Final Budget, 1999-2001

432 Pages·1999·38.6 MB·English

by  Santa Clara Valley Water District., Santa Clara County. Board of Supervisors., Santa Clara County Flood Control and Water District.

Santa Clara Valley Water District
San Jose, California
1999/00
&
2000/01
Capital and
Operating
Budget
nl I
Cia~ ~
Woler Disl:rid
SANTA CLARA VALLEY WATER DISTRrcf
USRARY
5750 AL~li\JCi EXPRESSWAY
SAN JOSE, CAUFORNlA 9SUili
Clara Valley Disbid
San~a Wa~er
SUMMARY BUDGET
FISCAL YEAR 1999/00 & 2000/01
BOARD OF DIRECTORS
Larry Wilson -Chair
District 4
Rosemary C. Kamei Gregory A. Zlotnick
District 1 Vice Chair, District 5
Joe Judge Robert W. Gross, Ph.D.
District 2 District 3
Sig Sanchez Tony Estremera
Director, At Large Director, At Large
Submitted by
Stanley M. Williams
General Manager
June 1,1999
PRESENTED TO
Santa Clara Vaney Water District~
California
For the Fiscal Year Beginning
July 1, 1998
The Government Finance Officers Association the
presented an award of Distinguished Presentation to Santa Clara
'"'"''"'~' budget fiscal year beginning 1, 1998.
and as a
one year
and
6
DISTRICT BOARD OF DIRECTORS
ROSEMARY C. KAMEl -DISTRICT 1
JOE JUDGE -DISTRICT 2 Santa aara Valle!:J Water Distrid
ROBERT W. GROSS, PH.D.-DISTRICT 3
LARRY WILSON, CHAIR-DISTRICT 4
GREGORY A. ZLOTNICK, VICE CHAIR-DISTRICT 5 5750 ALMADEN EXPRESSWAY
TONY ESTREMERA-AT LARGE
SAN JOSE, CA 95118-3686
SIG SANCHEZ-AT LARGE
TELEPHONE [phone]
FACSCIMILE [phone]
STANLEY WILLIAMS
GENERAL MANAGER www.scvwd.dslca.us
LAUREN L. KELLER AN EQUAL OPPORTUNITY EMPLOYER
CLERK OF THE BOARD
June, 1 1999
Honorable Board of Supervisors
County of Santa Clara
70 West Hedding Street
San Jose, CA 95110
Dear Board of Supervisors:
INTRODUCTION
The Santa Clara Valley Water District's FY1999-2000 and FY2000-2001 draft biennial budget is hereby
submitted for your review and consideration. The District's first two-year budget, this budget generally
follows the same format as previous years' budgets that have received Distinguished Budget Presentation
Awards from the Government Finance Officers Association (GOFA).
To facilitate your review, a summary of the budget is provided below. In addition, the Overview section
of the budget provides insight into the District's direction as it presents budget highlights and related
outcomes identified by the District's Board of Directors.
BUDGET SUMMARY
The FY1999-2000 and FY2000-2001 budget demonstrates a commitment to allocate financial
resources as effectively as possible for positive community outcomes. It includes several
changes, such as biennial budgeting, that emphasizes long-term planning for ongoing program
functioning within concu"ent fiscal constraints and population growth. The budget also
emphasizes effective use of capital dollars to continue implementing our five-year Capital
Improvement Plan (CIP), which includes additional .flood protection and required upgrades
to our three drinking water treatment plants. In addition, the budget reflects a more efficient
approach to administrative expenditures, resulting in significant cost savings that lead to a
23 percent reduction in the overhead rate. Finally, the biennial budget illustrates the District's
ongoing commitment to environmental stewardship through new and continuing projects.
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FY1999-2000 - Decrease in Operating Figure 1. Total Net Fund Outlays
Expenditures with Increase in Capital Projects
Total net fund outlays in the FY1999-2000 budget D
Water Utility Flood Management Other Funds
are $228 million, an increase of $37 million ( 19
percent) compared to the FY1998-1999 Adjusted
Budget. Total net operating outlays are $123
300
million, a decrease of$14 million (-lOpercent), and
capital appropriations are $105 million, an increase
of$51 million (94 percent) fromFY1998-1999. 250
The Flood Management fund outlays for 200
FY1999-2000 total $57 million, a decrease of$8
~
million (- 12 percent) from FY 1998-1999 (see Fig. '0§ 150
1). The Water Utility fund outlays for E
FY1999-2000 are $163 million, an increase of
100
$45 million (38 percent) from FY1998-1999.
Total fund outlays for the District General Fund
50
and Service Funds are $38 million in FY1999-
2000, a decrease of$4 million (-10 percent) from
FY1998-1999. After reimbursements, the net
fund outlays for the District General Fund and
Service Funds are reduced to $8 million, which
is at the same level budgeted in FY 1998-1999.
Projected annual revenues for FY1999-2000 are $166 million, which is a slight decrease of$1 million (- 0.6
percent) from FY1998-1999 (see Fig. 2). These resources will fund the proposed operating outlays of
$152 million and part of the capital appropriations of $105 million.
FY2000-2001 -Increase in Operating Expenditures, Increase in Capital Projects and Repayment
of Obligations
Total net fund outlays in the FY2000-2001 budget are $283 million, an increase of $55 million (24
percent) compared to the FY1999-2000 Proposed Budget. This amount includes the proposed net
operating outlays of $135 million, an increase of $12 million (1 0 percent) and capital appropriations of
$148 million, an increase of$43 million (40 percent) from FY1999-2000.
Flood Management fund outlays for FY2000-2001 total $103 million, an increase of $46 million (81
percent) from FY 1999-2000 (see Fig. 1) . Water Utility fund outlays for FY2000-2001 are $170 million,
an increase of $7 million (4 percent) from FY1999-2000. Total fund outlays for the District General
Fund and Service Funds are $40 million in FY2000-2001, an increase of $2 million (5 percent) from
FY1999-2000. After reimbursements, the net fund outlays for the District General Fund and Service
Funds are reduced to $10 million.
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11
In addition to the budgeted outlays for Figure 2. Revenues
FY2000-2001, the Water Utility is projected to make
a $90 million extraordinary payment toward the
District's accumulated obligation to the Central D D
O water Utility Flood Management Other Funds
Valley Project (CVP). Of the total payment, $70
million is to be funded from reserves held for
contingent liabilities together with $20 million
funded from the current revenue. 200
Projected revenues for FY2000-2001 are $168
~ 150
million; this is a slight increase of $2 million (1
percent) from FY1999-2000 (see Fig. 2). These
E:
resources will fund the proposed operating outlays ~ 100
of $165 million and a part of the capital
appropriations of $148 million. The additional
50
capital appropriations are funded from bond
proceeds and reserves.
RESERVES
In FY1999-2000, total District reserves increase by approximately $12 million. Districtwide operating
reserves are essentially unchanged, capital reserves increase by nearly $3 million, and reserves for
contingent liabilities increase by $10 million to build up funds needed to pay the District's share of the
costs of the Central Valley Project.
In FY2000-2001, the District anticipates drawing down on reserves by $98 million (see Pages III-26
and III-27). Operating reserves are to increase by $4 million, while $32 million from accumulated capital
reserves will be used to fund flood management and water utility capital improvements. The largest use
of reserves will be to pay down the District's contingent liability for costs of the Central Valley Project.
The budget anticipates that the District will reach resolution of its remaining financial issues with the
Bureau of Reclamation and that the entire reserve of nearly $70 million will be remitted to avoid
accumulating interest on any unpaid amounts.
While District reserves are decreased by $86 million over the two-year period of this budget, the District
reserves will still exceed $133 million, including $43 million in operating reserves, $75 million in capital
reserves, and $12 million in self-insurance appropriations. Since the Board of Directors has considerable
flexibility to designate funds between various reserve categories in emergencies, the planned levels of
reserves in both fiscal years are believed sufficient for the District to maintain essential services.
FLOOD MANAGEMENT
The FY1999-2000 Flood Management portion of the budget is based on an increase in the benefit
assessment rates of 4.6 percent over the FY1998-1999levy based on the estimated increase in the April
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111
to April San Francisco-Oakland-San Jose Figure 3. Operating and Capital Outlays for
Consumer Price Index. The benefit assessment Water Utility and Flood Management
revenue m FY2000· 2001 will be reduced by $6
million as the current program changes. Following
water Utility Operating Flood Management Operat1ng
June 30,2000, benefit assessments will be limited D D
water Utility Capital Flood Management Capital
to 1.25 of debt service for each zone. The 1 percent
property tax revenues projected for the flood zones
for FY1999-2000 is approximately 7.5 percent
300
greater than for FY 1998-1999, with a subsequent
projected 6 percent increase for FY2000-2001.
The income from investments is also projected to 250
increase by $1 million in FY 1999-2000, then stay
constant in FY2000-2001. In FY1998-1999 the 200
District received approximately $10 million from §
the state subventions for outstanding claims. '§ 150
E:
Subventions revenue is not included in this budget
since there is no reasonable assurance that we will
100
be receiving any subventions in the next two years
(Governor Davis has not included subventions in
50
his proposed budget for FY1999-2000). At the end
of FY1999-2000, $68 million in Certificates of
Participation will be issued for flood protection
projects.
The capital project appropriations for Flood Management are budgeted to be $23 million in FY 1999-2000
(see Fig. 3). This is the same level budgeted in FY1998-1999. Capital project appropriations for Flood
Management for FY2000-2001 are budgeted to be $64 million (see Fig. 3), an increase of$41 million (178
percent). The major capital expenditures that contribute to the increase are Guadalupe River, the Matadero
and Barron Creek Remediation, Adobe Creek, Lower Silver Creek and Upper Penitencia Creek projects.
Compared to FY 1998-1999, Flood Management revenues for FY 1999-2000 at $53 million reflect an $7
million (-12 percent) decrease (see Fig. 2), while the $34 million operating budget reflects a $2 million
( -5 percent) decrease compared to FY1998-1999 (see Fig 3.). For the second year of the budget, Flood
Management revenues at $48 million reflect a $5 million (-10 percent) decrease (see Fig. 2). Operating
outlays for FY2000-2001 are $39 million and reflect a $5 million (16 percent) increase compared to
FY 1999-2000. This increase is primarily attributable to debt service for new Certificates of Participation
(see Fig. 3).
WATER UTILITY
Revenues for the Water Utility in FY1999-2000 are projected to be $108 million, about $7 million (7
percent) greater than FY1998-1999 (see Fig. 2). Water revenues for FY1999-2000 are projected to
increase by $5 million in response to a 10 percent increase in the basic user charge from $260 per acre-
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IV
foot to $285 per acre-foot for water used in the northern portion of the County. An increase of $3
million in property taxes is projected to reflect the higher assessed values of properties in the County.
Finally, a decrease in interest earnings of $1 million results in a net increase of $7 million in revenues for
FY1999-2000. Revenues for the Water Utility in FY2000-2001 are projected to be $115 million (see
Fig. 2), which would be about $7 million (6 percent) greater than FY1999-2000. Water revenues for
FY2000-2001 are projected to increase by $8 million in response to a 9 percent increase in the basic user
charge from $285 per acre-foot to $310 per acre-foot for water used in the northern portion of the
County. A projected decrease in interest earnings of $1 million results in a net increase of $7 million in
revenues for FY2000-2001.
The FY1999-2000 operating outlays for the Water Utility of $85 million decreases by $14 million from
FY1998-1999 (see Fig. 3). Major items contributing to the decrease are: a $5 million decrease in payments
for the cost of imported water from the federal Central Valley Project; a $6 million decrease because no
additional water banking is projected; a $ 1 million reduction for investigations to define the threat to
County water supplies from MTBE; and $3 million less for Lenihan Dam emergency work. The above
decreases are offset by some increase in other activities for a net decrease of$14 million. Water Utility
operating revenues are projected to be $79 million, which is equal to 94 percent of operating outlays for
FY1999-2000 compared to 76 percent in FY1998-1999. The FY2000-2001 operating budget for the
Water Utility of $93 million increases by $8 million from FY1999-2000 (see Fig. 3). Major items
contributing to the increase are: a $6 million increase in debt service for FY 1999-2000 revenue bonds;
$1 million for the operation and maintenance cost for water banked in the Semitropic Water Storage
District; and $1 million for complex analyses of groundwater protection from MTBE. Water Utility
operating revenues are projected to be $88 million, which is equal to 95 percent of operating outlays for
FY2000-2001, compared to 94 percent in FY1999-2000.
In FY2000-01 the Water Utility is projected to make a $90 million extraordinary payment toward the
District's accumulated obligation to the federal Central Valley Project, which is to be funded from $70
million in reserves held for contingent liabilities and $20 million from current revenues.
The additional Water Utility capital project appropriations of $78 million for FY1999-2000 are about
$59 million (312 percent) more than in FY1999-1998 (see Fig. 3). The additional capital outlays consist
of a $56 million increase for continuing improvements at the District's three drinking water treatment
plants and a $3 million increase in investment of the South County recycled water improvement plan.
The 1999-2000 Water Utility capital appropriations will be funded from a combination of $12 million
from current operations, $2 million from reserves, and $64 million from revenue bond proceeds.
The additional Water Utility capital project appropriations of$77 million for FY2000-2001 are about $1
million less than in FY1999-2000 (See Fig. 3). Again, the FY2000-2001 Water Utility capital
appropriations will be funded from a combination of $1 million from current operations, $12 million
from reserves, and $64 million from revenue bond proceeds.
In FY 1999-2000, Water Utility reserves are planned to increase from $99 to $107 million. The reserve
for the Central Valley Project contingency will increase by $10 million to $70 million. Combined with a
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v
OTHER FUNDS
the District General, Equipment Service and Risk Insurance funds decreased more
$4 percent) over FY 1998-1999. Total outlays FY2000-200 1 in these funds increase
$2 million (5 percent) over FY1999-2000. the most part, services provided by these funds are
reimbursed through charges to the Flood Management Zones Water Enterprise.
FY1999-2000 and reimbursement charges to the Flood Management Zones \Vater
Utility Enterprise were lowered by reducing adw.Jnistrative costs a..."ld using nearly $6 million from General
Fund capital reserves to fund the capital appropriations of the General Fund.
STAFFING
The budget provides for staffing several ways. The number of authorized positions has increased
one since the FY1997-19981evel to ru-TI.ve at 636 authorized positions (see Page ill-23). The projected
cost for salaries ru!d benefits, adjusted for estimated vacancies, is $51 million~a.n increase of $3 w.Jllion
( 6 percent) compared to FY 1998-1999. Salaries and benefits for FY2000-2001 are projected to be $52
roillion, an increase of$1 million (3 percent) compared to FY1999-2000. The increases are budgeted
primarily to cover the adjustment of salaries due to a Districtwide classification and compensation study
completed during FY1998-1999.
CONCLUSION
During the next two fiscal years, the District will focus on specific needs central to carrying out its
primary mission: providing safe, reliable, high-quality water for Santa Clara County residents and
protecting the County's residents, lands and businesses from flood damage. The District will continue to
work with both local agencies and state and federal regulatory agencies to secure supplemental funding
sources and develop policies for environmental safeguards for incorporation in both Flood Management
a.nd Water Utility Enterprise activities. The District also will be undertaking significant capital work
with Lnitiation of construction of several flood protection projects and construction of major improvements
to its tr..ree water treatment plants.
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