Water- building 1,500 2,000 2,100 2,200 2,300 Electric - building 7,300 9,000 9,500 10,000 10,500 Contingency 70,000 70,000 70,000 70,000 70,000 Operating reserve 135,000 135,000 135,000. 135,000 135,000 Total operations and maintenance Capital improvement projects: #101 - Westside abandonment #149 - Sinking fund #159 - Televising sewer #164 - Miscellaneous sewer work #168 - Irvine pump station #171 - Irvine P.S. force main #180 - FOG program #181 - Newport/19th sewer #183 - System Wide Repair Program #184 - Force main replacement #186 - Sewer Lateral Program Total capital improvement projects Total expenses Net revenue over (under) expenses 1,829,950 1,775,800 1,814,200 1,908,800 1,952,000 250,000 250,000 250,000 250,000 250,000 100,000 100,000 100,000 100,000 100,000 25,000 25,000 25,000 25,000 25,000 190,000 125,000 125,000 125,000 125,000 500,000 - - - - - 440,000 440,000 - - 100,000 100,000 100,000 100,000 100,000 125,000 - - - - 450,000 700,000 . 700,000 700,000 700,000 - - - 440,000 440,000 100,000 100,000 100,000 100,000 100,000 1,840,000 1,840,000 1,840,000 1,840,000 1,840,000 4,597,850 4,624,400 4,730,500 4,897,300 5,017,400 1,550 1,000 400 300 1,000 10