City of Fort Bragg
Mid-Year Budget FY 2023/24
WATER ENTERPRISE FUND
The Water Enterprise rate structure is operating as intended, effectively supporting all operational needs, maintaining the operating reserve, servicing debt obligations, and accumulating funds for infrastructure upgrades, replacements, and maintenance. At the close of Fiscal Year 2023, there was an annual net position increase to $16.7 million.
According to fiscal policy guidelines, the operating reserve is established at 25% of the prior year's operating expense, resulting in a set reserve of $342k for Fiscal Year 2023. Additionally, the Enterprise fund has established a recession reserve of $100k, equivalent to 5% of the Fund's operating budget.
The capital reserve recorded an increase of $153k, reaching a total of $4.7 million. The Capital Improvement Plan (CIP) for the Water Enterprise outlines a total of $85.9 million for identified capital projects over the next five years, with funding sourced from Grants and Enterprise capital reserves. With these resources in place, the Fund is wellequipped to advance numerous projects outlined in the FY 24 budget, as detailed on page 203.
REVENUES
User fees entirely support Water Enterprise Fund revenues. As of the end of the second quarter, revenues surpassed expectations by $232k, reaching 58% of the budget. Previous water restrictions impacted revenue collection; however, with ample rainfall in the state, no restrictions are anticipated for the upcoming summer months. Projections indicate a year-end total revenue of $3.1 million, reflecting a 2 percent increase from the prior fiscal year. This increase is attributed to higher consumption levels, aligning more closely with pre-COVID totals. In the fourth quarter, a Request for Proposal will be issued for water and wastewater rates.
Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
Adopted
Budget
Approved Net
Budget
Amendments
Amended
Budget
Pro Rated
Budget as of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance %
Variance
Budget vs.
Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Operating Revenue $ 3,005,288 $ 3,018,464 $ 3,050,060 $ - $ 3,050,060 $ 1,525,030 $ 1,758,027 58% $ 232,997 $ 3,050,060 $ - Capacity Fees 44,837 91,608 50,000 - 50,000 25,000 5,425 11% (19,575) 15,000 (35,000) Grants Received 640,664 - - - - - -
Miscellaneous 44,837 63,639 60,100 - 60,100 30,050 11,004 18% (19,046) 41,000 (19,100) Total Revenue 3,735,626 3,173,710 3,160,160 - 3,160,160 1,580,080 1,774,456 56% 194,376 3,106,060 (54,100) Personnel services 1,039,332 1,175,299 1,192,854 - 1,192,854 596,427 584,941 49% (11,486) 1,165,726 27,128 Administration 683,735 700,106 473,565 - 473,565 236,782 234,576 50% (2,206) 473,565 - Repairs & maintenance 52,440 36,575 44,500 1,378 45,878 22,939 27,326 60% 4,387 45,878 - Materials & supplies 169,901 368,037 291,448 - 291,448 145,724 103,721 36% (42,003) 262,948 28,500 Utilities 147,423 174,940 175,000 - 175,000 87,500 91,501 52% 4,001 175,000 - Contractual services 93,135 90,394 93,000 29,258 122,258 61,129 18,560 15% (42,569) 112,258 10,000 Insurance 31,351 50,151 62,689 - 62,689 31,344 53,392 85% 22,048 62,689 - Other operating 35,035 6,415 10,500 - 10,500 5,250 677 6% (4,573) 10,500 - Interest/Debt Service * 55,434 67,764 65,289 - 340,080 170,040 294,689 87% 124,649 340,080 - Depreciation ** 364,752 364,563 - - - - 0% - - -
Total Expenditures 2,672,538 3,034,244 2,408,844 30,636 2,714,272 1,357,136 1,409,384 52% 52,248 2,648,644 65,628 Net Revenue/(Expense) $ 1,063,088 $ 139,467 $ 751,316 $ 445,888 $ 222,944 $ 365,073 82% $ 142,128 $ 457,416 11,528 * 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-Year Budget FY 2023/24
EXPENDITURES
Water Enterprise's expenses for the first half of FY 2024 totaled $1.4 million, 58% of the amended annual budget.
The projected year-end total is $2.3 million, $41k under budget. At mid-year, Debt Service is 87% of the total annual budget. Principal payments are paid in October and a second smaller interest payment is in April. The adopted budget includes the final loan payment of $337k for the 2014 Revenue refunding bond which will be paid off this fiscal year. Repairs and Maintenance are 60% of the adopted and are forecasted to end the fiscal year at budget levels.
Most of these repair costs were undertaken in the first half of the year. No other significant variances are expected in other enterprise expense category at year-end.
During the summer months of 2019-2022, the City faced significant water shortage challenges. To address these issues, City Staff proactively pursued alternative plans, such as implementing the Desalination Unit in 2021 and exploring alternative water sources and storage options, including the acquisition of the Highway 20 property.
Furthermore, the installation of new water meters, funded by the Community Development Block Grant (CDBG), will enhance the City's ability to detect leaks and monitor water usage in real time.
Projected revenues of $3.1 million and expenses of $2.6 million are anticipated for the Water Enterprise in FY 2022/23. With staff projections factored in, the Enterprise is expected to conclude the fiscal year with a net position of $13.2 million and reserves totaling $5.2 million.
The Enterprise Capital Reserve allocates $3.3 million for various Capital Improvement Projects (CIPs), including $812k for the Pudding Creek water main, $850k for the Distribution system, $500k for the raw water reservoir, $300k for the extended water system north, and $750k for the reclamation design.
In the previous fiscal year, the Enterprise fund acquired over 582 acres of property from the Mendocino Coast Recreation Park District for $2,420,579. This purchase will contribute to a reduction of reserves by $5.2 million in total. Staff remains proactive in securing Grant funds to support identified CIP projects, utilizing capital reserves for matching funds as needed. For a comprehensive list of scheduled Capital Improvement Projects for the Water Enterprise, please refer to pages 205-213 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
WATER ENTERPRISE
City of Fort Bragg
Mid-Year Budget FY 2023/24
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 2023 ended with an annual net position decrease of $1.2 million to $22.8 million. Per policy, the operating reserve is set at 25% of the prior year's operating expense, and for the Fiscal year 2024 was set at $625k.
REVENUES
Like the Water Enterprise fund, the projected year-end revenue for the current fiscal year is estimated to be $3.5 million or approximately $4k more than the original adopted budget but down from the prior year by 2%.
The septic dumping station recorded a $7k increase in operating revenues for the Fund.
EXPENDITURES
Wastewater Enterprise expenses totaled $1.4 million, 46% percent of the amended annual budget. The projected year-end total is $3.2 million, which is approximately $13k less than the budget:
At year-end personnel, services are expected to be approximately $21k under budget, mainly due to savings in personnel costs from benefits in a couple of positions. At the close of the fiscal year, the Non-Routine Maintenance division anticipates being under budget by approximately $29k for materials and supplies. However, CIRA insurance costs are projected to reach $112k, exceeding the budget by $42k. This increase is attributed to the actual costs incurred for the wastewater treatment plant, which was completed in 2021.
With projected revenues of $3.5 million and expenses of $3.2 million, Staff projects the Wastewater Enterprise to end FY 2024 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.
Audited
FY 2021/22
Actuals
Audited
FY 2022/23
Actuals
Adopted
Budget
Approved
Net Budget
Amendments
Amended
Budget
Pro Rated
Budget as
of
12/31/2023
YTD Actual
12/31/2023
Mid-Year
Variance
%
Variance
Budget vs.
Actual
Estimated
Year End
Forecast
Surplus/
(Shortfall)
Operating Revenue 407 $ 3,477,367 $ 3,390,904 $3,391,756 $ - $ 3,391,756 $ 1,695,878 $ 2,019,411 60% $ 323,533 $ 3,395,756 $ 4,000 Capacity Fees 415 112,468 44,221 120,000 120,000 60,000 68,374 57% 8,374 127,000 7,000 Miscellaneous Revenues416 20,319 181,799 20,000 20,000 10,000 9,500 48% (500) 20,000 - Total Revenue 3,610,153 3,616,924 3,531,756 - 3,531,756 1,765,878 2,097,285 59% 323,533 3,542,756 4,000 Personnel services 693,885 971,400 759,353 - 759,353 379,676 412,158 54% 32,481 737,852 21,500 Administration 1,225,605 1,430,931 713,395 - 713,395 356,697 355,631 50% (1,067) 709,395 4,000 Repairs & maintenance 175,875 95,853 142,750 25,696 168,446 84,223 89,021 53% 4,798 139,446 29,000 Materials & supplies 292,245 509,283 298,894 119,821 418,715 209,358 146,629 35% (62,729) 417,815 900 Utilities 222,967 305,844 300,000 - 300,000 150,000 196,785 66% 46,785 300,000 - Contractual services 360,280 446,764 411,701 303,775 715,476 357,738 167,345 23% (190,393) 715,476 - Insurance 49,798 56,506 70,633 - 70,633 35,316 112,645 159% 77,329 112,645 (42,012) Interest/Debt Service * 506 95,650 93,850 92,010 - 92,010 46,005 - 0% (46,005) 92,010 - Depreciation ** 829,815 816,894 - - - - 0% - - -
Total Expenditures 3,946,121 4,727,326 2,788,736 449,293 3,238,028 1,619,014 1,480,213 46% (138,801) 3,224,640 13,388 Net Revenue/(Expense) $ (335,967) $(1,110,402) $ 743,021 $ (449,293) $ 293,728 $ 146,864 $ 617,072 $ 462,334 $ 318,116 24,388 * 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-Year Budget FY 2023/24
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
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
FY 17/18 FY 18/19 FY 19/20 FY 20/21 FY 21/22 FY 22/23 FY 23/24 Projections
WASTEWATER ENTERPRISE