February 7, 2022 - Finance Committee -Water Sewer Electric Budgets

Mayor Hawk opened the meeting and turned it over to Chairman Mike Schwab at 6:15.

 

Council Members present: Dale Fox, Dave Godwin, Sydney Radich, Tom Hilliard, and Mike Schwab.  VA Miller and Clerk-Treasurer Kris King were also in attendance.

 

Chairman Schwab provided the following reports taken from the Clerk-Treasurer’s reports and asked the Clerk-Treasurer to go over each fund and add any comments:

 

                Funded by: 95% of Sale of Electricity Collections minus $ 240,000 to Debt Fund = $ 4,590,662.14

                                      KWH Tax =                                      $ 207,274.85

                                      Pole Rent =                                     $      1,072.00

                                      Mutual Aid Reimbursement =     $      1,091.16

                                      AMP Reimbursements =             $    19,218.74

                                      Reconnection Fees & Refunds = $     2,555.52

 

                Expenses:     Purchase of Power =                    $ 3,892,805.14

                                      Employee Wages & Benefits =    $    681,028.66   

                                      Operation/maintenance =           $    192,399.89

                                      Insurance =                                     $      15,856.65

                                      Engineering =                                 $      17,340.00    

                                      Fuel, repairs =                                $        3,742.19

                                     Capital outlay =                              $    261,866.01

                                     OMEGA JV5 deb =                          $       71,666.40

                                       and so forth

Please note that the salaries and benefits not only include the department itself but also contains 25% of the Mayor and Council, 30% of the Clerk-Treasurer, 90% of the Utility Staff, 40% of the Administrative Staff, 79% of the Village Administrator, and 17% of the Solicitor’s benefits package.

 

Whether a fund balance increases or decreases, it is important to make sure that the fund contains a six-month operating budget balance.  In the case of the Electric Fund, we had two large projects, AMI and SCADA, that reduced our fund balance.  The current operating budget used for this fund is $2,412,965.  The current unencumbered balance of operating funds is $2,684,700.  The fund may be down but is still in good shape.

                Funded by: 5% of Sale of Electricity Collections

                Expenses: Engineering & projects’ capital outlays

 

With the cost of most electric projects, I feel this should remain the same for 2022.

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                Funded by: $ 20,000 per month                      

Expenses: Electric Debt principal & interest; no current debt

(Should $ 20,000 per month for $ 00.00 Debt continue?)

Originally there was expected to be some debt within the last year or so but with the sale of the 69kV line to AMPT, no debt was issued.  I believe we can discontinue this distribution.

        (Approved on 02/01/21: Contracts - Engineering = $ 16,845 & Construction oversight = $ 5515)

 

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VA Miller reported that the department has been ordering transformers.  They have a lead time of 46 weeks – they are trying to keep their stock up.  Courtney and Associates are performing a rate study to make sure our rates are not too low or too high.

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                Funded by: 92% of Sale of Water Collections minus $ 12,000 to Debt Fund           = $ 399,523.78

                                                Misc. Sales & Meter Reconnection Fees=$     9,892.01

                                                Loan Proceeds=                                $ 164,495.39                    

Expenses:    

                                                Employee Wages & Benefits =          $  227,035.80   

                                                Operation/maintenance =                 $    65,731.55

                                                Contractual services =                        $    14,138.95

                                                Insurance =                                         $     13,944.05

                                                Engineering =                                      $     21,232.40

                                                Fuel & Repairs =                                 $       3,825.40

                                                Capital Outlay =                                  $  200,849.30

                                                Note Retirement =                              $          961.39

                                       and so forth

Please note that the salaries and benefits not only include the department itself but also contains 25% of the Mayor and Council, 10% of the Clerk-Treasurer, 5% of the Utility Staff, 5% of the Administrative Staff, 9% of the Village Administrator, and 17% of the Solicitor’s benefits package.

Whether a fund balance increases or decreases, it is important to make sure that the fund contains a six-month operating budget balance.  In the case of the Water Fund, we had two large projects, Jefferson Sanitary Sewer and Clear Well painting, that reduced our fund balance.  The current six-month operating budget used for this fund is $193,443.  The current unencumbered balance for operating funds is $235,224.29.  The fund took out a loan for the Jefferson project which enabled the fund to stay fairly consistent and in good shape.

This fund will also have a rate study done.

                Funded by: 8% of Sale of Water Collections

                Expenses: engineering = $ 6023.92; Capital Outlay (Meters?) = $ 17,923.13

 

The 8% is sufficient to support the proposed water line replacements over the next few years.

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                Funded by: $ 1,000 per month of Sale of Water Collections                     

Expenses: Water Debt principal & interest; minor current debt paid from Water Fund

This amount is going to have to be increased in the near future but not until the cost of projects are known.  We still have not received an amortization schedule for the Jefferson Project loan.

                OPWC Grant =      $ 94,080

                OPWC Loan =        $ 62,720    (Terms = 0 % for 20 years

                Local Match =       $ 225,992  (Replacement Fund balance =- $ 41,280 & Debt Fund = $ 19,000)

                                                Source of Funding for Loan & Match ?

(Bidding approved on 08/02/2021; Contract of $ 381,792 approved on 11/01/21 w/Workman Ind)

We may be looking into a loan at 1.2% for 20 years for this project unless we use ARPA Funds.  There was a discussion on using the ARPA funds for this project instead of the Council Chamber Remodeling.  The Clerk is concerned with the Final Rule from the Treasury Department.  Originally the Clerk, VA , Mayor and Solicitor believed that the project was eligible for the funding but the new rule makes it questionable.  We would be better off using the funds for the Water Filter Media Project that we are sure that are eligible for the funding and use Capital Project Funds for the Council Chambers.

 

                American Rescue Plan Funding = $ 54,144

(Bidding approved on 08/16/2021; Contract of $ 46,144.08 approved on 01/18/22 w/RBS General)

 

VA Miller recommends taking this out of the Water Improvement Fund in order to have more funding for the Water Filter Media Project.  This also keeps all the expenses for ARPA coming from the same project.  It makes it cleaner for reporting purposes.

 

                Application Made for:

OPWC Grant =      $ 113,817

OPWC Loan =       $  75,878    (Terms = 1.2 % for 20 years

Local Match of     $ 189,695 (Replacement Fund balance =- $ 41,280 & Debt Fund = $ 19,000)

                                                Source of Local Funding for Loan & Match ?

                (Approved on 04/05/21: Contract - Engineering = $ 19,900)

Going to look at other funding sources for the loan match.

                                                Source of Funding ?

                                               

Numbers 5 & 6: He will be looking into OPWC grants with a 51% match.  Council Member Schwab asked about possible CDBG?  VA Miller stated that 5^th Street falls into the right section.

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                Funded by: 90% of Sale of Sewer Collections minus $ 258,000 to Debt Fund         = $ 424,402.03

                                                Misc. Sales & Tap Permits                                                         = $     5,780.81

                                                Refunds & Deposits                                                                   = $           56.67    

Expenses:    

                                                Employee Wages & Benefits =           $  187,596.36   

                                                Operation/maintenance =                   $    15,380.94

                                                Contractual services =                        $  109,602.87

                                                Insurance =                                         $    13,944.05

                                                Engineering =                                      $           00.00

                                                Fuel & Repairs =                                 $       2,567.55

                                                Capital Outlay =                                   $    39,857.00

                                       and so forth

Please note that the salaries and benefits not only include the department itself but also contains 25% of the Mayor and Council, 10% of the Clerk-Treasurer, 5% of the Utility Staff, 5% of the Administrative Staff, 9% of the Village Administrator, and 17% of the Solicitor’s benefits package.

Whether a fund balance increases or decreases, it is important to make sure that the fund contains a six-month operating budget balance.  The current six-month operating budget used for this fund is $193,054.  The current unencumbered balance for operating funds is $369,737.95.  The fund is staying fairly consistent and in good shape.  This fund is watched closely due to some of the high operating expenses.

This fund will also have a rate study done.

                Funded by: 4% of Sale of Sewer Collections

                Expenses: engineering = $ 12,047.84; Capital Outlay (Meters?) = $ 00.00

 

This fund was originally set up to have enough to complete an annual relining project.  The revenue this year was higher due to grant money being returned to the account.  The 4% works out perfect for expected expenses at this time.

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                Funded by: $ 21,500 per month                      

Expenses: Annual Sewer Debt principal payment = $  254,565.86; no interest

This fund is set up to ensure there is always enough cash to make the loan payment.  The fund will be close to zero at the end of the current loan.

                Local Funding from _______________ Fund

                Local Funding from _______________ Fund

Local Funding

                Local Funding

                Local Funding

                Local Funding

 

VA Miller stated that the system will be increasing customers over the next couple of years with Stark County Metropolitan Sewer’s expansion to Justus and Harmon.  The project is currently moving forward with the surveying.  It has however discovered that State Route 62 is an easement.

Meeting Adjourned at 6:55pm.

 

Respectfully submitted,

Kris King, Clerk-Treasurer