FY 2011 BUDGET SUMMARY

 

 

            For fiscal year 2011 there are two major changes.  First, we are proposing doing away with the old peak usage and fixed charge basis of assessing water and sewer bills.  There has always been much confusion over this method, causing hard feelings from many quarters.  Our new method is to charge based upon the meter reading of gallons used.  Staff has looked at a variety of methods to accomplish the twin goals of making the system pay for itself and provide a reserve to pay for aging infrastructure as well as expanding the system.  Over the past winter, we had several frozen lines, mostly service lines, but one line that was our line.  That line was a plastic line, which will, in all probability, have to be replaced.  The purpose of reserves is to pay for things like that.  We have a leak in one of our sludge tanks that should be fixed until we can re-do the plant.  Again, reserves help us pay for these unexpected costs.  We need to build up that fund.

 

            We separated our consumers into two categories, those who are just on water and those who are on water and sewer.  For those on water only, we are suggesting a cost of $0.0304 per gallon and for those on water and sewer, a cost of $0.0604 per gallon.  These figures generally mean that the more you use, the more you pay.  We compared these prices against the FY 2009 bills (our last complete year) and discovered that some will pay more and some will pay less.  We considered a residential vs. commercial rate, but rejected it as too cumbersome (as we would then have to determine who is commercial and who is residential) and inequitable, as it costs us the same per gallon, no matter where we provide the water and where we receive the sewer.   We tried a “tiered” system, but that discouraged water conservation.  The biggest increase is for those on water, but not on sewer.  Staff felt that these individuals should connect to the sewer and will propose that their rate go up each year until they pay the same rate whether or not they are hooked to the sewer.  When we started the sewer line project it was the goal of having everyone on the system so that we had more control on the loading in the river and could limit the pollution leaving the Village.   We think that as the Village moves forward this system will allow us to better estimate our receipts and allow the consumers to understand how they can control their own budgets.

 

           

            In the budget, we have combined the water operating and sewer operating into one budget.  Since the new bills are to be based upon the metered usage, they will go into one revenue account.  During the upcoming year we will be working on the software for the billing to eliminate the $2400.00 per year (plus extras) we are paying for “Quikwater.”  The staff will break out only the road work for time keeping purposes.  We do this mostly for the COOP project and other road revenues.  This year we will keep solid waste separate, but that is mostly a hauling expense by outside contract anyway.

 

            The other major change was that we decided to fund an “Administrative Operating Reserve Account.”  This account is a set aside of the excess GRT that we had this year so that if we have a poor year next year we have more reserves than we normally have.  We normally budget to handle the stretch from June to December when our GRT is especially low, but we thought we should have a reserve from a good year (this year) that can also help us if it is a dry year.  Most other budget items remain the same with the exception of our capital projects funded with NM Finance Authority Funds and Water Trust Board Funds.

 

            In the salary category, we decide to propose a 1.5% increase in base salaries and a 2.5% additional payment paid in quarterly installments as it is earned.  There was some discussion about putting this in a pool and dividing it equally as was done last year, but some of the supervisors felt that this did not encourage people to improve and did not reward those who stay.  Those who have been here awhile and have skills we want people to have should be rewarded to stay.  We also have to budget for buy back time, overtime and increases in grade for getting higher water and sewer certifications.  That part of the salary budget hasn’t changed much in the last few years.  Because of the combination of the salary of the Administrator and the Attorney, the Village saved over $30,000. in salaries last year and will do the same this year.  Our insurance rates were only slightly increased, but we will be able to lower them in a couple more years if we are accident free.  The Municipal League’s multiplier works somewhat like the peaking factor worked in the water bills.

 

            Finally, we put into the budget some funds from the Water and Sewer Reserves to purchase water rights.  We haven’t yet made a commitment to do so, but if we don’t follow through for some reason the amount stays in the reserves. Other capital expenditures are in a similar situation and as the year goes along, we will re-evaluate our income so that we can decide if we are in a position to make some of those purchases.