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WPCA: Brookfield CT - 2017-18 Budget Narrative

Logo   WPCA Brookfield, CT



Brookfield WPCA Budget Narrative – FY2017-18

Introduction:

 It is useful to offer a narrative to accompany the budget to tell the story behind the numbers. There is much more on the activity of the WPCA on the web at www.brookfieldwpca.com

 The Commission:

 The commission has six volunteer members. Most have served for several years.  There are two alternate openings on the WPCA board as of the end of March 2017. 

 As to outside service, the commission uses engineering, accounting, legal and other support services as needed. The engineering firm has quite a bit of depth, serving several states. Their work includes maintaining and upgrading the sewer layer on the town GIS system.  The commission attorney has served the Brookfield WPCA for more than 20 years providing expertise in land use issues. He also has a valuable depth of corporate memory. The accounting firm, Bliss Allred and Company, was engaged last year has served the WPCA for more than a year. The former accountant has cooperated to affect a smooth transition.  

Operations Staff and Building

The WPCA has tripled in the number of customers and infrastructure over the last 15 years, doubled in the last 7-years all with four employees and a small office. It also has assumed all responsibility for its finances, increasing the work load for its four employees. Last year a half-time field staff position was added. This year a position has been created for a part-time director with the work load for the volunteer board having increased substantially over the past several years.

As part of planning for the future, the WPCA is currently exploring options regarding the purchase of a building to relocate operations. It will include appropriate reception area, office space for all employees so they can be co-located, meeting space and accommodate the part-time director.  

System Expansion:

One small installation at $600,000 was completed Fall 2016 at Brooks Quarry, an elderly housing project owned by the Brookfield Housing Authority built with a sub-standard sewer system in 1994. This system had failed requiring frequent and extensive maintenance. The Brookfield Housing Authority was awarded a CHFA grant to fund the project. It is now installed. The WPCA will take over the system after formal project closure.

Accommodating Growth:

Several significant capital improvement projects anticipated, most due to system growth.

  • A proposed Rollingwood project at $600,000 is designed to take advantage of recent system expansions to re-route to a full gravity system. The project awaits final easement agreements before a bid package can be posted. The cost will be divided among affected unit owners proportioned by their Grand List Value. BAN funds are in place to support the construction.
  • The North Pump Station, at the New Milford town line, and the station behind 777 Federal Road were both running at 50% capacity for normal operations during working hours as seen by the on-line data capture system. With growth planned from several new Condo projects in the Four Corners area, these two stations were upgraded with state-of-the-art controls and pumps of greater capacity. These projects, completed June 2016, will be funded as capital improvements by the Federal Road North District users. 
  • With the installation of the High Meadow Project, the pump station at Silvermine and Pocono Road required updating of the original 1997 electrical control system and adding an emergency generator. The project was completed late 2016. This station is on the High School system. The High School is used as an emergency shelter. This project was paid for with funds in Unrestricted Capital reserves funded by use fees. Each project is planned and approved on its own merits.

The WPCA Enterprise

The WPCA Enterprise Fund accounting is fully separated from the Town and on a full accrual accounting basis. Nevertheless, the WPCA is included as a business activity in the Town audit. The WPCA office handles payroll, billing receivables and accounts payable, including sewer bond and loan obligation payments. This arrangement is in place at the request of the Office of the Controller and Auditors in keeping with government Enterprise Fund accounting rules.

Unrestricted funds are broken down into Operating and Capital. This is a budgeting and reporting method useful to the Commission to monitor finances.

The sewer usage fee was set in June 2012 at $380 per unit per year to cover increasing Danbury treatment fees and depreciation. (A household is one unit.) The usage fee is proposed to increase to $420 per unit this coming year. This 10.5% jump amounts to about 2% annually over the last 5-year span. This rate still allows sustainable operations including the ability to make infrastructure upgrades to accommodate the growth in system use without raising usage rates. Excess funds from operations are put into the Capital Fund for handling enhancements or repairs—some planned, some unforeseen.  This Operations Capital fund is effectively designed to cover depreciation.

The number of customers has increased more than 50% since 2009. Efficiency measures have allowed the WPCA to maintain staff at four—two in the field, two in the office—for 15 years. Last year, the Commission authorized an additional part-time field employee with a vehicle, which was offset by the additional revenue from growth. For this year, the commission has authorized at part-time Director. With a part-time Director, the current 285 sqft office space will be inadequate. Consequently, the commission is investigating a move to office space apart from the Town Hall. The office space is projected to add 1.5% to the WPCA budget.

Cost of Operations by Flow:

At the end of 2015 there were 3350 units producing approximately 280,000 gallons per day or 0.280 million gallons per day (MGD). At the end of 2016 there were 3591 units, a 7% increase, producing about 0.295 MGD with the addition of Barnbeck and Laurel Hill apartments, Oak Meadow and the last units at Newbury Village and Riverview. While the new customers were anticipated for 2016-17, there was also a loss of customer revenue from the lost businesses in the Four Corners area that is now starting to return.

All sanitary wastewater flow is sent to the Regional Danbury Waste Treatment plant under the supervision of the CT DEEP and by an Interlace agreement with Danbury. The agreement allows a flow from Brookfield of up to 0.5 MGD. But this is slated to be reduced to 0.38 MGD in 2022 with new Phosphorous mitigation requirements imposed on the plant. Brookfield is sending waste at an average rate of 0.3 MGD, 86% of the new allowable flow. The Danbury Plant expansion will cost Brookfield a projected $2,230,000 after grants are applied. These grants are promised, but not guaranteed. However, the Town of Brookfield is responsible for its portion of engineering costs, a projected $350,000 over the next two Fiscal Years.

The impact of the Phosphorus removal at the Danbury plant will be to reduce the Phosphorous load to Lake Lillinonah by 7%. This gives all the appearances of building a bridge to nowhere; a social cost with even septic users contributing Phosphorous to the environment. Consequently, a request is outstanding for the Town to assist with this cost burden at a rate of $66,500 per year for the next two Fiscal Years, i.e, FY 17-18 & FY 18-19.

For the WPCA to cover Brookfield’s engineering cost share that will be billed to the Town of Brookfield. It is proposed to levy an additional $30 - 48 per use unit with the Town covering $65,000 of the annual $175,000 bill. The cost to sewer users will be at the higher should the Town fail to participate as requested.

Rate Increases:

Two rate increases are slated to be implemented in FY 2017-18.  One a permanent increase for operations of $40 per unit, from $380 to $420 per unit as discussed above. In the last FY the operations is projected to run at about a breakeven level. There was a $140,000 higher than budgeted fee charged by Danbury.

The second rate increase is designed to be temporary to cover the anticipated bill to the Town of Brookfield for Danbury Plant engineering fees. This increase will be billed as a surcharge to the usage bill for four billing events for the next two years. Any excess or shortfall will have to be covered by increases in use fees that accompany a BAN or Bond covering the approximately $2 million additional for the Brookfield portion of the Danbury Plant expansion which is slated to be operational in the year 2022. The $2 million could be $3 million depending on whether the pledged grants currently anticipated are honored.

Rate Structure:

Customer sewer rates are based on a “Unit” charge to fund operations as provided for by State Statute. Each household is one unit. Commercial establishments all have a formula to determine the usage rate according to WPCA Rules and Regulations. Water is now available along most of the sewer routes, but not all have connected and are still on private wells. So, a water flow-based rate system remains a challenge.  Historically, this has not been possible since most of the Town has not been on water meters. The Commission is aggressively exploring charging by water usage for commercial customers. This strategy may require commercial customers to install a water meter. 

The entire billing system is under review by a sub-committee of WPCA Commissioners. However, at the proposed rate of $420 per year per household unit, 75% or $310 covers the annual cost of WPCA operations and only 25% based on usage.

Summary:

Funds to pay each bond note or to make upgrades within each sewer district are kept separate and restricted bank accounts as required by Resolution that is attached to land records. In round figures, the Brookfield WPCA has assets of $25 million. It holds $6.4 million in bonds and loans against 7 discrete sewer districts with two debt-free. This requires a total of $400,000 in debt service, principal and interest, funded by users in each sewer district.

The operating budget in a simple form can be divided into five categories. See the table below.  

The Administration category includes outside legal, accounting and audit costs. There has been no expense for a WPCA Director as the commission is run entirely by volunteers. The proposed Part-Time Director will add an estimated 4% to the overall cost, not budgeted as part of the rate increase. 

 

WPCA Budgeted Expenses FY 2017-2018

Cost Element

Cost in $, 000s

Percent of Total

Danbury Fees

$320

20 %

Employee Costs

$594

38%

Operations

$306

19 %

Administration

$122

8%

Contribution to Capital

$231

15 %

Total

$1,573

100%

 

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