The 2019 budget for Platte Canyon Water and Sanitation District was adopted on November 29, 2018. The budget proposes general fund expenditures of $2,555,052 and capital expenditures of $1,881,679. The District’s total expenses are $4,436,731 with total revenue projected to be $3,345,488. The deficit of $898,656 will be funded by a transfer from the District’s reserve fund and will not result in higher taxes or customer charges.
The 2019 District budget includes financial projections for the 10-year period between 2019 and 2028. The Ten-Year Financial Plan projects the reserve fund balance to decrease from $9.5 million at year end 2018 to $6.3 million at year end 2028. This decrease in reserves is primarily due to the steady volume of capital water projects anticipated over the planning period. The Board reviews the fund balance every year to determine the adequacy of the reserves to fund District administrative, operations, maintenance, and capital project expenditures. The entire 2019 Budget is available on the District’s website at www.plattecanyon.org under Financial Information.
Revenue
The District will assess a property tax mill levy of 7.157 mills, which includes 0.053 mills for recovery of County issued refunds and abatements. The basic mill levy of 7.104 mills has not risen since 2005. Property and specific ownership tax revenue will remain the largest source of District funds at $1,773,828. This is 53.1 percent of total revenue.
Another significant source of revenue for the District comes from administrative and facility maintenance services provided to the nearby water and sewer utilities of Southwest Metropolitan, Bow Mar, Columbine, and Lochmoor Water and Sanitation Districts, and Valley Sanitation District. Revenue produced from these services is estimated to be $1,379,360.
Water and sanitary sewer tap permit revenue for the District continues to decline because there is little undeveloped property within the District boundaries. Revenue from tap permit sales in 2019 is expected to be $4,000.
General Expenses
Total general fund expenses budgeted for 2019 are $2,555,052, 4.1 percent more than the amount allocated in 2018 of $2,454,290.
Platte Canyon is largely a service-oriented organization with most of the administration and facility maintenance and operations performed by the District’s 14 full time employees. Thus, 68.9 percent of all general fund expenditures are personnel costs (such as employee wages and benefits). These costs are expected to be $1,760,397 in 2019, approximately 3.1% more than the amount budgeted in 2018.
While the District performs nearly all routine facility operation and maintenance services with its own forces, emergency and remedial maintenance services such as excavation work and street restoration are conducted by contractors retained by the District. Proposed expenses for these services is $197,940, $33,390 less than budgeted in 2018.
Administrative and professional consulting services include such items as production of the District newsletter, maintenance of the website, maintenance of computer and office equipment, dues for membership in professional associations, and contracting for professional legal and engineering services. The 2019 budget for these items is $179,000, an increase of $43,450 from the 2018 budget.
Capital Expenses
The budget for capital expenses in 2019 is $1,881,679, which is $334,549 more than budgeted in 2018 and $707,253 more than the average 2016-2018 costs. One sewer-related capital project is budgeted at $287,418. This project replaces 293 feet of polyethylene pipe and restores proper alignment to this run of sewer pipe. Four water projects totaling $1,244,231 are budgeted for 2019. Three projects together include the replacement of 4,632 feet of 8-inch cast iron pipe and one project includes the replacement of 732 feet of 6-inch cast iron pipe. All four projects replace pipe that has experienced several electrolysis and beam breaks.
Detailed explanations of these projects are included in the District’s Capital Master Plan for 2019-2028. This document includes a description of the new rating process developed during 2018 to prioritize the replacement of water mains over the ten-year planning period. This process is a more comprehensive assessment which incorporates a wider range of factors. As a result, the number of water mains identified for replacement during the ten-year planning period has increased significantly. The capital project budget could be reduced to mitigate the impact on District reserves by phasing the water projects over several years but would result in higher unit costs due to the loss of economies of scale and very low returns on current District investments.