Item 3: Ratification of FY11 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) budget for fiscal year (FY) 2010-11. 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 City of Springfield’s RWP budget. The operations, maintenance, equipment replacement, and major rehabilitation components are reflected in the City of Eugene’s RWP budget. The Cities’ Industrial Pretreatment Programs, managed locally in compliance with the MWMC Model Ordinance, also are included in the RWP budget. This year’s 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 adequate capacity will be provided to meet the needs of a growing service area. The FY 10-11 capital budget and FY 10-11 – FY 14-15 capital improvements work plan, which are included in this budget document, are derived from the 2004 MWMC Facilities Plan. The budgeted amount for FY 10-11 Facilities Plan capital improvement projects is $32,364,768; $28,032,993 is carryover from unfinished projects budgeted in FY 09-10, and $4,331,775 is new funding programmed in FY 10-11.The FY 10-11 capital budget also includes Major Rehabilitation, Equipment Replacement and Major Capital Outlay capital projects, budgeted at $105,579, $50,000 and $0 respectively.The total capital budget for FY 10-11 is approximately $32,520,347. Approximately $11 million of the total capital budget will not be spent in FY 10- 11, but is included to enable contracts for construction that will occur in FY 10-11. Unspent funds will be carried forward to the FY 11-12 budget as appropriate. In order to fund the actual cash flow requirements of the FY 10-11 CIP, the Commission will use State Revolving Fund (SRF) loans as well as strategic draw downs of capital reserves. The FY 10-11 RWP Operating Budget for Personnel Services, Materials and Services and Capital Outlay expense is $15,158,939. Consistent with the Commission’s Financial Plan and policies, the FY 10-11 budget maintains and uses several reserves, which are fully described in this budget document. Finally, the FY 10-11 budget includes debt service payments totaling $8,441,938 as scheduled for repayment of $47.3 million of revenue bonds issued in November 2006, and an additional $52.7 million in borrowing in FY 08-09 to fund the Facilities Plan capital improvements. Revenue sources necessary to fund Operations, Capital programs, debt service requirements and reserves include user charges, system development charges (SDCs), interest earnings and a small amount of miscellaneous revenues. For FY 10-11, user fee revenues (including septage service) are projected at $26,020,795. This level of revenue is projected based on a 5% increase in regional wastewater user fees, as recommended by the MWMC financial advisor in order to meet the Commission’s Financial Plan policies and net revenue objectives. Projected SDC revenues will be reduced about 11% over the FY 09-10 budgeted SDC revenue to reflect the continued downturn in development. Revenues from SDCs are projected at approximately $589,000. In summary, the projected FY 10-11 budget funds operations and administration sufficiently to maintain existing levels of service, and to meet the environmental performance and other legal Page 1 DRAFT FY 10-11 BUDGET AND CIP