Fisc

al

Yea

r 20

16Annual Budget

Prepared by Division of Management and Budget

Lyle G. Beefelt, Director Exceptional Water Service

Prince William County

Service Authority

Annual Budget

Fiscal 2016

Adopted

THE BOARD OF DIRECTORS

PAUL E. RUECKER, CHAIRMAN

JOYCE P. EAGLES, VICE-CHAIRMAN

JANICE R. CARR, SECRETARY-TREASURER

ERNIE GONZALES, MEMBER

DR. K. JACK KOOYOOMJIAN, MEMBER

GARTH PORTER, MEMBER

DAVID A. RUTHERFORD, MEMBER

L. BEN THOMPSON, MEMBER

ADOPTED

MAY 14, 2015

DEAN E. DICKEY

GENERAL MANAGER

Table of Contents

Budget Overview .............................................................................................................................................................................1

Operating Fund ................................................................................................................................................................................3

Replacement Fund ...........................................................................................................................................................................5

Expansion & Commitment Fund .....................................................................................................................................................6

Capital Budget ................................................................................................................................................................................7

Service Authority Performance........................................................................................................................................................8

Glossary of Abbreviations

$XXXK Thousands of Dollars

4WD (also 4 X 4) Four-Wheel Drive

ADMIN. Administration

AWRF Advanced Water Reclamation Facility

BNR Biological Nutrient Removal

CAFR Comprehensive Annual Financial Report

C&P Control and Process

CCTV Closed Circuit Television Camera

CIP Capital Improvements Program – A detailed schedule of

capital projects to be undertaken by the Authority or

contributed by developers.

DART Days Away, Restricted or Transferred

DO Dissolved Oxygen

DRW Dual Rear Wheel

ENG. Engineering

ERU’s Equivalent Residential Units – A unit of capacity equal to the

peak volume required to serve a typical single-family

residential customer. It is currently 400 gallons per day for

water and 330 gallons per day for sewer.

ESWR Environmental Services and Water Reclamation

EXT. Extended (as-in Extended Cab)

FBI Fluidized Bed Incinerator

FMU Fuel Management Unit

FY’XX Fiscal Year 20XX

GFOA Government Finance Officers Association

GIS Geographical Information System

HDPE High Density Polyethylene

HR Human Resources

HROD Human Resources Organizational Development

I/O Input/output

IT Department of Information Technology

LPFM Low Pressure Force Main

LTO Linear Tape-Open

LXX Lift Station (Wastewater) Number XX

M&B Management and Budget

MISC. Miscellaneous

MLSS Mixed Liquor Suspended Solids

MS Microsoft System

NACWA National Association of Clean Water Agencies

O & M Division of Operations and Maintenance

PA Public Announcement

PLC Programmable Logic Controller

PWCSA Prince William County Service Authority

RAC Real Application Clusters

SCADA Supervisory Control and Data Acquisition system – a

computerized system for remote monitoring and control of

facilities.

SUV Sport Utility Vehicle

UOSA Upper Occoquan Service Authority – A regional AWRF

owned by the Authority, Fairfax County, Manassas and

Manassas Park.

UTV Utility Vehicle

VEH. Vehicle

VML Virginia Municipal Leaque

VWEF Virginia Water Environment Federation

YTD Year-to-date

Fund Structure

The accounting general ledger and budget are prepared on a “four fund” basis, which provides a tool for tracking

revenues and expenses as they relate to the Authority’s growth and operations. The “four funds” are named for the

four areas on which the budget focuses: operations, capital expansion, debt service (commitment) and capital

replacement. General guidelines of the four funds are as follows:

Operating Fund: Funded by user rates and used to pay for daily operations.

Expansion Fund: Funded by availability fees and other developer charges and used to pay for

development administration and capital projects that increase capacity.

Commitment Fund: Funded by availability fees and interest earned and used to pay debt and

capacity agreements.

Replacement Fund: Funded annually by a transfer of excess operating funds and used to pay for capital

replacement expenditures.

FY’16 Adopted Budget

Page 1

FY’16 Budget Overview

The FY’16 Budget totals $132.4 million (see Chart 9), including funds available for Capital Budget Projects and debt principal.

• The Authority has budgeted for account growth of 1.0%, which is expected to produce $104.4 million in consumption and

service charge revenue.

• The Authority expects to certify 1,600 ERU’s in FY’16 and projects $24.9 million in availability fees.

• The budget projects $40.9 million in net income available for CIP projects and debt principal.

$132.4 Million

Uses

Chart 9

Sources & Uses of FundsAll Funds Combined

$104.4

$40.9

$24.9

$10.9

$26.2

$2.5

$33.4

$0.6

$19.8$0.7

$0.5

Consumption &

Svc. Charges

Availability Fees

Interest Income

Personnel Costs

Purchased Res.

Other

Interest Expense

Available for CIP

Projects and

Debt Prin.

OtherContingency

Add’l Reserves

$132.4 Million

Sources

Chart 10

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

Current Target Projected

PWCSA Fund Balances

FY’16 Adopted Budget

Page 2

FY’16 Budget Overview

TABLE 1 - FY'16 BUDGET SUMMARY - ALL FUNDS

Description

FY'14

Actual

FY'15

Budget

FY'15

Projected

FY'16

Request Difference

Percent

Change

Revenue

Consumption & Svc. Chrgs 102,651,162$ 104,583,000$ 103,792,433$ 104,437,900$ (145,100)$ -0.1%

Water Availability Fee 10,227,082 10,606,000 9,517,408 7,643,400 (2,962,600) -27.9%

Sewer Availability Fee 20,666,880 22,883,000 18,363,594 17,248,200 (5,634,800) -24.6%

Interest Income 3,910,462 2,269,300 2,847,151 2,451,000 181,700 8.0%

Other Revenue 587,322 580,000 574,782 580,500 500 0.1%

Total Revenue 138,042,908$ 140,921,300$ 135,095,369$ 132,361,000$ (8,560,300)$ -6.1%

Expenses

Personnel Costs 28,056,722$ 31,817,800$ 27,602,040$ 33,405,000$ 1,587,200$ 5.0%

Purchased Resources 22,062,269 26,435,700 24,012,079 26,236,600 (199,100) -0.8%

Interest Expense 12,114,539 11,880,200 10,029,091 10,928,500 (951,700) -8.0%

Other Expenses 15,576,488 19,373,800 15,619,385 19,794,300 420,500 2.2%

Contingency - 700,000 200,000 700,000 - N/A

Total Expenses 77,810,018$ 90,207,500$ 77,462,594$ 91,064,400$ 856,900$ 0.9%

Net Income (excl. Depr.) 60,232,890$ 50,713,800$ 57,632,774$ 41,296,600$ (9,417,200)$ -18.6%

Operating Fund

Page 3

Revenues

Description

FY'14

Actual

FY'15

Budget

FY'16

Request Difference

Percent

Change

Operating Revenues

Sale of Service - Water 29,600,985$ 30,769,000$ 30,002,500$ (766,500)$ -2.5%

Peak Use Charges 1,989,348 2,549,000 2,142,700 (406,300) -15.9%

Sale of Service - Sewer 50,641,341 51,438,000 51,155,800 (282,200) -0.5%

Service Charge - Water 5,105,476 5,090,000 5,548,300 458,300 9.0%

Service Charge - Sewer 8,765,609 8,561,000 9,459,200 898,200 10.5%

Application Fees 302,325 332,000 331,300 (700) -0.2%

Disconnect Fees 467,221 414,000 416,800 2,800 0.7%

Late Payment Fees 1,443,402 1,311,000 1,314,400 3,400 0.3%

Other Operating Revenue 1,167,628 1,045,000 1,048,000 3,000 0.3%

Total Operating Revenue 99,483,335$ 101,509,000$ 101,419,000$ (90,000)$ -0.1%

Non-Operating Revenues

Interest Income 703,811$ 372,900$ 459,400$ 86,500$ 23.2%

Property Rental 575,166 568,000 568,400 400 0.1%

Other Non-Operating 12,156 12,000 12,100 100 0.8%

Total Non-Operating 1,291,133$ 952,900$ 1,039,900$ 87,000$ 9.1%

Total Revenue 100,774,468$ 102,461,900$ 102,458,900$ (3,000)$ -0.0%

TABLE 2 - OPERATING FUND REVENUE

Operating Fund

Page 4

Expenses

Description

FY'14

Actual

FY'15

Budget

FY'16

Request Difference

Percent

Change

Operating Expenses

Salaries & Wages 17,931,921$ 20,250,200$ 21,559,300$ 1,309,100$ 6.5%

Fringe Benefits 7,293,145 8,215,600 8,455,500 239,900 2.9%

Purchased Water 10,195,911 13,299,200 12,916,900 (382,300) -2.9%

Purchased Sewer 10,949,400 12,210,000 12,393,200 183,200 1.5%

Contractual Services 3,540,146 4,726,900 4,991,300 264,400 5.6%

Repair & Maintenance 2,309,948 2,876,400 2,920,400 44,000 1.5%

Operating Supplies 4,668,357 5,257,600 5,217,900 (39,700) -0.8%

Utilities 3,504,177 3,480,100 3,599,300 119,200 3.4%

Insurance 438,824 462,800 478,800 16,000 3.5%

Other Operating Expenses 726,977 783,000 799,700 16,700 2.1%

Total Operating Expenses 61,558,806$ 71,561,800$ 73,332,300$ 1,770,500$ 2.5%

Non-Operating Expenses

Interest Expense 3,649,406$ 3,119,800$ 2,869,900$ (249,900)$ -8.0%

Contingency - 500,000 500,000 - 0.0%

Other Non-Operating 70,370 145,400 145,400 - 0.0%

Total Non-Operating 3,719,776$ 3,765,200$ 3,515,300$ (249,900)$ -6.6%

Total Operating Fund 65,278,582$ 75,327,000$ 76,847,600$ 1,520,600$ 2.0%

TABLE 3 - OPERATING FUND EXPENSES

Replacement Fund

Page 5

Description

FY'14

Actual

FY'15

Budget

FY'16

Request Difference

Percent

Change

Revenue

Operating Revenues -$ -$ -$ -$ N/A

Interest Income 1,248,460 898,700 898,700 - 0.0%

Total Revenue 1,248,460$ 898,700$ 898,700$ -$ 0.0%

Expenses

Contractual Services 30,838$ 88,500$ 88,500$ - 0.0%

Contingency - 100,000 100,000 - 0.0%

Total Expenses 30,838$ 188,500$ 188,500$ - 0.0%

Net Income (excl. Depr.) 1,217,622$ 710,200$ 710,200$ -$ 0.0%

TABLE 4 - REPLACEMENT FUND BUDGET

Expansion & Commitment Fund

Page 6

Description

FY'14

Actual

FY'15

Budget

FY'15

Projected

FY'16

Request Difference

Percent

Change

Operating Revenue

Operating Revenues 1,373,542$ 1,685,000$ 1,592,563$ 1,608,400$ (76,600)$ -4.5%

Inspection Fees & Revenue 1,794,285 1,389,000 1,498,237 1,410,500 21,500 1.5%

Availability Fees 30,893,962 33,489,000 27,881,003 24,891,600 (8,597,400) -25.7%

Interest & Other Income 1,958,191 997,700 1,487,382 1,092,900 95,200 9.5%

Total Revenue 36,019,980$ 37,560,700$ 32,459,185$ 29,003,400$ (8,557,300)$ -22.8%

Operating Expenses

Salaries & Wages 2,051,500$ 2,500,300$ 2,153,539$ 2,560,600$ 60,300$ 2.4%

Fringe Benefits 780,156 851,700 821,477 829,600 (22,100) -2.6%

Purchased Water 726,420 726,500 726,420 726,500 - 0.0%

Interest Expense 8,465,133 8,760,400 8,051,285 8,058,600 (701,800) -8.0%

Other 477,389 1,753,100 827,978 1,753,000 (100) -0.0%

Contingency - 100,000 - 100,000 - 0.0%

Total Expenses 12,500,598$ 14,692,000$ 12,580,698$ 14,028,300$ (663,700)$ -4.5%

Net Income (excl. Depr.) 23,519,382$ 22,868,700$ 19,878,487$ 14,975,100$ (7,893,600)$ -34.5%

TABLE 5 - EXPANSION & COMMITMENT FUND BUDGET

Capital Budget

Page 7

FY’16 Capital Budget

Summary by Type and Fund

TABLE 6 - FY'16 CAPITAL BUDGET

Funding Source

Division/Department Replacement Expansion Total Budget

Summary by Type

Equipment 1,837,000$ -$ 1,837,000$

Computer 730,000 - 730,000

Vehicles 359,000 - 359,000

Furniture and Fixtures 80,000 - 80,000

Buildings 165,000 - 165,000

Water and Sewer Projects (Under $100K) 825,800 - 825,800

Other - - -

Total Capital by Type 3,996,800$ -$ 3,996,800$

FY’16 Adopted Budget

Page 8

Service Authority Performance

Increased Efficiency and Accountability

To further its mission of providing superior service, the Authority monitors a broad array of performance measures. Steady

attention to execution has resulted in improvement in the Authority’s productivity and its quality of service. Progress on

selected performance measures is tracked in the following charts. The associated efficiency gains positively impact the adopted

FY’16 Budget.

• Abandoned call rate has improved significantly over the past three years; averaging 10% in FY’13 and currently averaging

less than 2% in FY’15 (see Chart 1).

• The Authority has made consistent improvement in reducing its technical inquiries. Regular training, additional resources,

and a focus on superior service has been a major driver in reducing the number of technical quality inquiries (see Chart 2).

Chart 1

Abandoned Call Rate

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Chart 2

Technical Quality Inquiries(Inquiries per 1,000 Customers per Month)

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

FY’16 Adopted Budget

Page 9

Increased Efficiency and Accountability (cont’d.)

• The Authority conducts an extensive customer satisfaction survey each year and an ongoing transactional survey to

determine how satisfied customers are with their most recent transaction. 8.9 of respondents indicated they were satisfied

with the Authority’s service as compared to the overall utility industry average of 8.5 satisfaction (see Chart 3).

• The Authority assesses quality service based on Authority-established objectives and service level targets. It focuses on

non-regulatory performance targets – technical quality complaint rate (complaints about water pressure, taste and odor and

complaints about sewer overflows and odor), valve exercise rate (a measure of how well we are maintaining the water

system) and water and sewer service disruption rates (planned and unplanned).

Chart 3

Annual Customer Relationship Survey

8.5

8.7

8.9

9.1

9.3

9.5

Service Reliability Rate

Chart 4

99.9990%

99.9991%

99.9992%

99.9993%

99.9994%

99.9995%

99.9996%

99.9997%

99.9998%

99.9999%

100.0000%

FY’16 Adopted Budget

Page 10

Operational Effectiveness (cont’d)

• The Authority continues to meet or exceed regulatory compliance requirements at the water reclamation plant and water

distribution and wastewater collection systems. The Authority’s performance continues to be in the Top (best) Quartile

compared to Qualserve utilities in Wastewater Treatment Effectiveness, Water Quality Compliance, and Technical Quality

Complaint Rate, which was significantly reduced compared to last year.

• The Authority’s Sewer Overflow Rate has significantly improved over last year and is now in the Qualserve Top Quartile.

In addition, the number of customers out of service longer than 4 hours due to unplanned water disruptions is now in the

top Quartile, and the Authority’s performance on shorter duration disruptions meets our target.

Chart 5

Water Distribution System Integrity

(Breaks per 100 Miles per Month)

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Actual Benchmark

Chart 6

Sewer Overflow Rate

(Overflows per 100 Miles per Month)

0.00

0.03

0.05

0.08

0.10

0.13

0.15

0.18

0.20

Actual Benchmark

FY’16 Adopted Budget

Page 11

A Culture of Savings

• The volume of unaccounted for water has decreased significantly since FY’06 as the Authority increased its efforts to

capture all billable consumption through the hydrant meter program, construction meters for developers, large meter

replacement program, the meter exchange program, implementing a leak detection program and increased quality assurance

reviews in the billing process (see Chart 7).

• When adjusted for inflation, actual operating expense per account remains unchanged since FY’06 (see Chart 8).

Chart 7

Unaccounted for Water(% Loss of Water Purchased and Produced)

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

Fiscal Year

Water Loss (%) Trend

Chart 8

Operating Expenses per Acct.(Inflation Adjusted)

$500

$550

$600

$650

$700

$750

$800Actual Inflation-Adjusted

FY’16 Adopted Budget

Page 12

Award Winning Service

The Service Authority has been recognized on both the national and state levels for overall excellence as well as exceptional

operations, safety and financial management programs.

For the 25th

consecutive year, the Division of

Finance was awarded the GFOA Certificate of

Achievement for Excellence in Financial Reporting

for the high quality of the PWCSA’s

Comprehensive Annual Financial Report (CAFR).

In 2014, PWCSA received NACWA’s Platinum Peak

Performance Award for outstanding compliance with

its discharge permit limits at the H. L. Mooney

AWRF for five consecutive years. The Authority has

also received the Gold Peak Performance Award for

permit compliance seven times.

The Virginia Municipal League (VML) presented

PWCSA with their Where the Rubber Meets the

Road award for meeting rigorous defensive driving

employee training goals.

The Authority was awarded the Corporate Safety

Award from the American Society of Safety

Engineers for demonstrating a commitment to

employee safety and health by achieving a DART

Incidence Rate below the industry national average.