A $43.834 million budget for 2013 was approved by the El Dorado Irrigation District Board of Directors Nov. 13 on a 4-1 vote, with Director Alan Day voting no.
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The operating budget is $1.8 million or 4 percent higher than the projected actual expenditures for the current calendar year. It is 2 percent higher than the original budget for this calendar year.
The budget is a two-year budget. For 2014 the budget is $44.684, and increase of $850,000 over the 2013 budget or .19 percent higher.
The projected expenditures for 2012 show water revenues “on track,” according to Finance Director Mark Price, wastewater revenue down $1.6 million due to using the lower of two years of winter water consumption as a basis, hydro revenues down $1.3 million due to a low water year, and hookup fees $1 million short of the budget forecast.
Expenses for 2013 show cost of living and merit increases adding $250,000 to expenses, while eliminating six positions saved $730,000. Increases in health care costs and Public Employee Retirement System costs were “substantially negated by an estimated $430,000 negotiated reduction in employee retiree and health benefit” costs to the district, according to Price.
Annual medical costs for the district declined 12.2 percent between 2008 and the 2013 budget, according to a chart presented during the budget discussions Tuesday, though they will increase 1.7 percent in 2013 compared to the projected expenses for 2012.
Pension costs increased 6.6 percent from 2008 to the 2012 projected expenses, though the share of the employee’s PERS contribution funded by the district declined from $825,00 to nearly $682,000 projected for 2012.
A breakdown of employee expenses prepared by Price shows a total of $10.865 million in 2013. Medical expenses are $3.067 million, retiree health $945,000, dental $269,000, vision care $40,000, Employee Assistance Program (insurance) $6,000, life insurance $43,000, Workers’ Compensation $395,000, FICA (Federal Insurance Contribution Act) $1.291 million, PERS $4.702 million, wellness $33,000, vehicle allowance $42,000, other $32,000.
Major expense changes affecting the 2013-14 operating budget are a $322,000 increase in electric utility costs, $120,000 in required electrical breaker testing at facilities, $423,000 to dredge the reservoir at the El Dorado Hills Wastewater Treatment Plan, and a $330,000 in land-use fee required by the Federal Energy Regulatory Commission.
District Counsel Tom Cumpston said the current FERC fee is $175,000. Director John Fraser said that was a 200-plus percent increase.
“We’re estimating,” Cumpston said.
“Do we have any kind of appeal?” Fraser asked.
“When the final rate comes up there is an appeal rule and finally we can litigate it.” Cumpston said.
“I would be in favor of asking Mr. McClintock (congressman) to reduce this,” Fraser said.
Revenues for 2013 and 2014 include an 11 percent rate increase for water each year and 5 percent for wastewater and recycled water each year.
“Drivers on rates are directly related to debt service capital costs,” said General Manager Jim Abercrombie.
Day had sought a 5 percent reduction of approximately $2 million in each of the two years of the budget cycle.
“I’d like to move we do this (budget) at the next meeting,” Day said. I ask the general manager to reduce the budget by 5 percent — $2 million per year. Given that we had rate increases, it would send a powerful message even if we didn’t pass it.”
Day’s motion died for lack of a second.
After eliminating six positions this year EID’s employee roster totals 221.5 full-time equivalents. In 2007 there were 306 employees. As hookup fee revenue and property tax revenue slid EID began shedding employees under past manager Tom Gallier, beginning in 2008, and under current GM Abercrombie, hired in 2009. Between 2007 and 2012 EID has eliminated or laid off 84.5 positions, a 27.6 percent reduction.
Additionally, on a 5-0 vote the board agreed to prepay $3 million on its Seres 2004A debt of $5.25 million that will come due March 1, 2013. In October 2011 the district prepaid $2 million on the portion of this that was due this year. Both prepayments are put in an escrow account that will release the money on the bond’s maturity date. The bonds, called Revenue Certificates of Participation, are not callable, meaning they cannot be paid off early. With $3 million in escrow the district will still need to come up with $2.25 million more to retire the COP on March 1, 2013. Interest rate on this bond is 5 percent.
Total debt service in the 2013 budget is $17.059 million this year, $20.759 million next year and $24.801 in 2014. The debt service to revenue ratio is 1.47 this year, 1.48 next year and 1.37 in 2014. The minimum ratio requred by bond covenants is 1.25.