Attached is the recommended preliminary budget for fiscal year 2024/2025.
Below is a description of major revenues and expenses for the FY 2024/2025 budget:
Income
The proposed FY 2024/2025 budget utilizes the following revenue sources and would result in a contingency of $55,800.02 or 6.03%:
- Interest (440300) income is relative to federal interest rates. The Agency follows the guidance provided by the Tehama County Auditor-Controller for the purposes of budgeting interest income. The recommended interest rate has not yet been released, so the preliminary budget is based upon a 2% interest rate. This will be amended at the time the Board approves the final budget.
- Gate Fees (461001) have been budgeted based on a flat fee. Despite the fact that expenses are projected to increase over FY 2023/2024 due to changes listed in this narrative, staff is not recommending an increase in the monthly fee of $70,000 due to the increase in the tipping fee as a result of the new operations contract. FY 2023/2024 resulted in a revenue surplus due to the Agency Manager’s medical leave. Staff is proposing to use a small portion of the surplus to mitigate further tipping fee increases at this time. The Agency has a healthy retained earnings balance. Most increases listed in the proposed budget are outside of the Agency’s control, with very few exceptions.
- Hazardous Waste Fees (461005) includes PaintCare reimbursements for managing paint reuse and reimbursement for home-generated sharps disposal. A small amount of revenue is also attributed to household hazardous waste business fees.
- Miscellaneous Revenue (471120) generally includes grazing lease fees, and other small amounts of revenue.
- Interfund Revenue (461070) is reimbursed salary/wages for direct labor on grant-related work.
Expenses
Expenses are expected to increase $16,940.21 over the previous fiscal year, as described below.
- Salary/Wages (510100), Overtime (510120), PERS (510200), OASDI (510210), Group Insurance (510300), and Unemployment Insurance (510310) take into consideration normal step increases at anniversary dates, the current employer PERS contribution rate and an anticipated 10% increase in Group Insurance beginning January 1, 2025. Staff no longer funds a second Recycling Program Analyst I/II. This position will be removed when the Agency transitions to an internal staffing structure.
- Pay in Lieu/Misc Payouts (51015) - Of current Agency staff, two staff members elected to receive payment for accrued vacation or Personal Time Off.
- PERS Unfunded Liability and ADP Misc PERS Unfunded are the Agency’s portion of the PERS unfunded liability, currently at $49,197.40 for FY 2024/25, and an additional discretionary payment to pay down the unfunded PERS loan balance faster. There will be some fluctuation in the Agency’s annual payment as it is based upon the prior year’s actual PERS payroll.
- Workers Compensation (510400) rates are expected to increase; however, the actual rate was unknown at the time this agenda item was prepared. As such, staff assumed a 10% increase over FY 2023/2024.
- Property, Crime, Liability, and Pollution Insurance (531500) includes an anticipated 30% increase in property liability premium over FY 2023/2024. A more accurate figure will be available in June.
- Maintenance of Equipment (53170) includes typical maintenance of equipment.
- Maintenance Structures-Improvement of Grounds (53180) takes into consideration the cost of maintaining the fire suppression systems at the Agency’s two Household Hazardous Waste facilities.
- Membership and Dues (53200) includes membership to the Rural Counties’ Environmental Services Joint Powers Authority, Solid Waste Association of North America, California Association of Recycling Market Development Zones and California Product Stewardship Council.
- Misc Expense (53210) is budgeted at $16,000. This expense account is utilized for Board per diem compensation for meeting attendance.
- Office Expense includes typical office supplies and a monthly lease payment for a multifunction copier.
- Professional/Special Services (53230) is proposed to be budgeted for $68,013. Costs associated with completing the CEQA review and related permitting for the proposed composting facility were previously included in this expense, utilizing surplus revenue from previous fiscal years. The Agency secured grant funding to fund these costs retroactive to July 1, 2023. As such, future expenses are no longer included. Expenses to be funded through current year franchise fees include attorney fees, independent audit costs, use of personnel at the Tehama County Auditor-Controller’s office for various accounting services, and an administrative fee pursuant to the agreement between the Agency and the County. The administrative fee between the Agency and the County is expected to increase in FY 2024/2025 due to the implementation of the Total Compensation Study by the County. The fee is based upon the previous calendar year; as such, FY 2024/2025 will be based on CY 2023, which is the first full year the compensation study was implemented. Below is an itemized breakout of budgeted expenses:
|
|
FY 23/24 |
FY 24/25 |
|
Attorney Fees |
$15,000 |
$15,000 |
|
Accounting Services Agreement |
$10,000 |
$10,000 |
|
Administration Fees |
$21,351 |
$23,013 |
|
Audit |
$9,500 |
$11,000 |
|
Lawrence & Associates |
$1,000 |
$1,000 |
|
Miscellaneous |
$2,000 |
$2,000 |
|
CEQA/Permitting |
------------ |
----------- |
|
Janitorial Services |
$7,200 |
$6,000 |
|
Total |
$66,051 |
$68,013 |
- Employee Travel/Training and Transportation (53290 and 53291) is expected to remain the same for FY 2024/25 and includes typical travel, training, and fuel costs.
- Utilities (53300) reflects anticipated costs for PG&E, Hue & Cry, and fire alarm maintenance, monitoring and testing.
- Hazardous Waste Disposal (558007) is proposed to be budgeted at $140,000. As the current agreement for services expires December 31st, 2024, staff may request an adjustment to this expense category.
- Litter Abatement/Illegal Dumping funds illegal dumping on roads outside of Baker and Plymire and also supports AB 109 illegal dumping clean-up costs in the community. Pursuant to the Agency’s policy, $12,000 is allocated to PATH and the remainder is available to fund waste disposal resulting from cleanups on public land.
Impact of the Proposed Changes on the Tipping Fee
Per Section 6.B.1 of the Landfill and MRF Operations Agreement, if the cost to operate the Agency is more or less than the fee paid to the Agency on an annual basis, the Agency reserves the right to raise or lower the fee as necessary, and will notify Waste Connections by April 15th of each year. As stated above, the Agency has an unrestricted retained earnings balance that would allow for the Agency to operate without any revenue for more than one fiscal year. As such, in an effort to lessen the effect of the new operations contract on the public, staff is recommending that the Agency utilize a portion of FY 2023/2024’s revenue surplus as a FY 2024/2025 revenue source rather than increase the tipping fee. As a reminder, the JPA Fee is only a small portion of the tipping fee. Other impacts to the tipping fee include annual CPI adjustments, the contractor’s cost to comply with changes in law, the closure/post-closure trust fund fee, and the cell liner trust fund fee.