Item 2C: Ratification of MWMC Budget

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Metropolitan Wastewater Management Commission Budget Message BUDGET MESSAGE To the Metropolitan Wastewater Management Commission: I am pleased to present the Metropolitan Wastewater Management Commission's (MWMC) proposed budget for fiscal year (FY) 2006-07. This budget funds operations, administration, and capital projects planned for the Regional Wastewater Program (RWP). The MWMC administration and Capital Improvements Program (CIP) components of the budget are reflected in the regionally funded portions of the City of Springfield's Environmental Services Division, Public Works Administration and Finance Department budgets. The operations, maintenance, equipment replacement, and major rehabilitation components are reflected in the regionally funded portions of the City of Eugene's Wastewater, Engineering and Maintenance Divisions' budgets. The Cities' Industrial Pretreatment Programs, managed locally in compliance with the MWMC Model Ordinance, also are included in the RWP budget. This year's proposed budget reflects a continued focus on design and construction of capital improvements planned to ensure that operation of the Regional Wastewater Facilities meets environmental regulations, and that increased capacity will be provided to meet the needs of a growing service area. The one- and five-year CIP, which are included in this budget document, have been derived from the MWMC Facilities Plan, which was adopted by MWMC and the Eugene, Springfield and Lane County governing bodies in 2004. The FY 06-07 CIP also includes Major Rehabilitation and Equipment Replacement capital projects, budgeted at $263,000 and $310,335 respectively. For FY 06-07, the combination of new projects and continuing projects carried forward from FY 05-06 results in a total CIP budget of $51,721,611. A planned issuance of debt fmancing in FY 06-07, based on the Commission's adopted Financial Plan, will augment revenues from user rates and systems development charges to provide sufficient funding for the capital programs. The combined R WP FY 06-07 Operating Budget includes increases of 5% in Personnel Services, 1 % Materials and Services, and 18% in contributions to reserves dedicated to fund capital programs over the originally adopted FY 05-06 budget. There are a number of factors which have impacted the proposed budget and affect the financial forecast for the upcoming year. The Personnel Services budget will increase to include the full-year impact of Springfield construction management staffing that was added during FY 05-06 to meet the CIP management requirements, as well as a .92 FTE increase in Eugene Wastewater Division personnel planned for FY 06-07. Cost ofliving adjustments are planned for Eugene personnel at 2.45%, and for Springfield personnel at 2%. The effect of these increases is mitigated somewhat by a significant reduction in PERS costs to the City of Eugene. The 1 % increase in the Materials and Services budget is a net result of increases in some areas and decreases in some areas as compared to the FY 05-06 budget. Finally, the FY 06-07 budget, as proposed, implements the Commission's adopted Financial Plan policies regarding reserves, asset management, and fmancing tools. Page 1 PROPOSED FY 06-07 BUDGET AND CIP