City of Fort Bragg
Mid-Term Budget FY 2022/23
WATER ENTERPRISE FUND
The Water Enterprise rate structure is functioning as designed and continues to fund all operations, maintain the operating reserve, provide for debt, and accumulate funds for infrastructure upgrades, replacements, and maintenance. The fiscal Year 2021/22 ended with an annual net position increase of $16.6 million.
Per fiscal policy, the operating reserve is set at 25 percent of the prior year's operating expense, and for the Fiscal year, 2021/22 was set at $342k. The Enterprise fund also established a recession reserve of $100k, sufficient for 5 percent of the Fund's operating budget.
The capital reserve increased by $1.3 million to $4.7 million. The CIP for the Water Enterprise stood at $71.4 million in total identified capital projects for the next five years, relying on Grants and Enterprise capital reserves for funding. The Fund is well-positioned to continue working on many projects on page 190 of the FY 22/23 budget.
REVENUES
User fees fully support the revenues for the Water Enterprise Fund. At the end of the second quarter, revenues were $262k more at 59% of the budget. In FY 20-22, the City implemented water restrictions measures in the summer in response to the reduced flows in the Noyo River, increased high tide events, and the lower-than-usual precipitation that affected the City's water supply. The City Council approved a targeted 30-40% reduction in water consumption in the previous years. Fortunately, in the second quarter, Fort Bragg received a significant amount of needed rainfall.
The projected year-end total revenue is $3.2 million or approximately $108k more than budget, a 2 percent increase from the prior fiscal year due to an increase in consumption and more in line with the prior year (pre-covid) totals.
FY 2020/21
Actuals
FY 2021/22
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2021
YTD Actual
12/31/2022
Mid-Year
Variance %
Variance
Budget vs.
Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Operating Revenue $ 3,288,053 $ 3,005,288 $ 2,970,342 $ - $ 2,970,342 $ 1,485,171 $ 1,747,268 59% $ 262,097 $ 3,036,779 $ 66,437 Capacity Fees 346,561 44,837 20,000 - 20,000 10,000 46,200 231% 36,200 52,000 32,000 Miscellaneous 92,353 - 82,300 - 82,300 41,150 32,346 39% (8,804) 91,800 9,500 Total Revenue 3,726,967 3,050,125 3,072,642 - 3,072,642 1,536,321 1,825,814 59% 289,493 3,180,579 107,937 Personnel services 452,486 1,039,332 919,986 11,151 931,137 465,569 426,121 46% (39,447) 856,897 74,240 Administration 470,943 683,735 457,183 - 457,183 228,592 244,226 53% 15,634 459,314 (2,131) Repairs & maintenance 36,419 52,440 42,200 - 42,200 21,100 9,588 23% (11,512) 15,700 26,500 Materials & supplies 149,770 169,998 226,348 - 207,348 103,674 96,191 46% (7,483) 212,548 (5,200) Utilities 117,070 147,423 144,000 - 144,000 72,000 89,160 62% 17,160 174,930 (30,930) Contractual services 56,769 93,135 127,500 46,033 173,533 86,767 47,710 27% (39,056) 123,000 50,533 Insurance 17,230 31,351 40,442 - 40,442 20,221 14,314 35% (5,907) 38,628 1,813 Interest/Debt Service * 64,949 55,434 782,993 - 782,993 391,496 383,077 49% (8,419) 782,993 - Depreciation ** 319,552 364,752 - - - - 0% - - -
Total Expenditures 1,687,506 2,672,538 2,751,652 57,184 2,789,836 1,394,918 1,316,797 47% (78,121) 2,670,419 119,417 Net Revenue/(Expense) $ 2,039,461 $ 377,587 $ 320,990 $ 282,806 $ 141,403 $ 509,017 180% $ 367,614 $ 510,160 227,353 * Audited results do not include payment of principal which is not an expense in full accrual accounting ** Depreciation Expense is not budgeted and therefore not included in calculation of budget variance
WATER ENTERPRISE
City of Fort Bragg
Mid-Term Budget FY 2022/23
EXPENDITURES
Water Enterprise's expenses for the first half of FY 2022/23 totaled $1.3 million, 47% of the amended annual budget.
The projected year-end total is $2.6 million, $119k under budget. At mid-year, Debt Service is 49% of the total annual budget. Principal payments are paid in October and a second smaller interest payment in April. The adopted budget includes the $785k to pay off the 2007 Department of Water Resource Loan. Once this loan is paid off, Water Enterprise will have only one remaining debt which will be paid off in 2025.
Utility Costs are 62% of the adopted and are forecasted to end the fiscal year at $30,930 above budget. Energy costs for electric have risen by 35% per month compared to last year due to rate increases with a slight increase in consumption. This report includes a budget amendment request for additional funds to cover these overages.
No other significant variances are expected in other enterprise expense category at year-end.
The summer months of 2019-2022 represented water shortage challenges for the City. City Staff actively pursued alternative plans to address these challenges, including the Desalination Unit implemented in 2021 and looking at alternative water sources and storage. Additionally, the new water meter installation funded by the Community Development Block Grant (CDBG) will assist the City in better-detecting leaks and water usage in real-time. -
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 projections Water Fund Operations
Revenues Expenditures Net Operating Income
City of Fort Bragg
Mid-Term Budget FY 2022/23
With projected revenues of $3.1 million, expenses of $2.6 million, staff projects, the Water Enterprise will end the FY 2022/23 with a net position of $13.2 million and reserves of $1.8 million. The Enterprise Capital Reserve budgeted $3.3 million to be transferred for Capital improvement projects, including the Pudding Creek water main $812k, the Distribution system $850k, the raw water reservoir $500k, the extended water system north $300k, and the reclamation design $750k. Additionally, the Enterprise fund is closing on a 582+ acres property purchase from the Mendocino Coast Recreation Park District, $2,420,579, which the Water reserves will fund. The reserves are projected to be reduced by $5.8 million altogether. Staff continues actively seeking Grant funds to fund the identified CIP projects and use capital reserves for matching funds.
For a more detailed list of the Capital improvement project scheduled for the Water Enterprise, refer to pages 190-196 of the Adopted Budget.
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
FY 16/17 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 Projections
WATER ENTERPRISE RESERVES
Capital Reserve ,
$3,292,138 , 8%
Unfunded CIP ,
36,600,000 , 92%
Water Enterprise Capital Improvement Funding
Capital Reserve Unfunded CIP
City of Fort Bragg
Mid-Term Budget FY 2022/23
WASTEWATER ENTERPRISE FUND
The Wastewater Enterprise rate structure is functioning as designed and continues to fund all operations, maintain the operating reserve, provide for debt, and accumulate funds for infrastructure upgrades, replacements, and maintenance. The fiscal Year 2021/22 ended with an annual net position increase of $2.04 million to $24.4 million. Per policy, the operating reserve is set at 25% of the prior year's operating expense, and for the Fiscal year 2022/23 was set at $625k.
REVENUES
Like the Water Enterprise fund, the projected year-end revenue for the current fiscal year is estimated to be $3.4 million or approximately $166k more than the original adopted budget but down from the prior year by 4% or $679k. The new septic dumping station recorded a $40k increase in operating revenues for the Fund.
EXPENDITURES
Wastewater Enterprise expenses totaled $1.2 million, 49% percent of the amended annual budget. The projected year-end total is $2.5 million, which is approximately $27k less than the budget:
At year-end personnel, services are expected to be approximately $25k under budget, mainly due to savings in personnel costs from benefits in a couple of positions. Utilities are forecasted to be $55k above budget estimates. Energy costs for electricity have risen by 35% per month compared to last year due to rate increases with a slight increase in consumption. A budget amendment request is requested for the overages. At year-end, materials and supplies in the Non-Routine Maintenance division are expected to be under budget by approximately $46k. Less maintenance is required for the sewer lift stations since a complete overhaul was undertaken.
FY 2020/21
Actuals
FY 2021/22
Actuals
Adopted
Budget
Approved
Net Budget
Amendments
Amended
Budget
Pro Rated
Budget as
of
12/31/2021
YTD Actual
12/31/2022
Mid-Year
Variance
%
Variance
Budget vs.
Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Operating Revenue $ 3,707,788 $ 3,570,257 $3,212,050 $ - $ 3,212,050 $ 1,606,025 $ 2,062,592 64% $ 456,567 $3,378,170 $ 166,120 Capacity Fees 309,446 7,353 15,000 15,000 7,500 39,727 265% 32,227 50,000 35,000 Miscellaneous Revenues 36,823 32,544 34,000 34,000 17,000 9,333 27% (7,667) 23,500 (10,500) Total Revenue 4,054,057 3,610,153 3,261,050 - 3,261,050 1,630,525 2,111,653 65% 456,567 3,451,670 166,120 Personnel services 686,110 687,773 576,890 12,651 589,541 294,771 314,532 53% 19,761 563,740 25,801 Administration 693,735 1,225,605 702,284 - 702,284 351,142 346,072 49% (5,070) 698,890 3,394 Repairs & maintenance 85,697 175,875 128,700 - 128,700 64,350 57,157 44% (7,193) 82,700 46,000 Materials & supplies 266,418 298,357 273,244 77,209 350,453 175,226 131,540 38% (43,686) 330,494 19,959 Utilities 198,320 222,967 220,000 - 220,000 110,000 194,328 88% 84,328 306,333 (86,333) Contractual services 164,551 360,280 260,000 205,495 465,495 232,747 222,518 48% (10,229) 460,495 5,000 Insurance 53,032 49,798 64,240 - 64,240 32,120 22,660 35% (9,459) 50,321 13,919 Interest/Debt Service * 97,760 95,650 93,850 - 93,850 46,925 - 0% (46,925) 93,850 - Depreciation ** 816,300 829,815 - - - - 0% - - -
Total Expenditures 3,061,923 3,946,121 2,319,208 295,354 2,614,562 1,307,281 1,288,807 49% (18,474) 2,586,822 27,740 Net Revenue/(Expense) $ 992,134 $ (335,967) $ 941,842 $ (295,354) $ 323,244 $ 822,846 $ 475,041 $ 864,847 864,847 * Audited results do not include payment of principal which is not an expense in full accrual accounting ** Depreciation Expense is not budgeted and therefore not included in calculation of budget variance
WASTEWATER ENTERPRISE
City of Fort Bragg
Mid-Term Budget FY 2022/23
With projected revenues of $3.4 million and expenses of $2.6 million, Staff projects the Wastewater Enterprise to end FY 2022/23 with a net position of $26.1 million and reserves of $2.1 million. The decline in reserves in fiscal year FY 17/18 is a result of the Wastewater treatment plant construction in addition to grant funds- seen below.
During the budget development, Staff identified a list of Capital Improvements Program (CIP) of $16.6 million needed to improve the Fund's infrastructure. A collection system rehab of $12 million is planned for FY 2024/25, with $1.5 million of Capital improvements budgeted for this fiscal year. (500,000)
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 projections Wastewater Fund Operations
Revenues Expenditures Net Operating Income
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
FY 16/17 FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 Projections
WASTEWATER RESERVES