11 - Final Year End Budget for FY 2012-13 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: Stacey Cuevas, Finance Manager
Date: August 29, 2013
Subject: Final Year End Budget for FY 2012 -13
Summary
Th is report serves as the year -end spending report for Fiscal Y ear 2012 -13 .
Staff Recommendation
That the Board of Directors receive and file this report.
Analysis
Overall, fiscal year 2012 -13 ended with a combined surplus of $5,186,939 in the solid and
liqu id waste funds . Eighty -six percent of this amount is fro m the CIP budget at
$4,460,316 . The Solid Waste Fund has a surplus balance of $190,645 and the Liquid
Waste Fund has a surplus balance of $4,996,294 .
A portion of the surplus is from savings in salaries and benefits due to two vacant
positions, Finance Manager, formally Accounting Manager, and Management Assista nt.
In addition, the Board of Directors had a vacant seat for two months and one Board
member has reduced his compensation for meeting attendance from six to three meetings
per month.
Other savi ngs includ e consulting services for a zero waste plan and branding, and the
District has been reimbursed $20,422.50 from CR&R for auditing their performance. In
addition, there is a savings of $43,004 or 43% in engineering services and $18,141 or 23%
in e quipment maintenance. Other s maller savings are attributed to plan check and
inspection services, and pump station maintenance.
ITEM NO. 11
Board of Directors
August 29 , 2013
Page 2 of 2
Eighty -six percent of the projected surplus is from Capital Improvement Projects. Six CIP
projects have been closed out in FY 2012 -13 that resulted in a total savings of $1,032,682 .
T his money will be transferred back into the Asset Management Fund. There are an
additional six CIP projects that are ongoing that have a combined total balance of
$3,436,894 . In October 2013, staff will bring back to the Board the CIP carry forwards.
Please see attached report for a more detail ed analysis.
Strategic Plan Element & Goal
This item supports achieving the objective and strategy of Strategic Element No. 7.0,
Finance , which 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 current and
planned operations and projects.”
Legal Review
Not applicable.
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
August 29 , 2013 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 2012 -13 Year -End Budget Report
SOLID WASTE FUND
As of June 30 , 2013
Account Name: Solid Waste Account # 10 -000000
Prepared by: Stacey Cuevas
EXECUTIVE SUMMARY
Attached, please find the final budget expenditure analysis for the Solid Waste maintenance
operating budget for FY 201 2 -13 . Please see budget account information below for additional
detail.
The annual working budget for this fund is $ 5,505,842 . T he Solid Waste Fund had budget
adjustments that totaled $167,595 for OC Waste & Recycling grant (composting), branding
consultant, Knowledge Transfer Program, actuarial value, building maintenance, marketing
video and expanding the door -to -door household h azardous waste collections for seniors and
disabled residents. In the last quarter of the fiscal year there was a budget adju stment of
$6,500 for the City of Costa Mesa’s 60th Anniversary ($4,000) and for being a bronze sponsor
of the City of Costa Mesa M ayor’s Celebration – the Art of Leadership ($2,500).
Total year -end expenditure s f or Solid Waste total $5,315,197 , which results in a balance of
$190,645 . The surplus balance is due to savings in salaries and benefits , special programs and
professiona l services.
The following sections provide summary information about the status of any given account
number that may need additional clarification. Please feel free to contact me if you have any
questions or need additional information about this report.
PERSONNEL
12 -13
Original
Budget
12 -13
Carry
Forward
12 -13
Adjustments
12 -13
Working
Budget
$5,338,247 $0 $167,595 $5,505,842
A surplus of $104,457 was realized at the end of the year . The Management Assistant
position was not filled because a volunteer intern was temporary filling this role. The intern
was promoted to the full -time Management Assistant position and has begun her new
position on July 15, 2013. Sa vings from Board salaries will occur due to one vacant Board
seat in the months of January and February and one Boa rd member is being compensation
for attending three meetings a month instead of the maximum amount of six meetings per
month , as per his dire ction .
Year -End Budget Report
June 30, 2013
Page 2 of 9
M&O
Special Programs
Staff has determined the Solid Waste fund will experience a deficit of $58,862 . The District
has historically paid for June collection services performed by CR&R in the month of July
without correctly accounting for this expense in the appropria te fiscal year. Staff has
corrected this practice by allocating the June 2013 payment to FY 2012 -13. Therefore,
thirteen payments to CR&R are reflected, which has caused deficit spending for the year.
Th e deficit was offset by significant savings in pro fessional services because the District
saved $50,000 on a zero waste consultant and $15,000 on a branding consultant .
Additionally, t he District spent $20,422.50 on a consultant for auditing CR&R’s performance.
This money has been reimbursed to the Dist rict as per the terms of the Agreement with
CR&R. A savings of $13,619 in legal s ervices was also realized . In addition, election costs
were less than expected at a savings of $10,111. District costs associated with postage
remain well under budget as a result of most correspondence and documents being sent
electronically, via email. The District realized an overall savings of $9,585 in postage. An
additional $14,224 was appro priated into the Community Outreach line item. This included
$6,500 was for the City of Costa Mesa’s 60th Anniversary and the Mayor’s Celebration – the
Art of Leadership, $5,000 was for promoting the HHW collection event at Orange Coast
College , $2,000 for the Green Guide , and $724 for the District’s marketing DVD. The
Community O utreach also supported the MUZEO Trash Artist Challenge for elementary
school children at $5,000. Through these events, District services and general messages
about recycling were delivered to the community and the District realized at surplus of $4,112
a t the end of the year . Board travel/meals/lodgi ng has a surplus of $1,748 .
The District did not budget any funds for contract services; however, $7,782 was spent from
this a ccount because the District had to hire a temporary contractor to perform plan check
duties after the permit technician was separated from employment with the District .
Special programs has a surplus of $145,495 . More than half of the projected surplus
($100,946) come s from the HHW door -to -door collection program where in the begi nning of
the fiscal year, the Board approved appropriating and additional $75,000 to expand this
program for seniors and disabled residents. Since impl ementing this program, there have
been 31 collections (averaging one collection per week) totaling $3,13 6 . Additional
expenditures for HHW includes $5,091 for collecting and disposing batteries and
fluorescents lights from the OCC Recycling Center. Also, the District did not spend any
money for additional lockable containers because it appears the demand ha s diminished,
which is a savings of $9,800. Educational tours are down, but t he District recently spent
$19,177.50 for an agreement with the Orange County Department of Education for their
Inside the Outdoors program to support the Project Zero Waste prog ram for costa mesa K –
6 th grade students and teachers. The program focuses on waste reduction and science
education with an emphasis on recycling. The Educational Tours line item has a surplus of
$3,557 .
Year -End Budget Report
June 30, 2013
Page 3 of 9
CAPITAL OUTLAY
The District over spent its Capital Outlay bud get by $44 5.00. The following are the capital
outlay expenditures for the fiscal year.
• Front office and lobby furniture $2,890.39
• Board Room audio equipment $210.90
• Computer desktop $93.97
• GIS upgrades $4 50.00
LIQUID WASTE FUND
As of June 30 , 2013
Account Name: Liquid Waste Account # 20 -000000
Prepared by: Scott Carroll
EXECUTIVE SUM MARY
Attached, please find the latest budget expenditure analysis for the Sewer maintenance operating
budget. The projections in this budget are based on run rates in some accounts and known or
anticipated spending in others. Please see budget account information below for additional detail.
The working budget for this fund is $9,586,795 . In September 2012, the Board app roved a budget
adjustment in the amount of $700,000 for rehabilitating the Santa Ana Avenue and 23 rd Street force
mains. In October 2012, the Board approved M&O carry forwards in the total amount of $31,265.
This amount is broken down for the following p rojects/programs:
M&O Carry Forwards
• Sewer Rate Study $ 4,690
• Actuarial Study $ 6,500
• Pump Station Improvements
at California & Canyon Pump Stations $20,075
Also in October 2012, the Board approved CIP carry forwards in the amount of $2,774,665 for the
following projects:
CIP Carry Forwards
• Project #101 – Westside Pump Stations Abandonment $1,341,625
• Project #129 – Bristol Street Sewer Improvement $ 15,000
• Project #171 – Irvine Force Main Rehabilitation $ 5,000
• Project #188 – GIS Upgrades $ 51,390
• Project #190 – Canyon Force Main Rehabilitation $ 124,920
• Project #191 – Force Main Assessments $ 50,000
• Project #192 – System Wide Sewer Reconstruction – Phase II $1,115,361
• Project #193 – Pump Station Seismic Refurbi shment $ 34,175
• Project #196 – Pump Station Emergency Equipment $ 37,194
In November, 2012 , the Board made another adjustment to the budget in the amount of $176,185 to
perform the PICA analysis of force main s. On April 18, 2013, the Board appr oved another adjustment
by allocating $25,000 from the Liquid Waste Fund Balance to the SLAP budget; however, the net
adjustment was $17,500 because the Board approved $7,500 from the Liquid Waste Contingency
Fund for the soils test on the Fairview Trunk a nd the Board approved transferring $4,000 from the
same contingency fund to the community promotion account for the City’s 60 th Anniversary event.
11 -12
Original
Budget
11 -12
Carry
Forward
11 -12
Adjustments
11 -12
Working
Budget
$5,879,680 $2,805,930 $901,185 $9,586,795
Year -End Budget Report
June 30, 2013
Page 6 of 9
The total year -end expenditur e for the Liquid Waste Fund is $4,590,364, with a year -end balance of
$4,996,4 31 . Of this amount, $4,469,666 is from CIP projects as shown on Page 6 of this report. The
projected surplus balance is due to salaries and be nefits savings, engineering services, professional
development/training, inflow reduction program, and capital i mprovement expenditures.
The following sections provide summary information about the status of any given account number
that may need additional clarification. Please feel free to contact me if you have any questions or
need additional information about this report.
PERSONNEL
M&O
Personnel expenses will have a surpl us of $197,235 . The savings in salaries and benefits
come from the Accounting Manager position that was vacant for seven months. This
position has been reclassified as Finance Manager and an appointment for the position has
been made. Other reasons for the savings includes one vacant Board seat in the months of
January and February and one Board member is being compensation for attending three
meetings a month instead of the maximum amount of six meetings per month, as per his
direction.
Spending in M&O accounts was below planned budget levels at year -end , providing a total
surplus balance of $266,250 . Significant line item savings are described in more details
below.
• A surplus of $43,004 was realized in Engineering Services because the District
En gineer is spending more time , as required, on inside/outside plan development,
hotspots, and CIP projects than general engineering. Because of the projected
surplus, staff transferred $19,540 from this account to fund replacing the pipes and
valves at the 21 st Street Pump Station. The estimated cost for this cost is $50,000.
• The Plan Check/Inspections line item has a small surplus of $4,528. Staff has
observed that inspection for ins ide projects are down, but5 ins pections for outside
projects has increas ed as a result of economic improvement and increase
development.
• Contract Services has a deficit of $25,907 because the permit technician position is
being temporary filled by a consultant while staff analyzes this position.
• Pump Station Maintenance has a surplus of $3,942. St aff successfully solicited bids
and executed a three year contract with Xylem for annual preventative maintenance .
The three year contract enabled to the District to save annually for this service.
Year -End Budget Report
June 30, 2013
Page 7 of 9
M&O (Continued)
CAPITAL OUTLAY
The District spent 88%% of its Capital Out lay budget. A total of $526,637 was spent on
capital outlay. The FY 2012 -13 Working Budge t for Capital Outlay is $599,130 , which leaves
a surplus of $72,493. Half of the budg et is for the new sewer combination truck from
VacCon. Significant capital outlay expenses are identified below.
• Sewer combination truck from VacCon - $334,664
• Receptionist and lobby furniture - $ 2,890
• Board room video equipment - $ 1,327
• Comp uter equipment & software update - $ 1,174
• SCADA system $ 62,899
• HQ building electrical plans $ 3,291
• Stainless steel enclosures at Santa Ana,
Victoria, Harbor & Sea Bluff Pump Stations - $ 38,250
• PS Equipment at Elden, Harbor & 19 th St - $ 3 9,044
• Stainless steel enclosure at California - $ 4,320
• Manhole cover ring sets - $ 11,158
• HQ rear patio expansion - $ 13,200
• Election costs were less than anticipated that resulted in a savings of $10,111.
• There is a surplus of $18,141 in Equipment Maintenance because the District only
spent $6,538.25 for renewing its license with Sp ringbook, the District’s financial
software. $18,000 was budgeted for this expense. Springbook gave the District
favorable discounts, but those discounts ended in July 2013 when the District paid
$14,173 to Springbook. $10,000 was budgeted for maintenance of the SCADA
system, but because little maintenance was required, th e District only spent $1,739.
• Miscellaneous Sewer Work realized a surplus of $21,858 as a result of significantly
less work required than the previous fiscal year .
• There has been $1,644 out of a budget of $26,000 spent on Inflow Reduction . The
expenditu res are from the District Engineer. Staff did purchase 39 manhole covers
without vent holes and those manhole covers have replaced existing manhole covers
as part of the District’s Inflow Reduction Program. The manhole covers were
purchased from the misc ellaneous sewer maintenance account. Because there is a
considerable surplus in this account, staff transferred $20,000 from this account to
fund replacing the pipes and valves at the 21 st Street Pump Station.
• EO C Equipment & Supplies has a net loss of ($3,775 ) because $4,124 was spent on
IT support for WebEOC and extending the T1 circuit from the phone closet to the
server room. The EOC laptops were also set up to support WebEOC and the GIS
server. This was an unplanned expense.
• Professional Developmen t/Training has a surplus of $32,957 because the Board
spent 65% of its $33,990 budget for traveling and lodging. Staff developme nt
expenditures are also down 17 % because of the vacant Finance Manager, formally
Accounting Manager position has been vacant f or seven months and the
Management Assistant position was vacant for the entire year.
• Contingency has a zero balance because staff transferred $10,460 from this account
to fund replacing the pipes and valves at the 21 st Street Pump Station. The estimated
c ost for this cost is $50,000.
Year -End Budget Report
June 30, 2013
Page 8 of 9
CAPITAL IMPROVEMENT PROJECTS
The following CIP projects are complete. The balance for these projects are also identified below.
Balance
Project #129 – Bristol Street Sewer Improvement - $ 10,488.94
Project #171 – Irvine Force Main Rehabilitation - $ 3,451.96
Project #188 – GIS Upgrades - $ (2,079.55)
Project #190 – Cany on Force Main R ehabilitation $ 15,526.31
Project #191 – Force Main Assessments $ 91,273.84
Project #192 – System Wide Sewer Reconstruction – Phase II $ 904,787.07
TOTAL: $1,023,448.57
The balance of $1 ,032,682.32 will be transferred back into the Asset Management Fund. The CIP
projects below are ongoing.
Project
FY 2012 -13
Appropriation
Carry
Forward
Total
Appropriation
FY 2012 -13
Expenses Balance
Westside Aband #101 $400,000 $1,341,625 $1,741,625 $105,839 $1,635,786
Seismic Refurbish #193 $34,175 $34,175 $3,377 $30,798
PS Emerg ency Eqpt #196 $1,000,000 $1,037,194 $1,037,194 $41,766 $995,428
System Wide Swr Ph3
#197 $670,000 $670,000 $58,853 $611,147
PICA Analysis #198 $176,185 $176,185 $6,868 $169,31 7
Fairview Trunk #199 $7,500 $7,500 $13,083 ($5,583)
TOTAL $2,253,685 $2,412,994 $3,666,679 $229,785 $3,436,894