United States Office of Water EPA 430/9-84-005
Environmental Protection Program Operations (WH-546) June 1984
Agency Washington DC 20460
>EPA Financial Management System
for Publicly-Owned
Treatment Works
(Accounting Options)
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U.S. ENVIRONMENTAL PROTECTION AGENCY
OFFICE OF WATER PROGRAM OPERATIONS
CONTRACT NUMBER 68-01-6591
FINANCIAL MANAGEMENT SYSTEM FOR
PUBLICLY OWNED TREATMENT WORKS
(ACCOUNTING OPTIONS)
JUNE 1984
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ACKNOWLEDGEMENTS
This publication was funded under contract 68-01-6591 from the
United States Environmental Protection Agency (U.S. EPA). This contract
was awarded to Gannett, Fleming, Corddry and Carpenter, Inc. and the
contract was managed by the Office of Water Program Operations,
U.S. EPA.
The Project Officer, Walter DeRieux, wishes to extend sincere
appreciation to the following members of the peer review panel for
taking time from their busy schedules to review this publication. These
peer reviewers were:
o Robert Brans, Illinois EPA, Springfield, Illinois.
o George Gray, U.S. EPA, Washington, DC.
o Edwin Horn, Jr., U.S. EPA, Region V, Chicago, Illinois.
o Robert Wood, Department of Public Works, Howard County,
Maryland.
o John Woodcock, Prince William County Service Authority,
Virginia.
The statements, conclusions and recommendations contained herein
are not to be construed as setting forth any legal or regulatory
requirement and do not necessarily reflect the views of the U.S.
Government or the U.S. EPA.
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TABLE OF CONTENTS
PAGE
PART ONE
I. EXECUTIVE SUMMARY 1-1
II. INTRODUCTION * II~1
A. Purpose of the Manual II-l
B. Organization of the Manual II-6
C. System Overview 11-10
1. Introduction 11-10
2. Accounting 11-10
3. Replacement Reserve 11-16
4. Revenue Generation 11-16
5. Budgeting 11-17
6. Planning 11-18
7. Implementation of a Computer-Based System 11-19
PART .TWO
III. ACCOUNTING III-l
A. Overview III-l
B. Activities 111-12
1. General Accounting (P-l) 111-12
2. Facilities Inventory (P-2) 111-14
3. Customer Billing (P-3) 111-17
4. Payroll - Personnel (P-4) 111-18
5. Purchasing (P-5) III-19
IV. REPLACEMENT RESERVE IV-1
A. Overview IV-1
B. Activities IV-8
1. Equipment Life and Depreciation (P-6) IV-9
2. Annual Replacement Reserve (P-7) IV-12
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TABLE OF CONTENTS
(Continued)
PART THREE
PAGE
V. REVENUE GENERATION
A. Overview
V-l
V-l
B. Activities
1. Revenue Requirements (P-8)
2. Service Area Analysis (P-9)
3. User Charge Rate Setting (P-10)
V-7
V-7
V-8
V-9
VI. BUDGETING
A. Overview
B. Activities
1. Revenue Analysis (P-ll)
2. Operations Performance (P-12)
3. Expenditure Analysis (P-13)
4. Budget Implementation (P-14)
5. Cash Flow Forecasts (P-15)
VI-1
VI-1
VI-6
VI-6
VI-7
VI-8
VI-8
VI-10
VII. PLANNING
A. Overview
B. Activities
1. Population Statistics (P-16)
2. Service Area Financial Ability Analysis
(P-17)
3. Performance Analysis (P-18)
4. Budget Planning (P-19)
VII-1
VII-1
VII-5
VII-5
VII-6
VII-10
VII-11
ii
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TABLE OF CONTENTS
(Continued)
PART FOUR
PAGE
VIII. GENERAL SYSTEM REQUIREMENTS
A. Introduction
B. Implementation
C. Operation
IX. COMPUTER SYSTEM REQUIREMENTS
A. Introduction
B. Hardware Requirements
C. Software Requirements
D. Selection Guide
VIII-1
VIII-1
VIII-2
VIII-A
IX-1
IX-1
IX-2
IX-4
IX-6
X. GOVERNMENTAL REGULATIONS
X-l
APPENDIX A - GLOSSARY
A-l
APPENDIX B - BIBLIOGRAPHY
B-l
APPENDIX C - INPUT SOURCE DOCUMENTS
C-l
APPENDIX D - FILE SPECIFICATIONS
D-l
APPENDIX E - OUTPUT DOCUMENT SPECIFICATIONS
E-l
iii
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LIST OF FIGURES
FIGURE NO. TITLE PAGE
II-l Activity Flowchart Legend II-9
II-2 Financial Management System Overview Flowchart 11-11
III-l Accounting Operations Flowchart III-3
III-2 General Accounting, P-l ' 111-21,111-22
III-3 Facilities Inventory, P-2 111-23
III-4 Customer Billing, P-3 111-24,111-25
III-5 Payroll-Personnel, P-4 111-26,111-27,
111-28
III-6 Purchasing, P-5 - 111-29,111-30
IV-1 Replacement Reserve Operations Flowchart IV-5
IV-2 Equipment Life and Depreciation, P-6 IV-13
IV-3 Annual Replacement Reserve, P-7 IV-14
V-l Cost Recovery Operations Flowchart V-3
V-2 Revenue Requirements, P-8 V-13
V-3 Service Area Analysis, P-9 V-14.V-15
V-4 Service Charge Rate Setting, P-10 V-16.V-17
VI-1 Budgeting Operations Flowchart VI-3
VI-2 Revenue Analysis, P-ll VI-12
VI-3 Operations Performance, P-12 VI-13.VI-14
VI-4 Expenditure Analysis, P-13 VI-15
VI-5 Budget Implementation, P-14 VI-16.VI-17
VI-6 Cash Flow Forecasts, P-15 VI-18
VII-1 Planning Operations Flowchart VII-2
VII-2 Population Statistics VII-13
VII-3 Financial Ability Analysis, P-17 VII-14.VII-15
VII-4 Performance Analysis, P-18 VII-16.VII-17
VII-5 Budget Planning, P-l9 VII-18
IV
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PART ONE
THE POTW FINANCIAL MANAGEMENT SYSTEM
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I. EXECUTIVE SUMMARY
Sound financial management is a key to successfully operating any
business. EPA has reviewed the management policies and procedures of small
publicly-owned treatment works (POTW's) and has found many shortcomings that
have directly or indirectly contributed to the failure of some plants to meet
their discharge requirements and to plan for future replacement costs. These
shortcomings in the management policies and procedures of POTW's were so
widespread and diverse that EPA decided to develop this guidance manual to
assist POTW managers in implementing a sound financial management system. The
goal of this manual is to guide POTW managers toward implementing a more
complete, consistent financial management system as defined by the EPA
Construction Grants Regulations and to facilitate computerization of that
system to reduce the personnel time required to run it. Of particular concern
to a financial management system is the establishment and the implementation of
accepted accounting standards and procedures. An accounting system that
provides management with the capability to determine their exact financial
position at any given time and under any proposed conditions by accounting for
revenues generated and operating expenditures is at the center of a successful
financial management system. Chapter III describes in detail the components of
an accounting system, while Chapter X summarizes some of the governmental
regulations and recommended standards affecting these various components. A
well-conceived accounting system would also enable the POTW owners to readily
determine accurate costs of services and proportionately allocate these costs
to customers based on usage.
A financial management system established along the guidelines proposed in
this manual would not only assist managers in monitoring the flow of dollars,
but would also serve as an information system. This system would provide
pertinent information in an organized form to enable management to more
effectively perform their duties; including tracking equipment performance,
scheduling preventive maintenance tasks, monitoring the utilization and
purchasing of equipment and supplies, determining and providing for sufficient
replacement funds, and distributing the work load. Computerization of the
financial management system would minimize the time required to record and
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process the required data, and in some cases, allow the collection and use
of valuable information previously not maintained due to staffing and file
storage limitations. An example of this is the establishment of a
comprehensive inventory system containing data on the plant's major equipment
and machinery and on spare parts; including information for ordering,
purchasing, operating, and maintaining items. These data could then be used to
not only monitor the purchase and replacement of assets, but also to initiate
a preventive maintenance system to schedule and monitor work assignments to
fulfill maintenance requirements. In general, with the timely generation of
appropriately formatted financial and plant operations information to assist
them, utility managers and owners will be able to more efficiently make
effective decisions and establish standards that would improve the performance
level of the treatment plant operations.
With the increased power and availability of mini- and micro- computers
at reasonable prices, the financial management systems of even small POTW's
can easily be computerized. Therefore, this manual was designed with
computerization in mind. Use of this document as a guide for implementing a
manually-operated financial management system, however, is not precluded
although information is presented, such as file layouts and system cost
estimates, that pertain strictly to computer application.
Chapter II of this manual (Introduction) is designed to provide the POTW
manager with a brief summary of the system. Chapters III through VII contain
detailed descriptions of the components of the financial management system,
which include accounting, replacement reserve, revenue generation, budgeting,
and planning. Each of these components is described in sufficient detail so
that an experienced financial manager and qualified computer programmer could
select the appropriate equipment and commercial software, and develop custom
software to fully implement the system. Chapters VIII through X provide
additional information on how to implement the financial management system,
what type of computer hardware and software are required, and governmental
regulations pertaining to financial management.
Certain portions of the financial management system are already available
in computer program form, particularly within the accounting area. These
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programs and the appropriate computer hardware can be purchased and installed
relatively easily within a few months' timeframe. Other portions of the
system are not currently available and would have to be custom-designed to
meet the needs of the POTW, therefore requiring several more months to
implement.
If the reader of this manual is only considering implementation of a
financial management system, then only Chapters II, VIII, IX and X should be
studied. If a decision has been made to implement the system to improve or
computerize an existing system, then Chapters III through VII along with
Appendices C, D, and E should also be studied. The reader should realize that
there are certain state laws and regulations concerning the methods and
formats for financial management systems and data archiving that may impact
specific accounting practices recommended in this manual. It is the reader's
responsibility to investigate and incorporate state requirements.
The entire financial management system described in this manual is most
applicable to larger and more complex POTWs; generally this means a mechanical
POTW of 1 million gallons per day (MGD) capacity or greater. The level of
sophistication and amount of detail in each of the five basic financial
management system elements (i.e. accounting, replacement reserve, revenue
generation, budgeting and planning) should increase as the POTW complexity and
size increases. Also, the applicability and cost-effectiveness of
computerizing a financial management system would probably increase as POTW
complexity and size increase. Regardless of the POTW's size or complexity,
the financial management system should include, as a minimum, the accounting,
revenue generation and budgeting elements.
This manual does not stipulate a relationship between the need for a
specific type of financial management system and the POTW design flow.
Generally, a financial management system's level of sophistication and
applicability for computerization is unique to each POTW and usually increases
as POTW complexity and size increase.
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II. INTRODUCTION
A. Purpose of the Manual
This manual presents a design for a financial management system for
"typical" Publicly-Owned Treatment Works (POTW's) which generally consist of
wastewater collection and treatment systems for a design capacity of 10 MGD or
less. With diminishing Federal resources available for funding their POTW's,
local communities, as well as States, must assume a greater funding and
management role in providing for their wastewater needs. These needs include
operating and maintaining wastewater collection and treatment facilities which
also allow for replacement of items needed to provide the present level of
service on a continuing basis. The new management role of the States and the
local communities is to ensure that the increasing local share of POTW funding
is spent cost- effectively.
The financial management system described in this manual is proposed to
help wastewater utility managers implement a system such that it satisfies the
User Charge System requirement as set forth in 40 CFR 35.2140(d) (refer to
Chapter X for the text of this regulation). The system consists of elements
that are to be tools to assist the utility managers and accounting staff in
performing their day-to-day accounting tasks and short-term budgeting and
planning activities. The various system elements provide readily accessible
financial and plant operation information that is up-to-date and accurate and
in a form most valuable to the end-user: the utility manager/operator, the
owner, the governing agency(s), and the public. The timeliness of these
elements aids utility managers in making decisions and setting policies that
will ensure compliance with NPDES performance standards while achieving
financial self-sufficiency in the operation and maintenance of the treatment
works. It is not the intention of this manual nor the EPA facilities planning
process to have a POTW determine the revenue potential of its service area in
order to establish its expenditure level and subsequently its sewer charge rate
and level of treatment. Since the implementation and enforcement of the NPDES
permit system, meeting environmental demands resulting from the consideration
of water quality standards are to be the POTW's goals. Therefore, costs to
II-1
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operate a facility at a specific treatment level determines the sewer service
charges needed to meet the corresponding revenue requirements, not the other
way around.
It is recognized that not all POTW's (most particularly those less than 3
mgd) would have the expertise or need to implement all elements of the proposed
financial management system. Therefore the various elements are so designed
that a POTW could implement only selected elements. Also, certain programs
within a given element, such as customer billing of the accounting element or
service charge rate setting of the revenue generation element, could be
developed with certain complex routines, as described in this manual,
eliminated when determined as not needed. In any case, without a detailed
on-line financial management system of some sort for daily cost accounting, one
would never know the POTW's financial status, or if the goal of financial
self-sufficiency was approached or even reached. The system is also capable of
caulculating operation performance indices from the data collected which could
assist the utility in determining the efficiency of their current operations
and in flagging operation problem areas.
The financial elements specifically addressed in this management system
include:
o Accounting and financial reporting;
o Replacement reserve;
o Revenue generation;
o Budgeting; and
o Planning and service area financial ability.
Because a comprehensive system for most POTW's would involve gathering,
recording, and processing large amounts of data and information for rapid
day-to-day analyses, this system design was developed with the intent to be
computer-based for automatic data processing. Even if a POTW manager did not
wish to incorporate computer capabilities into his financial management
functions, many of the activities described for the system presented here could
still be performed on a manual basis for effective overall management of the
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POTW facilities. It should be noted that the scope of this manual in reference
to financial planning is short-range in that it only addresses planning
activities within several fiscal periods to enable the facility to operate at
the current treatment level on a continuing basis. This includes planning for,
developing, and implementing operating budgets, and excludes long-term capital
budgeting processes and financing techniques needed for major changes in
facility design, operation, and expenditure levels. It should be noted that
the operating budget as defined here does include budgeting for capital
expenditures such as annual debt service requirements and reserves for
extensions and improvements needed to ensure continuing service.
The intended audience of this manual includes utility managers and owners
(grantees) and the accounting and engineering consulting communities. As
stated previously, the financial management system is to provide utility
managers with tools to assist them in complying with NPDES performance
standards while achieving financial self-sufficiency. The accounting community
and the engineering consulting communities can utilize this manual as an
information source and guidebook for constructing and implementing
computer-based financial management systems for POTW's.
A "typical" POTW setup was defined for this manual in order to develop a
generic financial management system that can be useful to the majority of
POTW's. The primary components affecting the design of such a system and their
classifications used to describe a typical setup for this manual are presented
below:
o Ownership - Only POTW's with operational autonomy are
included since the goal of the system is for a POTW to
operate on a self-sustaining basis. It is assumed
that the utility has complete control of its financing
and accounting systems, and the power to establish its
own budget and recover costs incurred. In general,
this definition includes four types of ownerships:
Single municipality to include all entities under
the state level such as counties, townships,
towns, etc. It must be noted that the utility
must be able to fully account for all of its
expenses and revenue in order to use the module
effectively. This could be a difficult effort
for this classification since many of the
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utility's support services may be provided by
separate municipal departments such as
purchasing, finance, planning, engineering, etc.
Independent authority to include the fully
autonomous entities that own and operate their
utilities with local government control defined
by state legislature.
Joint ownership to include utilities where two or
more communities or other entities have
constructed and jointly operate the wastewater
facilities. This classification includes
regional agencies.
Special purpose district (sanitary district) is
similar to joint ownership but allows for more
control over planning functions.
System Components - System components for a "typical"
POTW include two classifications: secondary treatment
and advanced treatment. Even though primary treatment
is not included as "typical", it was assumed that any
POTW having only primary treatment facilities could
use any financial management system developed for more
sophisticated POTW's. It was determined also that
having a wastewater collection system or not will not
significantly affect the financial management system
design.
System Size - The size (volume of wastewater treated)
is important to the design of the financial management
system since it affects the number of individual
financial transactions/accounts and, therefore, the
file sizes. This is of concern because the system is
designed with automation in mind using microcomputers
(which have limited storage capacity and data
management capabilities). It should be noted that the
resulting financial statements and reports showing
management the effect of all transactions will be of
similar form regardless of size. Large systems (over
10 mgd) are not considered typical in this manual and
therefore not addressed since these POTW systems would
need, if they are not already using, the assistance of
minicomputers or large mainframes (in-house or service
supplied) for their automated financial management
needs. The small plants (less than 3 mgd) may find
that the financial management systems in total is too
complex and demands too many resources to operate.
There are a number of elements in the financial
management system that could be left out by small
plants to result in a more manageable package,
including: facilities inventory, service area
analysis, revenue analysis, budget implementation,
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population statistics, and budget planning. As these
small plants grow, they could 'selectively implement
these elements to upgrade their financial management
system.
Obviously, the components used to define the "typical" POTW setup will not
cover all the needs of every POTW. To make the financial management system as
applicable as possible, a list of "options" has been derived to address the
most common variations other than those accounted for in the establishment of
the "typical" setup. These options must be considered when a financial
management system is being customized and implemented for a specific POTW.
They include:
o Means of revenue generation (often directly related to
the type of ownership);
o Secondary treatment processes (aeration, biological,
filtration, physical/chemical, and disinfection);
o Advanced treatment processes (phosphorus removal,
nitrogen removal, filtration, and screening);
o Collection system (sanitary, combined);
o Sludge treatment/disposal;
o General administration size and qualifications
(clerical, engineer, operator, administrator, lab
technician);
o Amount of information needed by management (to
determine which elements are to be implemented and the
level of interdependence of system programs and
files); and
o Level of management reviewing information (effects the
format of system output because different levels of
management have different needs).
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B. Organization of the Manual
The manual consists of four parts:
Part One - The POTW Financial Management System
includes Chapter I, the executive summary and Chapter
II, the introduction. The introduction has a system
overview section that provides general descriptions of
the six major elements which make up the financial
management system and summarizes the requirements for
a computer-based system.
Part Two - Financial Accounting includes Chapter III,
the detailed description of the accounting element of
the system. This element encompasses general
accounting and financial reporting, facilities
inventory, customer billing, payroll-personnel, and
purchasing functions. Also included is Chapter IV,
the detailed description of the replacement reserve
element which is to be used to estimate a "reasonable"
annual replacement reserve.
Part Three - Financial Planning includes Chapter V,
revenue generation; Chapter VI, budgeting; and Chapter
VII, planning. These chapters provide, respectively,
the detailed descriptions of sewer service charge
determination, operations budgeting, and planning
(including service area financial ability analysis and
utility operations performance evaluation).
Part Four - System Implementation includes Chapter
VIII which addresses management and operations
requirements; Chapter IX to provide guidelines for
computer system requirements; and Chapter X to
summarize governmental regulations concerning a POTW
financial management system.
Also included in the manual are five appendices:
Appendix A - a glossary which includes accounting,
computer and engineering terms.
Appendix B - a bibliography which lists reference
sources including guidebooks, handbooks, and manuals
of practice for accounting systems, sewer service
charge systems, inventory systems, and operation and
preventive maintenance systems that describe
evaluation techniques, standards, and regulations.
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o Appendix C - includes descriptions of required "base"
data and examples of input source document formats'.
o Appendix D - includes a general definition of "file"
as used in this manual and what characteristics are
specified and why. The twenty-one (21) files are then
individually presented and described. These
descriptions include: identification of accessing
programs and why they access (input, retrieval, or
both of particular data); identification of access
keys; and data descriptions for each item stored in
each record group.
o Appendix E .- includes descriptions in the form of
figures for each output document to be generated
(printed) by the programs of the proposed financial
management system.
Three types of flowcharts have been developed for this manual: overview
flowcharts, operations flowcharts, and activity flowcharts. The overview flow
chart, the macro-level flowchart, is presented in section C of this chapter,
the system overview. It illustrates the interaction between each of the
system's major elements: accounting, replacement reserve, cost recovery,
budgeting, and planning. This flowchart presents the system as a group of five
integrated elements, each of which consists of various interacting activities
(computer-based programs). The second level of flowchart is the operations
flowchart. There are five operations flowcharts, one for each of the five
elements. Presented in Chapters III through VII for each of their respective
elements, these flowcharts encompass all the activities of a particular element
and illustrate their interrelationship with each other and the data base files.
Also included with these flowcharts are listings of input (source) documents
and output documents.
The third and final level of flowcharts provided in this manual is the
activity flowchart. This flowchart illustrates the conceptual design for each
of the nineteen (19) activity programs which are the basis of the financial
management system. These programs each depict a "stand-alone" activity that
could be implemented and computerized without requiring the implementation and
computerization of other activities. In actual operations these processes
could be coded and executed as one computer program or a series of
interconnected programs. The processes illustrated in a given activity
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flowchart include retrieving data from and storing data in files; entering data
directly as a user; defining operations causing change in value, form, or
location of information; decision operations to determine which of a number of
alternative paths to follow; and printing of output documents. The intent of
the flowcharts is to provide the utility manager with guidelines for the
development of a computer-based financial management system; however, the
routines in each program could be manually performed. It should be noted that
some of these programs, particularly those of the accounting element, currently
exist in many commercially available packages. The flowchart legend presented
in Figure II-l describes the purpose of each of the six (6) symbols used in the
activity flowcharts. The lines connecting the symbols are drawn with arrows to
show the logical order of the operations sequence and data flow direction.
These flowcharts do not supply the computer programmer with data management
techniques, only the basic program logic. It is assumed that a programmer
attempting to develop any of these programs would have a basic knowledge of
data management and file maintenance programming techniques. If a utility
wishes to develop customized programs, some of the routines and logic flow of
programs may have to be altered to meet their needs.
The financial management system elements, in particular the accounting
element, are designed so that the user has the option to implement individual
programs or an integrated system of any related programs. An integrated,
computer-based system connects each related program and, as much as possible,
eliminates entering information by hand. It should be noted that since each
program is intended to be functional as a stand-alone system, there may be
duplication of certain functions when programs are integrated. This
duplication is necessary, aside from duplication of data storage (refer to
Appendix D-Files), and enhances the system in overall integrity.
II-8
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BEGINNING OF PROGRAM.
ENDING OF PROGRAM.
DECISION OPERATION THAT
DETERMINES WHICH OF TWO
ALTERNATIVE PATHS IS
FOLLOWED.
GENERAL USER INTERACTION
FUNCTION FOR ENTERING DATA
FROM SOURCE DOCUMENTS OR
EXISTING FILES FOR PROCESS-
ING AND/OR UPDATING STORED
DATA IN FILES. IN SOME CASES
WHERE REFERENCE IS MADE TO
•OPEN XXX FILE'. IT REQUIRES
ACCESSING (OPENING) FILE XXX
TO RETRIEVE FROM STORAGE AND
MAKE AVAILABLE THE DATA
STORED IN THE FILE.
ANT PROCESSING FUNCTlONi
DEFINED OPERATION(S) CAUSING
CHANGE IN VALUE IS). FORM IS) .
OR LOCATION(S) OF DATA OR
INFORMATION
OUTPUT FUNCTION FOR
•HARDCOPT- DOCUMENTS
REQUIRING PRINTING
FIGURE H-l
ACTIVITY FLOWCHART
LEGEND
II-9
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C. System Overview
1. Introduction
The financial management system consists of conceptual designs for five
(5) major elements, as illustrated in Figure II-2:
o Accounting;
o Replacement reserve;
o Revenue generation;
o Budgeting; and
o Planning.
Each element is divided into unique, stand-alone programs and files.
Table II-l lists the elements and their respective programs along with data
base files required to support the programs. In all, nineteen (19) programs
and twenty-one (21) files have been designed. Generally, the programs utilize
more than one file so files are shared. Each file is actually made up of
groups of related records (refer to Appendix E) where, in some cases, a program
may only access one particular record. If only certain programs are desired,
then only those records of the files required by those programs need to be
developed.
The following five sections (B through F) summarize the functions of each
program in the system. Section G summarizes the implementation steps for a
computer-based financial management system.
2. Accounting
The backbone to the system is the accounting element, which provides the
bookkeeping and basic financial reporting functions. The accounting element
feeds into all other elements, providing them with information concerning the
utility's financial position and effects of financial operations on the funds
and account groups. Five (5) separate activities (programs) make-up the
accounting element:
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M
I
REPLACEMENT RESERVE
REVENUE GENERATION
P-6
EQUIPMENT LIFE
AND DEPRECIATION
FILE ACCESSED'
- INVENTORY
f-1
ANNUAL REPLACEMENT
RESERVE
FILES ACCESSED'
- FACILITIES COST
ACCOUNTING
PURCHASING
FILES ACCESSED'
PURCHASE ORDER
INVOICE
VENDOR
JOURNAL ENTRr
BUDGET
SERVICE CHARGE
HATE SETTING
FILES ACCESSED-
- CUSTOMER
- SERVICE AREA
- RATE
- FACILITIES COST
V
siP*
< c
-N
V
Mi
™s
^ m
m
W
i
ro
PLANNING
POPULATION
STATISTICS
FILE ACCESSED'
SERVICE AREA
SERVICE AREA FINANCIAL
ABILITY ANALYSIS
FILES ACCESSED'
- FINANCIAL INDICATORS
- SERVICE AREA
- SUBSIDIARY LEDGERS
- DEBT HISTORY
- REVENUE
- FACILITIES COST
BUDGET
BUDGET PLANNING
FILES ACCESSED-
- BUDGET
- EMPLOYEE
A
BUDGETING
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TABLE II-1
SYSTEM PROGRAMS AND FILES
ELEMENT
PROGRAM
FILES
Accounting
General Accounting (P-l)
Facilities Inventory (P-2)
Customer Billing (P-3)
Payroll-Personnel (P-4)
Purchasing (P-5)
Journal Entry (F-ll)
General Ledger (F-8)
Subsidiary Ledger (F-18)
Budget (F-2)
Inventory (F-9)
Purchase Order (F-14)
Vendor (F-21)
Customer (F-3)
Billing (F-l)
Journal Entry (F-ll)
Employee (F-5)
Timesheet (F-20)
Tax (F-l9)
Journal Entry (F-ll)
Purchase Order (F-14)
Invoice (F-10)
Vendor (F-21)
Journal Entry (F-ll)
Budget (F-2)
Replacement
Reserve
Equipment Life and
Depreciation (P-6)
Annual Replacement Reserve
(P-7)
Inventory (F-9)
Inventory (F-9)
Facilities Cost (F-6)
11-12
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TABLE II-1
SYSTEM PROGRAMS AND FILES
(Continued)
ELEMENT
PROGRAM
FILES
Revenue Generation
Revenue Requirement (P-8)
Service Area Analysis (P-9)
Sewer Service Charge Rate
Setting (P-10)
Subsidiary Ledger (F-18)
Facilities Cost (F-6)
Revenue (F-16)
Customer (F-3)
Service Area (F-17)
Customer (F-3)
Service Area (F-17)
Rate (F-15)
Facilities Cost (F-6)
Budgeting
Revenue Analysis (P-ll)
Operations Performance
(P-12)
Expenditure Analysis (P-13)
Budget Implementation
Revenue (F-16)
Service Area (F-17)
Customer (F-3)
General Ledger (F-8)
Rate (F-15)
Journal Entry (F-ll)
Budget (F-2)
Inventory (F-9)
Maintenance (F-12)
Operations (F-13)
General Ledger (F-8)
Budget (F-2)
Debt History (F-4)
Budget (F-2)
11-13
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TABLE II-1
SYSTEM PROGRAMS AND FILES
(Continued)
ELEMENT PROGRAM FILES
Cash Flow Forecasts (P-15)
General Ledger (F-8)
Revenue (F-16)
Budget (F-2)
Planning
Population Statistics
(P-16)
Service Area (F-17)
Service Area Financial
Ability Analysis (P-17)
Financial Indications (F-7)
Service Area (F-17)
Subsidiary Ledger (F-18)
Debt History (F-4)
Revenue (F-16)
Facilities Cost (F-6)
Budget (F-2)
Performance Analysis
(P-18) Maintenance (F-12)
Operations (F-13)
Service Area (F-17)
Employee (F-5)
Budget Planning (P-19)
Budget (F-2)
Employee (F-5)
11-14
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o General Accounting (P-l) - to assist in monitoring
financial transactions by performing functions
including journal entry, ledger posting, and financial
reporting.
o Facilities Inventory (P-2) - to assist in maintaining
an up-to-date record of supplies and equipment in use,
on hand, on order, and required by developing a file
for all utility assets and techniques for maintaining
and evaluating a perpetual stockroom inventory,
cross-checking the file with periodic physical
inventories, and generating reports on inventory value
and status.
o Customer Billing (P-3) - to assist in generating
customer bills for more timely receipt of revenues by
developing a file for all service customers, which
includes information on the customer's user class;
calculating customer service charges; maintaining
customer useage, payment, and delinquency status; and
generating bills, reports, and journal entries (for
accounts receivable to P-l).
o Payroll-Personnel (P-4) - to assist in paying workers
and evaluating their performance by developing an
employee file with both payroll and personnel data;
calculating employee payroll and tax deductions;
generating paychecks and stubs, payroll reports, and
journal entries (for accounts payable to P-l); and
generating personnel reports for evaluating employee
potential and actual workload.
o Purchasing (P-5) - to assist in ordering and paying
for supplies and equipment by developing files for
purchase orders, vendors, and invoices and techniques
for updating these files; providing "timely" payments;
and generating voucher checks, reports, and journal
entries (for accounts payable to P-l).
As stated above, programs P-3, P-4, and P-5 generate journal entries for
the accounting program, P-l. Security control can be provided here by allowing
the journal entries to be generated by various designated employees and the
actual posting of these entries, which is a part of P-l, to be performed by a
different employee who has sole responsibility over the bookkeeping functions.
It is also possible to have the employee requesting and receiving purchased
assets (control over the inventory, P-2) be a different individual from the
employee doing the actual purchasing (control over the purchasing, P-5).
11-15
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3. Replacement Reserve
The second element involves estimating an annual replacement reserve based
on the depreciation of the utility's equipment and machinery assets. This
includes two programs:
o Equipment Life and Depreciation (P-6) - includes the
development of an inventory file and the calculation
of the depreciation rates or charges of an asset based
on its original cost, date of purchase, salvage value,
and service life which are modified based on
flucuations in the value of a dollar, usage and
maintenance of the asset, and, in some cases, the
experience of the engineer concerning technical
advancements and service area development.
o Annual Replacement Reserve (P-7) - includes generating
annual reports for replacement reserve based on the
depreciation rates and charges of the assets which
involves the development of an inventory file (for
input storage) and a facilities cost file (for output
storage).
This element requires input from the inventory records established by the
accounting element. The reserve values generated by the element is to be used
in determining the total cost of services for cost recovery analysis.
4. Revenue Generation
The revenue generation element is designed to set sewer service charge
rates based on the actual or proposed cost of services and on the existing or
projected level and type of development in the service area. Three programs
make up this element:
o Revenue Requirements (P-8) - includes accessing
subsidiary ledger expenditure data; isolating OM&R
costs from capital costs including debt service and
reserves for extensions/improvements; the development
of a facilities cost file to maintain cost of service
data and a revenue file to maintain revenue data; and
the generation of a report to document cost of
services in general and by user class, non-use revenue
amounts, and resulting revenue requirements to
determine sewer service charges.
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Service Area Analysis (P-9)
of a customer file for stor
and a service area file for
service area flows (at pump
bypasses/overflows, and
disaggregation of flow to
areas; and generation of
reports.
Sewer Service Charge Rate
the allocation of revenue i
determined by P-8, to cost
distribution to customer
sewer service rate schedules
charge and the "asset" charg
5. Budgeting
- includes the development
.ng data on customer flows
storing data on general
stations, system meters
Industrial meters);
subarea in the service
wastewater flow summary
SJetting (P-10) - includes
equirement cost values,
functions followed by
clalsses and the generation of
documenting both the user
e.
This element concerns the procedures for the implementation of a selected
operating budget plan, the periodic "control" functions that assure the
conformity of actual operations (financial and treatment processes) with the
budget plan, and the functions required to project cash flow during the budget
period. Five (5) programs provide these capabilities:
Revenue Analysis (P-ll) - determines the proposed cost
recovery amount by incorporating a projected loss
amount (such as that incurred from defaults on
customer billings) and trend data from historical
revenue collection data.
Operations Performance (P-12) - generates report
concerning equipment performance (maintenance, repair,
and usage), plant performance (compliance with NPDES
standards), and general statistics to evaluate any
parameter (such as pollutant influent/effluent levels,
energy usage, and chemical usage).
Expenditure Analysis (P-13) - includes the budget
comparison functions that generate periodic (yearly,
quarterly, or monthly) .reports comparing the budgeted
amount, by line-item or by department/activity, to the
actual expenditures to determine the variance from the
current and previous years or months.
Budget Implementation (P-14) - includes the
maintenance of a budget file to store budget "policy"
data (budget period length, review process, minimums,
etc.), the maintenance of a debt history file to store
proposed debt service data, the development of
11-17
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operating budget reports and schedules, and the
generation of a budget approval summary.
Cash flow forecasts (P-15) - includes the development
of cash flow forecasts for the utility as a whole or
by departments based on the ratios of receipts to
revenues and expenses to expenditures using historical
data.
6. Planning
The planning elements consist of developing and selecting budget plans for
the annual operating budget. This process involves analyzing the financial
capability of the service area and the performance of the utility system. Four
(4) programs are designed for this element:
o Population Statistics (P-16) - includes the
maintenance of service area population and income data
to evaluate trends and changes which also includes
land use development patterns.
o Service Area Financial Ability Analysis (P-17) -
involves the calculation of eleven (11) key financial
indicators to assess the service area's and sub-areas'
(individual communities) financial conditions and the
POTW's capability to finance various alternative
budget plans.
o Performance Analyses (P-18) - involves the evaluation
of present and proposed utility operations
(alternative budget plans) based on four performance
categories: efficiency ($/unit of work),
effectiveness (treatment removal rate), workload
(staffing capabilities), and wastewater loading (flow
and pollutant loading capacities of facilities).
o Budget Planning (P-19) - involves the generation of
budget plan work schedules for the selected plan.
As stated previously in this chapter, the environmental demands, resulting
from consideration of water quality standards and the related effluent
limitations, are the driving force of a POTW's design, operations, and
expenditure levels not the service area's ability (or willingness) to meet
revenue requirements. Even so, the service area financial ability analysis
program is presented as a means of assisting POTW managers in establishing
11-18
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timetables for minor construction projects and in evaluating the effects of
various financing alternatives. By providing an overview of the service area's
financial status and the budget requirements that are to ensure continuous
operations at specified performance levels, the managers and owners can
establish plans of action that take advantage of a favorable cash flow and
result in judicious investments and/or loans that keep costs of service and
debt service requirements at an optimal level.
7. Implementation of a Computer-Based System
The financial management system described in this manual can be used as a
guide by a utility manager in planning for a system suited to his POTW's
managerial needs. To implement a computer-based system several steps must be
followed:
o Evaluation of available software packages and any
required modifications;
o Identification of programs requiring custom design
software and of manual activities;
o Evaluation of vendors including their capabilities and
costs for providing hardware, software, training and
continued maintenance/follow-up service;
o Evaluation of effort and time required for converting
existing records to computer-based files; and
o Evaluation of existing staff capabilities and
limitations.
Table II-2 is a list of specific capabilities that are to be provided for
in a computer-based financial management system in order to conform with
generally accepted accounting principles (GAAP). The conceptual design for the
accounting element allows for these requirements. The following chapter
describes in detail the accounting basis to be used and the Sample Chart of
Accounts presented in Appendix C lists the appropriate funds and account groups
for a POTW.
All programs in all elements should be equipped with security checks and
controls that limit access (read and write) to data base files and execution of
11-19
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TABLE II-2
CHECKLIST FOR CONFORMITY WITH GAAP
The ability to produce required accounting and financial
records and reports on a cash, accrual, or modified accrual
basis.
The use of multiple accounting bases for financial
reporting, and the ability to track events from their
earliest point of formal recognition to the end point in
the process.
The use of appropriate funds and account groups to meet
GAAP accounting and reporting requirements. Each element
of accounting information must be fund specific and treated
according to that fund's special accounting measurement
characteristics.
The maintenance of audit trails, including identification
of the document that generates each accounting entry.
The use of double-entry bookkeeping to ensure accounting
consistency and to produce auditable financial records.
Source: Ernst & Whinney, "How Your Government Can Apply GAAP," 1982.
11-20
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programs to authorized personnel only. Also, all programs should be developed
using the menu-drive concept which provides the user with a list (menu) of
functions that can be activated and prompts the user for specific input. A
detailed discussion of these items and descriptions of staff requirements for
system implementation and operation are provided in Chapter VIII, General
System Requirements.
11-21
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PART TWO
FINANCIAL ACCOUNTING
-------
III. ACCOUNTING
A. Overview
Accounting, the "language" used to communicate financial information, is
the basis of a sound financial management system. The accounting element is
designed to accommodate the automatic recording of transactions and the
periodic preparation of financial statements. These functions are to assist
utility management in controlling current operations costs and planning for
projected service levels, thereby requiring the adoption of a proper chart of
accounts to classify financial transactions within a standard coding structure;
the formulation of procedures for the accumulation and reporting of financial
information and data; and the development of appropriate internal accounting
"checks and balances".
The integrated accounting system presented here provides the following
capabilities:
o General Accounting - Subsidiary ledgers and the general
ledger are instantaneously and automatically updated with
journal entry, customer billing, inventory, purchasing, and
payroll data and financial reports are printed on demand.
o Facilities Inventory - All facility assets are recorded in
a permanent record file, with stock items monitored in a
perpetual inventory which automatically flags items for
reorder and adjusts quantity on-hand and inventory value
when the file is updated (purchase or utilization of
items).
o Customer Billing - Includes processing of all billing
items: cash receipts and adjustments, meter data, billing
statements, delinquency/penalty histories, and reports.
Customer billings will be instantaneously and automatically
entered into the proper accounts in the accounts receivable
register (journal).
o Payroll and Personnel - Includes processing of timesheets,
payroll/paychecks, and W-2 forms, and generation of
reports. Payroll will be instantaneously and automatically
entered into the proper accounts in the accounts payable
register. Employee history data will be obtainable as
III-l
-------
recent as the last pay period for personnel management
evaluation reports.
o Purchasing - The purchasing (ordering, receiving, and
payment) process will be automated by the instantaneous
interactions between the Purchasing and General Accounting
programs (replacement reserve updates; inventory value and
quantity-on-hand updates; and matching of reorder notice,
purchase order, invoice and receiving slip).
A total of thirteen (13) file types are needed for the integrated
accounting system:
o Billing File;
o Budget File;
o Customer File;
o Employee File;
o General Ledger File;
o Inventory File;
o Invoice File;
o Journal Entry File;
o Purchase Order File;
o Subsidiary Ledger File;
o Tax File;
o Timesheet File; and
o Vendor File.
Figure III-l is the operations flowchart for the accounting element. It
should be noted that the General Accounting program, P-l, is presented as four
separate blocks (journal entry, ledger posting, financial reporting, and
closing entries) to better illustrate the interaction with the files and the
other programs (P-2, P-3, P-4, and P-5) of the accounting element.
Currently, accounting is the only area of finance for which national
standards are available. These standards, referred to as Generally Accepted
III-2
-------
III-3
FIGURE ffl-l
ACCOUNTING
OPERATIONS FLOWCHART
-------
FIGURE III-l
ACCOUNTING OPERATIONS FLOWCHART (Cont'd.)
List 1 - Source Documents, Customer Billings, P-3
o Meter Reading Book
o Payment Notice (Stub from Customer Billing Statement)
o Customer Connection Application, Water/Sewer (Request for Service)
List 2 - Source Documents, Payroll - Personnel, P-4
o Employee Application
o Employee Timesheet or Time Clock Card
o Employee Performance Review and Evaluation Form
List 3 - Source Documents, Purchasing, P-5
o Requisition Form
o Bid (Quotation)
o Receiving Report
o Invoice
List 4 - Source Documents, Inventory, P-2
o Facility Inventory Functional Number System (one time entry)
o Receiving Report
o Physical Inventory Report
o Stock Issue Ticket (for obtaining and returning)
o Maintenance Procedure Data (Manufacturer information)
List 5 - Billing Documents, P-3
o Billing Summary Register
o Billing Statements (per account)
o Delinquency Notice
III-4
-------
FIGURE III-1
ACCOUNTING OPERATIONS FLOWCHART (Cont'd.)
List 5 - Billing Documents, P-3 (Cont'd.)
o Delinquency - Penalty Register
o Shut-off Notice
o Customer Accounts Status Report
o Individual Customer Meter Reading Log
o Mailing Labels
o Customer Listing
List 6 - Payroll and Personnel Documents, P-4
o Employee File Listing
o Tax Rate File Listing
o Employee Timesheet Summary Report
o Payroll Register
o Payroll Deduction Register
o Paycheck and Stub
o Labor Distribution Report
o Wage Tax Report
o Union Dues Report
o Credit Union Report
o Unemployment Compensation Report
o Social Security Report
o United Way Report
o W-2 Forms
o Salary and Classification Report
o Performance Evaluation Report
o Certification, Registration, and Education Report
List 7 - Purchasing Documents, P-5
o Purchase Order
o Request for Quotation
III-5
-------
FIGURE III-l
ACCOUNTING OPERATIONS FLOWCHART (Cont'd.)
List 7 - Purchasing Documents, P-5 (Cont'd.)
o Report of Discrepancy
o Voucher Check
o Voucher Check Listing (Schedule of Bills)
o Purchase Order (Retired/Outstanding) Listing
o Invoice (Paid/Unpaid) Listing
List 8 - Inventory Documents, P-2
o Reorder Notice
o Inventory File Listing
o Inventory Summary Report (Stock Status Report)
o Quantity On-Hand Report (Multiple Warehouse Report)
o Reorder Analysis Report (Lead Time Report)
o Physical Inventory Analysis
o Back Order Report
o Utilization Rate Report
o Vendor Summary
o Stock Return Summary
o Inventory Cost (Value) Report
o Discontinued Parts Listing
o Inventory Stock Record
List 9 - Source Documents, Journal Entry, P-l
o Deposit Slip
o Receipt for Cash Received
o Notes Payable
o Customer Billing
o Customer Billing Payment Notice
III-6
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FIGURE III-l
ACCOUNTING OPERATIONS FLOWCHART (Cont'd.)
List 9 - Source Documents, Journal Entry, P-l (Cont'd.)
o Payroll
o Purchase Order
o Invoice
o Chart of Accounts (one time entry)
List 10 - Journals and Registers, P-l
o Listing of Journal Entries
o Check Register
o Cash Receipts Journal
o Cash Disbursement (Payment) Journal
o General Journal
List 11 - Ledgers, P-l
o General Ledger
o Subsidiary Ledger (Accounts Receivable, Accounts Payable, Fixed Asset)
List 12 - Financial Reports, P-l
o Balance Sheet
o Income Statement
o Trial Balance Report
o Encumbrances/Available Balance Report
o Revenues (Year to Date, Month to Date) Report
o Cash Requirements Report
o Cash Reconciliation Report
o Analysis of Equity Report
III-7
-------
FIGURE III-l
ACCOUNTING OPERATIONS FLOWCHART (Cont'd.)
List 12 - Financial Reports, P-l
o Budget Transfer Listing
o Investment Report
o Long-Term Bond/Notes Report
o Sinking Fund Report
o Fixed Asset Report
o Closing Entry Report
III-8
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Accounting Principles (GAAP), establish the type of accounting that government
entities should use, its basis and focus, and the reports that are regularly
produced. The accounting practices for this financial management system
consist of fund accounting using the accrual (or modified accrual) basis.
Since this study concerns only "publicly-owned" treatment works (POTW's) the
accounting element is organized for operations using fund accounting. Fund
accounting emphasizes separate detailed accounting and reporting for each of
the subparts (funds) of the utility-owner, the government. This assists in
assuring that legal restrictions governing the use of revenue sources are met.
The basis of accounting used for a system determines when revenues and
expenditures or expenses are recognized in the accounts and reported in the
financial statements. In accordance with Governmental Accounting, Auditing
and Financial Reporting (GAAFR), all proprietary funds (i.e. enterprise funds
and internal service funds) are to be accounted for using the accrual basis of
accounting and all governmental funds (i.e. debt service funds, general funds,
capital projects funds, and special assessment funds) are to be accounted for
using the modified accrual basis of accounting. These bases of accounting are
defined in GAAFR as follows:
o Accrual basis - transactions are recognized when they
occur, regardless of the timing of related cash flows.
o Modified accrual basis - revenues are recognized when
they become both "measurable" and "available" to
finance expenditures of the current period.
Expenditures are recognized when the related fund
liability is incurred except for: (1) inventories of
materials and supplies which may be considered
expenditures either when purchased or when used; (2)
prepaid insurance and similar items which need not be
reported; (3) accumulated unpaid vacation, sick pay,
and other employee benefit amounts which need not be
recognized in the current period, but for which
larger-than-normal accumulations must be disclosed in
the notes to the financial statements; (4) interest on
special assessment indebtedness which may be recorded
when due rather than accrued, if approximately offset
by interest earnings on special assessment levies; and
(5) principal and interest on long-term debts which
are generally recognized when due.
III-9
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The National Association of Regulatory Utility Commissioners (NARUC)
prescribes the accrual basis of accounting for sewer utilities in their
approved uniform system of accounts. Accounting standards for utilities are
also often prescribed by a variety of state and local laws. When legally
mandated accounting standards are not consistent with generally accepted
accounting standards, such as the requirement of cash basis accounting in some
states, the utility's accounting system must make it possible to satisfy both.
Cash basis accounting, which recognizes transactions only when cash changes
hands, does not present a utility's actual financial position or results of
operation. Cash accounting omits recognition of assets and liabilities not
arising from prior cash transactions including accounts receivable and accounts
payable. On the other hand, accrual accounting includes these items in order
to clearly present the utility's overall financial condition.
Government accounting standards are enforced in a variety of ways. Of
particular importance is the standardization of auditing procedures and goals
established by the American Institute of Certified Public Accountants (AICPA)
as published in their industry audit guide, "Audits of State and Local
Government Units", (ASLGU). Thus, in general, there is a common body of
knowledge about how government accounting is to be conducted and how accounting
activity is to be reported.
To ensure compliance with accounting standards, the financial management
system must not only be set up to handle fund accounting on an accrual basis
but must also be supplied with internal controls. Maintaining separate
programs that can interface with each other for an integrated accounting system
must be accompanied by security points to prevent unauthorized personnel from
performing selected accounting duties or accessing protected data bases. These
security points can include, but are not limited to, the following:
o Request for items to be purchased by inventory/stock
personnel only;
o Preparation and issuance of purchase order by
purchasing officer only;
o Receiving and issuance of items purchased by
inventory/stock personnel only;
III-10
-------
o Processing and payment of invoice by purchasing agent
only;
o Processing and issuance of paychecks by payroll
personnel only;
o Processing and distribution of customer bills by
billing personnel only; and
o Processing (recording) of all journal entries and all
ledger postings by bookeeper only.
Separation of accounting duties allows an employee to check another
employee's work. The integrity of the system is ensured because all the
individual processes that make up a particular transaction, such as the
purchase of a truck, must balance in the accounting books. Controlling access
to programs and files generally involves a programmed coding system which
assigns each employee with his unique access code (not to be equivalent to an
employee payroll number or any other employee number assigned for accounting
purposes).
Other security points include the use of prenumbered forms generated by
the computer which cannot be deleted or corrected, only voided, and the
integration of "signature approval" functions (such as in the generation of
voucher checks and paychecks and approval of the the operating budget) in the
programs that must be completed prior to continuation of the computer program
execution. Of major importance is the recording of data to computer-based
accounting books. Transactions data, once entered, cannot be deleted or
changed; it can only be adjusted by way of a separate entry in order for the
accounting system to be auditable.
The following section describes each of the individual programs of the
accounting element in more detail.
Ill-11
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B. Activities
1. General Accounting (P-l)
The General Accounting program (P-l), illustrated in Figure III-2 at the
end of this chapter, encompasses the journal entry, ledger posting, and
financial report preparation functions. This program is the "bookeeping" part
of the accounting element and requires information on accounts receivable (i.e.
customer billings), accounts payable (i.e. invoices), payroll, and inventory.
The basic processes (routines) of the program include:
o File Maintenance - This process is to be used to build
the Chart of Accounts, update nonfinancial data in
subsidiary and supporting files and define terms and
conditions.
o Regular Accounting Function - This process includes
the "normal" daily functions of recording purchase
orders, invoices, journal entries, ledger postings,
and budget transfers.
o Accounting Reports - This process is used to print
user-specified accounting reports on a predetermined
periodic basis or on demand, that are required for
informational and audit purposes.
o Closing Entries - This process is performed at the end
of the accounting period (i.e. fiscal year) and
following the budget transfer process. It closes all
expenditure and revenue accounts.
The chart of accounts is the numbering system used to classify accounting
transactions within a predetermined coding structure. This system serves as
the framework for recording, indexing, extracting, summarizing and reporting
financial information. Many systems have been developed as guidelines for
sewage utilities which vary as to the numbers and descriptive titles assigned
to various types of transaction classifications. Managers should design a
system to meet their utility's specific needs. This should be given careful
consideration because the system forms the reference framework for the
financial management data storage and retrieval system. Items to be addressed
for providing the needed information include the following:
III-12
-------
o Funds;
o Sources of revenue;
o Object of expenditures;
o Activities performed;
o Account types; and
o Programs or projects.
The "regular accounting function" routine is the key process of this
program in that it is the point of entry for all financial transaction data,
either manually for a stand-alone program or automatically for an integrated
accounting system. The program accurately tracks all financial transactions
(includes customer billings, inventory item purchases/vendor payments, and
payroll) by using the input data supplied in the journal entry file to
simultaneously record in the appropriate journals (registers) and post to the
corresponding ledgers.
The basis of this program is the double-entry system which requires that
for every entry made to the debit side of an account an entry would also be
made for a corresponding amount to the credit side of another account. The
double-entry basis of accounting is the most widely used system in municipal
accounting because of its three basic elements:
o The dual effect of every transaction is shown;
o The accounts must always be in equilibrium; and
o The combined effect of all transactions must be shown
as a decrease or increase in the surplus or deficit of
each of the various funds.
These elements provide an inherent "check and balance" feature and present the
total financial picture of the POTW, which are valuable characteristics for the
accounting system of a self-sufficient agency.
In an'integrated accounting system the Customer Billing program (P-3), the
Payroll-Personnel program (P-4), and the Purchasing program (P-5), enter
111-13
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financial transaction data (customer billings outstanding/paid, payroll amounts
and invoice/voucher check amounts) to the journal entry file. This data is
then accessed by the general accounting routine which uses the data to perform
the actual recording to journals and posting to ledgers (subsidiary and
general).
The reports to be generated in the accounting reports routine can include
the following:
o Balance sheet;
o Income statement;
o Trial balance;
o Specified journals;
o Encumbrances/available balance report;
o Revenues (year-to-date/month-to-date) report;
o Cash requirements report;
o Cash reconciliation report;
o Analysis of equity report; and
o Budget vs. actual report.
2. Facilities Inventory (P-2)
The computer-based inventory program proposed for this system and
illustrated in Figure III-3 at the end of this chapter, monitors and analyzes a
perpetual inventory. It consists of the following four (4) routines:
o Add Item to Inventory - provides on-line updating of
inventory through receiving and inspection of incoming
stock or installed capital assets (includes items such as
equipment, materials, tools, buildings, and tank
structures).
o Adjustment of Inventory - allows for adjusting the computer
Inventory File to match inventory status after taking a
physical inventory.
Ill-14
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o Issue Stock Item - receives stock issue requests and
updates quantity on-hand.
o Report Generation - analyzes Inventory File to print
various reports.
The first and second routines include a check of the quantity on-hand for
the concerned stock items to determine if the quantity is adequate (greater
than reorder point). If the quantity is less than the reorder point, a reorder
notice is automatically printed. The routines can be designed to include the
generation of a requisition form to accompany the reorder notice. The first
routine also updates the purchase order file and the vendor file after
receiving and inspection of incoming stock.
The last function, Report Generation, involves various analyses of the
Inventory File which include:
o Determination of quantity on-hand for specified inventory
items or all inventory items;
o Determination of reorder dates for specified inventory
items or all inventory items;
o Determination of inventory's value based on average
costing, first-in-first-out, or last-in-first-out methods
for stock items and estimated costing for capital assets.
o Determination of utilization rate for specified stock items
or all stock items; and
o Determination of backorder status.
Of particular concern to a wastewater utility manager is the establishment
of an Inventory File that not only includes records for items stocked in a
central warehouse or store room, but also records for all utility assets.
Therefore, the Inventory File designed for this system will consist of three
categories:
o Fixed assets - includes permanent capital assets such as
land, buildings, and process structures (tanks, filter
towers, drying beds', etc.);
Ill-15
-------
o Machinery/equipment - includes pumps, air blowers,
permanent flow meters, vehicles, furniture, etc.; and
o Stock items - includes items maintained in storage as spare
parts (couplings, piping, etc.) or as consumable materials
(oil, lubrications, chemicals, etc.) and items maintained
for temporary uses (tools, radios, portable meters etc.).
Accounting for all utility assets in the inventory file is useful for
appraising and assessing the total utility value; determining annual
replacement costs (refer to Chapter IV); and maintaining histories for
equipment maintenance, work loads, and performance (refer to Chapter VI,
Section B-2).
The backbone to an efficient computer-based inventory system is a
carefully planned and constructed alphanumeric coding system. This system
should:
o Specify the physical area where the item or equipment is
located (i.e. dewatering building, laboratory, and
administration buildings);
o Identify the inventory item type (i.e. pump, truck, and
meter); and
o Identify the specific associated process unit (i.e.
secondary clarification, chlorination, and sludge
digestion).
In implementing a coding system and developing a file, the utility manager
should:
o Decide what constitutes a unit of equipment (inventory
item);
o Discuss coding system with accounting personnel;
o Perform a physical inventory of all items to be included in
the file; and
o Review the manufacturers' manuals for each equipment
{ (inventory type) type.
Ill-16
-------
3. Customer Billing Program (P-3)
The computer-based billing process consists of nine (9) routines for basic
customer billing functions. The routines are illustrated in Figure III-4 at
the end of this chapter and are summarized below:
o File Maintenance - updates all non-financial data stored in
the Customer File. This data includes customer account
control data (electric, water, sewer, and garbage),
customer name and address, service address, user class
(industrial, commercial, residential, institutional and
governmental), and meter type and number.
o Cash Receipts and Adjustments - updates (addition or
adjustment) customer accounts balances (current and
previous) in the Customer File.
o Meter Data - updates individual water meter data and/or
sewage meter data including readings for flow and
maintenance history in the Customer File.
o Billing - generates and prints billing statements per
customer account using data from the Billing File (cycle,
books, bill date, due date, codes, rates etc.) and from the
Customer File (meter readings and current balance).
o Delinquency Processing - updates delinquent history of
appropriate customer accounts in the Customer File, applies
penalty charges, and generates and prints delinquency
notices and delinquency register.
o Penalty Processing - updates delinquent history of
appropriate customer accounts in the Customer File,
determines and applies penalty charges, generates an entry
for the delinquency register, and generates and prints
delinquency notices.
o Shut-off Processing - generates and prints shut-off notices
for appropriate customer accounts.
o Specials - generates and prints mailing labels, meter book
labels, customer account listings (alphabetical by name and
includes address), and/or account's status listing
(selected account(s) or all accounts on file).
o Reports - generates and prints daily reports (customer file
maintenance and cash receipts and adjustments), billing
reports (summary register and statements),
delinquency/shutoffs reports (register and notices), and/or
specials (labels, alphabetic customer listings, and status
listings).
111-17
-------
The design of a computer-based billing system includes the option of
automatically sending data for journal entry (accounts receivable) to a
computer-based general accounting system (General Accounting Program, P-l) via
system interface.
4. Payroll - Personnel Program (P-4)
The major part of this program is concerned with the employee payroll
system. In addition to these basic payroll and paycheck generation functions,
a routine was included to access timesheet data and employee records to produce
personnel reports. This added function was provided to assist a utility
manager in an annual employee review process and make him more aware of the
employee's present status and capabilities and future potential. All routines
are illustrated in Figure III-5 at the end of this chapter.
The following list is a brief description of the eight (8) routines in
this program.
o Employee File Maintenance - updates general data stored in
the Employee File which includes name, address, ID number,
hourly rate, salary, and leave data and prints out an
employee file listing.
o Tax File Maintenance - updates tax rate information for the
employees' witholdings and prints out a tax rate file
listing.
o Timesheet Processing - updates the timesheet data stored in
the Employee File and generates and prints an employee
timesheet listing.
o Payroll Calculation - determines the gross dollars from
timesheet data, the appropriate deductions, the resulting
net pay and the leave totals to be stored in the Employee
File. Also updates pay and deduction history for each
employee. Printouts include employee file listing, payroll
register, and payroll deduction register.
o Payroll Check Processing - generates and prints paycheck
and stub (or stub only) for each employee to be paid in the
present period.
o Payroll Report Generation - generates and prints reports
per user specifications. These reports can include labor
distribution, wage tax, union dues, credit union,
III-18
-------
unemployment compensation, social security (FICA), and
United Way.
o Year End and W-2 Processing - generates and prints W-2
Forms for employees, purges terminated employee records
from Employee File, and zeros-out all month-to-date,
quarter-to-date, and year-to-date data fields in the
Employee File.
o Personnel Report Processing - analyzes data in employee
file to generate various management reports per individual
employee or department or for total utility, to evaluate
employee(s) status and performance. These reports include:
Time Sheet Summary Report, Salary and Classification
Report, Performance Evaluation Report, and Certification -
Registration - Education Report.
The design of this computer-based payroll-personnel system should include
the option of automatically sending payroll data for journal entry to a
computer-based general accounting system (General Accounting Program, P-l) via
system interface.
5. Purchasing Program (P-5)
The purchasing functions incorporated into this program are illustrated in
Figure III-6 at the end of this chapter. They include purchase order
initialization and processing, bid selection and processing, and invoice
processing and payment. This program is separated from the general accounting
and inventory programs, in which it is normally included in existing packaged
programs, because the separation offers an inherent security point. The person
"purchasing" the goods and recording the relevant data is not the same person
"requesting and receiving" the goods or "accounting" for their costs in the
permanent records of journals and ledgers. Five (5) routines were designed for
this program which are summarized below.
o Initiate Purchase - selects a supply vendor from existing
vendor file, generates a new purchase order or updates an
existing outstanding blank purchase order, and generates a
request for quotation when required.
o Receive Bids - updates purchase order file with bid data,
notes selection of vendor, and prints a purchase order.
Ill-19
-------
Receive Goods - updates purchase order file with receiving
report data and flags discrepancies between what was
ordered and what is received.
Receive Invoice - updates purchase order file with invoice
data and flags discrepancies between what was ordered, what
was received and what is billed, creates a new record in
the invoice file, and updates the journal entry file.
Payment Processing - generates voucher check(s) for
invoices due, updates invoice file upon payment, and
updates the journal entry file.
Report Generation - generates listing of purchase order
records retired and/or outstanding, listing of invoice
records paid and/or unpaid, and listing of checks for
specified time period.
111-20
-------
ENTRY FILE.
PURCHASE ORDER /
RECORDS /
PRINT PURCHASE
ORDER REPORTS
(NEWLY ENTERED.
OUTSTAND1N
ETC.)
OPEN JOURNAL
ENTRt FILE.
INVOICE AND
PURCHASE ORDER
RECORDS
LIABILITY ACCOUNT
PRINT INVOICE
REPORTS
OPEN JOURNAL
ENTRY FILE
ENTER JOURNAL
ENTRIES FOR
PAYROLL.
BILLING. ETC.
GENERAL
LEDGER
ACCOUNTS
VALID
LONC-TERM
BONDS-NOTES
7
URNA
ENTRY IN
BALANCE
7
BONO/NOTES REPORT
ALL
SUPPORTING
JOURNAL ENTRY
ATA PROVIDE
7
UPDATE
JOURNAL
ENTRY
FILE
PRINT SINKING
FUND
REPORT
PRINT LISTING
OF JOURNAL
ENTRIES
ADO/CHANGE
DESCRIPTIVE
[DATA FOR ACCOUNTS
IN GENERAL LEDGER
FILE AND JOURNAL
ENTRY FILE
ARE
UBSIDIAR
LEDGERS
AFFECTED
POST--
GENERAL
LEDGER
7
PRINT CURRENT
CHART OF ACCOUNTS
ET 0
UB.LEDGE
• BALANCE OF
GEN.LEDGER
ACCOUNT
7
R
JOURNAL
ENTRIES
TO POST
7
PRINT GENERAL
LEDGER AND
SUBSIDIARY
LEDGERS
LEGEND
REFER TO FIGURE TJ-I
111-21
FIGURE m-2
GENERAL ACCOUNTING
PROGRAM P-l I of 2
-------
/ OPEN BUDGET Fim\
/ RETRIEVE PROCEDURE \
(DATA AND DATA ON FUNDS )
UNDER CONCERN. SPECIFY/
TRANSFER AMOUNT /
/STORE TRANSFER
/ RESULTS IN
' BUDGET FILE
AND GENERAL
LEDGER FILE
OPEN JOURNAL
ENTRlf FILE.
GENERATE
CLOSING
ENTRIES
(SET ALL
EXPENDITURE
AND REVENUE
ACCOUNTS TO
ZERO)
LEGEND
REFER TO FIGURE H-I
III-22
FIGURE m-2
GENERAL ACCOUNTING
PROGRAM P-l 2 of 2
-------
/ OPEN \
/INVENTORr FILE.X
(ENTER DATA FROM)
\ STOCK ISSUE /
\ REQUEST /
OPEN INVENTORY
FILE. ENTER
DATA FOR ITEM(S)
RECEIVED FROM
VENDOR IS)
VENT
SUMMARY
REPORTS
7
MANUALLY
REPARED PHYSICAL
INVENTORY REPORT
AVAILABLE
7
DETERMINE EQUIPMENT
CODE OF ITEM AND COMPARE
FILE DESCRIPTION
UITH ITEM
PEN INVENTORYN
FILE. SELECT )
TEM FROM FILE/
NTER QUANTITY
RECEIVED AND
PRICE DATA
VENTO
COST (VALUE)
REPORT
UPDATE
INVENTORY
FILE
TIL::AT;ON
ATE REPORT
PRINT LISTING
OF INVENTORY
MODIFIED
/ OPEN
(INVENTORY
FILE. ASSIGN
JU1PMENT CODE.
NTER NEW DAT
YSICA
INVENTORY
ANALYSIS
7
UPDATE
NVENTORY
FILE
/SPECIFY REPORT PARAMETERS
ITEM SELECTION
PERIOD COVERED (DATES)
STATISTICAL SUMMARIES
OPEN \
ERTINENT FILES\
(INVENTORY OR /
VENDOR) /
ALL ITEMS ^ N°
LOGGED
UPDATE \
PURCHASE ORDER \
FILE (NOTE \
FULFILLMENT OF /
PURCHASE /
ORDER) /
PRINT LISTING
OF STOCK FT-E
MODIFIED
LEGEND
REFER TO FIGURE tt-l
111-23
FIGURE nr-3
FACILITIES INVENTORY
PROGRAM P-2
-------
LEGEND
REFER TO FIGURE H-l
111-24
FIGURE HI-4
CUSTOMER BILLING
PROGRAM P-3 1 of 2
-------
1/8
'•
"w
"11 ^
J 1
1
EGEND
REFER TO FIGURE n-
111-25
FIGURE m-4
CUSTOMER BILLING
PROGRAM P-3 2 of 2
-------
LOAD NEW EMPLOYEE DATA
I UPDATE EMPLOYEE FILE'
NAME.ADDRESS.PHONE AND
SOCIAL SECURITY NUMBERS
BIRTH DATE.RACE.SEX.
CITIZENSHIP AND
DISABILITY DATA
MARITAL STATUS.MILITARY
STATUS.YEARS OF
EXPERIENCE ANO
SPECIALITIES
•HAME.PHONE NUMBER ANO
RELATIONSHIP FOR
EMERGENCY CONTACT
DATES OF HIRE OR REHIRE
ANO TERMINATION
•DATA ON EDUCATION
CERTIFICATION AND
REGISTRATION
ENTER
EMPLOYEE
NUMBER
DISPLAY
TAX FILE
SCREEN
' OPEN TIMESHEET \
, FILE AND ENTER )
\EMPLOYEE NUMBER/
PRINT UPDATED
[EMPLOYEE TIMESHEET
LISTING
LEGEND
REFER TO FIGURE H-I
111-26
FIGURE m-5
PAYROLL-PERSONNEL
PROGRAM P-4 I Of 3
-------
PRINT PAYROLL
REGISTER AND
PAYROLL
DEDUCTION
REGISTE
LEGEND
REFER TO FIGURE H-l
111-27
FIGURE UI-5
PAYROLL-PERSONNEL
PROGRAM P-4 2 of 3
-------
PRINT UPDATED
EMPLOYEE(FOR
NEW TEAR) AND
U-2 RECORD
/OPEN EMPLOYEE
/ OR TIMESHEET
\ FILE. ACCESS
\REQU1RED DATA
111-28
FIGURE m-5
PAYROLL-PERSONNEL
PROGRAM P-4 3 of 3
-------
OPEN PURCHASE
ORDER FILE TO
CREATE NEW
RECORD(ASSIGN
UN IQUE P - 0. »
OR RETRIEVE
EXISTING gr
P.O. NUMBER)
/ OPEN VENDOR FILE\
/ AND RETRIEVE LIST \
CHARGED IN /
P.O. FILE /
/UPDATE\
' EXISTING P.O. \
RECORD 1 ENTER
TYPE OF ITEMS.
QUANTITY. AND /
COSTS /
[PRINT PURCHASE
ORDER FORM FOR
ORDER
FLAG NEW
P.O. RECORD BY
INDICATING
EXPIRATION DATE
ANO NAMES OF
AUTHORIZED
EMPLOYEES
/UPDATE NEW P 0\
RECORD. ENTER DATE. \
(VENDOR NAME. SHIPPING)
DESTINATION. TYPE OF/
VJTEH. TOTAL COSTS /
PRINT PURCHASE
ORDER FORM FOR
ORDER
LEGEND
REFER TO FIGURE H-I
111-29
FIGURE m-6
PURCHASING
PROGRAM P-5
I of 2
-------
/ OPEN P.O.
/FILE. ACCESS
\ APPROPRIATE
\P.O. RECORD
IST1N
OF P 0.
RETIRED AND/OR
OUTSTANDING
7
PEN P.O. FILE\
RETRIEVE
APPROPRIATE
P.O. DATA
PRINT LISTING
OF P.O RECORDS
(RETIRED AND/OR
OUTSTAN01
OPEN INVOICE \
FILE.RETRIEVE \
APPROPRIATE /
INVOICE DATA/
PRINT VOUCHER CHECK (S)
WITH INVOICE NUMBER.
AMOUNT. DISCOUNT.
AND ACCOUNT
CODE
PRINT LIST OF
CHECK(S)
PRINTED
PRINT LISTING
OF CHECKS FOR
SPECIFIED TIME
PERIOD
/ UPDATE IN-
VOICE FILE
WITH CHECK
NUMBER.DATE
AND AMOUNT
ENTER COMMENT \
IN INVOICE FILE\
DECISION MADE/
E/DESCREPANCT/
/ OPEN INVOICE
FILE. CREATE NEW
ECORD (ASSIGN UNIQUE
INVOICE NUMSER)
AND ENTER DATA
/ UPDATE JOURNAL
/ ENTRY FILE WITH
VRANSACTION DATA
\ (INVOICE PAID)
UPDATE JOURNAL
ENTRY FILE WITH
TRANSACTION DATA
(INVOICE RECEIVED!
LEGEND
REFER TO FIGURE H-I
111-30
FIGURE m-6
PURCHASING
PROGRAM P-5
2 of 2
-------
IV. REPLACEMENT RESERVE
A. Overview
Included in the term "operation and maintenance" costs, as used in EPA's
regulations, are replacement costs. These costs are defined in section 212(3)
of the Clean Water Act as "...Those expenditures for obtaining and installing
equipment accessories, or appurtenances during the useful life of the treatment
works necessary to maintain the capacity and performance for which such works
are designed and constructed." The level of replacement reserve needed to meet
these costs are those needed to maintain status quo in terms of capacity and
performance of the physical plant of a grantee municipality's wastewater
treatment enterprise during its useful life. Therefore the financial
management system includes a procedure for determining an annual replacement
reserve for the operating budget to cover anticipated replacement costs for the
items defined as "machinery and equipment" in the inventory file (refer to
Appendix E). Also included in the reserve are amounts to cover the replacement
of "perishable" components of permanent structures (fixed assets of inventory
file). These components are necessary for the continuous operations of a POTW
during its useful life and address the replacement of "appurtenances" as
required in the Act.
To determine an annual reserve amount with an accounting basis, this
manual uses a mathematical procedure that defines the amount as a function of
the calculated annual depreciation. This requires determination of charges (or
rates) representing the depletion of an asset's value and subsequently its rate
of replacement for all machinery, equipment, equipment accessories, and
appurtenances. Used in these calculations are values for the purchase price
(includes installation costs), the salvage value (or removal costs) at the end
of the asset's service life, the date of purchase (or usage data), and the
service life in years (or usage). In an inflationary economy, replacement
costs will exceed calculated appropriations that are based on purchase prices
equal to the asset's historical or original costs (present worth at time of
purchase); therefore the methodology described in this manual incorporates an
adjustment factor, such as the Engineering News-Record (ENR) or EPA
IV-1
-------
Construction Cost Indices, to index the replacement base (the original cost) to
price increases. It is noted that this inflation adjustment factor is not
permissible when calculated depreciation amounts are used for recovery of
initial capital investment by way of tax deductions (for privately-owned
treatment facilities) or by including investment recovery as a cost of service
in the rate-setting process.
Currently most small POTW's do not practice any form of asset depreciation
for any purpose though many privately-owned utilities utilize depreciation of
assets to recover the initial investment of the physical plant. This
particular practice of recognizing calculated depreciation amounts as a cost of
service, which is prohibited for POTW's, leads to having utilities use
depreciation reserves as a cash flow and not for replacement expenses. A
separate replacement reserve based on calculated depreciation expenses should
be established to ensure that the utility can recover sufficient revenues for
replacement expenditures. It should be understood that the term "depreciation"
as used in reference to this system refers only to a computation methodology
and not the subject which is replacement reserve.
There are various methods to compute annual depreciation rates which may
be used to estimate annual replacement expenses including the following:
1. Straight-line method - distributes the replacement
cost of an asset in equal amounts to each accounting
period during the total estimated service life.
2. Unit-of-production (usage) method - distributes the
replacement cost of an asset in equal amounts to each
unit of usage during the total estimated service life.
3. Sum-of-the-year's digit method - determines the annual
replacement amount by applying a constantly declining
fraction to the service value of an asset.
4. Declining-balance method - determines the annual
replacement amount by applying a constant rate (based
on the salvage value to purchase cost ratio) to the
declining undepreciated balance of the asset cost.
5. Double-declining-balance method - determines the
annual replacement amount by multiplying the
undepreciated balance of the asset cost by a
percentage that is twice the annual rate (computed
IV-2
-------
without adjustment for net salvage value) associated
with the straight-line method.
6. Compound-interest method - determines the annual
replacement amount to be equal to the sum of the
annuity, defined as the annual contribution made to a
theoretical sinking fund (refer to item 7, below), and
the annual interest on the compound amount of the
accumulated annuities.
7. Sinking-fund method - determines the annual
replacement amount to be equal to an annuity that, at
an assumed rate of interest compounded annually over
the asset service life, will equal the depreciable
cost (original cost less estimated net salvage value).
Selecting a specific method depends on the type of assets to be replaced,
the utility's particular financial condition, and the analytical capabilities
of the utility (includes level of staff expertise and computerization). The
different methods presented above do not change the total replacement reserve
amount but the pattern of accrual is changed.
The accelerated methods, sum-of-the-year1 s digit, declining-balance, and
double-declining-balance, have patterns that are very similar to the actual
decline of most equipment in that service value expires more rapidly in the
early years than in the later years. These methods offer advantages when used
because more funds are available when needed for replacement during the initial
operating years and buffer against the financial blow of emergency replacements
that are not uncommon for wastewater treatment facilities. However, they can
cause initial sewer service charges to be higher in order to recover funds for
the reserve. This is of particular concern to a POTW designed for a rapidly
expanding service area whose initial users could already be experiencing high
service charges.
The compound-interest and the sinking-fund methods result in increasing
annual accruals for replacement reserves and provide the slowest rate of
reserve accumulation. The decelerated methods usually have little or no
relationship to the way in which the service value of equipment expires but
have potential use in replacement reserve calculations. They are based on the
"time value of money" concept and require small amounts of cash capital to be
reserved in the beginning with increasing amounts over the course of the
IV-3
-------
asset's service life thereby not keeping funds frozen in a reserve during the
time of the funds greatest present worth.
The straight-line method is the most popular method due to its simplicity.
Incorporating a usage factor with the straight-line method, which is time-based
(i.e. related strictly to duration of ownership), results in the
unit-of-production method. A usage factor can be defined as amount of time
(hours, days, etc.) in service versus length of time owned or units of output
(sludge generated, water treated, etc.) versus length of time running or owned.
Usage data to calculate this factor includes equipment runtimes, number of
equipment start/stops, and frequency of loading rates. Application of the
unit-of-production method depends on the availability and accuracy of equipment
usage data.
Figure IV-1 is the operations flowchart for this element and includes two
programs: the Equipment Life and Depreciation program (P-6) and the Annual
Replacement Reserve program (P-7). The first program is to be used to develop
schedules for equipment life and annual depreciation rates and charges, while
the second program is designed to generate a replacement reserve report to
assist in the annual budget preparations. The primary source of data for these
programs is the inventory file. The facilities cost file serves as the storage
file for the cost information generated by program P-7. The accuracy of the
information in the resulting depreciation schedules and the sufficiency of the
estimated annual replacement reserve are highly dependent on the level and
quality of recordkeeping; therefore, a computer-based inventory file is
essential to this program.
The magnitude of funds accumulating for replacement, as with any other
operating cost, must be reviewed annually and adjusted periodically to align
revenue with actual costs. Amounts reserved for replacement should not be
allowed to grow to proportions not realistically needed for near term
expenditure and upon disbursement should be replenished within the scope of the
approved revenue mechanism. It should be noted that component replacement is a
management option to continued component maintenance, whereby maintenance (or
lack of) extends or shortens the component's "service life". Deferrence of
maintenance to a point of where component replacement is no longer the solution
IV-4
-------
11**
•MS..
z
. o
±Q~
EQUlPnEt
LIFE AN
LPREC1AT
a
i
i
UJ **J
—1
SUJ3
^
« 1
FIGURE EC-I
REPLACEMENT RESERVE
OPERATIONS FLOWCHART
IV-5
-------
FIGURE IV-1
REPLACEMENT RESERVE OPERATIONS FLOWCHART (Cont'd.)
List 1 - Source Documents, Equipment Life and Depreciation, P-6
o Purchase Order Operations
o Manufacturer's Manual
o Operations Report (usage data)
o Plant Turnover Study
o Retirement Frequency Curves (or Survivor Curve)
o Equipment Maintenance Record
o Construction Cost Index Table
o Fixed Asset Record
List 2 - Source Documents, Annual Replacement Reserve, P-7
o Inventory Record
IV-6
-------
to functional deficiency and reconstruction (capital outlay) is the only
alternative is to be discouraged. The incorporation of a standardized
replacement reserve calculation procedure, manual or computer-based, with an
accounting basis such as proposed here would be a valuable tool to POTW
management in that it will provide accurate, up-to-date, total and itemized,
amounts to be accounted for in determining the replacement costs. These cost
estimates, along with other service costs, are then utilized by the revenue
generation element presented in Chapter V.
IV-7
-------
B. Activities
1. Equipment Life and Depreciation Program (P-6)
Basically, there are four routines in this program, as illustrated in
Figure IV-2 at the end of this chapter, which result in the development of
"schedules" for equipment life and annual depreciation rates and charges.
These routines include estimating the asset's service life and net salvage
value, modifying the asset's original costs, and applying the selected
depreciation formula to the service value of the equipment. Replacement
reserve calculations should he applied to all machinery and equipment inventory
items. These items are defined as that part of a grantee's assets that are
procured and installed rather than fabricated, erected or constructed on site
and include external piping, wiring and moving parts which perform a function.
In order to determine the replacement reserve for appurtenances as required by
federal regulations, calculations should also be applied to the "perishable"
components of fixed assets (permanent structures, non-mobile heavy/buried
equipment, and buried piping, duct work, or electrical connections). The
perishable components can be defined as a percentage of the corresponding
asset's total value and subsequently treated as separate items in the
calculation process.
For each item involved, the resulting schedules should include the
equipment code number (or corresponding fixed asset code number), description,
original cost, inflated replacement cost, salvage value, service life,
replacement (depreciation) rate(s) for each year of service life, book value,
and cost of removal (if applicable). This program only needs to be executed
once for any one item (unless its salvage value or service life are to be
modified or a different depreciation formula is preferred) because the schedule
will be maintained in the computer file as a reference source (input) to
determine the annual replacement reserve by executing program P-7.
The following sections describe the routines and specify the necessary
functions to be incorporated into an activity program that is to process
inventory data for the development of equipment life and depreciation
schedules.
IV-8
-------
a. Estimating the Service Life of an Item
The service life of an equipment item can be measured in terms of calendar
time or in terms of usage. Usage can be defined as service hours, units of
output, or number of start/stop sequences. Generally, the calendar time
(number of months or years since purchase, installation, or start-up of
equipment) is the service life measure used because of the availability of
data. However, with the coming of automated process control for treatment
operations, accurate usage data can be readily available from computer or
local-microprocessor storage. Equipment subjected to abnormal usage, such as
filters having an average loading rate greater than the average rate specified
during design (therefore subject to excessive usage) or a pump operating only
in stand-by mode (therefore subject to minimal usage) should make use of a
service life measured in terms of usage or, at the very least, have their
calendar time service life adjusted according to their atypical usage. Service
life is a variable and is affected by level of expenditure for maintenance.
This program allows for user-adjustment of service life for cases where a
maintenance program or lack of one has a significant effect on a particular
equipment's service life.
The input for this routine can be in the form of specific service life
values for individual units or line-item group averages for items having
similar usage characteristics, physical appearance, and function, and which
operate under the same general conditions. The average service life of a group
is based on a composite or weighted average of the service lives of the units
within the group. The source of this information can be plant turnover
studies, actuarial studies, "generally accepted" values, or manufacturer's
data. Generally, small POTW's do not have the manpower or funds for plant
turnover studies, and many new facilities have not been in operation long
enough for any valid statistics to be made based on their records. Conducting
actuarial studies based on equipment mortality records to generate retirement
frequency curves are also not generally within the capabilities of most small
POTW staff members. One possible alternative is to use the survivor curve
technique which involves a comparison of the utility's own retirement
expectancies with the more complete data of widely accepted survivor curves
such as the Iowa Curves developed by the Iowa State College of Engineering
IV-9
-------
Experiment Station (ISC Bulletin Nos. 125 and 155). The last two sources,
"generally accepted" values and manufacturer's data, are the most readily
available sources. The National Association of Regulatory Utility
Commissioners maintains tables of typical average service lives (years),
salvage rates (percent), and depreciation rates (percent) for utilities which
could be used as guidelines. The POTW's engineers and accountants should
collaborate on the development of a plant and equipment schedule and itemize
estimated replacement frequencies (service life).
The service life routine of program P-6 generates service values for each
equipment item to be considered in determining the annual replacement reserve.
This routine provides the following options:
o Using service life based on calendar time (years) or
on usage (only when there are readily available
records on equipment operations) and
o Using average service life values (user-determined),
remaining service life values (assigned to groups
based on stored survivor curve data from the
historical records of the inventory file), or
individual service life values (user-determined).
b. Estimating Net Salvage Value
The net salvage value of an asset is defined as the expected value of that
asset upon retirement minus the estimated cost of removal. The net salvage
value and the cost of removal are usually expressed as a percentage of the item
retired so that they are not significantly affected by absolute cost
fluctuations. Estimating the net salvage value is done in three steps:
o Enter a user-determined retirement value or select a
value stored in the historical records of the
inventory file for each equipment type (group). These
stored values are based on the utility manager's (or
engineer's) estimate or on historical data when
available;
o Subtract the estimated cost of removal which is
user-determined or retrieved from the historical
record data or the inventory file; and
IV-10
-------
c.
Modify (add to or subtract from) the net salvage value
to account for functional depreciation (inadequacy or
obsolescence) as determined by the user. Also, any
items known to be experiencing unusually frequent
operation problems as noted from maintenance records
should have their salvage value adjusted accordingly.
Adjusting Original Costs
As stated previously in this chapter, in an inflationary economy, using
the original costs for the depreciation base will not provide enough funds for
actual replacement costs; therefore, these costs are adjusted by using a cost
index. The POTW's engineers and accountants should collaborate in the effort
needed to determine the costs. The following indices are available and can be
stored in a computer file for easy application:
o Engineering News-Record (ENR) Construction Cost Index
- monthly, national average values; and
o Environmental Protection Agency (EPA), Office of Water
Program Operations, "Construction Cost Indexes" -
national averages for small city conventional
treatment plant, large city advanced treatment plant,
and complete urban sewer system (by quarters); "U.S.
City Averages" for sewer and sewage treatment plant
(by months); and "Major City" values for plant and
sewer (by quarters).
d. Selecting and Applying a Depreciation Formula
This routine consists of the user selecting a depreciation formula based
on the utility's needs. The seven formulas (methods) described previously are
those that should be available. Different formulas can be selected for
different asset types depending on their pattern of decline or on the
utility's financial condition.
The resulting schedules for each item to be incorporated into the
estimated replacement reserve are stored in the inventory file for use as input
to program P-7.
IV-11
-------
2. Annual Replacement Reserve Program (P-7)
Program P-7, illustrated in Figure IV-3 at the end of this chapter,
retrieves the values for replacement (depreciation) rate or charge from the
schedules created by the Equipment Life and Depreciation program (P-6) for all
the machinery and equipment items of the inventory file. The rate or charge
value for each item is then used to determine the accrued replacement reserve.
This accrued value can be represented as a separate value for each item of
concern or as a subtotal value for each line-item group. It should be noted
that once an item has reached its service life it will be flagged and its
depreciated value will be maintained at the current value until it is removed
from service at which time it will be replaced using replacement reserve funds
or deleted from the file if the function performed is eliminated. The report
generated from this program has the option of being printed in one of two
forms:
o Listing of accrued replacement reserves (depreciation) for
all items for each functional (activity) group of accounts
such as preliminary treatment, collection, primary
treatment, etc.; or
o Listing of accrued replacement reserves (depreciation) for
all line-item groups with a breakdown for each functional
group within a given line item group.
The total of either of the two listings is the total annual replacement
reserve which can be recorded as an operations expense once a year through a
journal entry. A consideration in determining the annual replacement reserves
is the accounting for interest earned on the accumulating reserve. Assuming
that the monies accumulating in a reserve are not used immediately, particu-
larly for major items with relatively long service lives, the "idle" monies
should be invested to generate interest. The mathematics involved require the
determination of a reserve depletion rate in order to calculate the remaining
interest-accumulating amount and therefore the appropriate adjustments
(decreases) to the previously estimated annual reserves.
IV-12
-------
,£NTER EQUIPMENTS /OPEN INVENTORY\
^COOE AND OPEN \ /' fcLkfNI|?,,
INVENTORY FILE ) ' EQUIPMENT DATA.
TO RETRIEVE /
STORED DATA /
\ NAME. DATE OF
\ PURCHASE. AND
\ORICINAL COST
ENTER USAGE DATA
-RUNTIMES
-NO. OF START/STOPS
-FREOUENCr OF
LOADING RATES
CALCULATE
SERVICE LIFE IN
'SERVICE HOURS' OR
UNITS OF OUTPUT"
TER SERVICE\
LIFE FROM
MANUFACTURERS'
DATA (OR
WHOLESALER!
AND PURCHASE
ORDERS /
CALCULATE SERVICE
! LIFE FROM GROUP
-.AVERAGE OF 'PLANT
[TURNOVER STUDIES"
BY LINE-ITEM)
CALCULATE SERVICE LIFE
FROM RETIREMENT
FREOUENCT CURVES OR
SURVIVOR CURVES
LEGEND
REFER TO FIGURE n-|
ADJUST ORIGINAL
COSTS OF ITEM
YEAR X TO ACTUAL
DOLLARS OF
CURRENT YEAR
1
SELECT DEPRECIATION FORMULA
AND CALCULATE DEPRECIATIONi
"PRODUCT I ON(USAGE) METHOD
•SUM-OF-THE-YEARS DIGIT
METHOD
.DECLINING-BALANCE METHOD
.OOUBLE-DECLIN ING-BALANCE
METHOD
.COMPOUND-INTEREST METHOD
.SINKING-FUND METHOD
/STORE ADJUSTED
( COST IN
\INVENTORY FILE
/ENTER DATA ON
/ FUNCTIONAL
/ DEPRECIATION
/ (INAOEOUACr/
< OBSOLESCENCE)
\ AND MAINTENANCE
\ (CORRECTIVE.
\PREVENTIVE AND
\ EMERGENCY)
STORE EQUIPMENT
DEPRECIATION DATA
IN INVENTORY FILE
PRINT SCHEDULES
FOR EQUIPMENT
LIFE AND ANNUAL
DEPRECIATION
RATES AND
CHARGES
IV-13
FIGURE EC-2
EQUIPMENT LIFE AND DEPRECIATION
PROGRAM P-6
-------
*
\EQj
'EN 1NVENTORT
FILE. ENTER
INDIVIDUAL
:QUIPMENT am,
, tfEPREClATE- ,
EXPENSES B»
INDIVIDUAL
ITEM
7
'EN INVENTOR
FILE. ENTER
EOUIPPIENT DATA
31 CROUP[LINE
ITEM)
CALCULATE TOTAL
ACCRUED DEPRECIATION
AND ANNUAL REPLACEMENT
RESERVE
PRINT REPLACEMENT
RESERVE REPORT
FOR INDIVIDUAL
ITEUS OR EACH
FUNCTIONAl
CLASS
PRINT SEPARATE
RESERVE REPORTS
FOR EACH LINE
ITEM SHOWING
BREAKDOWN Br
FUNCTIONAL,
CLASS
REFER TO FIGURE H- I
IV-14
FIGURE IZ-3
ANNUAL REPLACEMENT
PROGRAM P-7
RESERVE
-------
PART THREE
FINANCIAL PLANNING
-------
V. REVENUE GENERATION
A. Overview
The financial management system as described in this manual is intended to
assist POTW's in becoming self-sufficient. Self-sufficiency is obtained when
system costs are totally recovered through a revenue generation system without
the aid of institutional subsidies. In addition to recovering current costs,
revenues should be generated so that the system can operate on a continuing
basis. The Federal Water Pollution Control Act addresses revenue generation by
stating that:
"...integrated facilities shall be designed and operated to
produce revenues in excess of capital and operation and
maintenance costs and such revenues shall be used by the
designated regional management agency to aid in financing
other environmental improvement programs."
Integrated facilities, as used here, refer to those facilities that result from
integrating sewage treatment and recycling facilities "with facilities to
treat, dispose of, or utilize other industrial and municipal wastes, including
but not limited to solid waste and waste heat and thermal discharges."
The EPA Construction Grants Regulations addresses revenue generation by
stating that:
"Each user charge system must include an adequate financial
management system that will accurately account for revenues
generated by the system and expenditures for operation and
maintenance (including replacement) of the treatment
system."
Therefore, user charges are required to be designed to recover only those costs
incurred in operating the system (operation, maintenance, and replacement
costs). But, as implied in the Act, a financial management system that is to
V-l
-------
assist a POTW to be self-supporting and to operate on a continuing basis must
also account for debt service requirements and reserves for
extensions/improvements in the sewer service charge system. Subsequently, the
sewer service charge would consist of two components, a user charge to recover
operating costs and an "assets" charge to recover existing capital-related
costs and those future capital expenditures required for continuous operations.
The principal concern in designing a user charge system, and subsequently
the programs for the revenue generation element, is the establishment of a
proportionate system of sewer use charges based on the proportion of flow
volume and pollutant strength contributed by each user. It should be noted
that the "assets" component required for capital costs is also assumed to be
allocated based on sewer use in this manual though it is not required. In
fact, this component could incorporate a volume discount and sliding scale.
The following programs are designed to facilitate development and evaluation of
current and proposed sewer service charges to ensure their adequacy and
proportionality to cost. Each program can incorporate "policy" data, in the
form of limits and setpoints, that are established through the legal,
institutional, or administrative authority available to the POTW owner and
operators.
Figure V-l is the operations flowchart of the cost recovery element that
illustrates the interaction between the three activities: revenue requirement
analysis, service area analysis, and sewer service charge rate setting.
Basically the operations of this element consist of the Service Charge Rate
setting program, P-10, utilizing the cost of service data (generated by the
Revenue Requirements program, P-8, and stored in the facilities cost file); the
customer flow characteristics data (stored in the customer file); and the
service area flow data (updated by the Service Area Analysis program, P-9, and
stored in the service area file). Six (6) files are to be maintained:
1. Customer File;
2. Facilities Cost File;
3. Rate File;
4. Revenue File;
V-2
-------
V-3
FIGURE Z-l
REVENUE GENERATION
OPERATIONS FLOWCHART
-------
FIGURE V-l
REVENUE GENERATION OPERATIONS FLOWCHART (Cont'd)
List 1 - Source Documents, Revenue Requirements, P-8
o Pro-Forma Budget Plan Costs (OM&R)
o Pro-Forma Budget Plan Costs (Debt)
o Debt Service Record (Debt)
o Contribution Record (to other Departments)(OM&R)
o Contribution Record (to other Departments)(Debt)
o Rate for Available Rate of Return (Debt)
o OM&R Portion of Non-Use Revenue Data (Land Application Fees, Septage,
Disposal Fees, Sewer Availability Charges, Connection Fees, etc.)
o Non-Use Revenue Data for Debt (Land Application Fees, Septage, Disposal
Fees, Sewer Availability Charges, Connection Fees, etc.)
List 2 - Source Documents, Service Area Analysis, P-9
o Meter Records (includes location, type, service area code, meter readings,
and reading dates)
o Industry Records
o Service Area Data (includes boundary coordinates)
List 3 - Source Documents, Sewer Service Charge Rate Setting, P-10
o Water Consumption Data
o Sewage Flow Data
o Pollutant Concentration Records
o Allocation Breakdown Factors for Cost of Service Items and
Cost Function (OM&R)
o Allocation Breakdown Factors for Cost of Service Items and Cost Function
(Debt)
o Customer Rates for OM&R {
o Customer Rate for Debt Service
V-4
-------
5. Service Area File; and
6. Subsidiary Ledger File.
The Rate File and the Revenue File are to maintain OM&R and Debt Service data
separately.
The Revenue Requirements Analysis program, P-8, is to be used to determine
the total amount of money needed annually by a utility and consists of three
routines:
1. Determination of costs of service;
2. Determination of non-use revenue; and
3. Calculation of total revenue requirements; that is,
revenues to be recovered through sewer service
charges.
Each of these routines isolate OM&R from Debt Service for a federal grantee
with an approved user charge system.
The Service Area Analysis program, P-9, was included as a part of this
element because, in order to establish a "fair" sewer user rate structure, the
cost recovery technique must incorporate certain field data pertaining to user
characteristics. The information resulting from the collection and maintenance
of this data can provide insight to user behavior based on historical trends,
but more importantly it can be used to provide general information concerning
the volume and strength of flow generated by basic user classes.
The Sewer Service Charge Rate Setting program, P-10, consists of four
routines:
1. Revenue requirement (which involves accessing the
output generated by program P-8);
2. Allocation of costs to cost functions;
3. Allocation of costs to customer classes; and
4. Development of rate schedules.
V-5
-------
Each of these routines isolate OM&R elements from Debt Service for a federal
grantee with an approved user charge system.
The final output from this element consists of rate schedules (pro forma
or actual) to be reviewed, approved, and applied.
V-6
-------
B. Activities
1. Revenue Requirements Analysis Program (P-8)
There are two recognized and accepted concepts for establishing a
utility's annual revenue requirements; the "cash" basis (not to be confused
with the cash basis of accounting) and the "utility" basis. The cash basis,
the method described in this manual, is based on the theory that the required
revenue is the amount necessary to make the cash outlays as they fall due.
This method is particularly suitable to publicly-owned utilities organized to
serve the public on a self-supporting basis but not operated for profit. The
cash basis, as used for this program, incorporates costs for operation,
maintenance, debt service, and equipment replacement and local capital, i.e.
extensions and improvements into the estimation of the costs. The utility
basis includes as the revenue requirement, operating (operation, maintenance,
and equipment replacement expenses), capital depreciation, and a return on the
rate base (the investment in facilities providing the service). Generally, the
utility basis is only used by publicly owned utilities when they are subject to
a regulatory agency requiring compatibility with regulated utility rate
analysis practices.
To estimate the cost of service, the program as illustrated in Figure V-2
at the end of this chapter, addresses five (5) cost of service categories:
o Operation and maintenance costs;
o Debt service requirements;
o Replacement costs;
o Contribution to other department(s); and
o Reserves for extensions and improvements.
It should be noted that debt service and reserves for extensions and
improvements are the local capital cost ("assets") component of total costs
while the other three categories make'' up the operation, maintenance, and
replacement cost ("user charge") component.
V-7
-------
The program accumulates the costs into appropriate groups for the
determination of user charge rates and "assets" charge rates. Not all
categories require input; in fact, the last two categories may not be legally
acceptable for some POTW setups. Input for the cost categories can be for the
existing plant for which the accounting records (refer to Chapter III) are to
be accessed or for a proposed budget in which cost estimates are directly
entered by the user. Non-use revenue information can also be obtained from the
accounting records or directly entered from budget cost estimates. Because
there is such a variety of POTW non-use revenues (interest revenue, septage
disposal fees, land application fees, connection fees, etc.), there are no set
categories and cost data is to be entered directly for each user specified
cost.
The final component of this program calculates the revenue requirement
amounts to be recovered through the user charges and "assets" charges. The
total non-use revenue is subtracted from the revenue requirement for "assets"
charges to obtain an adjusted requirement amount. Both revenue requirement
amount should reflect not only recent cost experience but also recognize
anticipated future cost levels during the period for which rates are being
established. The revenue requirement report generated by this program is to
present the costs in prespecified categories as defined by the POTW's
particular needs to determine a proportionate sewer service charge rate
schedule which is developed using the Sewer Service Charge Rate Setting
program, P-10.
2. Service Area Analysis Program (P-9)
In order to apportion costs of service to users, certain user
characteristics must be compiled, examined, and evaluated. These
characteristics assist in determining the customer's user class based on
factors such as volume, frequency, and strength of wastewater flows generated.
Also of importance is the consideration of type and degree of development in
the service area which includes specification of total, sewered and sewerable
areas. This program, as illustrated in Figure V-3 at the end of this chapter,
is designed to accumulate this type of data and generate the appropriate
reports. The data collected consists of five (5) categories:
V-8
-------
o Flow meter data, which includes system meters on major
lines such as interceptors and connectors. Individual
water consumption meter data is collected as a part of
customer billings (refer to Chapter III, Section B-3);
o Pumping station data for the water or sewer system;
o Overflow or bypass data for the sewer system;
o Industrial flow and strength data from individual
sewer meters monitoring particular industries; and
o Service area boundary data, including data defining
zoning and land use type(s).
All data records include coordinate data, based on some predetermined
coordinate grid system. This data enables the program to superimpose the
monitoring points and the service area boundaries on the grid system to
determine the extent of the service area represented by each monitoring point.
The POTW manager can also use this information to generate flow summary reports
by specified service areas. Other reports generated by this program to assist
the manager in determining customer characteristics include:
o Flow summary reports by customer user class - this
report requires access to the customer file used in
the customer billing process and requires water and
sewer connections to be assigned coordinates;
o Meter flow report for system meters, pump stations, or
overflow monitoring points; and
o Industrial waste report by industry type or for a
selected industry.
All reports require the input of specified dates and access to the service
area file that maintains the data.
3. Sewer Service Charge Rate Setting Program (P-10)
This program, as illustrated in Figure V-4 at the end of this chapter,
incorporates the results of the revenue requirement analysis with cost
allocation"- techniques followed by the generation of a schedule of rates. As
stated in the overview section, this program consists of four (4) routines:
V-9
-------
determination of revenue requirements; allocation of costs to cost functions;
allocation of costs to user classes; and development of rate schedules. The
first routine consists only of accessing the output generated by the Revenue
Requirement Analysis program, P-8.
The second routine, allocation of costs to cost functions, is based on
what is referred to as the "modified base-extra capacity" methodology for
allocating costs. This methodology involves three cost function types as
defined below:
o Base costs - costs which tend to vary according to the
volume of wastewater collected and treated and costs
associated with service to customers under average
load conditions without the elements necessary to meet
sewage flow variations and resulting peaks;
o Customer costs - costs associated with serving
customers regardless of the amount of sewage generated
or maximum flow such as meter reading and billing
costs; and
o Extra-capacity (flow and strength) costs - costs
associated with service requirements to meet
extra-capacity flow and strength.
The routine determines extra-capacity factors for flow (average hour, average
day, peak hour and peak day) and strength (for selected pollutant parameters).
It is recognized that the determination and updating of these extra-capacity
factors for flow can be complex and therefore of questionable use to a small
POTW lacking the staff expertise or the flow monitoring capability required.
Figure V-4 illustrates that these factors can therefore be directly entered,
instead of calculated, and therefore be rough estimates based on experience and
more general flow data. Using these factors, when applicable, and user-defined
allocation factors which specify the distribution of a particular cost of a
service item to the relevant cost functions, the Cost Function Allocation
Schedule is generated. This schedule tabulates each service item's total cost
allocation to the cost functions: base, customer, and extra capacity (maximum
day, maximum hour and per pollutant type). It should be noted that Section
204(b)(2)(B) of the Clean Water Act requires cost functions to be defined in
V-10
-------
terms of volume, strength, and flow rate characteristics. The "modified
base-extra capacity" methodology proposed here satisfies this requirement in
that volume is addressed in terms of the base costs while strength and flow
rate characteristics are addressed in terms of extra-capacity costs. Customer
costs, as defined here, were separated from the volume cost function in that
they are costs unaffected by a change in volume of sewage generated by a
customer from one billing period to the next.
The third routine, allocation of service costs to user classes, utilizes
the same user classes (such as residential, commercial, industrial,
institutional, and governmental) used in the customer billing process and
defined by the Service Area Analysis program, P-9. These classes are selected
primarily on the basis of their activity (such as domicile, business,
manufacturing, etc.) which can be defined using metered water flow, metered
sewage flow, size of water connection, or number of water fixtures along with
general customer data received from the connection application form. This
routine uses the field data in the service area file and the customer file to
quantify the customer characteristics and determine the allocation factors for
each cost function. These factors include annual flow (total, average rate,
and percent of total), extra capacity flow and strength (percentage factor,
rate, and percent of total), and equivalent meter/billing factors. For each
class, the factors used to provide a measure of customer class responsibility
include annual sewage flow; maximum-flow level characteristics (flow and
strength loadings); and number of customers per meter size, billing cycle, and
bills rendered. From these factors the Customer User Class Responsibility
Distribution Schedule is produced. This schedule tabulates each customer
class1 total cost responsibility and the breakdown (percent and dollars)
according to cost function type (base, customer, extra-capacity).
It is appropriate at this time to address charges for operation and
maintenance for extraneous flows which are not directly attributable to users.
According to the EPA Construction Grants regulations these extra costs can be
distributed among users based on their actual use as are base costs and
customer costs; or they can be treated as extra-capacity costs and distributed
based on flow volume of the users, land area of the users, number of hook-ups
or discharges; or, in the case of a user charge system based on ad valorem
V-ll
-------
taxes, on property valuation of the users. Also to be provided in the revenue
generation system is a means of recovering the costs necessary to carry out the
procedures of any approved municiple pretreatment program. According to
federal regulations these costs can be recovered through the users
(extra-capacity costs) or paid in whole or in part by other available available
sources of funds.
The last routine, development of rate schedules, involves determining the
sewer service charge rate per user class and/or per specified volume of flow
(such as per 1000 gallons). The program incorporates a minimum bill or fixed
charge (per meter size or based on average flow of minimum usage customer) if
specified. The final output of this program is the Service Charge Rate
Schedule, which is a tabulation of the user charge rates and the "assets"
charge rates. These rates can be per customer type for the service area as a
whole or per subareas within a service area, depending on the utility's
particular needs.
V-12
-------
oS-u^
SHSi:2-
*SU£S!S
>^-JU* -J
rss-s:
SoSSi
r<^>
SSsiBi
1^ £
Sl§ilh
."i-1
S«!Si5
LEGEND
REFER TO FIGURE H-l
V-13
FIGURE 1-2
REVENUE REQUIREMENTS
PROGRAM P-8
-------
OPEN
ERV1CE ARE*
FILE
OPEN
ERV1CE AREA
FILE
ENTER DATA FOR
- LOCATION
- TYPE
- SERVICE AREA
CODE (SI
- SERVICE AREA
FLOW FACTOR
ENTER
PARAMETER
CODE FOR
EDITING
ADD/CHANCE
/DELETE
VALUE IS)
ENTER riETER \
READINGS AND )
EAD1NG DATES/
ENTER OATA FOR
- LOCATION
- TYPE
- SERVICE AREA
CODE IS)
- SERVICE AREA
FLOW FACTOR
UPDATE
SERVICE
AREA FILE
ENTER METER
READINGS AND
EADING DATES
ENTER OATA FOR
- LOCATION
- TYPE
- SERVICE AREA
CODE IS)
- SERVICE AREA
FLOW FACTOR
ENTER METER \
READINGS AND )
EAOING DATES/
ENTER DATA FOR'
- LOCATION
-SIC CODE
- SERVICE AREA
CODE (SI
- POLLUTANT
PARAMETER
CODE (SI
- ESTIMATED
DISCHARGE RATE
/ ENTER
SAMPLING DATES.
PARAMETER CODE.
AND SAMPLING
VALUES
YES /MORE
•INDUSTRY
OATA
ENTER
INDUSTRY
ID NUMBER
REFER TO FIGURE H-l
ENTER
SERVICE AREA
CHARACTERISTICS
OATA AND FLOW
FACTORS
ENTER
SERVICE
AREA ID
NUMBER
ENTER
BOUNDARY
COORDINATE
OATA
RINT\ YES PRINT LISTING!
LISTING ; m OF NEW DATA
FIGURE Z-3
SERVICE AREA ANALYSIS
PROGRAM P-9 I of 2
V-14
-------
OPEN SERVICE
AREA FILE.
RETRIEVE FLOW
DATA BY SERVICE
AREA CODE AND
DATE
ENTER DATES
AND SERVICE
AREA CODE IS)
SUMMARY BY
ERVICE ARE
PRINT FLOW
SUMMARY
REPOR
'OPEN CUSTOMER
FILE. RETRIEVE
DATA IFLOW
CHARACTERISTICS)
FOR CUSTOMER
TYPE
I OPEN SERVICE
AREA FILE.
RETRIEVE FLOW
DATA ST DATE
SUMMARY
BY CUSTOMER
TYPE
ENTER DATES
AND CUSTOMER
TYPE IS)
PRINT FLOW
SUMMARY
REPOR
/ENTER METER.
/ STATION. OR
OPEN SERVICE \
AREA FILE. \
RETRIEVE FLOW )
DATA BY ID /
UMBER AND DATE/
METER OR
PUMP STATION
OR OVERFLOW
REPORT
OVERFLOW 10
NUMBER AND
DATES
PRINT SPECIFIED
FLOW SUMMARY
REPORT
'OPEN SERVICEX
AREA FILE. \
RETRIEVE FLOW )
DATA BY SIC /
ODE AND DATE/
SUMMARY
Y INDUSTRY
TYPE
INDUSTRIAL
WASTE REPORT
OPEN SERVICE
AREA FILE.
RETRIEVE FLOW
DATA BY
INDUSTRIAL
ID NUMBER
AND DATE
ENTER
INDUSTRY ID
NUMBER AND
DATES
SUMMARY
8Y SELECTED
INDUSTRY
LEGEND
REFER TO FIGURE H-1
V-15
FIGURE Z-3
SERVICE AREA ANALYSIS
PROGRAM P-9 2 of 2
-------
ENTER VALUES (PHF.PDF.AHF.ADF)i
- PEAK HOURLY UATER USE (CF)
- PEAK DARr WATER USE (CF!
- AVERASE HOURLT UATER USE (CF)
- AVERAGE DART HATER USE (CF)
ALCULA
XTRA-CAPACITY
FACTORS
ASED
ON UATER
ONSUMPT10
7
ENTER VALUES IPHF.PDF.AMF.ADF)•
- PEAK HOURLT SEWAGE FLOW (MG)
- PEAK DAlLT SEWAGE FLOW (MG)
- AVERAGE HOURLT SEUAGE FLOW (MO
- AVERAGE OAlLr SEWAGE FLOW (MG)
NTER USER
DETERMINED
\WLUE.
TOTAL (I)
RATE FILE. \
RETRIEVE /
OPEN
FACILITIES
COST FILE.
RETRIEVE
VALUE FOR
TOTAL(I)
DETERMINE FACTORS'
- AVG (BASE) FACTORS
AVG HOUR FACTOR * AHF/PHF
AVG DAT FACTOR • ADF/PDF
- PEAK FACTORS
PEAK HOUR FACTOR • 1-AVG HOUR FACTOR
PEAK OAT FACTOR • 1-AVG OAT FACTOR
ENTER USER \
DETERMINED \
< EXTRA-CAPAC1U )
/STORE ECF(J)
' VALUES IN
\ RATE FILE
ELECT POLLUTANTS
- BOO/COD
- NITROGEN
- PHOSPHORUS
- HEAVY METALS
- TOXINS
NTER VALUES'
RIJ) • STRENGTH PHASE RATIO
(STRENGTHS COST TO
STSTEM COST FOR COST
FUNCTION)
CXIST RATIO FOR SPECIFIED
PARAMETERS
ALCULA
XTRA-STRENGIM
FACTORS
7
NTER DATA FROM ANNUAL
QUALITY CONTROL DATA'
PO - SYSTEM AVERAGE (BASE)
FOR SELECTED PARAMETERS
OPEN
RATE FILE.
ENTER ESF(J)
LEGEND
REFER TO FIGURE H-l
/ ENTER USER
/ DETERMINED
(EXTRA-STRENGTH
FACTORS.
ESFIJ)
1
CALCULATE ESF U) '
ESF U) - SR (J) * i
-------
/ENTER FOR EACH CUSTOMER
CLASSi
NO. OF CUSTOMERS PER
METER SIZE AND BILLING
crcLE
NO- OF CUSTOMERS PER
BILLS RENDERED
ANNUAL SEWAGE VOLUME
AND 1/1 FLOW
\- STRENGTH LOADING
f DETERMINE ALLOCATION
FACTORS FOR DISTRIBUTING
CUSTOMER COST
RESPONS1S1L1TT FOR EACH
COST FUNCTION
PRINT SCHEDULE Bl
•CUSTOMER CLASS I
RESPONSIBILITY I
DISTRIBUTION"
/ENTER DATA T0\
/ DEFINE BASIC \
< LEVEL OF CUST- >
\OMER FLOWS FOR/
\ BLOCKS /
PRINT SCHEDULE C
"SERVICE CHARGE RATE
L SCHEDULE-
/STORE SCHEDULE
( DATA IN RATE
\ FILE
LEGEND
REFER TO FIGURE H-l
V-17
FIGURE Z-4
SERVICE CHARGE RATE SETTING
PROGRAM P-IO 2 of 2
-------
VI. BUDGETING
A. Overview
Budgeting is the process of quantifying the overall activity plan of the
POTW for a specified period of time, usually on a yearly basis. An important
objective of this process is to fit together the separate plans made for
various segments of the utility to assure that these plans harmonize with one
another and that the aggregate effect of all of them on the whole utility is
satisfactory. The resulting budget plan provides the basis for a control
mechanism that is used for the periodic comparison between planned objectives
and actual performance.
The annual budgeting process, as adressed in this manual, includes the
development of an operating budget and a budget to provide for debt service
requirements and local capital cost requirements incurred as a result of
extensions and improvements. Capital budgets which commonly refer to budgets
providing for planned major construction in the form of capital outlays plans
and capital improvement programs, are not a part of this manual. The
distinction between annual budgets for debt service and local capital cost
requirements and capital budgets is that the former's budgeted expenditures can
be recovered by the revenues of the "asset" component of the sewer service
charge (refer to Chapter V) whereas the latter's budgeted expenditures usually
involve the use of various capital financing techniques including general
obligation bonds, revenue bonds, and loans. This distinction is made because a
capital budget, which is usually a part of a community's (or POTW's) master
plan effort undertaken every 5 to 20 years, involves capital cost requirements
much greater than those needed for extensions and debt service and therefore
can not be met through the service charge revenue generation technique. A
discussion of the various "creative" financing techniques available for major
capital outlays and the long-term capital budgeting process is not within the
scope of this manual.
The computer-based budgeting process requires extensive user interface due
to the many non-quantitative factors involved in allocating funds to various
VI-1
-------
activities and account types in budget preparation. Figure VI-1 is the
operations flowchart for the budgeting element. Basically programs P-ll, P-13,
and P-15 are to provide the utility manager with financial information for
"control" purposes. Knowing how actual expenses compare with budgeted
expenditures of the past and current fiscal years and what cash surpluses or
deficits are expected, the manager can make decisions or take actions to
maintain the "financial health" of the POTW utility. Program P-12, along with
P-ll and P-13, provide the utility manager with information that will assist
him in making the decisions necessary for budget implementation. These
programs provide documentation to support the manager's proposed budget during
the review process.
The primary data base of this element is the budget file which stores all
data relating to the operating budget including "policy" data, current and
historical approved budget amounts and work schedules, current and historical
revenue/expenditure projections and cash flow forecasts, proposed alternative
plans (temporary storage only during budget planning period), and budget
approval data (dates of review/approval and comments). Access to this
particular file is to be restricted to authorized personnel due to the nature
of the data maintained, particularly the budget "policy" and approval data,
including budget period dates; review process dates, agency names, and
sequence; organization classifications; budget minimums; flexible budget
ranges; standard budget transfer procedure; water conservation program
information; capital improvement implementation schedule; and revenue use
constraint data.
Other files required include:
o Customer File (F-3)
o Debt History File (F-4)
o General Ledger File (F-8)
o Inventory File (F-9)
o Journal Entry File (F-ll)
o Maintenance File (F-12)
VI-2
-------
VI-3
FIGURE 21-I
BUDGETING
OPERATIONS FLOWCHART
-------
FIGURE VI-1
BUDGETING OPERATIONS FLOWCHART (Cont'd.)
List 1 - Source Documents, Revenues Analysis, P-ll
o Departmental Revenue Worksheet
o Predicted Loss Amount (based on previous customer billings records)
List 2 - Source Documents, Operation Performance, P-12
o Work Order or Work Order Summary
o Maintenance Log (Maintenance Activity Report)
o Maintenance Schedule (PM Work Record and Report of Trouble)
o Rain Gage Records
o Daily Laboratory Record
o Daily Activity/Process Operation Logs
o NPDES Discharge Monitoring Report
o Monthly Plant Performance Report
o Energy Data Form
o Daily Utility Operating Report
List 3 - Source Documents, Expenditure Analysis, P-13
o Operating Expense Worksheet
List 4 - Source Documents, Budget Implementation, P-14
o Regulations (concerning Budget Standards and Revenue Use)
o Organization Chart
o Water Conservation Program Report
o Capital Improvement Program Report
o Debt Service Records (for Bond Sales, Requirements, and Sources of
Funds)
o Budget Activity Summary Worksheet
VI-4
-------
o Operations File (F-13)
o Rate File (F-15)
o Revenue File (F-16)
o Service Area (F-17)
VI-5
-------
B. Activities
1. Revenue Analysis (P-ll)
Budget preparation requires an accurate estimation of collectible
revenue. Reliable statistics on the past operations of a utility can be used
to document changes that took place, such as changes in revenue. These changes
can be attributed to service area growth patterns and variations in land use or
customer characteristics, as well as changes in the utility's rate structure.
The revenue analysis program, as illustrated in Figure VI-2 at the end of this
chapter, is designed to estimate a proposed revenue generation amount based on
the current or projected sewer service rate charges, historical records of
uncollected billings and other revenues, and on the accuracy of past revenue
projections. The design consists of five (5) major components:
o Determination of base revenue generation amount - uses
the existing or a proposed rate schedule stored in the
rate file and projected flows (per capita and
industrial) stored in the service area file to
determine the potential amount of revenue that can be
generated through sewer service charges.
o Determination of predicted loss amount - represents
the uncollectable utility revenues, based on the
historical bad debt factor, percentage of bad debt to
the amounts receivable (cash receipts or operating
revenue). This factor is based on data retrieved from
the customer file (delinquency history), and
accounting records (amounts receivable). The program
also provides the option of adjusting the amount for
projected changes in user income as stored in the
service area file.
o Determination of total revenue generation amount -
equals base revenue amount minus predicted loss
amounts referred to above.
o Modification of total revenue generation amount -
based on percentage difference (over or under) between
actual and estimated revenues for previous budget
periods. This incorporates the non-user charge
revenue sources such as penalty fines, connection
fees, etc. which were not accounted for in the
predicted loss amount. This function requires
accessing historical records for actual and projected
revenue amounts of previous budget periods.
VI-6
-------
Report generation - involves printing the Statement of
Actual and Estimated Revenues.
2. Operations Performance (P-12)
The budget control function should not only include the periodic
comparison of actual expenditures incurred and actual revenues collected to
budgeted and proposed amounts, respectively, but also the comparison of actual
operations of equipment and plant treatment levels to projected performance
levels. The operations performance program, as illustrated in Figure VI-3 at
the end of this chapter, provides this capability so that utility managers can
see the total operations picture. Staying within a budget but not obtaining
the expected treatment efficiencies and equipment performance levels that are
to accompany the budget reflects a problem which could be related to an
ill-conceived operating budget or poor operation or maintenance procedures.
The program design has three (3) basic components, each relatively
independent of the other:
o Evaluation of equipment performance - extension of a
comprehensive preventive maintenance system by using
the data stored in the inventory file including work
order summaries, maintenance logs, and maintenance
schedules to determine maintenance activity status and
equipment malfunction rate. These functions result in
the generation of workload/accomplished summaries and
the history of repairs report.
o Evaluation of plant performance - includes printing
EPA NPDES reports, along with notation of
non-compliance; daily operations reports; and summary
reports (weekly, monthly, annually) to provide the
utility staff with comprehensive reports on operation
status and treatment performance.
o Trend/statistical analysis - includes generation of
trend plots for specified pollutant and flow
parameters, with superimposed NPDES standards when
applicable; calculation of treatment removal
efficiencies and loading rates; calculation of general
statistics for specified parameters; and determination
of parameter relationships using linear regression
analyses. This last function could include
correlating the usage level of chemicals and energy to
pollutant loadings.
VI-7
-------
3. Budget Comparison (P-13)
As stated previously in this chapter, budget preparation can provide an
effective management control mechanism for expenditures. This involves
comparing actual operation and maintenance expenditures, debt service payments,
and local capital expenditures with budgeted expenses on a routine basis.
Basically, this program, as illustrated in Figures VI-4 at the end of this
chapter, is designed to generate a budget report used for budget/expenditure
comparison. The report format should be user-specified with the following
options:
o Time period of current expenditures and budget
expenses (specified fiscal year or month);
o Time period(s) of past expenditures and budget
expenses for comparison;
o Cost/Fund breakdown (line item/department/activity);
and
o Expenditures or expenditures and revenues.
The report can include (depending on the selection of options) totals,
excess/deficiency amounts, fund balances, variances of actual to budgeted, and
flags for noting "problems" needing possible budget transfers.
4. Budget Implementation (P-14)
This program, as illustrated in Figure VI-5 at the end of this chapter, is
the link between the budget planning processes that are addressed in Chapter
VII (Planning) and the periodic budgeting functions that include the control
techniques of comparing projected revenues, budgeted expenditures, and proposed
operation performance levels to actual conditions.
o Update "policy" data - enter program control data
including budget period (length and dates), review and
approval procedure (names of agencies, established
dates, and review sequence), organization
classifications, account classifications used for
budget reports, budget minimums, flexible budget
ranges, standard budget transfer procedure, water
VI-8
-------
conservation program (text and statistics to accompany
budget report), capital improvement program (dates for
implementation schedules affecting current operating
budget and existing debt service requirements), and
federal regulations on revenue use restrictions and
limitations (to flag appropriate revenue and
expenditure funds).
Update proposed expenditures - enter proposed
expenditure data by character type (including dollar
amount, personnel requirements, and man-years) and by
activity classification (dollar amount only).
Internal check is made to compare total dollars for
expenditures by character type and total dollars for
activity classification. If totals do not equal, a
"flag" is used to alert user. This process is
continued for all departments and for all levels of
service (for flexible budgets only). Preliminary
budget schedules are then produced for review.
Update proposed debt service - projects long-term
payable indebtedness and maturities by fiscal year,
then prints reports on debt service requirements and
outstanding indebtedness.
Perform budget analysis - retrieves data from revenue
file and allocates, when applicable, revenues to
appropriate departments and/or expenditure categories
based on user specifications and revenue use controls
(refer to first function).
Generate budget report (schedules) - prints reports as
specified including summary of operating expenditures;
statement of assessable bases and tax rates; summary
of man-years requirements; summary of personnel
requirements; allocation of operating budget to major
categories of expenses; breakdown of operating
expenditures by fund, function, and department;
summaries of general fund operating revenues and
operating revenues by source; and summary of local
capital expenditures. This function is used when
management has selected a particular budget plan from
those proposed during the planning process (refer to
Chapter VII). These reports are then used as the
documents for presenting the budget to the public or
proper authorities and agencies for approval.
Budget review/approval update - updates record
maintaining budget review and approval data including
agency name, date(s) of review or approval, and
comments.
VI-9
-------
5. Cash Flow Forecasts (P-15)
Utility managers must estimate the amount of cash required to:
o Conduct normal utility operating activities;
o Meet contingencies; and
o Maintain minimum balances required to compensate for
bank services rendered or provide lines of credit in
order to determine the appropriate amount of cash to
be retained "on hand" or in an account.
Cash held on hand or in checking accounts are nonearning assets. When this
cash balance is excessive, utility management is witholding resources from
possible profitable investment or is paying interest on borrowed money that is
not needed to finance utility operations.
Because of the need to maintain a sufficient but not excessive cash
balance, a sound financial management system provides for forecasting cash
receipts and disbursements. This activity is concerned with providing cash
flow forecasts to:
o Anticipate future cash deficiencies;
o Augment the cash balance by short-term borrowing or by
issuing long-term securities;
o Formulate debt repayment plans; and
o Plan the investment of excessive cash balances.
The design of the cash flow forecast program, as illustrated in Figure
VI-6 at the end of this chapter, consists of three (3) components:
o Add new forecast data;
o Edit existing forecast data; and
o Generate forecast report.
VI-10
-------
A particular income or disbursement forecast is stored in the budget file
by specified timeframe (preferably equal to the budget period) and department.
The projected income is retrieved from the revenue file for a specified
category and timeframe increment (i.e. month) and multiplied by the "historical
ratio" of cash receipts to revenues which is automatically updated at the end
of each budget period. This adjustment accounts for differences between
revenue estimates determined using the accrual basis and the cash basis. The
projected expenditure is retrieved from the budget file and adjusted for
differences between expense estimates determined using the accrual basis and
cash basis by multiplying the "historical ratio" of expenses to expenditures.
The editing function of this program allows for user-adjustment of
program-generated forecasts (including other fund sources and uses not
currently stored in file) and therefore reflects the subjective judgement of
the utility manager and staff on future conditions.
The report produced by this program is for a user-specified timeframe and
includes the option of displaying actual general ledger data for the current
time period. After each source and use (including payment of interest and
principal amounts on existing debt) are estimated for each increment of the
specified timeframe, the resulting net cash balance will indicate the need for,
and timing of, additional financing (or investment). The cash forecast then
can be adjusted, via the edit function, for the effect of the additional
financing (or investment).
VI-11
-------
/ OPEN SERVICE AREA ,
/TILE. ENTER ACTUAL PER\
(CAPITA FLOW. INDUSTRIAL)
fLOW. ANO SERVICE BASE/
\ TO MAKE PROJECTION
/OPEN SERVICE AREA FILE.
/ ENTER PROJECTED USER
\ INCOME. TAX BASE
\ (PERCENT CHANCE)
OPEN CUSTOMER FILE.
RETRIEVE OELINOUENCT
HISTORY
ENTER EST1MATEDN
PREDICTED LOSS
AMOUNT /
OPEN REVENUE
'FILE. RETRIEVE
.PREDICTED LOSS
AMOUNT
/STORE TOTAL COST
RECOVERY AMOUNT
, IN REVENUE FILE
PRINT STATEMENT
OF ACTUAL AND
ESTIMATED
REVENUES
LEGEND
REFER TO FIGURE n-l
VI-12
FIGURE 21-2
REVENUE ANALYSIS
PROGRAM P-ll
-------
OPEN
INVENIORr FILE
AND MAINTENANCE
FILE
/ UPDATE MAINTENANCE \
/FILE WITH NEW INVENTORYX
/ ITEMS. UORK ORDER
\ SUMMARY. MAINTENANCE
\ LOG. AND MAINTENANCE /
\ SCHEDULE /
COMPARE MAINTENANCE
COMPLETED TO MAINTENANCE
SCHEDULED OR ORDERED
!(INCLUDES BOTH PREVENTIVE
[ AND CORRECTIVE MA1NT.I
PRINT REPORT ON
UORK LOAD/
ACCOMPLISHED
SUMMARY
STORE MAINTENANCE
, ACTIVITY STATUS DATA
\ IN MAINTENANCE FILE
DETERMINE
REPAIR RAIE
FOR EQUIPMENT
ITEMS
I COMPARE RATE TO
PROPOSED SCHEDULE
OR MANUFACTURERS
RATING TO DETERMINE
PERCENT DEVIATION
(BY MANUFACTURER/
PRINT REPORT ON
HISTORY OF REPAIRS
»ND FLAG BAD
PERFORMANC
PRINT REPORT ON
HISTORY OF REPAIRS
AND FLAG BAD
PERFORMANC
/ STORE EQUIPMENT \
' REPAIR HISTORY DATA )
,1N MAINTENANCE FILE/
OPEN OPERATIONS FILE.
ENTER DATA FROM RAIN GAGE
RECORDS. METER RECORDS. LAB
RESULTS. AND DAILY ACTIVITY/
PROCESS OPERATION LOGS
LEGEND
REFER TO FIGURE n-I
VI-13
FIGURE 21-3
OPERATIONS PERFORMANCE
PROGRAM P-IZ I of Z
-------
'EN OPERATIONS FILE.
SELECT OPERATING
PARAMETER(S) AND TIME
PERIOD FOB ANALYSIS
ENTER NPOES
STANDARD. IF
APPLICABLE.
SPECIFY APPLICABLE
' DESIGN CRITERIA
DETERMINE'
- PERCENT OF VALUES CREATER
THAN NPOES REQUIREMENT
- TREATMENT REMOVAL EFFICIENCIES
- LOADING RATE
PRINT TSENO REPORT
INCLUDING PLOTS OF
PARAMETERS. NPDES
STANDARDS. TREATMENT
EFF1CIENCIE
LOADING
DETERMINE'
AVERAGE. GEOMETRIC AND
QUADRATIC MEANS. MEDIAN
TOTAL. MAXIMUM. MINIMUM
SUM OF SQUARES. VARIANCE.
STANDARD DEVIATION. COEF.
OF VAR1ENCE. STD. ERROR
OF MEAN
ESTABLISH\
(0) AND X 10) \
1TH PIIN.. MAX../
AND RANGE /
I DETERMINE
{LINEAR REGRESSION,
! FORMULA
i 1 • AX • B !
PRINT FORMULA AND 1
NEU VALUES. PLOT 1
xco). r (0). x.
AND r —
/STORE LINEAR\
REGRESSION FORMULA
\IN OPERATIONS FILE
LEGEND
REFER TO FIGURE H-l
VI-14
FIGURE TZI-3
OPERATIONS PERFORMANCE
PROGRAM P-12 2 of 2
-------
OPEN GENERAL
LEDGER FILE.
ENTER ACTUAL
REVENUE AND
EXPENDITURE
DATA
/OPEN BUOGET\
/FILE. ENTER \
CORRESPONDING/
PUDCET DATA/
/OPEN aUDGET\
/FILE. ENTER\
CORRESPONDING/
BUDGET DATA/
LEGEND
REFER TO FIGURE E-l
VI-15
FIGURE 33-4
EXPENDITURE ANALYSIS
PROGRAM P-13
-------
*NTER LENGTHS AND DATES
OF SPECIFIED PERIODS
(ANNUAL-FY. QUARTERLY.
MONTHLY. CONTINUOUS)
.JNTER NAME IS) OF R£VIEU\
AGENCY (GOV T • .MANAGE- \
KENT. UTILITY PERSONNEL >
AND PUBLIC) WITH ESTAB- /
I SHED DATES I SEQUENCE/
-NTER TITLE. GRADE. AND\
CURRENT EMPLOYEE NAME/ N
NUMBER FOR ORGANIZATION
CLASSIFICATIONS FQR DELE-
GATION OF MANAGERIAL
:ESPONSIS1LITIES (DEPART-,
MENT LEVEL) /
/OPEN CHART OF ACCOUNTS \
/FILE. RETRIEVE ACTIVITY1
CALSS1F1CAT10NS AND
LINE ITEM (OBJECT OF
EXPENDITURE) CLASSIF- ,
1CAT10NS FOR BUDGETING /
ENTER CONTINGENCY
RESERVE MINIMUM.
CASH BALANCE MINIMUM,
BUDGET INCREASE MINIMUM.
1 AND DEBT POLICY LIMIT
/ ENTER FLEXIBLE BUDGET
'RANGES FOR SERVICE LEVEL
(INCLUDES STRENGTH AND
, FLOW LOADINGS)
ENTER PROCEDURE(S) FOR
STANDARD BUDGET
\ TRANSFER (ADJUSTMENT!
ENTER DATA FQR UATER \
CONSERVATION PROGRAM /
ENTER DATES FOR
IMPLEMENTATION
SCHEDULES
/ENTER CONSTRAINT
QATA ON USE QF
REVENUES
PRINT LISTING
OF POLICY
PARAMETERS,
/STORE POLICY\
(PARAMETERS IN>
\auDCET FILE/
-f
OPEN BUDGET
FILE. ENTER
JPARTMENT CODE
OR DEPARTMENT,
BUDCET
ENTER PROPOSED
EXPENDITURE BY
'CHARACTER (LINE ITEM
CLASSIFICATIONS) .
SALARIES AND WAGES.
OPERATING EXPENSES.
CAPITAL OUTLAT.
AND DEBT SERVICE
/ENTER PROPOSED
/PERSONNEL REQUIREMENTS
\ (FULL TIME/PART TIME)
\*MO PROPOSED MABTEARS
/ ENTER PROPOSED \
/ EXPENDITIRES BT \
/ ACTIVITY CLASSIFICATION
\ (AOnlNISTRATlON.
N0PERAT10NS. MAINTENANCE./
\__ AND LABORATORY)
ENTER PROPOSED DEBT
SERVICE DATA (BOND
SALES. REQUIREMENTS.
ID SOURCES OF FUNDS)
PROJECT LONG-TERM
INDEBTEDNESS PAY-
ABLE AND MATURITIES
BY FISCAL YEAR
PRINT REPORT
- DEBT SERVICE
REQUIREMENTS
- OUTSTANDING
INDEBTED "
/STORE ALL DATA.
/RESULTS IN DEBT
SERVICE FILE.
STORE DEBT SCRVICI
\REOU1REMENTS IN
BUDCET FILE
LEGEND
REFER TO FIGURE H-I
VI-16
FIGURE 21-5
BUDGET IMPLEMENTATION
PROGRAM P-14 I of 2
-------
BUDGET
V1EW/APPROVA
UPDATE
7
'OPEN BUDGET FILE.
/ RETRIEVE DATA ON
\ REVIEW/APPROVAL.
\ SELECT -AGENCT-
OPEN BUDGET FILE -
OPEN BUDGET FIL£\
FOR RETRIEVING }
REPORT DATA /
/RETRIEVE EXPENDITURE
\DATA AND REVENUE USE
\ CONTROL DATA
PRINT SUMMARY
OF OPERATING
EXPENSES AND
REVENUE
ERATI
EXPENSES AND
REVENUES
RETR EVE PROPOSED
SESSAB
ASES AND T
RATES
7
PRINT STATEMENT
OF ASSESSABLE BASES
AND TAX RAT
NTER DATA
DATES OF
REVIEW
COMMENTS
PRINT PRELIMINARTI
OPERATING REPORT
(REVENUES AND
EXPENDITURE
PRINT SUMMARY
OF PERSONNEL
REQUIREMENTS
RSONN
REQUIREMENTS
NTER DATA
DATES OF
APPROVAL
COMMENTS
PRINT ALLOCATION OF
OPERATING BUDGET TO
MAJOR CATEGORY OF
EXPENSE
LAST
AGENCY IN
REVIEW/APPROVAL
SEQUENCE
/ STORE REVENUE
AND EXPENOITRUE
ALLOCATION DATA
IN BUDGET FILE
UNO.
UNCTION AN
EPARTMENT
CHECK DATA ENTERED
FOR REVIEW/APPROVAL
ORDER TO SPECIFIED
FLAG INCONSISTENCIES
PRINT BUDGET
REVIEW AND
APPROVAL
SUtlMAR
YCS PRINT OPERATING
— REVENUES BT
SOURCE
/STORE AGENCIES
REVIEW/APPROVAL
DATA IN BUDGET
FILE
LEGEND
REFER TO FIGURE H-I
VI-17
FIGURE 3ZT-5
BUDGET IMPLEMENTATION
PROGRAM P-14 2 of 2
-------
/OPEN REVENUE FILE.
/ RETRIEVE PROJECTED
meant FOR
SPECIFIED REVENUE
SOURCE AMP nOMTH
OPEN BUDGET FILE.
RETRIEVE PROJECTED
EXPENDITURE FOR
SPECIFIED OOJECT
CAIECORY AND HONTH
1
1
ADJUST AMOUNT
TO REPRESENT
CASH AHOUNT
IX EXPENSE
/EXPENDITURES)
INTER PARAttETER1
CODE FOR DATA
TO BE EDITED
/ OPEN GENERAL
/LEDGER FILE TO
\08TA1N CURRENT
V_ EXPENSES
/ OPEN BUDGET
< FILE FOR
VATEST UPDATE
CALCULATE CASH
BALANCE FOR
FORECAST PERIOD
LEGEND
REFER TO FIGURE H-l
VI-18
FIGURE YI-6
CASH FLOW FORECASTS
PROGRAM P-15
-------
VII. PLANNING
A. Overview
Prior to and during the budget preparation process, each department (or
sub-department) in a utility prepares department plans with alternative plans
of action. Generally each alternative plan requires the use of a different
combination of manpower and labor skills, material resources, and plant
facilities. To harmonize the various department plans with one another to
produce a preferred utility budget plan, the operations conditions representing
the alternative plans of action for each department are to be combined and
evaluated. The planning element of the financial management system involves
evaluating the plans based on the financial capability of the revenue source
(the service area) and on the operations performance of the physical activities
involved. It should be noted that this evaluation process assumes that all
proposed plans will ensure compliance with governmental regulations concerning
treatment performance and water quality standards. The operations flowchart
for the planning element is presented in Figure VII-1.
The first activity of the planning element involves determining population
and income changes based on statistical analysis of population data stored in
the service area file. The resulting information is then used by the two
evaluation activities of this element: service area financial ability analysis
and performance analysis as an indicator of the economic base to estimate
household financial ability and as indicator of development to estimate
residential flow service levels.
The service area financial ability analysis activity of the planning
element is intended to assist municipal officials in analyzing the financial
impact of a proposed budget plan on the community as a whole and on individual
users, including households and nonresidential users. This impact can include
both the initial capital investment of a major construction project and the
cost of operations and maintenance (including replacement). As stated in
Chapters II and VI, the proposed financial management system is primarily
concerned with short-term budgeting (annual operating budgets, debt service
VII-1
-------
a.
1
E AREA
IAL ABILITY
qis
>=£
ai£
1 J
t.
;
*S
^
<«
VII-2
FIGURE 3ZH-I
PLANNING OPERATIONS
FLOWCHART
-------
FIGURE VII-1
PLANNING OPERATIONS FLOWCHART (Cont'd.)
List 1 - Source Documents, Population Statistics, P-16
o Population Record (from U. S. Census Bureau or State Data Center)
o Income Records (from U. S. Census Bureau or State Data Center)
List 2 - Source Documents, Performance Analysis, P-18
o User - determined Benefit Value for Activity "as is"
o Units of Work (Gallons of Flow Treated, Gallons of Sludge Generated, etc.)
o Proposed Departmental Budget Plan Expenditures
o Plant Treatment Operation Records
o Employee Records
o Projected Flow Values
List 3 - Source Documents, Service Area Financial Ability Analysis, P-17
o Construction Costs records
o Operation and Maintenance Cost Records
o Property Tax Records
o Property Assessment Records
List A - Budget Planning, P-19
o Employee Records
o Budget Report
VII-3
-------
requirements, and local capital costs) and planning for the expenses of an
existing treatment facility, rather than long-term capital investment planning.
It is recognized, though, that the service area financial ability analyses and,
subsequently, the planning activities required for annual operating and
long-term capital budget preparation are not completely separable and that both
types of budgets are required for a complete financial system. In view of
this, the service area financial ability element will encompass some components
involving capital outlay plans and capital improvement programs.
The performance analysis activity evaluates the present operations
performance for existing facility conditions and the projected operations
performance for proposed plans of action. Four categories of evaluation are
addressed: efficiency, effectiveness, workload, and wastewater loading.
The budget implementation program, P-14, of the budgeting element provides
a routine to generate a "preliminary operating report" which lists the proposed
revenues allocated to each department and/or expenditure category. This
program can be used to define the financial requirements of the alternative
budget plans for the evaluation proposed for the planning element. The final
activity of the planning element then generates a "work schedule summary" for
the preferred budget plan. This document, along with the "preliminary
operating report" for that particular budget plan, provides input to the budget
implementation program, P-14, for generating the final budget reports
(schedules) to be used in the budget review process.
VII-4
-------
B. Activity
1. Population Statistics (P-16)
This program, as illustrated in Figure VII-2 at the end of this chapter,
maintains income and population data for the service area, allocates population
within the service area, and generates statistics. It consists of three (3)
components:
o Population dissaggregation - dissaggregate population
data by overlaying boundaries of the service area(s)
and its subdivisions using residential zoning
development density districts, sewer planning areas,
etc. to generate allocation factors which are applied
to actual or projected population figures.
o Development of median income - involves extrapolating
either the median household income or the adjusted
median family income to the full census block to
allocate income to service areas.
o Statistical analysis - performs statistical tests on
population and income data including frequency
distributions, T-tests, correlations (using Pearson's
R with significance levels), and multiple regression
(for both time-series or cross sectional data).
The last component is used basically to assist utility managers in making
population and income projections but can also be used to determine
correlations of the total service area's population and income to various
subareas or service categories. These correlations could generate ratios that
would act as constraints in the dissaggregation process.
Regression analysis and correlations could also be made with population
data and any one of (or combinations of) the following parameters:
o Number of utility hookups;
o School enrollment;
o Number of births;
o Number of deaths; and
VI I-5
-------
o Number of net migrants.
The results of this program are used to indicate the change in both the
economic base (income and population size) of residential users and the
residential development (flow volume and type).
2. Service Area Financial Ability Analysis (P-17)
This program, as illustrated in Figures VII-3 at the end of this chapter,
consists of the six (6) components described in the following sections.
a. Estimate facilities costs. This component includes:
o Entering construction costs - includes
construction costs incurred during installation
of equipment accessories and appurtences. The
program adjusts costs to current dollars using
EPA indices (Small City Conventional Treatment
Index and Complete Urban Sewer System Index).
o Entering operation and maintenance costs -
includes costs for labor, fuel and power,
material and supplies, outside services,
equipment, and miscellaneous items. The program
adjusts costs to current dollars using EPA
indices (O&M Plant Indices for Pump Stations and
Sewers).
Costs for a number of proposed operating budget plans can be
entered simultaneously for comparative evaluation. The
resulting "Cost Summary Report" includes costs by system
components and totals.
b. Estimate financing amounts. This component is intended to
determine the amount to be borrowed, if any, by the grantee and
to identify the methods of financing that amount. It can be
used in determining the financing of the costs incurred for
major capital construction projects, but in this case is used to
address financing of annual costs resulting from plant
operations and extensions and improvements needed for
VII-6
-------
c.
continuous operation of the utility. The procedure was divided
into five functions:
o Determining amount to be borrowed - involves
determining grantee share (by system component
and total system), total construction-related
costs, and total grantee contributions.
o Determining annual debt service payment -
involves various types of financing sources;
general obligation bond, revenue bond, or loan.
o Determining total estimated annual wastewater
facilities costs.
o Determining total funding for annual POTW's
costs.
o Generating Summary of Cost Totals for Budget
Plan(s) which includes a "flag" for
"non-selfsupporting" plans (total costs greater
than total funding).
Estimate annual cost per household. This component includes:
o Determining annual cost per household -
calculated based on residential share of total
estimated annual POTW charges (divided by number
of households) and annualized one-time costs
(fees and assessments).
o Evaluating annual costs - determine annual costs
and compare to household income to flag
"high-cost" projects.
The output from this component is an Annual Costs Per Household
report.
d. Assess the community debt history. This component is designed
to determine the gross direct debt, direct net debt, overlapping
net debt, and overall net debt for the service area based on the
present outstanding debt and the proposed new debt (principal
component). From these figures a debt repayment schedule for
direct net debt is generated to determine the percentage of debt
limit used assuming the new debt is taken on. A Summary of Debt
VII-7
-------
History report is produced as output. It should be noted that
this particular component is more for evaluation of the costs
for major capital investments than the annual operating costs of
concern in this study.
e. Evaluate the service area's financial history. This component
involves the calculation of eleven (11) key financial indicators
which were selected because of their importance in explaining
the difference in credit worthiness between a service area with
a strong credit rating and one with a weak credit rating.
o Annual rate of change in population growth (to
represent changes in the economic base);
o Operating surplus (deficit) as a percentage of
total current expenditures;
o Property tax collection rate (needed only for
those few instances where a POTW uses an ad
valorem tax user charge system);
o Property tax revenues as a percentage of full
market value of property (needed only for those
few instances where a POTW uses an ad valorem tax
user charge system);
o Overall net debt as a percentage of full market
value of real property;
o Overall net debt as a percentage of personal
income;
o Direct net debt outstanding per capita;
o Overall net debt outstanding per capita;
o Direct net debt due five (5) years as a
percentage of direct net debt outstanding;
o Operating ratio; and
o Coverage ratio.
f. Generate summary reports. The last component includes
accumulating output from the other five components to generate
two reports:
VII-8
-------
o Wastewater Facilities Financial Information
Report using data from components a, b, and c;
and
o Supplemental Financial Information Report using
data from components d and e.
The second report requires the application of a user-defined
rating scale to determine weak, average, or strong ratings with
respect to the calculated values of the financial indicators.
Commercial and industrial dischargers are also to be considered in this
program due to their significant contribution to billable flow. When
estimating "cost per household" (item C of this section), the nonresidential
share (commercial and industrial) is used to determine the residential share of
the total annual POTW charges. This is done by accessing the service area file
(F-17) to obtain nonresidential users' flow data and thereby determine the user
types' proportionate shares.
In using this program the user should remember that though sewer service
charge increases would appear to increase revenues, under certain conditions,
this may not be the case. If the water supply service charge is increased at
any time, due to the concept of price elasticity of demand for a commodity,
water consumption and therefore sewer discharges may decrease. Also, an
increase in sewer service charge may induce development changes due to the fact
that both residential and industrial populations are migratory. In either case
the effect in total sewer revenues would be negative even with the increase in
service charge. At what point does the change in cost of sewer or water
service induce a negative effect on revenues is not easy to determine
considering the involvement of many factors such as the economic strength of
the service area, the type of industries in the area (in regards to
water-intensive characteristics), and the ratio of variable costs of service to
fixed costs of service for the POTW. In any case, the utility managers should
be aware of this paradox in their planning efforts.
VI I-9
-------
3. Performance Analysis (P-18)
Utility managers must develop performance measures and procedures to
analyze achievements relating to objectives. The first step in this analysis
is to determine whether relationships that existed in the past should continue
to exist in the future; therefore the continuation of a particular activity
should be evaluated. The decision to perform or not to perform an activity
involves the comparison of the estimated expense of performance with the
estimated value of expected benefits. If it is determined that an activity
needs to be performed in order to help a utility reach its goals, a choice must
be made among the alternative budget plans proposed for the activity.
Ranking the alternative plans based on performance involves developing
quantitative performance measures for evaluating the activities proposed. The
measures used in this program include: efficiency, effectiveness, workload,
and wastewater loadings.
The program, as illustrated in Figure VII-4 at the end of this chapter,
consists of six (6) components:
o Evaluate existing activity cost-benefit ratio - This
involves using estimated expenses from financial
records and a user determined estimated value for
benefit.
o Efficiency evaluation - This measures the
relationships between cost incurred and amount of work
accomplished. It involves calculating unit costs,
total costs divided by number of work units ($ per
gallon of wastewater treated, $ per cubic feet of
sludge generated, etc.) for a proposed plan and
comparing them to user-defined standards and to unit
costs of other proposed plans. These unit cost
standards should be periodically updated to reflect
changes in wages, costs of materials, and changes in
technology. Standard maintenance activities which
involve a significant expense for the utility would be
particularly adaptable to this type of performance
evaluation.
o .Effectiveness evaluation - This evaluation emphasizes
results and can be in the form of treatment removal
efficiencies or effluent pollutant levels for
particular unit treatment processes. The routine for
this program involves using EPA's "Diagnostic
VII-10
-------
Operational Modeling Programs," for each proposed
plan, including generation of plots for the
performance results and flagging activities with
problems. These programs were developed to detect
problems in the operations of existing facilities and
to identify the cause of the problem as either a
"process limitation" or an "operational deficiency".
A manager using these programs could zero in on the
"effectiveness" problems of the utility for the
existing situation and simulate the "effectiveness" of
any proposed facility changes in the alternative
budget plans. These programs would also assist in the
evaluation based on wastewater loading and component
efficiency.
o Workload evaluation - Workload is a quantitative
measure of performance because it indicates the amount
of work actually performed by the utility and the
potential for handling additional workload that may be
proposed by an alternative plan. This particular
routine involves determining available workload
capacity based on staff limitations or staff currently
used and comparing it to workload requirements of
proposed plans.
o Wastewater loading evaluation - The activities
proposed by the alternative plans should be judged by
the level of service they accommodate. This routine
compares projected service area loadings to the
loading capacities of activities proposed in various
alternative plans.
o Generate summary performance report - This involves
compiling and ranking evaluation results for all plans
of a specified activity.
It should be noted that not all evaluation categories are needed for
evaluating the operations performance of all proposed plans but when choosing
between two or more plans, the same type evaluation categories must be used to
provide for a meaningful ranking.
4. Budget Planning (P-19)
This activity, whose program flowchart is illustrated in Figure VII-5 at
the end of this chapter, is primarily a report generator. The report produced
is a work schedule for the preferred budget plan to be used in the budget
VII-11
-------
implementation process. Once the preferred budget is reviewed and approved by
the proper authorities the work schedule can be distributed to the department
managers or other persons responsible for the management activities of a group
(such as maintenance staff, laboratory technicians, and plant operators).
VII-12
-------
/ENTER POPULATION
< DAT* FROM STATE
\ DATA CENTER
TEA ISUBAREAJ . CENSUS
RACT AND BLOCK. AND
ALLOCATION FACTOR
(NTER IHCOMEX
DATA FROM \
STATE DATA /
CENTER /
REFER TO RGURE H-l
FIGURE rZH-2
POPULATION STATISTICS
PROGRAM P-16
VII-13
-------
ETERM!NE\ NO
FACILITIES
COSTS
7
DETERMINE
ANNUAL CDS!
ER HOUSEHOL
7
OPEN FACILITIES
COST FILE. RETRIEVE
CONSTRUCTION COST
DATA I- A)
ONSTRUCTION
COSTS
7
OPEN SERVICE AREA
FILE. RETRIEVE.
- NO. OF HOUSEHOLDS
- HOUSEHOLD
INCOME (- 3)
ENTER "SHARES" UNDER
GOVERNMENTAL FUNDING
\ (• B)
ENTER COSTS \
BY SrSTEM )
COMPONENTS /
OPEN REVENUE FILE.
RETRIEVE-
• TOTAL ESTIMATED
ANNUAL CHARGES
FOR "RESIDENTIAL
SHARE I* C)
ESTIMATED ANNUAL
COSTS/HOUSEHOLD
NOT INCLUDING
SERVICE CHARGE
(- D)
DETERMINE GRANTEE
SHARE car STSTEM
COMPONENTS AND FOR
DETERMINE ANNUAL
COSTS/HOUSEHOLD.
PAID. REPAYMENTS
FOR ISSUANCE AND
TOTAL ANNUAL i/HH
ENTER COSTS BY
SYSTEM COMPONENTS.
TO INCLUDE COST
CATEGORIES'
- LABOR
- FUEL AND POWER
- MATERIALS AND
SUPPLIES
- OUTSIDE SERVICES
- EQUIPMENT COSTS
BUDGET PLAN
^ODE AND STOR
\ DATA
OPEN REVENUE FILE.
CONTRIBUTIONS. LOCAL
FUNDS. PREPAID CON-
NECTION FEES. ETC.
PRINT REPORT
FOR 'ANNUAL
COSTS PER
HOUSEHOL
USING EPA INDICES
AND TOTALIZE FOR
EACH CATEGORY AND
GRANTEE CONTRIBUTION
DETERMINE AMOUNT TO
STORE DATA
IN SERVICE
AREA FILE
PRINT SUMMARY
REPORT OF
FACILITIES
COSTS
ENTER FOR GENERAL
OBLIGATION BONO.
- J AMOUNT BORROWED
ESTIMATED INTEREST
TERMS OF MATURITY
ESTIMATED ANNUAL
FACILITIES COSTS
/ OPEN FACILITIES \
/COST FILE. ASSIGN \
\ BUDGET PLAN CODE /
\ AND STORE DATA /
DETERMINE ANNUAL DEBT
SERVICE PAYMENT USING
CAPITAL RECOVERY TABLES
DEBT SERVICE AMT.
OPEN FACILITIES \
COST FILE. RETRIEVE \
PROJECTED 04M COSTS /
(• G)
OPEN GENERAL
LEDGER FILE.
STORE DATA
IN DEBT
\HISTORY FILE/
\RETR1EVE EXISTING
\ANNUAL DIM
LEGEND
REFER TO FIGURE H-l
VII-14
FIGURE 3ZII-3
FINANCIAL ABILITY ANALYSIS
PROGRAM P-17 I of 2
-------
ASSES
COMMUNITY
EBT HISTORY
OPEN DEBT HISTORY
FILE. RETRIEVE.
- COMMUNITY'S
OBLIGATION BONO
RATING AND DATE
OF RATING
UTILITY'S REVENUE
BONO RATING AND
OATC OF RATING
PRESENT OUTSTANDING
DEBT (BONDED. LEASES.
UNFUNDED PENSION
LIABILITIES.
AND NOTES)
PERAT1N
SURPLUS/
DEFICIT
7
ENTER BUDGET PLAN
CODE AND RETRIEVE
PROPERTY
TAX COLLECTION
RATE
(PRINCIPAL COMPONENT)
- GROSS DIRECT OEBT
- DIRECT NET DEBT
- OVERLAPPING NET
I- OVERALL NET DEBT
RELIANCE
ON PROPERTY
'AX REVENUE
7
REPAYMENT SCHEDULE
FOR DIRECT NET OEBT
VERALL NC
DEBT AS Z OF
FULL MARKET
VALUE
7
/ ENTER DEBT \
\ LIMITATIONS /
PRINT SUMMARY
OF DEBT
HISTORY
/ STORE DAIA
( IN DEBT HISTORY
FILE
'OPEN SERVICE
AREA FILE.
RETRIEVE
POPULATION
\ DATA
ENTER DATA! \
AMT. OF REVENUES
AMT OF EXPENDI- ,
TURES /
DETERMINE'
- TOTAL CURRENT
REVENUES AND
EXPENDITURES
- CURRENT SURPLUS
(DEFICIT)
- CURRENT OPERATING
SURPLUS (DEFICIT)
AS 2 OF TOTAL
CURRENT EXPENDITURES
-*•
ENTER-
YEAR OF MOST
RECENTLY COMPLETED
TAX TEAR
PROPERTY TAX
COLLECTED
PROPERTY TAX LEVIED,
•*•
ENTER-
'- ASSESSED VALUE
OF REAL PROPERTY
- CURRENT ASSESS-
MENT RATIO
\- PROPERTY TAX
REVENUES
OPEN OEBT
HISTORY FILE.
RETRIEVE TOTAL
OVERALL DEBT
/ ENTER FULL \
/MARKET VALUE \
1 OF REAL /
PROPERTY /
OPEN DEBT HISTORY
FILE. RETRIEVE
OVERALL NET DEBT
IPEN SERVICE
AREA FILE.
.RETRIEVE DATA
ON INCOME
1
CALCULATE
OVERALL NET
OEBT AS Z OF
PERSONAL INCOME
OPEN OEBT
HISTORY FILE.
RETRIEVE DIRECT/
OVERALL NET DEBT
OUTSTANDING
|OP£« SERVICE
AREA FILE.
(ETR1EVE CURRENT
POPULATION
!
1
DETERMINE DIRECT/
OVERALL NET DEBT
OUTSTANDING
PER CAPITA
YES
! ENTER DATA FOR- \
FACILITIES COST \
ESTIMATES
FINANCING SOURCE
AND AMOUNT ,
ANNUAL COSTS PER/
HOUSEHOLD /
PRINT POTW
FINANCIAL
INFORMATION
SHEET ~~
/ENTER DATA FOR-
- COMMUNITY DEBT
HISTORY
- FINANCIAL INDI-
CATORS
ENTER AND STORE
IN FINANCIAL INDICATOR
FILE NEW Z LEVELS
FOR RATINGS (WEAK.
AVERAGE. AND STRONG)
PRINT
SUPPLEMENTAL
FINANCIAL
1NFORMAT1
SHEET
/OPEN DEBT
HISTORY FILE.
RETRIEVE DIRECT
NET DEBT OUE IN
5 YRS AND TOTAL
\ OUTSTANDING
OPEN REVENUE
FILE. RETRIEVE
\EXPECIED REVENUES ,
- \ DATA
' OPEN BUDGET
FILE. RETRIEVE
BUDGETED EXPENSE /
DATA /
DETERMINE'
- OPERATING RATIO
(OPERATING REVENUES/
OPERATING EXPENSES)
- COVERAGE RATIO
((TOTAL REVENUES- i
OPERATING EXPENSES)/
ANNUAL DEBT SERVICE)
LEGEND
REFER TO FIGURE TJ-I
VII-15
FIGURE m-3
FINANCIAL ABILITY ANALYSIS
PROGRAM P-17 Z of 2
-------
/OPEN SUBSIDIARY
'LEDGER. RETRIEVE
EXPENSE FOR
\ACT1VITY 'AS IS'
ENTER ESTIMATED
VALUE OF BENEFIT
FOR ACTIVITY
•AS IS'
OPEN OPERATIONS
FILE, RETRIEVE
UNIT COSTS FOR
ACTIVITY
ESTABLISH UNITS OF
YORK FOR ACTIVITY
(GAL. OF FLOW TREATED.
GAL. OF SLUDGE
GENERATED. ETC.)
ENTER COSTS FROM
PROPOSED PLAN
(ENERGY. CHEMICALS.
MANPOWER. ETC.)
OPEN OPERATIONS\
FILE. RETRIEVE >
POLLUTANT DATA /
ENTER INFLUENT/EFFLUENT
CHARACTERISTICS DATA
(AVG. AND PEAK FLOWS.
BOO. TSS. YSS. TEMP..
TKN. ALKALINITY. ETC.)
/ENTER PROCESS
/ CONFIGURATION
AND DESIGN DATA
(CLARIFICATION.
ACTIVATED SLUDGE.
\SLUDGE DIGESTION.
\ ETC.
ENTER DATA
OPERATING STANDARDS
INPDES DISCHARGE)
- EXPECTED/ACTUAL
OPERATING DATA
PRINT RESULTS
OF STANDARDS TO
ACTUAL/EXPECTED
COMPAR1 SON
(EFFECTIVENESS
LISTING)
PRINT EFFICIENCY
LISTING (RANK
PROPOSED PLANS FOR \-
A PART1CUL "
ACTIVITY)
FLAG ACTIVITY
AS POSSIBLY
NEEDING
EXPANSION
"•"RES
^> STA
1
FLAG FACILITIES
IN ACT1V TY WITH
UNUSUAL CONDITIONS
LEADING TO PROCESS
LIMITATIONS
"^\ 1
IOARDS--P JCORRE
^^ j ACT
AG
VI TY ]
EDING!
CTIVE;
ION ,
FLAG ACTIVITY
(EXISTING ONLY)
AS POSSIBLY HAVING
OPERATIONAL
DEFICIENCIES
1
I
FLAG ACTIVITY
TO CONSIDER
•SHUTING-OOUN-
ONE OR HOPE
UNIT PROCESSES
PRINT
ANALYTICAL
RESULTS
LEGEND
REFER TO FIGURE H-l
VII-16
FIGURE SLI-4
PERFORMANCE ANALYSIS
PROGRAM P-18 I of 2
-------
OPEN
EMPLOYEE
FILE. RETRIEVE
STAFF LIMITATIONS
DATA
/ENTER DATA
ON STAFFING
LIMITATIONS
(MAX. MANMOURS
AND LABOR
DISTRIBUTION!
ENTER
/ UORKLOAD
I REQUIREMENT
, FOR PROPOSED
\ PLAN
COMPARE AVAILABLE
WORKLOAD TO
REQUIREMENTS (FLAG
L IF REQ.>AVA1L )
PRINT UORKLOAO
LISTING (ACTIVITT
REQUIREMENTS
AND PRESENT STAFF
CAPABILITIES),
- EVALUATE\ NO
•< UASTEVATER
LOADING
OPEN SERVICE
/ AREA FILE.
/ RETRIEVE
( EXISTING/PROJECTED
\ POPULATION. PER
\CAPITA UATER/SEWER,
\ DATA
/ENTER
/ PROJECTED/
/ EXISIINS FLOW
\ AND POLLUTANT
\ LEVELS TO 8E
\ SERVICED
COMPILE ALL EVALUATIO
RESULTS FOR ALL PLANS
OF A SPECIFIED ACTIVITT
AN RANK FOR EACH
EVALUATION CATEGORY
PRINT LISTING
OF ACTIVITY
LOADING
CAPACITIES AND
SERVICE LEVELS
LEGEND
REFER TO FIGURE H-I
FIGURE 3ZH-4
PERFORMANCE ANALYSIS
PROGRAM P-18 2 of 2
VII-17
-------
OPEN BUDGET FILE.
RETRIEVE
COST AND MANPOUER
REQUIREMENTS
/OPEN EMPLOYEE FILE
< RETRIEVE MANPOWER
\ DATA
LEGEND
REFER TO FIGURE H.-I
VII-18
FIGURE 2K-5
BUDGET PLANNING
PROGRAM P-19
-------
PART FOUR
SYSTEM IMPLEMENTATION
-------
VIII. GENERAL SYSTEM REQUIREMENTS
A. Introduction
The financial management system of this manual is comprised of activities
that will enable a POTW to collect, compile (enter and edit), process, and
report data using either manual or automated procedures. A successful system
is one that efficiently and accurately provides financial and related
operations performance information that can be readily used for evaluating,
planning, and controlling the POTW operations. The requirements of a system to
ensure its success are grouped into two general categories, implementation and
operation. These categories and their requirements, described in the following
two sections, are applicable to both manual and automated systems. For more
specific requirements concerning automation, Chapter IX describes the computer
system requirements for a computer-based financial management system.
VIII-1
-------
B. Implementation
System implementation includes planning, design and development of system
processes; equipment installation; staff training; and operation
start-up/support. System planning steps include identification of legal
constraints and routine administrative procedures and controls along with
establishing a chart of accounts and the level of flexibility and potential
growth desired for the system. System planning also requires an assessment of
the existing system in order to evaluate what changes, if any, are required to
meet the needs of the POTW. Once this evaluation is made the POTW can follow
one of five (5) alternatives:
o Alternative 1 - Continue with the existing system;
o Alternative 2 - Improve the existing system;
o Alternative 3 - Develop a new custom designed system
(manual or computer-based);
o Alternative 4 - Install a commercial computer software
"package" for critical activities such as general
accounting, billing, payroll, etc.; or
o Alternative 5 - Obtain a system developed by a similar
utility.
At this point the design and development processes are initiated. The
design process can be performed by using this manual's general system design
for the desired components. The design process must include deciding which
procedures will be computerized and which will continue to be manually
processed. If alternative 2 was selected, the improvement could require
training staff, purchasing office equipment, and modifying a specific procedure
to comply with the proposed procedure of this manual. Alternative 3 would
require obtaining outside consulting services (computer service bureau or an
accounting and engineering consulting firm to develop the desired system
components based on this manual). Alternatives 4 and 5 would require system
modifications and may or may not require outside services, depending on the
type and amount of modifications required. Another important component of the
design process is the incorporation of security controls to assure the
financial management system's integrity. The type of security controls desired
VIII-2
-------
must be clearly defined due to their significant effect on both the selection
of computer hardware and on the design of computer program logic and execution
procedure. These security controls and their operational procedures are
described in the following section of this chapter.
Once a system design is approved and developed, the selection and
installation of equipment and the training of existing staff or hiring of new
staff are the next steps which are to be completed simultaneously because of
their interrelationship. It is very important that the system be completely
designed prior to equipment selection. With the current popularity of small
computers and automated office equipment, many people purchase equipment
without completely defining their needs and end up with hardware they do not
need or that is incompatible with the system design. The requirement of
training staff is very important because the acceptance and capabilities of
staff members operating the system can make or break even the most
sophisticated system. The training program should include provisions for
user-documentation for both manual and computer-based systems.
Operation start-up and support is the final step in the implementation
process. This step includes the conversion of existing data which involves
reconciliation of old account codes to new codes and obtaining unavailable data
that the new system requires. If an existing manual system is being converted
to a computer-based system, procedures will be required to transfer historical
data onto the new computer system. If one computer-based system is replacing
another, special computer programs may be needed to convert the data into a new
format. Also some programs on the old system may still be desired and
therefore may require modification in order to execute in the new computer's
operating system. It is recommended that the operation start-up be scheduled
at the start of a fiscal period, a natural point of record initiation.
Operation support following startup is necessary because of the changes in
reporting requirements, equipment, and applications that will obviously occur
over the life of the POTW. Periodic review of the financial management system
is also recommended as a part of this on-going operation support.
VIII-3
-------
C. Operation
The three major requirements for the successful operation of a financial
management system include the availability of a broad and reliable data base,
the employment of qualified, responsible staff to operate the system, and the
installation of security procedures to continually monitor and safeguard the
systems operations. The data base requirements are to be defined during the
planning and design of a system while staff training is to occur after system
development. The security procedures are also to be defined during the
planning and design stages. Security for a computer-based financial management
system can be divided into three types: system security, data security, and
accounting security.
System security is concerned with unauthorized access to the computer
program or the data. Without protection, either of these can be intentionally
or accidentally altered. Any business large enough to have more than one
person working on its books should be able to control the access to the
different financial management functions; this separation is one of the basic
principles of accounting which is the center of this system. Common procedures
used to address this type of security problem include:
o Keylock on system unit and/or display station - helps
prevent unauthorized persons from gaining access to
all system and display stations. When a station has a
keylock, the user must have a key to unlock the unit.
o Password - helps prevent persons from gaining access
to the system by assigning unique passwords that users
must enter at a display station before they can
operate the system.
o Restricted access to disk files and libraries -
restricts access to files and libraries by requiring
each file and library to have a user list. Access is
restricted to the users on the list and violation of
the access rules results in an error message and a
processing halt. An option can be to have successful
accesses to protected files and libraries logged which
will provide an audit trail.
t
o Restricted access to computer programs by predefined
menus - restricts access to programs and prevents
compilation of new programs by predefining the menu to
VIII-4
-------
be automatically displayed to each operator at sign
on. Using a menu security function, users can be
restricted to the execution of only those jobs
associated with his/her menu (or series of menus).
o Data security in communications lines - adds security
on communication lines via the attachment of
encryption devices between the computer systems
communications line adaptor and the external modem.
It should be noted that the applicability of the above system security
procedures is highly dependent on the computer hardware and operating system
installed. Many microcomputers on the market at this time do not yet have
these sophisticated security capabilities, unlike most mini- or main-frame
systems which do.
Data security is concerned with preventing stored data from being altered
through incorrect or faulty computer operation. The programs should be so
designed and coded as to anticipate operator errors and to have built-in
defenses against them. In practice, data security begins with the quality
control of data collection in the field. Data collection methods should be
clearly defined and include preprinted, serialized forms and provisions for
authorized signatures for manually collected field data and reliable
instrumentation/recording devices, with restricted access, for automatic data
collection. File maintenance, the task of keeping the permanent computer data
base updated, includes adding, changing, and in some cases deleting, data
stored on record (manual or computer). A computer-based system can incorporate
the use of "temporary" files for updating records. These files will accumulate
data for a given period and at the end of the period, at which time the data
has been verified and entered into a permanent file, the data will be deleted
from the temporary file. Once utilized, they will be initialized and recreated
during the next updating cycle. The data update process of a computer-based
system can be designed to not only provide security control by requiring
passwords for access to specific functions, but can also provide quality
control by activating file maintenance or editing programs that include
preassigned values for ranges, maximums, minimums, averages, etc. to "check"
quantitative field data values (flows, dates, coordinates, budgeted amounts,
etc.) for inconsistencies. The inconsistencies or errors noted will then be
"tagged" for manual checking to determine the reason for or source of a
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problem. Qualitative field data (names, codes, addresses, etc.) can also be
checked by allowing only certain pre-specified character strings to be used and
therefore provide a computer check. For data that has no established "check"
values, one staff member can initially enter the data followed by a second
member who re-enters on top of the first entry. This type of verification is
common practice for many data entry applications and can be also used for
manual record update and storage procedures. Another part of data security
involves data backup for those occasions when control is unexpectedly lost as
in a power failure. A well-designed program will remind the user to implement
back-up at times designated as strategic data updating, such as before each
ledger posting operation. Generally a three-disk (or tape) rotation scheme is
sufficient for accounting and other financial data. This scheme involves
loading data (backing up) at the end of a prespecified time period onto an
off-line disk (tape) using a different disk (tape) each time. After three
backups the disks (tapes) are rotated for the next three back-up periods and so
on. It should be noted that separate backup disks (tapes) should be maintained
for the operating system programs and the source codes of all application
programs.
Accounting security is concerned with maintaining audit trails of
documents leading to each figure reported by the accounting element. These
security procedures include designing the accounting program's ledger posting
routine so as not to allow batches to be posted to the general ledger unless
they are balanced and, once posted, not to allow them to be changed. Any
errors detected at this point should only be corrected via the use of an
adjusting transaction which compensates for an error without hiding it. Also,
a well-designed program should automatically print a batch just before posting
for a hardcopy listing.
In regards to staff qualifications, the training program of the
implementation process is the key, along with well documented users manuals, to
ensure competence. A computer-based system can assist in the operations of a
system by making use of menu driven programs. This requires developing
programs that when executed, prompt the user through data updating, processing,
and reporting routines. When well-designed, all a user has to do is answer
questions or select functions requested by the programs.
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The proper distribution of task assignments among the staff is also very
important to the operations of a financial management system and should be
completed during the implementation stage. These assignments should be
established based on a staff member's capabilities and experience and should be
clearly defined so that each staff member fully understands his or her
responsibilities. Most small POTW's have one or two persons performing several
functions that larger POTW's can assign to a group of staff members who usually
make up a clearly defined department which was created for a specific function
within the utility's organization. Because of this, most small POTW's may have
a problem in meeting the needs of separation of duties required for system
security purposes as mentioned previously. But the computer-based system can
have the programs so designed as to set up other security controls to assist in
protecting the utility against unauthorized alterations to the computer
programs and the data base. These controls were described previously in this
section as data and accounting security controls.
Depending on the level of computerization and on which functions of the
financial management system presented in this manual a utility decides to
implement, certain staff members will be involved in setting-up and in
performing the on-going operations of the system. Top level management, such
as the plant supervisor or superintendent, would conduct the initial planning
with the help of this manual. More detailed planning and preliminary design
would involve not only top level management but also the various levels of
management or, in the case of a small POTW, staff members relevant to the
particular elements selected to be implemented. The accounting and replacement
reserve elements would require management to involve staff members involved in
the various accounting functions including bookeeping, payroll, customer
billings and purchasing and staff members in utility operations such as the
plant engineer or the chief operator who could assist in the establishment of
an inventory system. The cost recovery, budgeting, and planning elements would
require top management to confer not only with the accounting staff, but also
the plant engineer, the utility's engineering consultants (if applicable), and
the municipality's or district's planners and council members. Note the people
involved for these elements depend highly on the type of ownership and on the
size of the POTW. For more detailed design and development, the POTW would
either have to add to their staff a system analyst and computer programmer or
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employ the service of computer consultants. The computer consultants could be
strictly business application consultants if only the accounting and
replacement reserve elements were desired. For the remaining elements, a
consultant should be able to provide the combined services to meet both
engineering and computer needs.
The ongoing operations required for a working financial management staff
is also dependent on the various elements and their components implemented.
The accounting element would require the same staff members currently
responsible for the accounting functions performed with additional training to
instruct them on the new accounting procedures and, if applicable, the
procedures in operating the computer equipment. The inventory function of the
accounting element and the replacement reserve element would require the
accounting staff to work closely with the plant operations staff. The revenue
generation element would require input from both the accounting staff and the
plant supervisor or engineer in order to determine revenue requirements and
service area characteristics to develop the service charge rate schedule. The
budgeting element would require the accounting staff and all levels of plant
management to work together to perform the functions required in the evaluation
of operation performance and analyses of revenue and expenditure in order to
generate a budget and make cash flow forecasts. The planning element functions
would be primarily operated by the plant management who would use the input
from other sources via access to the data base file.
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IX. COMPUTER SYSTEM REQUIREMENTS
A. Introduction
The computer equipment (hardware), programs (software), and supplies
needed to implement the financial management system described in this manual
will vary depending on the size of the POTW. For discussion purposes, it is
assumed that the POTW treats 1.0 million gallons of wastewater a day and serves
approximately 2,500 customers (accounts). It is also assumed that the entire
financial management system will be implemented.
There are a multitude of vendors selling hardware, software, and supplies
in the market today that possess the capability of running the financial
management system. This chapter does not identify specific manufacturers or
software sources. Instead, all specifications are given in generic terms to
allow for user selection. It is firmly suggested that the POTW select system
components through local retail outlets that provide in-house maintenance of
all the products they sell. Experience has shown that the best equipment and
software is only as good as the service that follows the sale.
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B. Hardware Requirements
The minimum hardware requirements for the POTW described in the previous
section include the following:
o Central processing unit (CPU) with 64 k bytes of
directly addressable random access memory (RAM);
o Single floppy disk drive with a minimum of 140 k bytes
of storage per disk;
o Hard disk drive with a minimum of 5 m bytes of
storage;
o 9-inch (minimum) cathode-ray tube (CRT) monitor;
o Typewriter style keyboard with separate numeric key
pad; and
o Printer with both tractor and roller feed that can
handle variable width forms and 132 characters per
line, with a minimum print speed of 80 characters per
second.
Typical prices for systems with these characteristics are currently in the
$3,500 to $6,000 range. However, prices have been dropping constantly as
technology advances.
Certain components described in the list above can be substituted for more
or less powerful units if the POTW happens to be larger or smaller,
respectively, than the system described in Section A. Typical of the
substitutions that could be considered are:
Large Plant
CPU with more random
access memory
More storage capacity
on the hard disk
CPU capable of supporting
more than one user
concurrently (shared
processing)
Higher speed or additional
printer.
Small Plant
Replace hard disk with
a second floppy disk
drive
Slower printer
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It is important to emphasize the need for the POTW to study and carefully
select the software for the financial management system before making any
decisions about hardware.
Another consideration that could influence the choice of hardware is the
physical environment in which the system will operate. Ideal conditions
generally are a dust-free room where temperature can be maintained at or below
72°F and humidity is controlled to 45 percent. If the location has good
controls for modifying temperature and humidity and minimizing dust, then most
systems will work well. If the location will be subject to significant
temperature or humidity variations or considerable amounts of dust, the
selected equipment must be capable of sustaining operation under those
stresses. Again, the more severe the operating environment is, the more
important local service will be. A fourth environmental factor to consider is
the reliability of the power supply. Power failures, interrupts, and/or surges
can damage hardware and destroy data stored on disks. Surge suppressors, and
for larger systems back-up power supplies, are considered necessary.
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C. Software Requirements
Software generally falls into two categories: system and application.
System software, often referred to as the computer's operating system, is the
instruction set that defines the control commands for the central processor.
The operating system can be permanently stored in the computer's ROM (read only
memory), or can be stored on disk for subsequent loading after the system is
turned on. In most cases the computer manufacturer will sell a customized
operating system designed to take advantage of special functions built into the
machine. These manufacturers normally offer one or two other general operating
systems that will increase the systems' marketability. Selection of the
operating system is not as important as selection of the application software;
the two are interdependent, however.
Application software is the series of programs that actually make up the
financial management system. The management system described in this manual is
not currently available as a single, integrated software package. Some of the
elements, particularly accounting, are commercially available as an integrated
package from vendors. Other elements must be purchased as separate components
and linked together by a custom programmer for the POTW.
Application software is generally written in a specific programming
language. The languages most frequently used include:
o Assembler
o BASIC
o COBOL
Assembler, sometimes incorrectly referred to as the machine language, is
machine-specific. That is, if a program is written on one brand and model of
machine, it most likely will not function on any other brand of machine, or
sometimes even the same brand but different model. Commercial software
developers have responded to this problem by usually offering their products in
several different assembler languages for the leading computers. The advantage
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that assembler offers over other languages is processing speed - often 10 to 30
times faster than BASIC or COBOL.
BASIC and COBOL are higher level languages than assembler - that is they
have a series of single-word commands that cause the computer to perform
functions that would require several assembler commands to execute. These
languages are easier to employ, but the operation is slowed down considerably.
A decision on application software should be made only after a careful
review of the POTW's needs and a detailed study of the available software. The
decision must be made with a full understanding of the abilities of the
employee that will be running the system - a complex, programmer-oriented
system will be doomed if a clerk or junior aide is expected to run it. The
"better" commercial software usually employs "menus" or pre-formatted screens
that prompt the user to enter appropriate information. In addition, a properly
designed program will screen the data supplied by the user and identify,
through error messages, any incorrect response and offer directions for
correcting the error. Careful consideration should also be given to the level
of security control built into the system. Since sensitive, confidential
records are to be stored, it is important to have a system that deters
unauthorized access to files and programs.
As mentioned before, certain substitutions can be made when the POTW is
larger or smaller than the plant described in Section A. Since there are
currently no generic specification standards for software, the only
consideration to be given in selection is whether to implement a complete
financial management system or stand-along programs such as payroll or customer
billings. Obviously, a small plant may not need to computerize all the
activities described in this manual and a large plant may have many other
applications for a computer. The important thing to stress is that, for any
POTW, the activities outlined in this manual should be accomplished, even if by
hand.
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D. Selection Guide
Computers have become a powerful and dynamic force in our society. They
can provide a low-cost, high-speed, reliable solution to many problems
involving data management and manipulation. On the other hand, when improperly
applied or poorly planned, computerization can lead to frustration, reduced
output, or excessive costs.
In the field of computer applications, it is important to strive for a
balance between these important factors:
1. Computer power;
2. Cost;
3. Flexibility; and
4. Security.
The goal of the POTW's planning efforts is to optimize these factors while
meeting the application needs.
Before selecting a system, it is important to gather all available
information on the application needs and the available software and hardware
that might fit those needs. With the variety of programs and equipment on the
market today, it is usually no problem to identify a number of alternatives
that can accomplish the goals of most normal applications. However, the
important and most difficult thing to accomplish is the balance of the factors
mentioned before - providing adequate computer power to meet the needs, at the
lowest possible cost, while allowing flexibility for future expansion or
changing needs and maintaining security control. Another factor that is very
important in the microcomputer field (because it is changing so rapidly) is to
select systems that will have adequate maintenance and support after
installation.
Table IX-1 lists some important selection criteria that should be
considered when choosing a computerized financial management system. Table
IX-2 presents some ranking criteria for both software and hardware.
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TABLE IX-1
IMPORTANT SELECTION CRITERIA
1. The system must be easy to use (i.e. menu-driven).
2. The database management language must be efficient and effective.
3. There must be adequate productivity aids to keep customized programming
requirements to .a minimum. Report generation software with flexible
format is desirable.
4. Response time must be reasonable when the system is at peak operating
loads. This applies to both processing time and input/output activities.
5. The system must be compatible with a high percentage of other vendors'
software and hardware.
6. The system must be large enough to do the job it is intended to do.
7. The software and hardware vendors must provide adequate information on
system enhancements and changes, and prompt maintenance service. Remote
diagnostic capability would be a desirable feature.
8. The software and hardware must be available within the required time
frame.
9. The system must be energy efficient and reliable.
10. The system must provide for security including system security, data
security, and accounting security.
11. The cost of the system, above all other criteria, must be within .budget.
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TABLE IX-2
POTENTIAL SYSTEM RANKING CRITERIA
Software
Hardware
Do cument a t ion
Ease of Programming
Ease of Use
Purchase Cost
Run Time
Security Control
User Training
Availability
Documentation
Ease of Expansion/
Upgrade
Ease of Use
Internal Storage
Maintenance Cost
Maintenance Response
Time
Purchase Cost
Reliability
Response Time
Software Compatibility
User Training
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X. GOVERNMENTAL REGULATIONS
Governmental regulations that affect financial management operations for a
POTW define relevant terms, establish procedures and their bases, and dictate
restrictions and limitations. These regulations are primarily an attempt to
standardize accounting practices, maintain the auditability of financial
records, ensure the proportionality of cost recovery techniques, protect
against the occurrence of unaffordable budgets and indebtedness, and guarantee
the integrity of the financial operations as a whole along with compliance with
NPDES treatment standards.
Currently, the Federal government, through EPA, regulates POTW financial
management practices using the Clean Water Act and the Construction Grant
Regulations. These regulations basically address the revenue generation
element of financial management, particularly the determination of costs of
services and the establishment of user charges. Other regulations governing a
particular POTW include those enacted by State and local governments. There
are also many guidelines and standards addressing financial management
functions that have been established by institutions such as the National
Association of Regulatory Utility Commissioners (NARUC), the American Institute
of Certified Public Accountants (AICPA), the U.S. General Accounting Office
(GAO), the U.S. Office of Management and Budget (OMB), and the National Council
of Governmental Accounting (NCGA).
EPA construction grants regulations that address the financial management
system of a POTW include:
o 40 CFR 35.2106 "Plan of operation":
"The applicant shall submit a draft plan of
operation that addresses development of an
operation and maintenance manual; an emergency
operating program; personnel training; an
adequate budget identifying the basis for
determining the annual operation and maintenance
costs and the costs of personnel, material,
energy and administration; operational reports;
laboratory testing needs; and an operation and
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maintenance program for the complete waste
treatment system."
A draft plan of operation is required prior to either
Step 3 Award or Step 2 and 3 Approvals of the
pre-performance certification period.
40 CFR 35.2140 "User charge system", paragraph (d) -
Financial management system:
"Each user charge system must include an adequate
financial management system that will accurately
account for revenues generated by the system and
expenditures for operation and maintenance
(including replacement) of the treatment system."
The regulations also define the POTW's responsibilities and functions and,
therefore, the expenditures to be accounted for in a financial management
system. These expenditures include operation and maintenance costs incurred
during the useful life of the treatment works which are necessary for managing
and maintaining the facility. The term "operation and maintenance," when used
in the regulation, includes replacement. Replacement costs are defined in
section 212(3) of the Clean Water Act as "...Those expenditures for obtaining
and installing equipment accessories, or appurtenances during the useful life
of the treatment works necessary to maintain the capacity and performance for
which such works are designed and constructed." Chapter IV provides a detailed
description of a utility's assets to be included in the calculation of
replacement costs for determining annual reserve amounts to be budgeted. It
should be stressed that the definition does not include expenditures for
expansions, upgradings, or betterments that would add to the book value of the
assets or improve the treatment capacity and performance of the facility. Also
to be noted is that eventhough depreciation of fixed assets (land, buildings
and other items), as an expense, is considered to be a capital cost and is not
to be included in the development of user charge rates, "perishable" components
(i.e., windows, electrical outlets, and plumbing) are considered to be
appurtences and are to be included in replacement costs calculations.
State and local regulations concerning financial management systems for
utilities vary depending on the 'particular State and form of utility ownership
and its organization. As stated in Chapter I, this manual is only concerned
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with ownership types that include single municipalities, independent
authorities, joint ownerships, and special purpose districts. Whatever the
form of ownership or the regulatory authority having control, financial
information required for particular regulatory purposes is generally the same.
Items affected include:
o General accounting and depreciation practices.
o Revenue generation techniques - includes sewer service
charge rates determination, financing, metering and
billing practices.
o Reporting requirements - includes financial position
and operating results.
Financial guidelines and standards affecting POTW financial operations
include the Generally Accepted Accounting Principles (GAAP) which establish the
type of accounting that government entities should use, its basis and focus,
and the reports that are regularly produced. These principles were set forth
by the NCGA in their Statement 1, "Governmental Accounting and Financial
Reporting Principles" (March 1979 version). Other NCGA statements include
Statement 2 ("Grant, Entitlement, and Shared Revenue Accounting by State and
Local Governments"), Statement 3 ("Defining the Governmental Reporting
Entity"), and Statement 4 ("Accounting and Financial Reporting Principles for
Claims and Judgements and Compensated Absences"). Along with these statements,
NCGA has also provided documented interpretations.
These government accounting standards are enforced by the standardization
of auditing procedures and goals established by the AICPA as published in their
audit guide, "Audits of State and Local Government Units". Due to the
expanding role of independent auditing in the public sector, the GAO has also
prescribed generally accepted auditing standards (GAAS) in "Standards for Audit
of Governmental Organizations, Programs, Activities, and Functions" (the
"yellow book").
There are many recommended systems of accounts for wastewater facilities,
including those proposed by the National Association of Regulatory Utility
Commissioners and the Water Pollution Control Federation (MOP No. 10). There
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are also many State and local laws that conflict with generally accepted
accounting standards. It is not the purpose of this manual to make
recommendations to State or local governments in order for them to comply with
these standards. Therefore, the POTW's must assume the responsibility of
having an accounting system that makes it possible to satisfy both the federal
standards and the local and State regulations.
In regards to determining the allowable costs to be accounted for in
revenue requirement calculations and budget preparation, the OMB has produced
circular A-87, "Cost Principles for State and Local Government", that sets
forth principles for determination of direct and indirect cost components.
These principles are designed to provide that federally-assisted programs, in
this case POTW grantees, bear their fair share of the recognized costs.
Another circular, A-102, entitled "Uniform Requirements for Assistance to State
and Local Governments", promulgates standards for establishing
consistency and uniformity among Federal agencies in the administration of
grants to State and local governments. The standards set forth include
standards for grantee financial management systems, financial reporting
requirements, monitoring and reporting program performance, and property
management standards.
Another control mechanism at the local level incorporates the pretreatment
requirements of the EPA Construction Grants Program. These requirements can be
met through a program that is designed to recover revenues from contributing
industrial users to cover the operating costs of the program. The funding
mechanism options that can be mandated include a service charge where
pretreatment charges are based on estimated or actual service used
such as monitoring activities; an industry surcharge which multiplies the
existing user charge by a pretreatment factor based on industry class; and a
pollutant strength charge where pretreatment charges are based on amount of
pollutant discharged.
Government regulations at the local level can be used to enforce federal
and institutional standards and principles and to ensure that the financial
system is effective, particularly in regards to .revenue collection. The
methods available for enforcing payment at any one locality depends on the
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statutory provisions, regulations, and to some extent, the precedent setting
court cases appropriate to that particular location. The enactment of a local
sewer use ordinance is a requirement by the EPA Constructions Grants Program as
evidence of compliance. According to federal regulations, it is to be a
control instrument setting forth rules and regulations governing the use of the
public sewer system by prohibiting new sources of inflow and by requiring
proper design and construction techniques for new connections. Municipalities
of small and moderate size can expand on this definition and legislate sewer
use ordinances that are self-contained in that they encompass all elements of
control, including financing options and the establishment of rentals or
service charges. Intermunicipal agreements, another type of control
instrument, are also required by the Construction Grants Program where two or
more jurisdictions are served by the POTW. These agreements are to ensure that
all jurisdictions will be obligated to comply with financial arrangements and
procedural requirements under the grant.
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APPENDIX A
GLOSSARY
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APPENDIX A
GLOSSARY
References:
1. American Public Works Association, et.al.
Financing and Charges for Wastewater Systems. 1973.
2. Municipal Finance Officers Association.
Governmental Accounting, Auditing, and Financial Reporting. 1980.
3. National Association of Regulating Utility Commissioners.
Glossary of Depreciation Terms. November 10, 1980.
4. National Association of Regulating Utility Commissioners. Uniform
System of Accounts for Class C and D Sewer Utilities. 1977"!
5. Water Pollution Control Federation. Uniform System of Accounts for
Wastewater Utilities. Manual of Practice No. 10. 1970.
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GLOSSARY
Accelerated depreciation. A generic term for any of the depreciation methods
which results In larger depreciation accruals In the early yeara of an
asset's life and diminishing in amount in the later years of the life of
that asset. Examples: Sum-of-Years-Dlgits, Double-Decllnlng-Balance, etc.
Access time. The time required to obtain data from a computer's main memory or
a storage device* such as a diskette.
Accessories. In relation to POTW's, they are generally considered to be
piping, ductwork, or electrical connections which have become part of the
real property and are required for equipment to fulfill Ita function. They
are buried In structures and/or otherwise relatively fixed to a permanent
structure.
Account. A record In which data relating to a certain specified subject are
accumulated.
Account number. The number assigned to a specific account title In a system of
accounts. Where accounts are numbered, the account number and account title
may be used Interchangeably. When a single owner operates more than one
utility or enterprise (as, for Instance, a city that may operate water,
electric, and wastewater utilities), the use of an identifying symbol in
each of the several systems of accounts may prevent confusion. See also
coding.
Accounting period. A period at the end of which and for which financial
statements are prepared. See also fiscal period.
Accounting procedures. All processes which discover, record, classify, and
summarize financial information to produce financial reports and to provide
internal control.
Accounting system. The total structure of records, formal and informal,
together with the procedures which discover, record, classify, summarize,
and report Information on the financial position and results of operations
of a utility or any of its funds, fund types, balanced account groups, or
organizational components.
Accounts payable. A liability account reflecting amounts on open account
owing to private persons or organizations for goods and services received by
a utility (but not including amounts due to other funds of the same
utility).
Accounts receivable. An asset account reflecting amounts owing an open account
from private persons or organizations for goods and services furnished by a
utility (but not including amounts due from other funds of the same
utility). Amounts due from other funds should be reported separately. -See
also account receivable - users.
Accounts receivable - users. Accounts receivable arising primarily as a
result of furnishing sales of material or service to users.
Accrual basis. The basis of accounting under which revenues are accounted for
when earned or due, even though not collected, and expenditures are
accounted for as soon as liabilities are Incurred, whether paid or not.
Accrued expenses. Expenses Incurred up to a given date, but not paid; in some
cases, not payable (due) until a future date.
Accrued income. Income earned up to or due at a given date, but not collected.
Accumulated depreciation. A valuation account to record the accumulation of
periodic credits made to record the expiration of the estimated service
value of the utility's fixed assets. See also depreciation.
Activity. (1) Specific and distinguishable line of work performed by one or
more organizational components of a utility for the purpose of accomplishing
a function for which the utility is responsible. For example, collection,
pumping, treatment, laboratory, general administrative, etc. (2) Expendi-
ture classification according to the specific lines of work performed by
organization units. The segregation of the expenditures made for each of
the utility's activities constitutes an activity classification.
Actuarial analysis (study). The translation of a body of statistics by means
of the mathematical tools of the actuary, Into data or charts that display
the relationship between retirements and age, and indicated average life.
Actuarial basis. A basis used in computing the amount of contributions to be
made periodically to a fund or account so that the total contributions plus
the compounded earnings thereon will equal the required payments.
Administrative costs. Operating costs Incurred in performing administrative
activities. For a POTW system these activities include, but are not limited
to, customer billings generation and collection, general accounting, payroll
generation, purchase order processing, and special services (engineering,
legal and account). See also operation, maintenance, and replacement costs.
Algorithm. A series of steps organized to solve a problem.
"All-Inclusive" operating statement. The basic financial statement which, under
NCCA Statement 1, consists of the operating statement and the statement of
changes In fund equity combined Into a single GAAF basic financial statement.
Allowance for uncollectibles. A valuation account used to indicate the
portion of an account which it Is estimated will never be collected.
Amortization. The process of allocating an asset, a liability, or an amount
over future accounting periods. (1) Gradual reduction, redemption, or
liquidation of the balance of an account according to a specified schedule
of times and amounts. (2) Provision for the extinguishment of a debt by
means of a Debt Service Fund (sinking fund).
Annual budget. A budget applicable to a single fiscal year. See also budget
and operating budget.
Annuities payable. A liability account reflecting the amount of annuities due
and payable to retired employees in a public employee retirement system.
-------
Annuity. A series of equal money payments made at equal Intervals during a
designated period of time.
Annuity, amount of. The total amount of money accumulated or paid during an
annuity period from an annuity and compound Interest at a designated rate.
Annuity period. The designated length of time during which an amount of
annuity Is accumulated or paid.
Application program. A computer program designed to meet specific user needs,
such as a program that controls Inventory or monitors a manufacturing
process.
Appraisal. (1) The act of appraising. See also appraise. (2) The estimated
value resulting from such action.
Appraise. To make an estimate of value, particularly of the value of property.
If the property Is valued for purposes of taxation, the less-inclusive tern
"assess" Is substituted for this term.
Appropriation. A legal authorization granted by an administrative body to make
expenditures and to Incur obligations (liabilities) for specific purposes.
Appropriation account. A budgetary account set up to record specific
authorizations to spend. The account is credited with original and any
supplemental appropriations and Is charged with expenditures and
encumbrances.
Appropriation ledger. A subsidiary ledger containing an account for each
appropriation. Each account usually shows the amount originally
appropriated, transfers to or from the appropriation, amounts charged
against the appropriation, the net balance, and other related information.
Appurtences. Any part of a POTW grantee's fixed assets that were constructed
and are ancillary or necessary for equipment to operate or perform a
function. They can be defined so broadly as to include structures housing
process equipment (buildings) and, in the case of wastewater treatment
facilities, the tankage and plumbing that is burled, or so large that they
are considered permanent fixtures.
ASCII code. The American National Standard Code for Information Interchange.
The code by which characters are translated into binary numbers In a
computer's memory. Each ASCII code number uses 1 byte of computer memory
and is used to control printers and communication devices.
Assess. To value property officially for the purpose of taxation.
Assessed valuation. A valuation set upon real estate or other property by a
government as a basis for levying taxes.
Assessment. (1) The process of making the official valuation of property for
purposes of taxation. (2) the valuation placed upon property as a result of
this process. (3) The charge against any particular parcel of land within
the boundaries of an irrigation, water, sewer, drainage, or other district
created for the purpose of constructing improvements, or a share of the
total cost of such Improvement, usually based on the proportionate benefits
received by such parcel as a result of the improvement.
Assessment role. In the case of real property, the official list containing
the legal description of each parcel of property and its assessed valuation.
The name and address of the last known owner are also usually shown. In the
case of personal property, the assessment roll is the official list
containing the name and address of the owner, a description of the personal
property, and its assessed value.
Assessments, special. A direct tax levy assessed against property to pay for
property Improvements that ordinarily are a direct benefit to the property
itself.
Assets. Any real property and property rights that are of value to and owned
by the enterprise (utility).
Capital - Property of a permanent nature or Intended for long continued
use or possession, employed in or necessary for the conduct of an
undertaking, and representing the investment of noney or its equivalent.
Examples Include trucks, meters, pumps, and motors.
Fixed - Permanent property, such as land, buildings, sewer collection
pipelines, tanks, rights and benefits (tangible and intangible),
permanently employed in the rendering of a service or in the production
of a product.
Intangible - Any element of value applied to permanent property of a
nonphyslcal nature such as a franchise, trademark, patent, copyright,
good will, cost of organizing, developing, and establishing; also, such
Items as going value, right of access, water right, and power right.
Physical - See assets, tangible.
Tangible - Permanent property of a physical nature such as lands, buildings
mineral deposits, wells, reservoirs, plant equipment of all kinds,
utensils, furnishings, merchandise. Intended for immediate use and
permanent Improvements.
Associated company. One of the number of individual utilities owned or
operated by a parent company. See operating municipality.
Audit. A methodical examination of utilization or resources. It concludes in
a written report of its findings. An audit is a test of management's
accounting system to determine the extent to which Internal accounting
controls are both available and being used. Various types of audits Include
Internal audit, independent audit, financial and compliance audit, program
compliance audit, single audit, performance audit, pre-audit, and
post-audit.
Audit program. A detailed outline of work to be done and procedures to be
followed in any given audit.
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Audit report. The report prepared by an auditor covering the audit or
investigation made by him. As a rule, the report should Include: (a) a
statement of the scope of the audit; (b) explanatory comments (If any)
concerning exceptions by the auditor as to application of generally accepted
auditing standards; (c) opinions; (d) explanatory comments (If any)
concerning verification procedures; (e) financial statements and schedules;
and (f) sometimes statistical tables, supplementary comments, and
recommendations. The auditor's signature follows item (c) or (d).
Auditor's opinion. A statement signed by an auditor in which he or she states
that he or she has examined the financial statements in accordance with
generally accepted auditing standards (with exceptions, if any) and In which
he or she expresses an opinion on the financial position and results of
operations of some or all of the constituent funds and balanced account
groups of the government as appropriate. See unqualified certificate.
Authority. A government of public agency created to perform a single function
or a restricted group of related activities. Usually such units are
financed from service charges, fees, and tolls, but In some Instances they
also have taxing powers. An authority may be completely Independent of
other governments for Its creation. Its financing, or the exercise of
certain powers.
Authority bonds. Bonds payable from the revenues of a specific authority.
Since authorities usually have no revenues other than charges for services,
their bonds are ordinarily revenue bonds.
Automatic data processing (ADP). See electronic data processing (EDP).
Backup. The process used to create a copy of data entered into the
computer. This process should be done on a regular basis so that data will
not be lost if the computer malfunctions.
Bad debts. Accounts receivable judged impossible or Impractible to collect.
Sometimes called Uncollectible Accounts.
Balance sheet. A statement showing the financial position of an enterprise at
a specific date, ordinarily prepared from books kept by double entry. The
basic financial statement which discloses the assets, liabilities, and
equities of an entity at a specified date In conformity with GAAP.
Balance sheet account. An account that is used to show the financial
condition of the utility as of a certain date.
BASIC. (Beginner's All-purpose Symbolic Instruction Code) a widely used
interactive computer programming language developed by Dartmouth College
that is especially well-suited to personal computers and beginning users.
Basic financial statements. Those financial statements, including notes
thereto, which are necessary for a fair presentation of the financial
position and results of operations of an entity in conformity with GAAP.
Under Statement 1, basic financial statements Include a balance sheet, an
"all inclusive" operating statement, and (for proprietary funds, pens'lon
trust funds and nonexpendable trust funds) a statement of changes in
financial position. See alao combined statements - overview, combining
statements - by fund type, general purpose financial statements, and
generally accepted accounting principles.
Baud. A unit of computer data transmitting/receiving speed, roughly equal to a
single bit per second. Common baud rates are 110, 300, 1,200, 2,400, 4,800,
and 9,600 bits per second.
Benefits. The advantages gained, tangible or intangible, by the Installation
or construction of a system or works for one or more given purposes. When
the term Is used In connection with drainage and flood control districts. It
applies to the value of the resulting reduction In high groundwater level
and danger from flooding, due to the construction of the system. Benefits
will vary with each particular piece of property. When the beneficiaries
are to be assessed, the cost of the construction work Is usually apportioned
against each parcel of property In accordance with the estimated or actual
benefit received. Benefits may also be used as a measure of justification
of projects proposed for construction at public expense.
Benefits, flood. The value of the flood protection as estimated In terms of
damage eliminated or other advantageous effects of the proposed work.
Betterment. An addition nade to, or change made in, a fixed or capital asset
which Is expected to prolong Its life, expand Its capacity, or Increase its
efficiency beyond Initial design parameters and over and above that arising
from maintenance, and the cost of which la therefore added to the book value
of the asset. The term la sometimes applied to sidewalks, sewers, and
highways, but It Is preferable to designate these as "Improvements". See
also improvements.
Biochemical oxygen demand (BOD). The quantity of oxygen utilized In the
biochemical oxidation of organic matter In a speclfed time and at a
specified temperature, usually at 5 days and 20°C.
Binary. Number system with only two digits - 0 and 1 - In which each symbol
represents a decimal power of two. This Is represented In a computer
circuit by the presence of current (equivalent to "1") or its absence
(equivalent to "0"). All computer programs are executed In binary form.
Bit. Short for binary dlt, which Is a single digit of Information, 0 or 1, as
used by a computer.
Bond. (1) A written promise to pay a specified sum of money, called the face
value or principal amount, at a specified date or dates In the future,
called the maturity date(s), together with periodic Interest at a specified
rate, payable periodically. The difference between a note and a bond Is
that the latter runs for a longer period of time and requires greater legal
formality. (2) A warranty by an underwriting organization such as an
Insurance company guaranteeing honesty, performance or payment by
contractor.
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Bond anticipation notes. Short-term interest-bearing notes issued by a
government in anticipation of bonds to be issued at a later date. The notes
are retired from proceeds of the bond issue to which they are related.
Bond discount. The excess of the face value of a bond over the price for
which it Is acquired or sold. The price does not include accrued interest
at the date of acquisition or sale.
Bond fund. A fund formerly used to account for the proceeds of general
obligation bond issues. Such proceeds are now accounted for in a Capital
Projects Fund.
Bond ordinance or resolution. An ordinance or resolution authorizing a bond
issue.
Bond premium. The excess of the price at which a bond is acquired or sold
over its face value. The price does not include accrued interest at the
date of acquisition or sale.
Bonded debt. That portion of indebtedness represented by outstanding bonds.
See also gross bonded debt and net bonded debt.
Bonded indebtedness. See bonded debt.
Bonds authorized and unissued. Bonds which have been legally authorized but
not issued and which can be issued and sold without further authorization.
y> This term must not be confused with the term "margin of borrowing power" or
I "legal debt margin," either one of which represents the difference between
the legal debt limit of a government and the debt outstanding against it.
Bond Issued. Bonds sold.
Bonds payable. The face value of bonds issued and unpaid.
Books. A collective term used to designate the system of accounting in
general. A book may contain several accounts or one account may require
several books.
Books of original entry. The record in which the various transactions are
formally recorded for the first time, such as the cash journal, check
register, or general journal. Where mechanized bookeeping methods are used,
it may happen that one transaction is recorded simultaneously in several
records, one of which may be regarded as the book of original entry.
Memorandum books, check stubs, files of duplicate sales invoices, etc.
whereon first or prior business notations may have been made, are not books
of original entry in the accepted meaning of the term, unless they are also
used as the media for direct posting to the ledgers.
Book value. Value as shown by books of account. In the case of assets which
are subject to reduction by the valuation allowances, "book value" refers to
cost or stated value less the appropriate allowance. Sometimes a distinction
is made between "gross book value" and "net book value," the former
designating value before deduction of related allowances and the latter
after their deduction. In the absence of any modifier, however, the term
"book value" is understood to be synonymous with "net book value."
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Branch sewer or sub-main sewer. A sewer that receives wastewater from a
relatively small area and discharges into a trunk sewer or main sewer.
Budget. A plan of financial operation embodying an estimate of proposed
expenditures for a given period and the proposed means of financing them.
Used without any modifier, the term usually indicates a financial plan for a
single fiscal year. The term "budget" is used in two senses in practice.
Sometimes it designates the financial plan presented to the appropriating
body (utility) for adoption and sometimes the plan finally approved by that
body. See also annual budget, capital budget, capital program, and
long-term budget.
Budget document. The instrument used by the budget-making authority to
present a comprehensive financial program to the appropriating body. The
budget document usually consists of three parts. The first part contains a
message from the budget-making authority, together with a summary of the
proposed expenditures and the means of financing them. The second consists
of schedules supporting the summary. These schedules show in detail the
information as to past years' actual revenues, expenditures, and other data
used In making the estimates. The third part is composed of drafts of the
appropriation, revenue, and borrowing measures necessary to put the budget
into effect.
Budget message. A general discussion of the proposed budget as presented in
writing by the budget-making authority to the legislative body. The budget
message should contain an explanation of the principal budget items, an
outline of the government's experience during the past period and its
financial status at the time of the message, and recommendations regarding
the financial policy of the coming period.
Budgetary accounts. Accounts used to enter the formally adapted annual
operating budget into the general ledger as part of the management control
technique of formal budgetary integration.
Budgetary comparisons. Governmental GAAP financial reports must include
comparisons of approved budgeted amounts with actual results of operations.
Such reports should be subjected to an independent audit, so that all
parties involved in the annual operating budget/legal appropriation process
are provided with assurances that government monies are spent in accordance
with the mutually agreed-upon budgetary plan.
Budgetary control. The control or management of a utility in accordance with
an approved budget for the purpose of keeping expenditures within the
limitations of available revenues.
Budgetary expenditures. Decreases in net current assets. In contrast to
conventional expenditures, budgetary expenditures are limited in amount to
exclude amounts represented by noncurrent liabilities. Due to their
spending measurement focus, governmental fund types are concerned with the
measurement of budgetary expenditures.
Buffer. A temporary area in a computer system for data, frequently used to
hold data being passed between computers or other devices, such as printers,
which operate at different speeds or different times.
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Buildings. A fixed asset account reflecting the acquisition cost of permanent
structures owned or held by a government and improvements thereon.
By t. e. An 8-bit sequence of binary digits. Each byte corresponds to one
character of data, representing a single letter, number or symbol. Bytes
are the most common unit for measuring computer and disk storage capacity.
See also kilobyte, megabyte.
Callable bond. A type of bond which permits the issuer to pay the obligation
before the stated maturity date by giving notice of redemption in a manner
specified in the bond contract. Synonym: Optional Bond.
Capital assets. See fixed assets.
Capital budget. A plan of proposed capital outlays and the means of financing
them. See also capital program.
Capital expenditures. See capital outlays.
Capital grants. Grants which are restricted by the grantor for the
acquisition and/or construction of fixed assets.
Capital improvement program. See capital program.
Capital outlays. Expenditures which result in the acquisition of or addition
to fixed assets.
Capital program. A plan for capital expenditures to be incurred each year
over a fixed period of years to meet capital needs arising from the
long-term work program or otherwise. It sets forth each project or other
contemplated expenditure in which the utility is to have a part and
specifies the full resources estimated to be available to finance the
projected expenditures.
Capital projects funji. A fund created to account for financial resources to
be used for the acquisition or construction of major capital facilities
(other than those financed by proprietary funds, special assessment funds,
and trust funds).
Capital resources. Resources of a fixed of permanent character, such as land
and buildings, which cannot ordinarily be used to meet current expenditures.
Cash. An asset account reflecting currency, coin, checks, postal and express
money orders, and bankers' drafts on hand or on deposit with an official or
agent designated as custodian of cash and bank deposits. All cash must be
accounted for as a part of the fund to which it belongs. Any restrictions
or limitations as to its availability must be indicated Jn the records and
statements. It is not necessary, however, to have a separate bank account
for each fund unless required by law.
Cash basis (accounting). When revenues are accounted for when received in
cash, and expenditures are accounted for when paid, the system of accounting
is said to be on the cash basis.
Cash basis (revenue requirement estimation). When the annual revenue
requirement is determined as that amount necessary to make the cash outlays
as they fall due. Incorporates costs for operations and maintenance; debt
service; normal replacements, extensions, and improvements; and an allowance
for a "rate of return" into the estimation of the cost of services.
Cash discount. An allowance received or given if payment Is completed within
a stated period of time. This term is not to be confused with "trade
discount".
Cash with fiscal agent. An asset account reflecting deposits with fiscal
agents, such as commercial banks, for the payment of matured bonds and
interest.
Cathode-ray tube (CRT). A vacuum tube that generates and guides electrons
onto a fluorescent screen to produce such images as characters or graphic
displays on video display screens.
Cell. An electronic spreadsheet term that refers to the individual row/column
where the user enters information. Cells are reference points on the
spreadsheet.
Central processing unit (CPU). Electronic components in a computer that
control the transfer of data and perform arithmetic and logic calculations.
Certificate of conformance in financial reporting program. A voluntary
program administered by MPOA to encourage governments to publish efficiently
organized and easily readable CAFRs (comprehensive annual financial report)
and to provide peer recognition and technical assistance to the finance
officers preparing them.
Certified public account. An accountant to whom a state has granted a
certificate showing that he or she has met prescribed educational,
experience, and examination requirements designed to insure competence in
the practice of public accounting. The accountant holding such a
certificate is permitted to use the designation Certified Public Accountant,
commonly abbreviated CPA.
Change funds. Money on hand (not to be deposited) used in making change so
that collections may be deposited in tact in the proper depository.
Character. A basis for distinguishing expenditures according to the periods
they are presumed to benefit. See also character classification.
Character classification. Expenditure classification according to the time
periods expenditures are presumed to benefit. The four groups are: (1)
current operating expenditures, presumed to benefit the current fiscal
period; (2) service, presumed to benefit prior fiscal periods primarily, but
also present and future periods; and (3) capital outlays, presumed to
benefit the current and future fiscal periods; and (A) intergovernmental,
where one government transfers resources to another.
Charge, sewage. See rate, sewer.
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Charges, fixed. Those carrying and operating costs of any business or project
that continue to occur whether the business operates or produces anything or
not. They usually include interest on the retirement of bonds and other
borrowings, certain kinds of taxes and insurance, payments due under certain
contracts, and in some cases may include all or a certain portion of the
administrative overhead.
Chip. A piece of semiconductor material containing microscopic integrated
circuits.
City equity. The net contribution in cash, property, or services to the
accounting utility by the City in which it operates from the date the first
expenditures were incurred to the date of the balance sheet. Synonym:
Municipal Equity.
Classification of accounts. A list of accounts arranged in groups, each group
referring to some particular phase of the financial operations of the
enterprise and its financial operations of the enterprise and its financial
condition. See also account number.
Clearing account. An account used to accumulate total charges or credits for
the purpose of distributing them later among the accounts to which they are
allocable or for the purpose of transferring the net differences to the
proper account.
COBOL (Common Business-Oriented Language) . A high-level computer programming
ff language that is well-suited to business applications involving complex data
I records (such as personnel files or customer accounts) and large amounts of
^ printed output.
Coding. A system of numbering or otherwise designating accounts, entries,
invoices, vouchers, etc., in such a manner that the symbol used reveals
quickly certain required information. To illustrate the coding of accounts,
the number "200" might be assigned to expenditures made by the Department of
Finance and the letter "A" might be used to designate expenditures for
personal services. Expenditures for personal services in the Department of
Finance would then be designated, for posting and other purposes, by the
code "200-A". Other examples are the numbering of monthly recurring journal
entries to indicate the month and nature of the entry and the numbering of
invoices or vouchers so that the number reveals the date of entry. See also
account number.
Collection system. The sewer lines and appurtenances used and useful in the
collection and conveyance of wastewater. See also vastewater system.
Combination bond. A bond issued by a government which is payable from the
revenues of a governmental enterprise but which is also backed by the full
faith and credit of the government.
Combined sewer. A sewer designed and used to receive both surface runoff and
wastewater.
Combined statements - overview. The five basic financial statements
comprising the first of the financial reporting pyramid's three reporting
levels containing GAAP basic financial statements. They include: (1)
Combined Balance Sheet - All Fund Types and Account Groups; (2) Combined
Statement of Revenues, Expenditures, and Changes in Fund Balances - All
Governmental Fund Types; (3) Combined Statement of Revenues, Expenditures,
and Changes in Fund Balances - Budget and Actual - General and Special
Revenue Fund Types (and similar governmental fund types for which annual
budgets have been legally adopted); (4) Combined Statement of Revenues,
Expenses, and Changes in Retained Earnings (or Equity) - All Proprietary
Fund Types; (5) Combined Statement of Changes in Financial Position - All
Proprietary Fund Types; and (6) Notes to the Financial Statements. Trust
Fund operations may be reported in (2), (4), and (5) above, as appropriate,
or separately. The Combined Statements - Overview are also referred to as
the "liftable" general purpose financial statements (CPFS).
Combining statements - by fund type. The second of the financial reporting
pyramid's three reporting levels containing GAAP basic financial statements.
Such statements are presented for each fund type for which the government
maintains more than one fund. They include GAAP basic financial statements
for each fund of a particular fund type in separate adjacent columns and a
total column which duplicates the column for that fund type in the Combined
Statements - Overview.
Command. A user instruction to the computer generally given through a
keyboard, which can be a word, mnemonic, or character that causes a computer
to perform a predefined operation.
Compatibility. (1) The ability of an instruction, program or component to be
used on more than one computer. (2) The ability of computers to work with
other computers that are not necessarily similar in design of capabilities.
Composite rate of depreciation. A single depreciation rate to be applied
against the total depreciable assets to determine the depreciation for an
accounting period. The use of a composite rate assumes that the
depreciation expense thus arrived at is the same as would be obtained by
applying proper individual rates of depreciation against the cost of each
unit, and totaling the individual amounts.
Comprehensive annual financial report (CAFR). The official annual report of a
government. It includes five Combined Statements - Overview (the "liftable"
GPFS) and basic financial statements for each individual fund and account
group prepared in conformity with GAAP and organized into a financial
reporting pyramid. It also includes supporting schedules necessary to
demonstrate compliance with finance-related legal and contractual
provisions, extensive introductory material, and a detailed Statistical
Section. Every government should prepare and publish a CAFR as a matter of
public record.
Commitments. See encumbrances.
Configuration. The assortment of equipment (disks, diskettes, terminals,
printers, etc.) in a particular computer system.
Construction. See construction in progress.
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Construction contracts payable. A liability account reflecting amounts due on
contracts for construction of buildings and other improvements.
Construction in progress. A fixed asset account reflecting the cost of
construction work undertaken but not yet completed in that not ready for
service at the date of balance sheet.
Consumer* See customer and user.
Consumption method. The method under which inventories are recorded as
expenditures when used. See also purchase method.
Contingent assets. Assets that are not owned by the enterprise at present but
that will be owned at a later date if a certain prescribed set of
circumstances comes to pass or if certain acts are performed.
Contingent liabilities. Items which may become liabilities as a result of
conditions undetermined at a given date, such as guarantees, pending law '
suits, Judgments under appeal, unsettled disputed claims, unfilled purchase
orders, and uncompleted contracts. All contingent liabilities should be
disclosed within the basic financial statements, including the notes
thereto. See liability reserves.
Contracts payable. A liability account reflecting amounts due on contracts for
goods or services furnished to a government. Amounts withheld as guarantees
on contracts should be shown separately in an account entitled Contracts
;> Payable - Retained Percentage. See also accounts payable.
I
00 Contracts payable - retained percentage. A liability account reflecting
amounts due on construction contracts which have been completed but on which
part of the liability has not been paid pending final inspection or the
lapse of a specified time period, or both. The unpaid amount is usually a
stated percentage of the contract price.
Contribution from customers. An equity account in an enterprise fund which
shows the amount of permanent fund capital contributed to the fund by its
customers.
Contribution from government. An equity account in a proprietary fund which
shows the amount of permanent fund capital contributed to the enterprise by
the government from general government revenues and resources.
Contributions from subdividers. An equity account in an enterprise fund which
shows the amount of permanent fund capital contributed by subdivision
developers and builders.
Contributions in aid of construction. Cash or other assets contributed or
donated to the accounting utility for the purpose of financing, wholly or in
part, the extension of its facilities.
Control account. An account, usually kept in the general ledger, that
receives the aggregate of the debit and of the credit postings to a number
of identical, similar, or related accounts called subsidary accounts so that
its balance equals the aggregate of the balances in these accounts. Note:
This procedures serves as a check on the mathematical accuracy of the detail
ledger account postings and frees the control ledger of a mass of detail.
Conventional expenditures. Decreases in net financial resources. In contrast
to budgetary expenditures, conventional expenditures are not limited in
amount to exclude amounts represented by noncurrent liabilities.
Core. The older type of non-volatile computer memory made of ferrite rings
that represents binary data by switching the direction of polarity of
magnetic cores. Most modern computers use integrated circuits, which are
faster than core memory, but volatile.
Cost accounting. That method of accounting which provides for assembling and
recording of all the elements of cost incurred to accomplish a purpose, to
carry on an activity or operation, or to complete a unit of work or a
specific job.
Cost ledger. A subsidiary record wherein each project, job production center,
process, operation, product or service is given a separate account to which
all items entering into its cost are posted in the required detail. Such
accounts should be so arranged and kept that the results shown in them may
be reconciled with and verified by a control account or accounts in the
general books.
Cost of original. The actual cost of a property to the person first devoting
it to utility service.
Cost of removal. The cost of demolishing, dismantling, tearing down or
otherwise removing plant items, including the cost of transportation and
handling incidental thereto.
A
Cost of replacement. The cost, actual or estimated, of duplication with a
property of equal utility and desirability.
Cost of reproduction. The estimated cost of reproducing specific property new.
Note: The difference between the Cost of Replacement and the Cost of
Reproduction is that the former usually refers to the replacement of some
unit or part of a unit in the plant, whereas the latter usually refers to
the replacement of the entire plant.
Cost of service. The aggregate of the costs to the utility of furnishing
service and to which it is entitled when recovering in the form of rates or
service charges. The cost of service includes the following major elements:
Expenses of maintenance and operation, depreciation, taxes and return on
Investment.
Cost records. All ledgers, supporting records, schedules, reports, invoices,
vouchers, and other records and documents reflecting the cost of projects,
jobs, production centers, processes, operations, products, or services, or
the cost of any of the component parts thereof.
Cost unit. A term used in cost accounting to designate the unit of product or
service whose cost is computed. These units are selected for the purpose of
comparing the actual cost with a standard cost or with actual costs of units
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produced under different circumstances or at different places and times.
See also unit cost, work unit, standard cost.
Coupon rate. The interest rate specified on interest coupons attached to a
bond. The term is synonymous with nominal interest rate.
Coverage. The ratio of net revenue available for debt service to the average
annual debt service requirements of an issue of revenue bonds. See also net
revenues available for debt service.
Cf/M (Control Program for Microprocessors). An operating system used by many
personal computers.
CPU. See central processing unit.
Credit. The acknowledgement, by entry on the right side of a double-entry
account, of the reduction of a debt by a debtor or an obligation to a creditor.
The opposite of debit.
CRT. See cathode-ray tube.
Current. A term which, applied to budgeting and accounting, designates the
operations of the present fiscal period as opposed to past or future
periods. It usually connotates items likely to be used up or converted into
cash within one year.
Current assets. Those assets which are available or can be made readily
available to finance current operations or to pay current liabilities.
Those assets which will be used up or converted into cash within one year.
Some examples are cash, temporary investments, and taxes receivable which
will be collected within one year.
Current fund. See general fund.
Current liabilities. Liabilities which are payable within one year from the
date of the balance sheet. See also floating debt.
Current resources. Resources to which recourse can be had to meet current
obligations and expenditures. Examples are current assets, estimated
revenues of a particular period not yet realized, transfers from other funds
authorized but not received, and in the case of certain funds, bonds
authorized and unissued.
Current special assessments. Special assessments levied and becoming due
within one year.
Current taxes. Taxes levied and becoming due within one year.
Cursor. Symbol used to indicate where the next character to be input or
output will be displayed on the computer's display screen (CRT).
Customer. The most generally accepted term for customer or user in water, gas,
and electric utilities. The term user is favored for wastewater utilities
as being more appropriate and having identification value. See also user.
Cycle system (of billing) . A prearranged plan whereby the various operations
of the user accounting department such as meter reading, billing,
collecting, and posting are staggered over a definite period to distribute
the work of the department evenly.
Data processing. (1) The preparation and handling of information and data from
source media through prescribed procedures to obtain such end results as
classification, problem solution, summarization, and reports. (2)
Preparation and handling of financial information wholly or partially by
mechanical or electronic means. See also electronic data processing (EDP).
Database. A collection of data or information (such as mailing lists or
inventory). A database program helps to organize and manipulate collections
of data.
Debit. An entry on the left side of an account kept by the double-entry
method. The opposite of credit.
Debt. An obligation resulting from the borrowing of money or from the purchase
of goods and services. Debts of governments include bonds, time warrants,
notes, and floating debt. See also bond, note payable, floating debt, and
long-term debt.
Debt limit. The maximum amount of gross or net debt which is legally
permitted.
Debt service fund. A fund established to account for the accumulation of
resources for, and the payment of general long-term debt principal and
interest. Formerly called a sinking fund. See also fund, sinking.
Debt service fund requirements. The amounts of revenue which must be provided
for a Debt Service Fund so that all principal and interest payments can be
made in full on schedule.
Debt service requirement. The amount of money required to pay interest on
outstanding debt, serial maturities of principal for serial bonds, and
required contributions to accumulate monies for future retirement of term
bonds.
Deferred charges (assets, debits). Expenditures which are not chargeable to
the fiscal period in which made but are carried on the asset side of the
balance sheet pending amortization or other disposition. An example is
Discount on Bonds Issued. Deferred charges differ from prepaid expenses in
that they usually extend over a long period of time (more than five years)
and are not regularly recurring costs of operation. See also prepaid
expenses.
Deferred credits (Income). Credit balances or items which will be spread over
following accounting periods either as additions to revenue or as reductions
of expenses. Examples are taxes collected in advance and premiums on bonds
issued.
Deferred expenses. See prepaid expenses.
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Deferred liabilities. Liabilities not elsewhere provided for that are not
current in nature and on which payment or other disposition is deferred to a
future accounting period. An example is users' or customers' advances for
construction.
Deferred revenues. Amounts for which asset recognition criteria have been
met, but for which revenue recognition criteria have not been met. Under
the modified accrual basis of accounting, such amounts are mesureable but
not available.
Deferred serial bonds. Serial bonds in which the first installment does not
fall due for two or more years from the date of issue.
Deferred special assessments. Special assessments which have been levied but
which are not due within one year.
Deficiency. A general term indicating the amount by which anything falls
short of some requirement or expectation. The term should not be used
without qualification.
Deficit. (1) In a private utility, the deficit is the amount by which
liabilities, reserves, and capital stock exceed its assets. (2) In a
publicly owned utility, the deficit is the amount by which the liabilities,
reserves, and equity exeed the assets. See also surplus.
Delinquent bills. Bills remaining unpaid on and after the date on which a
f> penalty for nonpayment is attached.
I
Q Deposit. (1) Money placed with a banking or other institution or with a person
either as a general deposit subject to check or as a special deposit made
for some specified purpose. (2) Securities lodged with a banking or other
institution or with a person for some particular purpose. (3) Sums
deposited by customers for electric meters, water meters, etc., and by
contractors and others to accompany and guarantee their bids.
Depreciation. (1) Expiration in the service value of fixed assets, other than
wasting assets attributable to wear and tear, deterioration, action of the
physical elements, inadequacy, obsolescence, and supression prior to elapse
of useful life as, for instance, removal necessitated by street
improvements. (2) The portion of the cost of a fixed asset other than a
wasting asset which in some cases is charged as an expense during a
particular period. In accounting for depreciation, the cost of a fixed
asset, less any salvage value, is pro-rated over the estimated service life
of such an asset, and each period is charged with a portion of such cost.
Through this process, the entire cost of the asset is ultimately charged off
as an expense.
Depreciation fund. Synonym: reserve for depreciation.
Depreciation method. The method used in the determination of depreciation
that accrues during an accounting period or in the estimation of reserves to
cover replacement costs. See also sinking-fund depreciation and
straight-line average life depreciation.
Direct debt. The debt which a utility has incurred in its own name or assumed
through the annexation of territory or consolidation with another utility.
See also overlapping debt.
Direct expenses. Those expenses which can be charged directly as a part of
the cost of a product or service, or of a department or operating unit, as
distinguished from overhead and other indirect costs which must be prorated
among several products or services, departments, or operating units.
Direct labor. Labor directly expended or applied in productive operations as
distinguished from that not directly connected with a production process.
Direct materials. The cost of materials which become an integral part of a
specific manufactured product or which are consumed in the performance of a
specific service.
Direct net debt. Gross direct debt less debt that is self-supporting (revenue
bonds) and double-barreled bonds (general obligation bonds secured by
earmarked revenues which flow outside the general fund).
Disbursements. Payments in cash.
Discounts. Actual or contingent reductions in the price of services or
materials that are first stated at some other and larger amount. See also
cash discount and trade discount.
Disk. A rigid, flat, circular plate with a magnetic coating for storing data
for a computer. Physical size and storage of disks can vary. See also
floppy disk.
Disk drive. An electromechanical device into which a disk i« inserted to read
or write information.
Disk operating system (DOS). Computer software that controls the process of
transmitting information to and from a disk. The disk operating system
formats the disk and keeps track of where information is stored on it.
Display screen. A device that provides a visual representation of data; a
TV-line screen. See also cathode-ray tube.
Distribution. The division of needed annual revenue requirements in a rate
structure, that is, the unit charges to volume, to wastewater
characteristics, to area, to front footage, or to property valuation.
District, assessment. The land or area created by statutory enactment within
the boundaries of which the cost of an improvement is assessed for the
benefits derived.
District, drainage. (1) An organization created and operating under statutory
enactment for the purpose of financing, constructing, and operating a
drainage system. (2) The land or area within the boundaries of a drainage
district as delimited In the organizing statute.
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District, sever (water). (1) An organization created and operating under
statutory enactment for the purpose of financing, constructing, and
operating a wastewater system (water supply system). (2) The land or area
within the boundaries of a sewer (water) district as delimited in the
organizing statute. It may embrace parts of one or more political
subdivisions.
Domestic wastewater. Wastewater discharged to the sewer system from residences
and from commercial, Institutional, recreational and similar facilities.
Residential flow Is usually estimated from the service area's population
using an average dally per capita flow of sewage (approximately 100 gallons
per day per capita). Also referred to as normal domestic sewage. See
also wastewater.
Dot-matrix printer. A printer for computer that forms characters from a
two-dimensional array of dots. More dots In a given space produce
characters that are more legible.
Double entry, A system of bookeeplng based on the fundamental theory that
every business transaction has a twofold aspect; therefore, a complete
record Is obtained by entering the amounts to the debit of one or more
accounts and to the credit of one or more other accounts. The double-entry
system Is contemplated in the current systems of utility accounting.
Due to construction fund. A liability account reflecting amounts received
to finance construction, usually by a builder for water and sewer lines.
These amounts Include only short-term obligations on open account and not
noncurrent portions of long-term loans.
Earned surplus. That part of surplus that has arisen out of earnings. The
term Is not limited to free surplus and may also include appropriated
surplus. See also surplus, free surplus, and appropriated surplus.
Earnings. See Income and revenue.
Easement. An acquired right to the use of land owned by others. Ordinarily
more restricted in scope than a leasehold.
Effective intere
rning on a bond Investment based on
the actual price paid for the bond, the coupon rate, the maturity date, and
the length of time between interest dates, in contrast with the nominal
Interest rate.
Electronic data processing (EDP). Data processing by means of high-speed
electronic equipment. See also data processing.
Electronic spreadsheets. A computerized table that allows the user to perform
forecasting and financial modeling functions quickly and efficiently.
Eminent domain. The power of a government to acquire private property for
public purposes. It is frequently used to obtain real property which cannot
be purchased from owners In a voluntary transaction. Where the power of
eminent domain is exercised, owners are compensated by the government in an
amount determined by the courts.
Encumbrances. Obligations In the form of purchase orders or contracts that
reduce the balance of tha particular budget account to which they are
chargeable. They cease to be encumbrances when paid or converted Into a
liability. Note: This use of the term should be distinguished from lien or
mortgage, which refers to property.
Enterprise fund. A fund established to account for operations (a) that are
financed and operated in a manner similar to private business enterprises -
where the Intent of the governing body IB that the costs (expenses,
including depreciation) of providing goods or services to the general public
on a continuing basis be financed or recovered primarily through user
charges; or (b) where the governing body has decided that periodic
determination of revenues earned, expenaes Incurred, and/or net income is
appropriate for capital maintenance, public policy, management control,
accountability, or other purposes. Examples of Enterprise Funds are those
for water, gas, and electric utilities; swimming pools; airports; parking
garages; and transit systems.
Entity. The basic unit upon which accounting and/or financial reporting
activities focus. The basic governmental legal and accounting entity Is the
Individual fund and account group. Under NCGA Statement 1, governmental
GAAF reporting entitles Include (1) the Combined Statements - Overview (the
liftable GFFS) and (2) financial statements of individual funds (which may
be presented as columns on Combining Statements - By Fund Type, on
physically separate individual fund statements, or both). The term "entity"
is also sometimes used to describe the composition of "the government as a
whole" (whether the library Is part of the city of a separate government,
whether the school system is part of the county or an Independent special
district, etc.).
Entry. (1) The record of a financial transaction In its appropriate book of
account. (2) The act of recording a transaction in the books of account.
Equipment. See machinery and equipment.
Estimated uncollectible accounts. See allowance for uncollectlbles.
Exhibits. The accounts, statements, and other papers that accompany and are a
part of a financial report. Sometimes the term Is used only for the balance
sheet or other principal statements. See also schedules.
Expenditures. Decreases In net financial resources. Expenditures Include
current operating expenses which require the current or future use of net
current assets, debt service, and capital outlays. See also budgetary
expenditures and conventional expenditures.
Expenses. Decreases In net total assets. Expenses represent the total cost
of operations during a period regardless of the timing of related
expenditures.
Extraneous flows. Uastewater flow component in sewer lines that is in addition
to normal domestic and industrial flows. See also infiltration/Inflow.
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Face value. As applied to securities, this term designates the amount of
liability stated In the security document.
Fiduciary. One who acts In a position of a trust, a trustee.
File. A collection of logically related records or data treated as a single
Item. A file Is the means by which data Is stored on a disk or diskette so
It can be used at a later date.
Filename. The sequence of alphanumeric characters assigned by a user to
Identify a file which can be read by both the computer and user.
Financial adviser. A person or a business rendering a service of advise In
the marketing of bonds who may prepare a prospectus to canvass for bids on
sale of bonds.
Financial reporting pyramid. NCGA Statement 1 organization plan for the
Financial Section of the CAFR. The pyramid presents GAAP basic financial
statements on three distinct and progressively more detailed reporting
levels: (1) Combined Statements - Overview (the "liftable" GPFS): (2)
Combining Statements - By Fund Type: and (where necessary or appropriate)
(3) individual fund statements.
Financial statements. See basic financial statements.
Fiscal agent. A financial representative such as a trust company serving a
corporation.
Fiscal period. Any period at the end of which an enterprise closes its books
to determine its financial condition and the results of Its operations,
commonly one year, though not necessarily a calendar year. See also
accounting period.
Fixed assets. Assets of a more or less permanent character or Intended for
long-time use that are employed in the operation of the utility. Fixed
assets may either be tangible or intangible. See also tangible fixed assets
and Intangible fixed assets.
Fixed capital. The investment represented by fixed assets.
Fixed charge. A charge that cannot be escaped, shifted, or altered, as
interest, rental, taxes and amortization.
Fixed liabilities. Liabilities that are to paid one year or more after the
date of the balance sheet. See also bonded debt.
Fixtures. Attachments to buildings which are not intended to be removed and
which cannot be removed without damage to the buildings. Those fixtures
with a useful life presumed to be as long as that of the building itself are
considered a part of the building; all others are classified as equipment.
Floating debt. Liabilities other than bonded debt and time warrants which are
payable on demand or at an early date. Examples are accounts payable,
notes, and bank loans.
Floppy disk. A flexible disk, made of mylar and coated with a magnetic oxide,
used for storing and retrieving computer data. Sometimes called a floppy
diskette.
Force account. A method employed in the construction and/or maintenance of
fixed assets whereby a utility's own personnel are used Instead of an
outside contractor. This method also calls for the purchase of materials by
the utility and the possible use of Ita own equipment, but the
distinguishing characteristic of the force account method ia the use of the
utility's own personnel.
Forfeiture. The automatic loss of cash or other property as a punishment for
not complying with legal provisions and as compensation for the resulting
damages or losses. This tern should not be confused with confiscation. The
latter term designates tha actual taking over of the forfeited property by
the government. Even after property has been forfeited. It cannot be said
to be confiscated until the government claims it.
Formal budgetary integration. The management control technique through which
the annual operating budget is recorded in the general ledger through the
use of budgetary accounts. It is Intended to facilitate control over
revenues and expenditures during the year.
Format. The arrangement by which information is stored on a computer floppy
disk in tracks and sectors.
FORTRAN (Formula Translation). A widely used high-level computer programming
language well-suited to problems that can be expressed in terms of algebraic
formulas. It is generally used in scientific applications.
Franchise. A special privilege granted by a government permitting the
continuing use of public property, such as city streets, and usually
involving the elements of monopoly and regulation.
Free surplus. The portion of surplus that has not been appropriated for any
particular purpose.
Full faith and credit. A pledge of the general taxing power for the payment of
debt obligations. Bonds carrying such pledges are referred to as general
obligation bonds or full faith and credit bonds. See also general
obligation bonds.
Function. A group of related activities aimed at accomplishing a major
service or regulatory program for which the utility is responsible. For
example, public health is a function. See also subfunction.
Functional classification. Expenditure classification according to the
principal purposes for which expenditures are made. Examples are public
safety, public health, public welfare, etc.
Fund. A fiscal and accounting entity with a self-balancing set of accounts
recording cash and other financial resources, together with all related
liabilities and residual equities or balances, and charges therein, which
are segregated for the purpose of carrying on specific activities or
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attaining certain objectives in accordance with special regulations,
restrictions or limitations.
Fund accounts. All accounts necessary to set forth the financial position and
results of operations of a fund.
Fund balance. The fund equity of governmental funds and trust funds.
Funded debt. Same as bonded debt, which is the preferred term.
Funded deficit. A deficit eliminated through the sale of bonds issued for
that purpose. See also funding bonds.
Fund, sinking. A fund consisting of such items as cash, credits, securities
created by adding thereto at regular intervals of time such equal sums that
the sinking fund will, with such interest as accrues to it, contain a
predetermined amount at any one or more designated dates in the future,
possibility for the retirement of term Bonds or other bonds specified to be
retired from a sinking fund. See also debt service fund.
Funding. The conversion of floating debt or time warrants into bonded debt.
Funding bonds. Bonds issued to retire outstanding floating debt and to
eliminate deficits.
GAAP. See generally accepted accounting principles.
>.
I GAAS. See generally accepted auditing standards.
h-"
^* General expenses. A class of expense accounts grouped together for the
purpose of the income statement. They represent costs incurred in the
operation of the enterprise that are not otherwise classified and are not
directly connected with productive operations. These expenses are sometimes
referred to as general and administrative expenses. Examples are salaries
of general officers and executives and general office expenses.
General fixed assets. Fixed assets used in operations accounted for in
governmental funds. General fixed assets include all fixed assets not
accounted for in proprietary funds or in trust and agency funds.
General fixed assets account group. A self balancing group of accounts set up
to account for the general fixed assets of a government.
General fund. The fund used to account for all financial resources except
those required to be accounted for in another fund.
General Journal. A book of original entry in which entries not recordable in
special journals are made.
General ledger. A book, file or other device which contains the accounts
needed to reflect the financial position and the results of operations of an
entity. In double entry bookeeping, the debits and credits in the general
ledger are equal. Therefore, the debit balances equal the credit balances.
See also subsidiary ledger, control account, and subsidiary account.
Generally accepted accounting principles (GAAP). Uniform minimum standards of,
and guidelines to, financial accounting and reporting. They govern the form
and content of the basic financial statements of an entity. GAAP encompass
the conventions, rules and procedures necessary to define accepted
accounting practice at a particular time. They include not only broad
guidelines of general application, but also detailed practices and
procedures. GAAP provide a standard by which to measure financial
presentations. The primary authoritative statement on the application of
GAAP to state and local governments is NCGA Statement 1. Every government
should prepare and publish financial statements in conformity with GAAP.
The objectives of governmental GAAP financial reports are different from and
much broader than, the objectives of business enterprise GAAP financial
reports.
Generally accepted auditing standards (GAAS). Measures of the quality of the
performance of auditing procedures and the objectives to be attained through
their use. They are concerned with the auditor's professional qualities and
with the judgment exercised in the performance of an audit. Generally
accepted auditing standards have been prescribed by (1) the American
Institute of Certified Public Accounts (AICPA) and (2) the U.S. General
Accounting Office (GAO) in Standards for Audit of Governmental
Organizations, Programs, Activities, and Functions (the "yellow book").
General obligation bonds. Bonds for the payment of which the full faith and
credit of the issuing government are pledged.
General purpose financial statements (GPFS). Those basic financial statements
which comprise the minimum acceptable fair presentation in conformity with
GAAP. As such, they constitute the minimum acceptable scope of independent
annual GAAP audits. Under 1968 GAAFR, the GPFS included financial
statements for each individual fund and account group maintained by a
government. In Statement 1, the NCGA redefined governmental GPFS to consist
of financial statements for each of the eight fund types in use and for both
account groups presented in separate adjacent columns on the financial
reporting pyramid's five Combined Statements - Overview. See also basic
financial statements, combined statements - overview.
General revenue. The revenues of a utility other than those derived from and
retained in an enterprise. If a portion of the net income in an enterprise
fund is contributed to another nonenterprise fund, such as the general fund,
the amounts transferred constitute general revenue of the government.
Governmental accounting. The composite activity of analyzing, recording,
summarizing, reporting, and interpreting the financial transactions of the
governments.
GPFS, See general purpose financial statements.
Grants. Contributions or gifts of cash or other assets from another
government to be used or expended for a specified purpose, activity, or
facility. See also capital grants and operating grants.
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Gross bonded debt. The total amount of direct debt of a utility represented
by outstanding bonds before deduction of any assets available and earmarked
for their retirement (general obligation bonds plus revenue bonds). Also
referred to as gross direct debt.
Gross income. Utility operating income plus the total of other income during
an accounting period.
Gross revenues. Revenues arising directly from utility operations.
revenue and income are not synonomous.
The terms
Group plan. A plan used in accounting for depreciation whereby a composite
rate of depreciation is applied to a group of assets Involved in some operating
phase of the enterprise.
Hard disk. A metal disk with magnetic coating used to store information for
quick access by the computer system. Hard disks can run at much higher
speeds than floppy disks and are capable of storing much more information.
Hardware. The physical equipment that makes up a computer system.
Household. A household consists of all the persons who occupy a housing unit.
A house, an apartment or other group of rooms, or a single room, is regarded
as a housing unit, when it is occupied or intended for occupancy as separate
living quarters. A household includes the related family members and all
the unrelated persons, if any, such as ledgers, foster children, wards, or
f> employees who share the housing unit. A person living alone in a housing
I unit, or a group of unrelated persons sharing a housing unit as partners, is
^ also counted as a household.
Imprest account. An account into which a fixed amount of money is placed for
the purpose of minor disbursements. As disbursements are made, a voucher is
completed to record their date, amount, nature, and purpose. At periodic
intervals, or when the money is completely expended, a report with
substantiating vouchers is prepared and the account is replenished for the
exact amount of the disbursements, and appropriate general ledger accounts
are charged. The total of cash plus substantiating vouchers must at all
times equal the total fixed amount of money set aside in the imprest
account. See also petty cash.
Improvements. Buildings, other structures, and other attachments or
annexations to land which are intended to remain so attached or annexed,
such as sidewalks, trees, drives, tunnels, drains, and sewers. Sidewalks,
curbing, sewers, and highways are sometimes referred to as "betterments",
but the term "improvements" is preferred.
Improvements other than buildings. A fixed asset account which reflects
acquisition value of permanent improvements other than buildings, which add
value to land. Examples of such improvements are fences, retaining walls,
sidewalks, pavements, gutters, tunnels, and bridges.
Income. All receipts arising from utility operation as distinguished from
revenue that ordinarily represents the receipts that arise from the
rendering of a particular utility service, as for instance, from charges for
sewer service.
Income account. An account that is used to show the results of operation for
a certain period and how these results were obtained.
Income deductions. An item of expense, the payment of which has been
authorized to be made from income inclusive of revenues.
Income statement. A statement setting forth the revenues earned, the expenses
incurred, and the excess of deficiency of revenue as compared with expense.
Synonyms: Profit and Loss Statement, Income and Expense Statement.
Indirect charges. See overhead.
Indirect labor. Labor that cannot be Identified with the specific furtherance
of any construction, operation, or productive process but nevertheless does
further general operations.
Individual fund statements. The third of the financial reporting pyramid's
three reporting levels containing GAAP basic financial statements. Such
statements should be presented only when necessary or appropriate.
Governments should not present physically separate individual fund financial
statements which simply repeat information already presented in columns on
the Combined Statements - Overview or Combining Statements - By Fund Type.
Under Statement 1, physically separate individual fund statement formats are
normally used only: (1) to present required individual fund budgetary
comparisons; (2) to present prior-year comparative data; or (3) to present
more detailed Information than is presented for a fund on one of the higher
levels of the financial reporting pyramid.
Input. Data to be accepted by the computer. An input device allows
instructions and data to be given to the computer.
Intangible fixed assets. Nonphysical fixed assets, such as patents and
franchises.
Intercepting sewer (interceptor): A sewer that receives dry weather flow,
frequently added quantities of stormwater from a number of transverse sewers
or outlets, and usually additional predetermined quantities of stormwater,
and conducts such waters to a point for treatment or disposal.
Interfund accounts. Accounts in which transfers between funds are reflected.
See interfund transactions.
Interfund loans. Loans made by one fund to another.
Interfund transactions. Transactions between funds of the same utility. They
include: (1) Quasiexternal Transactions; (2) Reimbursements; (3) Residual
Equity Transfers; and (A) Operating Transfers.
Interim financial statement. A financial statement prepared before the end of
the current fiscal year and covering only fiscal transactions during the
current year to date.
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Internal check. An accounting method or procedure so designed that the work
of one employee is complementary to that of another, thus providing a
continuous audit on the accuracy of accounting work.
Internal control. A plan of organization under which employees' duties are so
arranged and records and procedures so designed as to make it possible to
exercise effective accounting control over assets, liabilities, revenues,
and expenditures. Under such a system, the work of employees is subdivided
so that no single employee performs a complete cycle of operations. Thus,
for example, an employee handling cash would not post the accounts
receivable records. Moreover, under such a system, the procedures to be
followed are definitely laid down and require proper authorizations as
designated officials for all actions to be taken.
Internal service fund. A fund used to account for the financing of goods or
services provided by one department or agency to other departments or
agencies of a utility, or to other utilities, on a cost-reimbursement basis.
Inventory. A detailed list showing quantities, descriptions, and values of
property. It may also include units of measure and unit prices. The term
is often confined to consumable materials but may also cover fixed assets.
When an inventory covers all property of the enterprise and is priced as of
a certain date, it is known as an appraisal.
Inventory appraisal. A detailed list of the individual items comprising an
assembled property either with or without unit costs or prices applied
thereto.
Investment banker. A brokerage firm purchasing or "underwriting" an entire
issue of bonds for resale on a more or less retail basis.
Investments. Securities and real estate held for the production of revenues
in the form of interest, dividends, rentals, or lease payments. The term
does not include fixed assets used in the utilities operations.
Investments in default. Bonds, notes, mortgages, or other instruments on
which there exists a default in the payment of principal or interest.
Job account. An account pertaining either to an operation which occurs
regularly (a "standing order") or to a specific piece of work (a "job
order"), showing all charges for material and labor used and other costs
incurred, together with any allowances or other credits.
Journal. A book of original entry in which a record is first made and in
which explicit or implied directions are given for posting to specific
accounts the financial information involved in a transaction. See also
general journal, special journal, and register.
journal voucher. A voucher provided for the recording of certain transactions
or information in place of or supplementary to the journals or registers.
The journal voucher usually contains an entry or entries, explanations,
references to documentary evidence supporting the entry or entries, and the
signature or initials of one or more properly authorized officials.
Kilobyte (K). Informally, 1000 bytes of information. Actually, 1 K bytes
consist of 1024 bytes of information. (All totals given in K bytes should
be multiplied by 1024 to get the exact number of bytes stored.) Disk
storage is usually rated in terms of K bytes of information. See also byte
and megabyte.
Land. A fixed asset account which reflects the cost of land owned that is
used and useful and rights to use land not owned. Included under this term
are land sites, rights of way, easements, and leaseholds.
Land, assessable. Any land located within the boundaries of an irrigation,
drainage, sewerage, or district of similar character that is subject to
assessment to defray the cost of constructing Improvements in the district.
Such lands usually include all those within the district boundaries except
those specifically exempted by statute, the latter class generally including
district rights of way and other property, and property publicly owned for
public uses.
Land rights. Rights or obligations in connection with the occupation of, or
ownership in, land. See also easement, leaseholds, and rights of way.
Language. The set of instructions by which the computer is able to do work.
Software programs are written in a particular high level language (such as
BASIC or COBOL) with commands that resemble English. High level languages
are translated into machine language by the computer.
Lateral sewer. A sewer that discharges into a branch or other sewer and has
no other common sewer tributary to it.
Leasehold. The right to the use of real estate by virtue of a lease, usually
for a specified term of years, for which consideration is paid, as
distinguished from the ownership in the land.
Lease-purchase agreements. Contractual agreements which are termed "leases,"
but which in substance amount to purchase contracts.
Ledger. A group of accounts in which are recorded the financial transactions
of an entity under separate account titles. See also general ledger and
subsidiary ledger.
Legal debt limit. See debt limit.
Levy. (Verb) To impose taxes, special assessments, or service charges for the
support of governmental activities. (Noun) The total amount of taxes,
special assessments, or service charges imposed by a government.
Liabilities. Debt or other legal obligations arising out of transactions in
the past which must be liquidated, renewed, or refunded at some future date.
This term does not include encumbrances in as confined to items payable, but
not necessarily due.
Liability reserves. Liabilities that represent merely an estimate of the
amount because of lack of invoices or other sources of information. Note:
The difference between a liability reserve and a contingent liability is
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that the former represents a definite liability, the approximate amount of
which is known; the latter consists of items that may become liabilities as
a result of conditions undetermined at the date of the balance sheet.
Lite, service. The period of time between the date when a physical unit of
property was first put into service new as a part of the property and the
date when it was retired or Is anticipated to be retired from service. If
depreciation Is accounted for on a production basis rather than a time
basis, then service life should he measured in terms of the appropriate unit
of production. The service life of equipment will vary depending upon
levels of expenditure for maintenance.
Life, useful. The life of an asset that la Influenced by obsolescence or a
myriad of economic factors.
"Llttable" general purpose financial statements (GPFS). NCGA Statement 1's
GPFS are degtgned to be "liftable" from the Financial Section of the
comprehensive annual financial report (CAFR) for inclusion in official
statements for securities offerings or for widespread distribution, along
with an independent auditor's opinion, to users requiring less detailed
information than Is contained In the full CAFR. In order to be "liftable,"
the GPFS must Include all disclosures necessary for their fair presentation
In conformity with GAAP Including certain specified disclosures related to
Individual funds. See also general purpose financial statements.
Limited-term Investment. An Investment that will mature within one year from
date of the balance sheet as opposed to long-term Investment that Implies
maturity after more than one year.
Loans receivable. An asset account reflecting amounts which have been loaned
to individuals or organizations external to a utility, Including notes taken
as security for such loans.
Long-term budget. A budget prepared for a period longer than a fiscal year;
or, in the case of some state governments, a budget prepared for a period
longer than a biennlum. Long-term budgets concerned with capital outlay
plans and capital Improvement programs are referred to as capital budgets.
Long-term debt. Debt that is payable (mature) during some future accounting
period, I.e., more than one year from the date of issuance.
Machine language. The only language the computer understands without first
translating what was input. All high level languages (such as BASIC or
COBOL) are translated by the computer into machine language before
processing.
Machinery and equipment. Tangible property of a more or less permanent nature,
other than land or buildings and improvements thereon. Examples are
external piping, pumps, machinery, tools, trucks, cars, furniture, and
wiring. Mechanical and electrical apparatus generally comprise
approximately 30-40% of treatment plants and lesser percentages of
conveyance networks (lift and pump stations, etc.)
Magnetic tape (Magtape). Magnetic tape used as a mass storage media and
packaged on reels. The data stored on magnetic tape can only be accessed
serially. It Is often used as a back up device on larger computer systems.
Maintenance. The upkeep necessary for efficient operation of physical
properties. It involves labor and materials but Is not to be confused with
replacement or retirement. It includes repetitive and pteventatlve programs
and major and minor repairs. "Minor repairs" Include the addition of new
bearings, seals, valves, and "parts" that are occasionally necessary to
maintain equipment to perform Its designed function. On the other hand,
"major repairs," those which materially Increase the useful life of the
equipment component and the cost of which is significant In relation to the
value of the component, nay be considered to replace the function of that
component In comparison with its original service life. Prudent Judgment is
required from an accounting standpoint to Judge whether an expenditure Is a
minor repair charged to a maintenance account or a major repair which may be
charged. In whole or part, to a replacement account.
Matured bonds payable. A liability account reflecting unpaid bonds which have
reached or passed their maturity date.
Matured Interest payable. A liability account reflecting unpaid Interest on
bonds which have reached or passed their maturity date.
Median Income. The median Income Is the amount Which divides the distribution
Into two equal groups, one having Incomes above the median, and the other
having incomes below the median.
Megabyte (M). 1 million bytes of Information. See also byte.
Memory. (1) The main high-speed storage area In a computer where Instructions
for a program being run are temporarily kept. (2) A device In which data
can be stored and from which it can later be retrieved.
Menu. A computer displayed list of options from which the user selects an
action to be performed by typing a letter or positioning the cursor.
Menu-driven. A computer system that primarily uses menus for Its user
Interface rather than a command language.
Meter reading. Securing and recording Information with reference to the
consumption of water by each customer. The term may include other
activities such as the meter testing and the Investigation of unusual
consumption. Note: The sewer utility is Involved only to the extent that
metered water consumption is used as a guide In the distribution of the
costs or service and to the extent that is assumes the cost of meter
reading.
Minifloppy disk, a 5k-lnch floppy disk. This size is often called minifloppy
to distinguish it from 8-inch floppy disks.
Microcomputer. A computer which is physically very small - It can fit on or
under a desk - and which Is based on large-scale integration (LSI)
circuitry. It is usually the least expensive of the computer types.
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Microfloppy disk, a 3-lnch to 3>5-inch floppy disk enclosed in a plastic
cartridge. This size is called microfloppy to distinguish It from 5^-lnch
minifloppy disks.
Microprocessor. A single-chip central processing unit incorporating LSI
technology.
Minicomputer. A type of computer whose physical size Is usually smaller than
a mainframe. In general, its performance exceeds that of a microcomputer.
Since minicomputers are more modular than mainframes, they can be configured
to provide better price/performance systems.
Modem. An interface device that enables a computer to communicate information
over telephone lines.
Modified accrual basis. The accrual basis of accounting under which revenues
are recognized when they become both "measurable" and "available to finance
expenditures of the current period." Expenditures are recognized when the
related fund liability Is Incurred except for: (1) inventories of materials
and supplies which may be considered expenditures either when purchased or
when used; (2) prepaid insurance and similar items which need not be
reported; (3) accumulated unpaid vacation, sick pay, and other employee
benefit amounts which need not be recognized in the current period, but for
which larger-than-normal accumulations must be disclosed in the notes to the
financial statements; (A) Interest on special assessment Indebtedness which
may be recorded when due rather than accrued, if approximately offset by
Interest earnings on special assessment levies; and (5) principal and
interest on long-term debt which are generally recognized when due. All
governmental funds and Expendable Trust Funds are accounted for using the
modified accrual basis of accounting.
Monitor. The display screen or CRT.
Mortgage bonds. Bonds secured by a mortgage against specified properties of a
utility. If primarily payable from enterprise revenues, they are also
classed as revenue bonds.
Municipal. In its broadest sense, an adjective which denotes the state and
all subordinate units of government. In a more restricted sense, an
adjective which denotes a city or village as opposed to other local
governments.
Municipal bond. A bond issued by a state or local government.
Municipal corporation. A body politic and corporate established pursuant to
state authorization for the purpose of providing governmental services and
regulations for its Inhabitants. A municipal corporation has defined
boundaries and a population, and Is usually organized with the consent o
its residents. It usually has a seal and may sue and be sued. Cities ai
villages are examples of municipal corporations. See also quasi-municlp;
corporations.
of
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Municipal Improvement certificates. Certificates issued in lieu of bonds for
the financing of special improvements. As a rule, these certificates are
placed In the contractor's hands for collection from the special assessment
payers.
Net bonded debt. Gross bonded debt less any cash or other assets available
and earmarked for its retirement.
*
Net income. Proprietary fund excess of operating revenues, nonoperating
revenues, and operating transfers-ln over operating expenses, nonoperating
expenses, and operating transfers-out.
Net profit. See net Income.
Net revenues. See net Income.
Net revenues avallsble for debt service. Proprietary fund gross operating
revenues less operating and maintenance expenses but exclusive of
depreciation and bond Interest. "Net revenue available for debt service" as
thus defined is used to compute "coverage" on revenue bond issues. See also
coverage. Under the laws of some states and the provisions of some revenue
bond Indentures, "net revenues available for debt service" for computation
of revenue bond coverage must be computed on a cash basis rather than in
conformity with GAAP.
Net worth. The residual equity of the owners of any enterprise. In a private
utility, capital stock, capital surplus, and earned surplus are items
constituting net worth. In a publicly owned utility, net worth consists of
earned surplus but may also Include city equity if the city's contributions
are considered permanent.
Nominal interest rate. The contractual Interest rate shown on the face and in
the body of a bond and representing the amount of Interest to be paid, in
contrast to the effective Interest rate. See also coupon rate.
Nonoperatlng expenses. Proprietary fund expenses which are not directly
related to the fund's primary service activities, such as the furnishing of
wastewater service.
Nonoperating Income. Income derived from activities other than those directly
connected with the furnishing of utility service. See also nonoperating
revenues.
Nonoperating properties. Properties owned by the accounting utility but not
actually used and useful nor intended to be used in the furnishing of
utility service.
Nonoperating revenues. Proprietary fund revenues which are incidental to,
by-products of, the fund's primary service activities.
Nonvolatile memory. Memory that does not lose its contents when a computer's
processor's power supply is shut off or disrupted.
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Note payable. In general, an unconditional written promise signed by the
maker to pay a certain sum in money on demand or at a fixed or determinable
time either to the bearer or to the order of a person designated therein.
Note receivable. An unconditional written promise, signed by the maker, to
pay a certain sum in money on demand or at a fixed or determinable future
time to the accounting utility, either directly or by endorsement.
Notes to the financial statements. The summary of significant accounting poli-
cies and other disclosures required for a fair presentation of the basic finan-
cial statements of an entity in conformity with GAAP which are not included on
the face of the basic financial statements themselves. The notes to the finan-
cial statements are an integral part of the basic financial statements.
Object. As used in expenditure classification (object class), this term
applies to the article purchased or the service obtained (as distinguished
from the results obtained from expenditures). Examples are personal
services, contractual services, materials, supplies, and equipment. See
also activity, character and function.
Object of expenditure. See object.
Obligations. Amounts which a utility may be required legally to meet out of
its resources. They Include not only actual liabilities, but also
unliquidated encumbrances.
Obsolescence. The decrease In the value of assets resulting from economic,
social, technical, or legal changes. This Is an element of depreciation.
Official statement. A legal document which summarizes all the salient features
of the underlying documents and agreements which support a municipal bond
offering. It is considered the disclosure document which presents informa-
tion that Is "material" to the offering. The official statement should
contain what a reasonable investor would need to know in making a decision
about the issue. Thus this document will usually include a description of
the Issuer, a description of the purpose of the project being financed, a
description of the security of the bond, a summary of the principal
financing documents, any feasibility studies which relate to the security,
and any other "key information".
Operating budget. Plans of current expenditures and the proposed means of
financing them. The annual operating budget (or in the case of some state
governments, the biennial operating budget) Is the primary means by whiclj
most of the financing acquisition, spending, and service delivery activities
of a government are controlled. The use of annual operating budgets Is
usually required by law. Even where not required by law, however, annual
operating budgets are essential to sound financial management and should be
adopted by every government. See also budget.
Operating expenses. Proprietary fund expenses necessary to the maintenance of
the enterprise, to the rendering of service for which operated, and to the
collection of revenue. Note: Some utillty commissions interpret the term
"operating expenses" In a narrow sense so as to exclude depreciation taxes,
and property losses chargeable to operations and require that each of these
be classified independently as an operating revenue deduction. In examining
or preparing an income statement, the sense In which the term is used must
be kept in mind.
Operating grants. Grants which are restricted by the grantor to operating
purposes or which may be used for either capital or operating purposes at
the discretion of the grantee.
Operating Income. The excess of proprietary fund operating revenues over
operating expenses.
Operating municipality. The city or municipality that owns the utility and
operates It directly through the governing body or Indirectly through an
appointed board or otherwise.
Operating revenues. Proprietary fund revenues which are directly related to
the fund1s primary service activities. They consist primarily of user
charges for services.
Operating statement. The basic financial statement which discloses the
financial results of operations of an entity during an accounting period In
conformity with GAAP. Under NCGA Statement 1, operating statements and
statements of changes in fund equity are combined into "all-inclusive"
operating statement formats.
Operating system. In reference to computers, It is the software (such as
CP/M) which controls the operation of the computer and its peripherals.
The operating system enables the users and hardware devices to communicate
with the computer and Its peripherals and use its resources.
Operating transfers. All Interfund Transfers other than Residual Equity
Transfers, e.g., legally authorized transfers from a fund receiving revenue
to the fund through which the resources are to be expended, transfers of tax
revenues from a Special Revenue Fund to a Debt Service Fund, transfers from
the General Fund to a Special Revenue or Capital Projects Fund, operating
subsidiary transfers from the General or a Special Revenue Fund to an
Enterprise Fund, and transfers from an Enterprise Fund other than payments
in lieu of taxes to finance General Fund expenditures.
Operation, maintenance and replacement costs. (OM&R) Annual costs (exclusive
of capital costs and debt service requirements) Incurred by a POTW in
providing wastewater collection and/or treatment services. Line items
include, but are not limited to, salaries, indirect salary costs,
chemicals, power, building utilities, building and ground maintenance,
transportation equipment, employee training, travel, publications, sewer
maintenance, office equipment and supplies, insurance, contractual services
and rentals, and routine replacement of equipment. Cost components
Include, but are not limited to, treatment, conveyance, collection, and
administrative. Sometimes OM&R costs are jointly referred to as operating
expenses. See also administrative costs and replacement cost.
Optional bond. See callable bond.
Order, A formal legislative enactment by the governing board of certain local
governments which has the full force and effect of law. For example, county
governing boards In some states pass "orders" rather than laws or ordinances.
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Ordinance. A formal legislative enactment by the governing board of a
municipality. If it is not in conflict with any higher form of law, such as
a state statute or constitutional provision. It has the full force and
effect of law within the boundaries of the municipality to which it applies.
The difference between an ordinance and a resolution Is that the latter
requires less legal formality and has a lower legal status. Ordinarily, the
statutes or charter will specify or Imply those legislative actions which
must be by ordinance and those which may be by resolution. Revenue raising
measures, such as the Imposition of taxes, special assessments and service
charges, universally require ordinances. See also resolution.
Organization expense. The Incidental coats of organizing the utility.
Examples are fees and expenses of incorporation and office expenses incident
to organizing the utility.
Outfall sewer. A sewer that receives the wastewater from a collecting system and
carries it to a point of final discharge. As usually used herein, the term
relates to the sewer conveying plant effluents to a point of final discharge.
Outlays. Synonymous with Expenditures. See also capital outlays.
Output. The information reported or generated by a computer. An output
device (such as a printer or CRT) enables the computer to report the results
of a program operation.
Overall net debt. This Is the sum of direct net debt and overlapping debt.
Overdraft. (1) The amount of which checks, drafts, or other demands for
payment on the treasury or on a bank exceed the amount of the credit against
which they are drawn. (2) The amount by which requisitions, purchase
orders, or audited vouchers exceed the appropriation or other credit to
which they are chargeable.
Overhead. Those elements of cost necessary to produce an article or to perform
a service of such nature that the amount applicable to each unit of product
or service cannot be determined readily or accurately and are thus usually
allocated on some arbitrary basis. Normally, they relate to those objects of
expenditure that do not become an integral part of the finished product or
service such as rent, heat, light, supplies, management, and supervision.
Overlapping debt. The proportionate share of the debts of local governments
located wholly or in part within the limits of the reporting government
which must be borne by property within each government. Except for special
assessment debt, the amount of debt of each unit applicable to the reporting
unit Is arrived at by (1) determining what percentage of the total assessed
value of the overlapping jurisdiction lies within the limits of the
reporting unit, and (2) applying this percentage to the total debt of the
overlapping jurisdiction. Special assessment debt is allocated on the basis
of the ratio of assessments receivable in each jurisdiction which will be
used wholly or in part to pay off the debt to total assessments receivable
which will be used wholly or in part for this purpose.
Pay-as-you-go basis. (1) A term used to describe the financial policy of a
utility which finances all oi Its capital outlays from current revenues
rather than by borrowing. A utility which pays for some Improvements from
current revenues and others by borrowing is said to be on a partial or
modified pay-as-you-go basis. (2) Failure to finance retirement obligations
on a current basis.
Penalties. Amounts added to users' bills if not paid by a certain date.
Pension trust fund. A Trust Fund used to account for public employee
retirement systems. Pension Trust Funds are accounted for in essentially
the same manner as proprietary funds, but with an Important expanded
emphasis on required fund balance reserves.
Performance budget. A budget wherein expenditures are based primarily upon
measurable performance of activities and work programs. A performance
budget may also incorporate other bases of expenditure classification, such
as character and object class, but these are given a subordinate status to
activity performance.
Peripheral. A device that Is external to the computer"sCPU and main memory,
e.g., printer, modem, or terminal, but connected to It by appropriate
electrical connections.
Perpetual inventory. A system whereby the inventory of units of property at
any date may be obtained directly from the records without resorting to an
actual physical count. A record is provided for each Item or group of items
to be Inventoried and Is so divided as to provide a running record of goods
ordered, received, and withdrawn, and the balance on hand, in units and
frequently also in value.
Petty cash. A sum of money set aside on an Imprest basis for the purpose of
making change or paying small obligations for which the Issuance of a formal
voucher and check would be too expensive and time-consuming. Petty cash
accounts are sometimes referred to as petty cash "funds". However, they are
not "funds" In the sense of governmental accounting's eight fund types.
Petty cash accounts should be reported aa assets of the fund of ownership.
See also imprest account.
Petty cash voucher. A voucher used to record individual disbursements of
petty cash. See also imprest account.
Posting. The act of transferring to an account in a ledger the data, either
detailed or summarized, containing in a book or document or original entry.
Prepaid Items (expenses). An asset account reflecting charges entered in the
accounts for benefits not yet received. Prepaid items differ from deferred
charges in that they are spread over a shorter period of time than deferred
charges and are regularly recurring costs of operations. Examples of
prepaid items are prepaid rent, prepaid interest, and unexplred Insurance
premiums. An example of a deferred charge is unamortlzed discounts on bonds
sold.
Primary treatment. The first major (sometimes the only) treatment, usually
sedimentation, which results in the removal of a relatively high percentage
of suspended matter but little or no colloidal and dissolved matter.
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Private utility. An enterprise owned by private individuals or by a
corporation and operated for the purpose of rendering utility service.
Processor. The functional part of the computer system that reads, interprets,
and executes Instructions. See also central processing unit.
Pro forma. For form's sake; an indication of form; an example. The term is
used in conjunction with a noun to denote merely a sample form, document,
statement, certificate, or presentation, the contents of which may be either
wholly or partially hypothetical, actual facts, estimates, or proposals.
Profit and loss statement. See income statement.
Program. The complete sequence of instructions and routines needed to solve a
problem or to execute directions in a computer.
Program budget. A budget wherein expenditures are based primarily on programs
of work and secondarily on character and object class. A program budget is
a transitional type of budget between the traditional character and object
class budget, on the one hand, and the performance budget, on the other.
See also performance budget and traditional budget.
Programming language. The words, mnemonics, and/or symbols, along with the
specific rules allowed in constructing computer programs. Some examples are
BASIC, FORTRAN, and COBOL.
Project. A plan of work, job, assignment, or task.
Property. See assets.
Property dividend. A dividend paid in this form of property.
Proprietary accounts. Those accounts which show actual financial position and
results of operations, such as actual asset liabilities, fund equity
balances, revenues, expenditures, and expenses as distinguished from
budgetary accounts. See also budgetary accounts.
Public accounting. The practice of accounting for various entities which are
related to the accountant clients rather than employers. This term is not
synonymous with Government Accounting.
Purchase method. The method under which inventories are recorded as
expenditures when acquired. See also consumption method.
Purchase order. A document which authorizes the delivery of specified
merchandise or the rendering of certain services and the making of a charge
for them.
Qualified certificate. An auditor's certificate in which the auditor states
that he has not verified certain items, or is unable to do so, or that in
his opinion the' statements do not accurately or fully reflect actual
conditions, or that the information furnished him is not considered
sufficient to enable him to reach a conclusion.
Quasi-municipal corporation. An agency established by the state primarily for
the purpose of helping the state to carry out its functions; for example, a
county or school district. Some counties and other agencies ordinarily
classified as quasi~municipal corporations have been granted the powers of
municipal corporations by the state in which they are located. See also
municipal corporation.
RAM (random access memory). Memory that can both be read and written into
(i.e. altered) during normal operation. RAM is the type of memory used in
most computers to store the instructions of programs currently being run.
Rate base. The value of utility property used in computing an authorized rate
of return as authorized by law or a regulatory commission.
Rate, depreciation. The rate or percentage at which value or usefulness of a
property is being exhausted.
Rate, flat. The charge for water or sewer service that is not based on
metered quantity. It may be based on size of service pipe, number of water
fixtures or outlets, land frontage, or other arbitrary measures usually
fixed by law.
Rate making. The process of determining what the charges for water or other
services furnished by a public service utility should be to yield an
adequate revenue.
Rate, meter. The charge for water based on the quantity used as measured by
water meters.
Rate, sewer. The charge for sewer service.
Realtime. Taking place during the actual occurrence of an event. It refers
to computer systems or programs that perform a computation during the actual
time that a related physical process transpires, in order that the results
of the computation can be recorded or used to guide the physical process,
e.g., computers that guide airplane landings.
Rebates. Abatements or refunds.
Receipts. Cash received.
Recoverable expenditure. An expenditure made for or on behalf of another
government, fund, or department, or for a private individual, firm, or
corporation which will subsequently be recovered in cash or its equivalent.
Refund. (Noun) An amount paid back or credit allowed because of an
overcollection or because of the return of an object sold. (Verb) To pay
back or allow credit for an amount because of an over-collection or because
of the return of an object sold. (Verb) To provide for the payment of an
obligation through cash or credit secured by a new obligation.
Refunding bonds. Bonds issued to retire bonds already outstanding. The
refunding bonds may be sold for cash and outstanding bonds redeemed in cash,
or the refunding bonds may be exchanged with holders of outstanding bonds.
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Register. A record for the consecutive entry of a certain class of events,
documents, or transactions, with proper notation of all the required
particulars. The form of registers varies from a one-column to a
multi-columnar sheet of special design whereon the entries are distributed,
summarized, and aggregated for convenient posting to the accounts. See also
journal.
Regular serial bonds. Serial bonds in which all periodic installments of
principal repayment are equal.
Reimbursement expenditure. See recoverable expenditure.
Reimbursements. (1) Repayments of amounts remitted on behalf of another
party. (2) Interfund transactions which constitute reimbursements of a fund
for expenditures or expenses Initially made from it which are properly
applicable to another fund - e.g., an expenditure properly chargeable to a
Special Revenue Fund was initially made from the General Fund, which is
subsequently reimbursed. They are recorded as expenditures or expenses (as
appropriate) in the reimbursing fund and as reductions of the expenditure or
expense in the fund that is reimbursed.
Remote. Not hard-wired; communicating via switched lines such as telephone
lines. Usually refers to peripheral devices (e.g., printers, video
terminals) that are located at a site away from the computer's CPU.
Replacement cost. The cost as of a certain date of a property which can
render similar service (but which need not be of the same structural form)
as the property to be replaced. Replacement is an incremental element of
operating costs and is variable depending upon levels of expenditure for
maintenance. The statutory definition of the term means expenditures for
obtaining and installing equipment, accessories or appurtences during the
useful life of the treatment works necessary to maintain the capacity and
performance for which they were designed and constructed. It is not a
capital cost and does not increase the book value of an asset. See also
reproduction cost.
Reproduction cost. The cost as of a certain date of reproducing an exactly
similar new property in the same place. Sometimes this term is designated
as "reproduction cost new" to distinguish it from "depreciated reproduction
cost," which is the reproduction cost of a given property less the estimated
amount of accumulated depreciation applicable to it. In the absence of any
modifier, however, the term "reproduction cost" is understood to be
synonymous with "reproduction cost new". See also replacement cost.
Requisition. A written demand or request, usually from one department to the
purchasing officer or to another department, for specified articles or
services.
Reserve. (1) An account used to earmark a portion of fund balance to indicate
that it is not appropirate for expenditure; and (2) an account used to
earmark a portion of fund equity as legally segregated for a specific future
use.
Reserve for bad debts. This use of the term "reserve" is no longer acceptable
under NCGA Statement 1. See allowance for uncollectibles.
Residual equity transfers. Nonrecurring or non-routine transfers of equity
between funds, e.g., contribution of Enterprise Fund or Internal Service
Fund capital by the General Fund, subsequent return of all or part of such
contribution to the General Fund, and transfers of residual balances of
discontinued funds to the General Fund or a Debt Service Fund.
Resolution. A special or temporary order of a legislative body; an order of a
legislative body requiring less legal formality than an ordinance or
statute. See also ordinance.
Restricted Assets. Monies or other resources, the use of which is
restricted by legal or contractual requirements. In governmental
accounting, special treatments are applied to restricted assets arising out
of revenue bond indentures in Enterprise Funds. These are sometimes also
called restricted "funds" but such terminology is not preferred.
Retirement allowances. Amounts paid to government employees who have retired
from active service or to their survivors. See also annuity.
Retirement fund. See pension trust fund.
Retirement order. A work order that refers to the retirement of the utility
plant. See also work order.
Retirement work. Work inclusive of labor and materials involved in the
retirement of utility plant.
Return. The amount, usually an annual percentage of the race base, that the
accounting utility earns. For private utilities, the allowable rate of
return is commonly fixed by state regulatory authorities.
Revaluation. A value other than cost placed on assets to reflect changes
in the general price level.
Revenue bonds. Bonds whose principal and interest are payable exclusively
from earnings of an Enterprise Fund. In addition to a pledge of revenues
such bonds sometimes contain a mortgage on the Enterprise Fund's property.
Revenue bonds payable. A liability account which reflects the face value of
revenue bonds issued and outstanding.
Revenue. In general terms, money received in exchange for the delivery of
goods and services. A more precise definition: additions to assets, such
as cash or accounts receivable, which (1) do no increase any liability, such
as a debt obligation; (2) do not represent a recovery of an expenditure,
such as results from a return of defective purchased equipment; (3) do not
represent the cancellation of certain liabilities without a corresponding
increase in other liabilities or a decrease in assets, such as forgiveness
of a debt; and (A) are not contributions made to fund businesslike
enterprises. Note: If accounts are kept on a cash basis, the term is
synonymous with "Revenue Receipts." If the accounts are kept on an accrual
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basis, the term includes all revenue, whether accredited or collected. In
utility accounting, revenue usually refers to receipts from the rendering of
a particular utility service as distinguished from Income, which denotes
receipts of all sources.
Revenues collected in advance. A liability account reflecting revenues
collected before they become due.
Revenue deduction. An item of expense that is to be paid from revenue.
Revenue receipts. Revenue collected.
Revolving fund. (1) An Internal Service Fund. (2) An imprest account which
is accounted for as an asset of a fund.
Right of way. Land acquired for location of utility lines inclusive of that
required for construction, access, and maintenance.
ROM: (Read Only Memory) Memory containing fixed data or instructions that is
permanently loaded during the manufacturing process. A computer can use
the data in the ROM, but cannot change it.
Salvage value. The amount received for property retired, less any expenses
incurred in connection with the sale or in preparing the property for sale,
or, if retained, the amount at which the material recoverable is chargeable,
to materials and supplies, or other appropriate account. (Can be preceded
with the word gross or net.)
Sanitary sewer. A sewer that carries wastewater and to which storm and surface
waters are not intentionally admitted.
Schedule, water service. A statement required from water supply companies by
state regulatory commissions setting forth the rates to be charged
consumers.
Schedules. 1. The explanatory or supplementary statements that accompany the
balance sheet or other principal statement periodically prepared from the
books; 2. The accountant's or auditor's principal work papers covering his
examination of the books and accounts; 3. A written enumeration or detailed
list in orderly form. See also exhibits and supporting schedules.
Secondary treatment. The treatment of wastewater by biological methods,
usually after primary treatment, including such aerobic processes as
activated sludge and trickling filters.
Sector. The fraction of a computer circular disk track on which data is
stored. The number of sectors of a soft-sectored disk is determined when it
is formated by a disk operating system. Typical values are between 10 and
16. The number of sectors of a hard-sectored disk is predetermined by the
number of index holes in the disk, usually 10 or 16.
Securities. Bonds, notes, mortgages, or other forms of negotiable or
nonnegotiable instruments. See also investments.
Self-supporting or liquidating debt. Debt obligations whose principal and
interest are payable solely from the earnings of the enterprise for the
construction or improvement of which they were originally issued. See also
revenue bonds.
Separate sewer system. A system requiring dual sewers (sanitary sewers and
storm sewers) as distinguished from the single combined sewers that serve
both functions.
Serial annuity bonds. Serial bonds in which the annual installments of bond
principal are so arranged that the combined payments for principal and
interest are approximately the same each year.
Serial bonds. Bonds whose principal is repaid in periodic installments
over the life of the issue. See also regular serial bonds, deferred serial
bonds, straight serial bonds, and serial annuity bonds.
Service charge. The rate charged by the utility for rendering service, usually
used as a ready-to-serve charge. A charge against users for the collection
or the collection and treatment of wastewater and for the provision of the
facilities therefor. The charges for use may be related to water
consumption, size of water meter or connection, wastewater flow, strength of
wastewater, number and type of plumbing fixtures, or other means of
determination other than charges against property. This is also referred to
as sewage service charge, sewerage service charge, sewage treatment charge,
sewer rental, sewer rent, sewer charge, sewer service charge, and sewer-use
charge in practice. The charge serves to produce some or all of the total
annual revenue requirements.
Service lite. See life, service.
Sewage. See wastewater.
Sewer service charge. As defined by Federal regulations, it is the
combination of user charges and debt service charges. See also user charge.
Sewer system. See wastewater system.
Sewer utility. See wastewater utility.
Sewerage. A system of sewers and appurtenances for the collection, transporta-
tion, and pumping of wastewater and industrial wastes.
Shared revenues. Revenues levied by one government but shared on a
predetermined basis, often in proportion to the amount collected at the
level, with another government or class of governments.
Short-term debt. Debt with a maturity of one year or less after the date of
of issuance. Short-term debt usually includes floating debt, bond antici-
pation notes, tax anticipation notes, and Interim warrants.
Sinking fund. A fund established to account for the accumulation of resources
for, and the payment of, the principal and interest of general long-term
debt. See also debt service fund.
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Sinking fund bonds. Bonds issued under an agreement which requires the govern-
ment to set aside periodically out of its revenues a sum which, with
compound earnings thereon, will be sufficient to redeem the bonds at their
stated date of maturity. Sinking fund bonds are usually term bonds.
Sinking-fund depreciation. A method of computing depreciation which takes into
account interest on the reserve. As compared with the straight-line method,
the sinking fund method produces lower early acruals and higher acruals in
the latter part of the service life.
Sinking fund requirement. The amount needed to be placed periodically in the
sinking fund so that the accumulation thereof and the earnings thereon will
be sufficient to redeem sinking fund bonds. Note: The amount required
periodically should be calculated on an actuarial basis unless otherwise
required by regulation.
Sludge disposal. The processing and disposition of the semiliquid mass of
accumulated settled solids from the wastewater treatment plant.
Software: The tasks or programs that makes the computer perform a particular
function.
Special accounts receivable; Accounts receivable resulting from the sale of
materials, equipment, or services other than the rendering of sewer service.
Special assesssment fund. A fund used to account for the financing of public
> improvements or services deemed to benefit primarily the properties against
I which special assessments are levied.
to
Crt
Special funds. Sums of money or other assets set aside for specific purposes.
Special district. An independent unit of local government organized to perform
a single governmental function or a restricted number of related functions.
Special districts usually have the power to incur debt and levy taxes;
however, certain types of special districts are entirely dependent upon
enterprise earnings and cannot impose taxes. Examples of special districts
are water districts, sanitrary districts, drainage districts, flood control
districts, hospital districts, fire protection districts, transit
authorities, port authorities, and electric power authorities.
Special district bonds. Bonds issued by a special district.
Special journal. A journal in which are entered all entries of a particular
type. Examples include cash receipts journals, cash disbursement journals,
purchases journals, etc. See also journal and general journal.
Special revenue fund. A fund used to account for the proceeds of specific
revenue sources (other than special assessments, expendable trust, or for
major capital projects) that are legally restricted to expenditure for
specified purposes. Under NCGA Statement 1, the use of Special Revenue
Funds is required only when legally mandated.
Standard cost. The predetermined cost of performing an operation or producing
a product when labor, materials, and equipment are utilized efficiently
under reasonable and normal conditions. Normal condition exist when there
is an absence of special or extraordinary factors affecting the quality or
quantity of the work performed, or the time or method of performing it.
Statements. See basic financial statements.
Statement of cash receipts and disbursements. A financial presentation
presenting a summary ofan entity's cash transactions in an accounting
period.
Statement of changes in financial position. The basic financial statement
which (for propietary funds. Nonexpendable Trust Funds, and Pension Trust
Funds) presents information on the amount (but not necessarily the nature)
of the sources and uses of an entity's cash or working capital during an
accounting period in conformity with GAAP. The statement of changes in
financial position may be presented in any of the following four ways: (1)
as a statment of revenues and expenditures detailing all revenues, other
financing sources, expenditures, and other financing uses; (2) as a
statement beginning with reported net income, adjusting it for items not
requiring (providing) working capital, and detailing only nonoperating
financing sources and uses; (3) as a statement of cash receipts and dis-
bursements; (4) as a statement beginning with reported net income, adjusting
it for items not requiring (providing) cash, and detailing only non-
operating cash receipts and disbursements.
Statement of changes in fund equity. The basic financial statement which
reconciles the equity balances of an entity at the beginning and end of an
accounting period in conformity with GAAP. It explains the relationship
between the operating statement and the balance sheet. Under NCGA Statement
1, statements of changes in fund equity are combined with operating state-
ments into "all-inclusive" operating statement formats.
Statement of financial condition. See balance sheet.
Statement of revenues and expenditures. The basic financial statement which is
the governmental fund and Expendable Trust Fund GAAP operating statement. It
presents increases (revenue and other financing sources) and decreases
(expenditures and other financing uses) in an entity's net current assets.
Statement of revenues and expenses. The basic financial statement which is
the proprietary fund. Nonexpendable Trust Fund, and Pension Trust Fund GAAP
operating statement. It presents increases (revenues) and decreases
expenses) in an entity's net total assets.
Statistical tables. Financial presentations included in the Statistical
Section of the CAFR which provide detailed data on the physical, economic,
social, and political characteristics of the reporting government. They are
intended to provide CAFR users with a broader and more complete under-
standing of the government and its financial affairs than is possible from
the basic financial statements and supporting schedules included in the
Financial Section. Statistical tables usually cover more than two fiscal
years and often present data from outside the accounting records. In
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contrast to Financial Section information, therefore, Statistical Section
data are not usually susceptible to independent audit.
Statute. A written law enacted by a duly organized and constituted legislative
body. See also ordinance, resolution, and order.
Stores. Materials or goods on hand in storerooms of the utility and subject to
requisition.
Storm sewer. A sewer that carries surface runoff and to which sanitary
wastewater flow is not intentionally admitted.
Straight-line average life depreciation. The method seeks to recover the net
original cost including salvage of depreciable property over the average
service life of the property in uniform charges.
Straight serial bonds. Serial bonds in which the annual installments of bond
principal are about equal.
Structures, A general term used to describe physical plant exclusive of land.
Subactivity. A specific line of work performed in carrying out a governmental
activity. For example, "cleaning luminaires" and "replacing defective
street lamps" would be subactivities under the activity of "street light
maintenance."
Sub function.
function.
safety."
A grouping of related activities within a particular governmental
For example, "police" is a subf unction of the function "public
Subsidiary account. One of a group of related accounts which support in detail
the debit and credit summaries recorded in a control account. An example is
the individual property taxpayers' accounts for the taxes receivable control
account in the general ledger. See also control account and subsidiary
ledger.
Subsidiary Ledger. An accounting record containing a group of subsidiary
accounts in which are recorded in detail identical, similar, or related
transactions. The accounts in the subsidiary ledger support the debit and
credit summaries recorded in a controlling account in the general ledger.
See also control account, subsidiary account, and general ledger.
Subvention. A grant.
Supplies. Commodities needed In the rendering of service but not necessarily
directly identified with it. Examples are fuel for building heat, janitor
supplies, and lubricating oil.
Supporting schedules. Financial presentations used (1) to demonstrate
compliance with finance-related legal and contractural provisions; (2) to
present information spread throughout the basic financial statments that can
be brought together and shown In greater detail (e.g., cash balances,
investments, current and delinquent taxes, etc.); (3; to present greater
detail for information reported in the basic financial statements (e.g.,
additional revenue sources detail, changes in general fixed assets by
function, etc.); and (4) to present information not disclosed in GAAP basic
financial statements (e.g., cash receipts and disbursements, changes in
Agency Fund assets and liabilities, etc.).
Surety bond. A written promise to pay damages or to indemnify against losses
caused by the party or parties named in the document, through nonperformance
or through defalcation. For example, a surety bond might be required of an
independent contractor. Surety bonds also Include Fidelity Bonds covering
government officials and employees.
Surplus. The amount by which the assets of a private utility exceed the total
of its liabilities, reserves, and capital stock. In a publicly owned
utility, the amount by which the assets exceed the total of the liabilities,
reserves, and municipal equity. The use of the term "surplus" in
governmental accounting is generally discouraged because it creates a
potential misleading inference.
Suspended solids. Solids that either float on the surface of or are in
suspension in water, wastewater, or other liquids and that are removable by
a standard laboratory filtering procedure.
Suspense accounts. Accounts that carry charges or credits temporarily,
pending the determination of the proper account or accounts to which such
charges or credits are to be posted. Synonym: Clearing Account.
Tangible fixed assets. Physical fixed assets.
Tape. A recording media for data or computer programs. Tape can be in
permanent form, such as perforated paper tape. Generally,, tape is used as a
mass storage medium, in magnetic form and has a far higher storage capacity
than disk storage, but it takes much longer to write or recover data from
tape than from a disk.
Tax lien. A right that municipal utilities have in many states to attach
specific customers' (users') accounts to the taxes assessed against specific
property. Such attachment operates as a claim against the property until
the account is paid.
Tax levy ordinance. An ordinance by means of which taxes are levied.
Tax rate. The amount of tax stated in terms of a unit of the tax base, for
example, 25 mills per dollar of assessed valuation of taxable property.
Tax rate limit. The maximum rate at which a government may levy a tax. The
limit may apply to taxes raised for a particular purpose, or to taxes
imposed for all purposes, and may apply to a single government, to a class
of governments, or to all governments operating in a particular area.
Overall tax rate limits usually restrict levies for all purposes and of all
governments, state and local, having jurisdiction in a given area.
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Ul
Tax roll. The official list showing the amount of taxes levied against each
taxpayer or property. Frequently, the tax roll and the assessment roll are
combined, but even in these cases the two can be distinguished.
Tax supplement. A tax levied by a local government which has the same base as
a similar tax levied by a higher level of government, such as a state or
province. The local tax supplement is frequently administered by the higher
level of government along with its own tax. A locally Imposed,
state-administered sales tax is an example of a tax supplement.
Taxes. Compulsory charges levied by a government for the purpose of financing
services performed for the common benefit. This term does not include
specific charges made against particular persons or property for current or
permanent benefits such as special assessments. Neither does the term
include charges for services rendered only to those paying such charges, as
for example, sewer service charges.
Term bonds. Issues of bonds In which the individual bonds nominally mature
simultaneously. In some cases, however, there may be more than one maturity
date, such as a nominal serial bond having postponed maturies in only a few
late years of Its term. Term bonds are usually retired from sinking funds.
Terminal. An input/output device used to enter data Into a computer and record
the output. Terminals are divided into two categories: hard copy (e.g.,
printers) and soft copy (e.g., video terminals).
Timesharing. Providing computer service to many users by working on each one's
task part of the time.
Track. A circular strip on a computer disk's surface on which data is stored.
Track-density. The number of circular tracks per inch on the surface of a
computer disk. A standard track density is 48 tracks per inch. Some newer
disks have double that amount, 96 tracks per inch.
Trade discount. An allowance, usually varying in percentage with the volume
of transactions, made to those engaged in certain businesses and allowable
without respect to the time when the account is paid. These discounts are
commonly considered a reduction of the sales or purchase price and not
earnings. The term is not to be confused with "cash discount."
Traditional budget. A term sometimes applied to the budget of a government
wherein expenditures are based entirely or primarily on objects of
expenditure. See also program budget and performance budget.
Transfer voucher. A voucher authorizing transfers of cash or other resources
between funds.
Treatment works. Any devices and systems used In the storage, treatment,
recycling, and reclamation of municipal sewage, domestic sewage, or
Industrial wastes of a liquid nature, including intercepting sewers,
outfall sewers, sewage collection systems, pumping, treatment process units,
etc. See also wastewater utility.
Trial balance. A tabulation of the balances of the accounts in a ledger kept
by double entry, with the debit and credit balances shown in separate
columns. If the totals of the debit and credit columns are equal or their
net balance agrees with a control account, the ledger from which the figures
are taken is said to be "In balance."
Trunk sewer or main sewer A sewer that receives wastewater from a number of
tributary branches or sub-main sewers and serves a large terrrltory.
Trust funds. Funds used to account for assets held by a government in a
trustee capacity for Individuals, private organizations, other governments,
and/or other funds.
Trust and agency fund. One of the eight generic fund types in governmental
accounting. See also trust funds.
Turnkey system. A computer that is ready to be used without adding any
hardware or software; it Is complete as packaged for a particular
application.
Unamortized. When a debit or a credit is to be entirely accounted for in the
current account period, it is said to be unamortized.
Unbilled accounts receivable. An account which designates the estimated
amount of accounts receivable for services or commodities sold but not
billed. For example. If a utility bills Its customers bimonthly but
prepares monthly financial statements, the amount of services rendered or
commodities sold during the first month of the bimonthly period would be
reflected in the balance sheet under this account title.
Uncollectible accounts. See bad debts.
Unexpired Insurance. The portion of policy premiums that represents the cost
of Insurance during subsequent accounting periods.
Unexpended allotment. That portion of an allotment not yet expended.
Unexpended appropriation. That portion of an appropriation not yet expended.
Unit cost. A term used In cost accounting to denote the cost of producing a
unit of product or rendering a unit of service; for example, the cost of
treating and purifying 1,000 gallons of sewage.
Unit of production depreciation. A variation of the straight-line depreciation
method which, Instead of allocating the depreciable base of a property unit
uniformly through its service life, allocates it uniformly on a "use" or
production basis such as miles, hours of run time, megwatt-hours, million
gallons, or other measure of service.
Unit tax ledger. A ledger in which is recorded the assessed value and other
data on taxable properties. Where the unit tax ledger system Is used, there
is an individual ledger card for each piece of taxable property, and where
legal provisions permit, this ledger functions in lieu of a tax roll.
Unliquidated encumbrances. Encumbrances outstanding. See also encumbrances.
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Unqualified certificate. An auditor's certificate in which the auditor states
that the accounts referred to in the certificate are, in his opinion,
correct and reflect accurately the conditions or the transactions, or the
results shown.
Useful life. See life, useful.
User. The term refers to the party who is billed, usually for sewer service,
from a single connection and has no reference to the number of persons
served. See also customer.
User accounting and collecting. That phase of the utility's activity relating
to the determination of the amount due from each customer, the billing
therefor, collecting of amounts due, and the various procedures necessary to
record in detail the transactions relating to the above activities.
User charge. As defined by Federal regulations, It Is a charge levied on
users of a treatment works, or that portion of the ad valorem taxes paid by
a user, for the user's proportionate share of operation, maintenance and
equipment replacement costs of such works. See also sewer service charge
and user charge system.
User charge system. (UCS) The system of charges regulated by the EPA and
developed to allocate the operation, maintenance, and replacement costs of
wastewater treatment services to the recipients of the services within the
service area. A system may be based upon either actual (or estimates of)
use or ad valorem taxes but must assure that each user will pay his
proportionate share of the costs. If based on use, the system must result
in the distribution of the costs to each user (or user class) in proportion
to such user's contribution to the total wastewater loading by all users
(or user classes). A system based on ad valorem taxes may be approved only
if the system was in existence on or before December 27, 1977 and that the
system meets the requirements of a "dedicated" ad valorem tax system.
User class. As established in the preamble to the August 21, 1973 federal
regulations (38 FR 22524), the user classes to be defined for a POTW's user
charge system include residential, commercial, industrial, institutional and
governmental.
Users' deposits. The liability of the utility for money deposited with it by
users as at least a partial guarantee that they will meet their bills.
Utility. A term in general use to denote a public utility. An enterprise
engaged in the performance of some public service such as furnishing water,
gas, electricity, or sewer sevice.
Utility fund. See enterprise fund.
Utility plant. Value of all assets represented by plant used and useful In
the rendering of utility service.
Value. As used in governmental accounting, this term designates: (1) the act
of describing anything in terms of money; or (2) the measure of a thing in
terms of money. The term should not be used without further qualification.
See also book value and face value.
Value, fair. A value that IB fair to all parties under the existing or assumed
circumstances; the base on which earnings from service rates and charges may
be predicated.
Value, going. The value of the development of the earning power of a public
utility (in excess of the appraised value of physical property) used in
determining the total present value of the property.
Value, water right. The value, expressed in dollars, of the right to use water
occurring in a given source. It may be expressed in value per unit rate of
flow, or per unit of volume diverted during a year.
Vendor. A firm or individual from whom the accounting utility purchases
supplies or materials.
Vendor liability. An account payable or which may become payable to a vendor.
Volatile memory. Computer memory that loses Its contents when power is removed
unless battery back up Is available. See also core and non-volatile memory.
Voucher. A written document which evidences the propriety of transactions
and usually indicates the accounts in which they are to be recorded.
Voucher register. The journal In which vouchers are entered after being
approved for entry.
Voucher system. A system which calls for the preparation of vouchers for
transactions involving payments and for the recording of such vouchers in a
special book of original entry, known as a voucher register. In the order in
which payment Is approved.
Vouchers payable. Liabilities for goods and services evidenced by vouchers
which have not been paid.
Warrant. An order drawn by the legislative body or an officer of a government
upon Its treasurer directing the latter to pay a specified amount to the
person named or to the bearer. It may be payable upon demand, in which case
it usually circulates the same as a bank check; or it may be payable only
out of certain revenues when and If received, In which case it does not
circulate as freely.
Warrants payable. The amount of warrants outstanding and unpaid.
Wastewater. The spent water of a community. From the standpoint of source, it
may be a combination of the liquid and water-carried wastes from residences,
commercial buildings, industrial plants, and Institutions together with any
groundwater, surface water, and stormwater that may be present. In recent
years,the word wastewater has taken precedence over the word sewage. See
also domestic wastewater.
Wastewater system. (wastewater facility) A collective term used to denote all
~ the property involved in the operation of a wastewater treatment utility. It
Includes land, sewer lines and appurtenances, pumping atations, treatment
plants, and general property. See also wastewater utility. Synonym: Sewer
System.
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Wastewater treatment plant. An arrangement of devices and structures for
treating wastewater, including sludge disposal, In order to remove or alter
Its objectionable constituents. (This also may be referred to as a
wastewater facility or wastewater disposal plant or works, or water
pollution control plant or works.)
Wastewater utility. An enterprise, the principal objective of which is the
rendering of wastewater service. Synonym: "Sewer Utility." See also
treatment works.
Water system. A collective term used to denote all of the property involved
In the operation of a water utility. It Includes land, water lines and
appurtenances, pumping stations, treatment plants and general property.
Winchester disk. A computer hard disk permanently sealed In a drive unit to
prevent contaminants from affecting the read/write head; this virtually
eliminates the need for adjustment of the head by field service personnel.
The disk is capable of storing larger amounts of data than a diskette.
>• Word. The greatest number of bits a computer is capable of handling In any
' one operation. Usually subdivided Into bytes.
Word processing system. A system that processes text, performing such
automatic functions as paragraphing, paging, left and right Justification,
rearrangement of lines, and printing the text.
Work In process. The cost of partially completed products manufactured or
processed, such as a partially completed printing Job. Sometimes referred
to as "work In progress." See also construction In progress.
Work In progress. See Construction in Progress and Work In Process.
Work order. A written order authorizing and directing the performance of a
certain task and issued to the person who Is to direct the work. Among the
Items of Information shown on the order are the nature and location of the
Job, specifications of the work to be performed, and a Job number which is
referred to in reporting the amount of labor, materials, and equipment used.
Work program. A plan of work proposed to be done during a particular period by
the administrative agency in carrying out Its assigned activities.
Work unit. A fixed quantity which will consistently measure work effort
expended In the performance of an activity or the production of a commodity.
Working capital. Cash, materials, supplies, and other similar current assets
necessary in the operation of the enterprises. Usually measured by the
excess of current assets over the current liabilities.
Working capital fund. See Internal service fund.
Yield. See effective Interest rate.
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APPENDIX B
BIBLIOGRAPHY
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APPENDIX B - BIBLIOGRAPHY
ACCOUNTING
1. American Institute of Certified Public Accountants. Audits of State and
Local Governmental Units.
2. American Water Works Association. Water Utility Accounting. 1980.
3. Ernst & Whinney. How Your Government Can Apply GAAP. 1982.
4. Government Finance Research Center and Peat, Marwick, Mitchell & Co.,
Financial Capability Guidebook. 1983.
5. Hayes, F. O'R., et.al. Linkages - Improving Financial Management in
Local Government. 1982.
6. Municipal Finance Officers Association, et.al. An Accounting Handbook
for Small Cities and Other Governmental Units.
7. Municipal Finance Officers Association. Governmental Accounting,
Auditing, and Financial Reporting. 1980.
8. National Association of Regulatory Utility Commissioners. Depreciation
Practices for Small Water Utilities. August 15, 1979.
9. National Association of Regulatory Utility Commissioners. Depreciation
Practices for Very Small Water Utilities. November 15, 1981.
10. National Association of Regulatory Utility Commissioners. Glossary of
Depreciation Terms. November 10, 1980.
11. National Association of Regulatory Utility Commissioners. Public Utility
Depreciation Practices. 196.8.
B-l
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APPENDIX B - BIBLIOGRAPHY
ACCOUNTING
12. National Association of Regulatory Utility Commissioners. Results of
Survey on Depreciation Practices for Water and Sewer Utilities, 1981.
13. National Association of Regulatory Utility Commissioners. Uniform System
of Accounts for Class C and D Sewer Utilities 1977.
14. Water Pollution Control Federation. Uniform System of Accounts for
Wastewater Utilities. Manual of Practice No. 10. 1970.
B-2
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APPENDIX B - BIBLIOGRAPHY
ENGINEERING
1. American Public Works Association, et al. Financing and Charges for
Wastewater Systems. 1973.
2. American Water Works Association. Computer-Based Automation in Water
Systems. 1980.
3. American Water Works Association. Water Rates Manual. AWWA No. Ml
2nd ed. 1972.
4. American Water Works Association. Water Utility Management. AWWA
No. M5. 1980.
5. Thompson, William B. "Setting Up a Simplified P-M Program". WATER/
Engineering & Management. January 1983.
6. U. S. Environmental Protection Agency. Diagnostic Operational Modeling
Programs for Municipal Wastewater Treatment Plants -Field Evaluation and
Process Review Project Report. EPA Region 10. October 1982.
7. U. S. Environmental Protection Agency. Diagnostic Operational Modeling
Programs for Municipal Wastewater Treatment Plants-Users Manual. EPA
Region 10. October 1982.
8. U. S. Environmental Protection Agency. Energy Management Diagnostics.
EPA-430/9-82-002. 1982.
9. U.S. Environmental Protection Agency. Guidance Manual for POTW Pretreat-
ment Program Development. August 1983.
10. U.S. Environmental Protection Agency. Handbook of Procedures - Construc-
tion Grants Program for Municipal Wastewater Treatment Works, 2nd Edition.
MCD-03. 1980.
B-3
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APPENDIX B - BIBLIOGRAPHY
ENGINEERING
11. U. S. Environmental Protection Agency. Maintenance Management Systems
for Municipal Wastewater Facilities. MO-7. EPA-430/9-74-004. October
1973.
12. U. S. Environmental Protection Agency. Model Protocol for the
Comprehensive Evaluation of Publicly Owned Treatment Works Performance
and Operation. EPA-600/52-82-015. May 1982.
13. U. S. Environmental Protection Agency. Wastewater Utility Recordkeeping,
Reporting and Management Information Systems. EPA-430/9-82-006. 1982.
14. Water Pollution Control Federation. Manual of Practice No. 3 -
Regulations of Sewer Use. 1968.
B-4
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APPENDIX B - BIBLIOGRAPHY
COMPUTER
1. Auer, J. and Harris, C.E. Major Equipment Procurement.
2. Buck. Introduction to Data Security and Controls. Q.E.D. Information
Sciences, Inc. 1982.
3. Cleary and Levenbach. The Professional Forecaster. Lifetime Learning
Publications. 1982.
4. Gushing. Accounting Information Systems. Addison-Wesley Publishing
Company. 1982.
5. Dagless and Aspinall. Introduction to Microcomputers. Computer Science
Press, Inc. 1982.
6. Danhof and Smith. Computing System Fundamentals. Addison-Wesley
Publishing Company. 1981.
7. Davis. Computers and Business Information Processing. Addison-Wesley
Publishing Company. 1981.
8. Digital Equipment Corporation. Guide to Personal Computing.
9. Eaton and Snithers. A Manager's Guide to Information Technology. Philip
Allan Publishers, Ltd. 1982.
10. Grinold and Marshall. Manpower Planning Models. North-Holland
Publishing Company. 1977.
11. Haueisen and Camp. Business Systems for Microcomputers. Prentice-Hall,
Inc. 1982.
12. Isshiki. Small Business Computers; Selection. Prentice-Hall, Inc.
1982.
B-5
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13. Jermann. Structure and Programming of Microcomputers. Alfred Publishing
Co., Inc. L982.
14. Kindred. Data Systems and Management. Prentice-Hall. 1980.
15. Kraemer and King. Computers and Local Government: Vol. 1, II. Praeger
Publishers, Inc. 1977.
16. Kroenke. Business Computer Systems. Mitchell Publishing Company. 1981.
17. McKinney. How to Computerize Your Small Business. Prentice-Hall, Inc.
1980.
18. O'Brien. Computers in Business Management. Richard D. Irwin. 1982.
19. Peters, Laurence J. Software Design; Methods and Techniques. Yourden
Press, New York, NY. 1981.
20. Pooch and Chattergy. Minicomputers: Hardware, Software, and Selection.
West Publishing Company. 1980.
21. Porochnia, Leonard. The Minicomputer: To Buy Or Not To Buy. National
Association of Accountants, New York, NY. 1982.
22. Kinder, Robert M. A Practical Guide to Small Computers. Monarch Press,
New York, NY. 1981.
23. Rosa, Nicholas and Miller, Merl. Management's Guide to Desktop Computers.
The Dartnell Corporation, Chicago, IL. 1982.
24. Singlemann and Longhurst. Business Programming Logic: A Structural
Approach. Prentice-Hall, Inc. 1982.
25. Smolin. How to Buy the Right Small Business Computer System. John Wiley
and Sons, Inc. 1981.
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26. Walsh. Understanding Computers. John Wiley and Sons, Inc. 1982.
27. Warnier, J.D. Logical Construction of Systems.
28. Watson and Carroll. Computers for Business; A Managerial Emphasis.
Business Publications, Inc. 1980.
29. Wilkinson. Accounting and Information Systems. John Wiley and Sons,
Inc. 1982.
B-7
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APPENDIX B - BIBLIOGRAPHY
COMPUTER
PERIODICALS
1. ACCESS (The Journal of Microcomputer Applications), published six times a
year by LEDS Publishing Co., Inc., Durham, NC.
2. Business Computer Systems, published monthly by Cahners Publishing Co.,
Boston, MA.
3. Byte, published monthly by McGraw-Hill, St. Peterborough, NH.
4. Computing Newsletter, published monthly except June, July, and August by
the Center for Cybernetics Systems Synergism (CYSYS), Colorado Springs,
CO.
5. ECAN (Engineering Computer Applications Newsletter), published monthly by
Engineering Computer Applications, Inc., Englewood, CO.
6. Infosystems, published monthly by Hitchcock Publishing Co., Wheaton, IL.
7. Interface Age, published monthly by McPheters, Wolfe and Jones, Cerritos,
CA.
8. Mini-Micro Systems, published monthly by Cahners Publishing Co., Boston,
MA.
B-8
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APPENDIX C
INPUT SOURCE DOCUMENTS
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APPENDIX C
INPUT SOURCE DOCUMENTS
List of Figures
(Applicable Program in Parentheses)
PAGE
Sample Chart of Accounts for POTW (P-l) C-l.C-2
Facility Inventory Functional Number System (P-2) C-3.C-4
Sample Maintenance Procedure Data (P-2) C-5
Stock Issue Ticket (P-2) C-6
Customer Meter Reading Card (P-3) C-7
Water Meter Readings (P-3) C-8
Request for Service (P-3) C-9.C-10
Timesheet (P-4) C-ll
Time Clock Card (P-4) C-12
Employee Performance Review and Evaluation Form (P-4) C-13
Sample Invoice (P-5) C-14
Sample Receiving Report (P-5) C-14
Requisition Form (P-5) C-15
Bid (Quotation) Form (P-5) C-16
Fixed Asset Record (P-6) C-17
Equipment Maintenance Record (P-6) C-18
Departmental Revenue Worksheet (P-ll) C-19
Work Order (P-12) C-20
Preventive Maintenance Work Record and Report of Trouble
(P-12) C-21
Daily Utility Operating Report (P-12) C-22
Daily Laboratory Record/Report (P-12) C-23
Energy Data Form (P-12) C-24
-------
APPENDIX C
INPUT SOURCE DOCUMENTS
List of Figures
(Continued)
PAGE
Monthly Plant Performance Report (P-12) C-25
Maintenance Activity Report (P-12) C-26
Operating Expense Worksheet (P-13) C-27
Budget Activity Summary Worksheet (P-14) C-28
-------
SAMPLE CHART OF ACCOUNTS FOR A POTW
CODING ITEM
00 The first two digits indicate the fund (an independent
fiscal and accounting entity with a self-balancing set of
accounts):
10 General
20 Special Revenue
30 Capital Projects
40 Enterprise
41 Wastewater Enterprise
50 Internal Service
60 Special Assessment
70 Debt Service
80 Trust and Agency
00-00 The next two digits indicate the series of revenue sources:
10 Taxes
11 General Property
20 User Charges
21 Sewer Service Charges
30 Intergovernmental
40 License Permits
50 Departmental Billings
60 Rent
70 Miscellaneous
00-00-000 The next three digits indicate the major object of
expenditure:
100 Personal Services
200 Operating Expenses
300 Maintenance Expense
400 Capital Outlay
Other items at this level could be activities:
100 Collection
200 Pumping
300 Treatment
310 Preliminary
320 Primary
330 Secondary
340 Tertiary
350 Sludge
400 General Administration
500 Laboratory
C-l
-------
SAMPLE CHART OF ACCOUNTS FOR A POTW
(Continued)
CODING ITEM
00-00-.000 Or program/project:
(Cont'd.)
100 Major Capital Outlay
200 Federal Project
00-00-000-0000 The last four digits indicate the account type:
1000 Cash
2000 Assets Other Than Cash, Property, Plant and Equipment
3000 Property, Plant, and Equipment
4000 Liabilities and Fund Balances
5000 Income (Revenue) Accounts
6000 Expense Accounts
C-2
-------
FACILITY INVENTORY
FUNCTIONAL NUMBER SYSTEM
100 Raw Wastewater Station
110 Screening
111 Bar Screen!
112 Conveyor!
120 Grinding
121 Grinder •
130 Waitewater Flow
131 Pumping
132 Valvei and Gates
133 Wet Well Level Control
134 Flow Measurement
135 Pump Seal Water
136 Compressed Air
140 Auxiliary Service*
141 Sump Pumping
142 Ventilation
143 Hoist.
144 Electrical Supply
200 Primary Treatment
210 Primary Settling
211 Tanks and Gate*
212 Sludge Collectors
213 Scum Launders
220 Sludge Handling
221 Pumping
222 Pump Seal Water
223 Flow Measurement
224 Sludge Degritting
230 Scum Handling
231 Pumping
232 Pump Seal Witer
233 Scum Well Level Control
240 Auxiliary Services
241 Sump Pumping
242 Ventilation
243 Hoists
244 Electrical Supply
300 Secondary Treatment
310 Aeration
311 Tanks and Gates
312 Adjustable Weirs
313 Tank Air Diffusers
314 Incremental Feed Channel Air Diffusers
316 Tank and Feed Channel Water Sprays
316 Mixed Liquor Flow Measurement
317 Diffuser Sock Washing
3ZO Air Delivery
321 Filters
322 Blowers
323 Flow Measurement
324 Pressure Relief
325 Channel Sparger Air Delivery
326 Compressed Air
330 Secondary Clanfiers
331 Mixed Liquor Channel Air Spargers
332 Mixed Liquor Channel Water Sprays
333 Clarifier Mechanism and Gates
340 Chemical Treatment
341 Flocculant Mixing
342 Flocculant Pumping
350 Return Sludge
351 Pumping
352 Pump Seal Water
353 Return Sludge Wet Well Level
354 Dewatering
355 Flow Measurement
360 Excess Sludge
361 Pumping
362 Pump Seal Water
363 Flow Measurement
364 Dilution
370 Scum
371 Scum Well Level Control
372 Scum Pumping
380 Auxiliary Services
381 Sump Pumping
382 Ventilation
383 Hoists
384 Electrical Supply
400 Chlorination and Effluent Flow
410 Chlorination
411 Chlorine Handling and Weighing
412 Evaporation
413 Chlorinators
414 Chlorine Detection and Venting
415 Injectors and Diffusers
416 Contact Chambers
420 Residual Chlorine Analysis
421 Analyzers
422 Influent Sampling
423 Effluent Sampling
430 Effluent Water
431 Weirs and Gates
432 Level Measurement
433 Return Water Pumping, High Lift
434 Return Water Pumping. Low Lift
435 Pump Seal Water
440 Auxiliary Services
441 Sump Pumping
442 Ventilation
443 Hoist?
444 Electrical Supply
Source: EPA "A Planned Maintenance Management System for Municipal
Wastewater Treatment Plants"
C-3
-------
FACILITY INVENTORY
FUNCTIONAL NUMBER SYSTEM
(Continued)
500 Sludge and Scum Processing
510 Auxiliary Services
511 Sump Pumping
$12 Ventilation
513 Hoists
514 Electrical Supply
520 Sludge Thickening
521 Thickeners
522 Pumping
523 Flow Measurement
524 Chlorination
525 Compressed Air
1 Sludge Storage and Handling
531 Sludge Storage Tank
532 Screw Feeder*
533 Pumps
534 Conveyors
535 Flow Measurement
536 Flushing Water
537 Hydraulic Power
538 Sump Purr.pir.g
540 Scum Handling
541 Weir Control
542 Pumping
550 Lime Treatment
551 Dry Lime Storage Tank
552 Level Indication
553 Vibration
554 Dust Collection
555 Dry Lime Feeding
556 Lime Mixing
557 Lime Slurry Pumping
560 Ferric Chloride Treatment
561 Storage Tanki
562 Compressed Air Supply
563 Day Tanks
564 Pumping
570 Polymer Treatment
571 Mixing
572 Pumping
580 Sludge Conditioning
581 Conditioning Tanks
590 Vacuum Filtration
591 Vacuum Pumping
592 Filtering
593 Filter Agitation
594 Filtrate Pumping
600 Incineration
610 Incinerators
611 Mechanism*
620 Gas Supply
621 Oil Supply
631 Shutoff
632 Filtration
633 Pumping
634 Flow Rate
640 Air Supply and Foul Gases
641 Cooling Air
642 Combustion Air
643 Four Gas Delivery
650 Scrubbing
651 Scrubbers
652 Flush Water
653 Exhaust Fan*
660 Ash Handling
661 Elevators
662 Conveyors
663 Storage
664 Conditioning
665 Feeding
670 Auxiliary Services
671 Sump Pumping
672 Ventilation
673 Hoists
674 Electrical Supply
700 Utilities and Services
710 Recorders and Meter*
711 Flow
712 Pressure
713 Level
714 Concentration
715 Electrical and Position
720 Laboratory Facilities
721 Lab Equipment
730 Plant Service Equipment
731 Plant Water
732 Heating
733 Hot Water
734 Lighting
740 Outside Utility Supply
741 Electricity
742 Gas
743 County Water
750 Maintenance, it Repair Facilities
751 Machine Shop
752 Mechanical Shop
753 Electrical Shop
760 Buildings and Grounds
770 Safety Equipment
771 Fire Extinguishers
772 Hydrants
773 Emergency Lighting
774 First Aid Equipment
Source: EPA "A Planned Maintenance Management System for Municipal
Wastewater Treatment Plants"
C-4
-------
Sample Maintenance Procedure Data
MAINTENANCE PROCEDURE SHEET
Page 1 oi 1
EQUIPMENT NAME
Sampling Pump M, Chlormation Influent
Plant Area
Level
Location
.MPS No. 4221 Ml
Avcrace Time
-------
STOCK ISSUE TICKET
S.I.T. NUMBER
QTY
DATE
UNIT
REQUESTEI
DESCRIPTION/NAME
) / / REQUESTED BY
DELIVER TO
STOCK/EQUIPMENT NO.
(signature)
DATE ISSUED / /
TO BE RETURNED? YES NO
SUPPLIED BY
RECEIVED BY
(signature)
(signature)
DATE RETURNED / /
(if applicable)
RETURNED BY
RECEIVED BY
(signature)
(signature)
C-6
-------
CUSTOMER
METER READING CARD
CUSTOMER NAME
CUSTOMER ACCOUNT NUMBER
SERVICE ADDRESS
MAILING ADDRESS
(If Different from
Mailing Address)
METER READING
123456789
123456789
123456789
123456789
NUMBER OF CONSECUTIVE
ESTIMATES
NUMBER OF METER DIALS
METER MAKE
0 METER NUMBER
0 METER SIZE
0 SERVICE NUMBER
0 REMOTE - METER SERIAL NUMBER (IF
APPLICABLE)
METER LOCATION
PREVIOUS READING
PROJECTED LOW READING
PROJECTED HIGH READING
NAME OF METER READER
REVERSE SIDE CONTAINS SPECIAL INSTRUCTIONS TO METER READER, AND COMMENTS FROM
METER READER FOR SITUATIONS THAT MAY ARISE AS THEY PERTAIN TO READING THE
METER.
C-7
-------
WATER METER READINGS
CUSTOMER
NAME
CUSTOMER
ADDRESS
METER LOCATION
GALS.
METER TYPE NO. FEET
DATE
BY
READING
i^^m
^mmm
m**m
REMARKS
MUNICIPAL AUTHORITY
C-8
-------
DEPARTMENT OF PUBLIC WORKS
BUREAU OF ENGINEERING
REQUEST FOR SERVICE
(WATER AND/OR SEWER CONNECTION)
The following information is requested so that your application can be
considered for processing:
1) Owner's Name
2) Street City State
3) House Number (Where connection is requested)
4) Parcel or Lot Number Subdivision Name
5) Does the property pay front foot water benefit tax front foot sewer
6) Attach Plan or Sketch showing the following, (if no SDP is required);
a) Subject property:
b) Name of fronting road:
c) Nearest road intersection:
d) Location at property line of requested connections (water, sewer,
sprinkler):
7) Size of connection requested;
a) Sewer house connection size: Contract No.
b) Domestic water house connection size: Contract No.
c) Domestic water meter size:
d) Detector Check size:
* A letter of request for Unmetetered Fire Protection Connection must
accompany this completed form, together with four (4) copies of a
plan showing the desired location of such connection.
8) Any structure being renovated, leased or if the occupant(s) are being
changed the developer shall supply the Bureau of Engineering with a
drawing showing:
a) Building layout
b) Location of suite or bay in question
c) Occupant of suite(s) or bay(s)
C-9
-------
(Continued)
ADDITIONAL INFORMATION REQUIRED FOR COMMERCIAL AND INDUSTRIAL CONNECTIONS:
a) WAREHOUSE: b) COMMERCIAL:
Storage Area sq. ft. Office Area sq. ft,
Office Area Sq. ft. Business Area sq. ft,
Other - Service, Professional,
Business, etc. sq. ft,
c) INDUSTRIAL (Type): d) FOOD SERVICE (Type):
Production Area sq. ft. Seating Capacity:
Of fie Area Sq. ft. Dining
Cocktail Lounge
e) OTHERS: If school, specify: name of school; number of students; area in
square feet; if hospital, state name, number of beds, area in
square feet, etc.
NUMBER OF EMPLOYEES; Within Next 2 Years Ultimate
Office:
Production, Sales
or Service:
TOTAL
WATER USAGE: Average GPP Peak GPP Average GPP Peak GPP
Pomestic:
Process:
SEWER PISCHARGE; Average GPP Peak GPP Average GPP Peak GPD
Domestic:
Process:
SIGNATURE (Developer)
PRINT NAME:
DATE:
PHONE NO.:
C-10
-------
TIME DISTRIBUTION SHEET
NAME
EMPLOYEE NO.
DEPARTMENT _
JAN
FEB
MAR
APR
MAY
JUNE
JULY
AUO
SEPT
OCT
NOV
DEC
1
2
3
4
5
6
7
8
9
10
II
12
LEAVE BALANCE BROUGHT FORWARD FROM
UArATIHM CAQMCn TUIC VC-AD •
13
14
19
15
16
17
18
19
20
21
22
23
24
25
26
27
TOTAL
28
29
30
31
OT
MRS.
REG.
HRS.
SICK
LEAVE
HRS.
VAC.
HRS.
HOLI.
HRS.
TOTAL
MON.
HRS.
-------
NAME
PAY PER
R.T. HOURS
O.T. HOURS
HOURS
TIME CLOCK CARD
pypi NO
inn FNn|MR
RATE AMOUNT F.I.C.A.
RATE AMOUNT FED. W.T.
AMOUNT CITY/ST. W.T
STATE U.C.
BONOS
M AM 6:45
M PM 3:00
TU AM 6:49
TU PM 3--00
W AM 6--3S
W PM 3--00
TH AM 6:38
TH PM 3:00
FR AM 6 46
FR PM 3:02
NUMBER OF
EXEMPTIONS
TOTAL EARNINGS
TOTAL DEDUCTIONS
BALANCE DUE
DAILY TOTALS
R.T. Hourt O.T.
TOTAL HOURS SHOWN IS CORRECT SIGNATURE
C-12
-------
EMPLOYEE PERFORMANCE REVIEW AND EVALUATION 1
Deportment
Dvtlesi
j«t a-.^;,«ti»-
'
DO NOT AUOW PERSONAL FEEIING TO GOVERN YOUR RATING
which ore not typical. Check In black which seems best to fit above
Knowledge
of Work
Effect on
WoHcer*
Promptness
Responsibility
Accuracy
Quantity
•fWork
Initiative
Application
Comments :
Practically
None
a
Often
3reeds
Trouble
D
A'vsyt
Tardy
a
Careless
and
• Negligent
a
Is highly
Inaccurate
a
Amount of
work unset*
bfoclory
a
Must always
be told what
to do
a
Indifferent
and lazy
a
r— j Below
'— ' Average
a
Sometimes
|J causes
Dissension
a
Musi be
aremir 4ed
about
Promptness
a
DNol very
reliable
D
j~l Is often
Inaccurate
D
Turns out
Q just enough
ta get by
a
Needs con.
Q sidereble
Supervision
a
Tendency
II toward
Indifference
a
Use bock of sheet
D Acceptable
Knowledge
a
No out.
D standing
effect on
workers
a
a I sv illy
Prompt
a
Accepts
f| Resp.
when asked
a
Mokes
1 1 Occasional
errors
a
r~"l Turns out
^~* fair omf.
a
Needs
D Direction
and help
in coses
D
(~~J Average
"— ' application
a
. Do not be Influenced by UNUSUAl SITUATIONS
employee.
Somewhat
D obove
Average
a
Q Belter than
Average
a
Neve -let)
II without
good cause
a
Assumes
I— I Reip.
L— ' without
being told
a
^_^ Somewhat
II above
Average
a
Always
D finishes
alloted
amount
a
Needs
n lirrie
Supervision
D
I — ] Interested
l— ' and Diligent
a
n
D
a
a
a
a
a
a
Very well
Informed
Promotes
cooperation
and Good'
will
D
Almost
never Late I
D |
Accepts jj
Resp. above 1
Average i
Requirement |
D
I
Rorely |
makes §
mistakes Q
Turns out D
more than |
average R
amount B
D 1
Pushes work |
thru on own 3
initiative I
I
Puts extra 1
effort into fa
work §
a I
for additional information or remarks. H
Source: EPA "Wastewater Utility Recordkeeping, Reporting and Management
Information Systems"
C-13
-------
SAMPLE INVOICE
Ace Laboratories, Inc.
Ill MAIN STREET
ANYTOWN.USA
TELEPHONED 111/222-3333
INVOICE
XXXXX
SOLO
TO
SHIPPED
TO
ORDERED
SHIPPED
.4
INVOICE DATE
ITEM NO.
TERMS
SHIPPED VIA
DESCRIPTION
SALESMAN IPPD. OR COLL.
UNIT PRICE
AMOUNT
SAMPLE RECEIVING REPORT
Ace Laboratories, Inc.
No. XXXXX
RECEIVING REPORT
RECEIVED FROM
ADDRESS
VIA
REC'D IN SHIPPING BY
PCS. RECEIVED
OUANITY REC'D
1
2
3
4
5
6
7
8
9
IO
PCS. PER FREIGHT BILL
QU AMITY BACK/0
DATE RECEIVED
PURCHASE ORDER NO.
PRO. NUMBER PREPAID COLLECT RECEIVED IN DEPT. BY
WEIGHT CHARGES FOR OEPT.
BREAKAGE OR SHORTAGE
CATALOG NUMBER
DESCRIPTION
COMMENTS'
C-14
-------
REQUISITION FORM
R. F. Number
QTY
UNIT
DESCRIPTION/NAME
TOTAL
COST/UNIT
TOTAL COST
JUSTIFY ALL ITEMS HERE:
(continue on back if necessary)
If SOLE SOURCE SUPPLIER, attach "SOLE SOURCE" JUSTIFICATION FORM.
If to be purchased on basis of EMERGENCY, justify in DETAIL.
Date required
Use/site location
Is this NEW equipment or
REPLACEMENT?
Est. Useful Life
COMPLETE THIS AREA IF PURCHASE IS TO COST
MORE THAN $100, HAS A USEFUL LIFE OF MORE
THAN 5 YEARS, AND IS A REPLACEMENT?
Old Fixed Asset:
Description
Inventory Code
Traded?
Location
Scrapped?
**OFFICE USE ONLY**
Delivered / /
Date ordered
Vendor
Delivery date expected
Total units
Total cost
P.O. #
Sole Source
PRIORITY: (circle one)
1. Emergency
2. Hand-carry
3. Expedite
4. Routine
If priority not
assigned by Dept.
Head, will be
ROUTINE.
Submitted by
Date
DEPARTMENT HEAD APPROVAL
Date
FUND APPROVAL-COMPTROLLER
Date
C-15
-------
BID
(QUOTATION)
Vendor name,
address, and
phone number
TO: (Utility name and address)
No.
DATE
INQUIRY DATE
INQUIRY NUMBER
EST. DELIVERY
(from receipt of
TERMS
order)
F.O.B.
TO BE SHIPPED VIA
SALESMAN
IN RESPONSE TO YOUR INQUIRY, WE SUBMIT THE FOLLOWING QUOTATION.
QUANTITY
STOCK NUMBER/DESCRIPTION
PRICE
PER
AMOUNT
Please refer to the above Quotation Number when placing your order.
By
C-16
-------
FIXED ASSET RECORD
ASSET TAO NO.
FIXED ASSET LCDCU ACCOUNT HO.
ASSET DESCRIPTION
VENDOR
ACOUISITIOM DATA
LOCATION DATA
DATE ACOUMCO
METHOD OF ACM
PURCHASE OROER NO. .
DATE
OR DEFT.
BUN.OINOOR
OTHER LOCATION
RESPONSIBLE OFFICIAL
OR OTHER PtBSON
ORK3MAI. COST OR API
TRANSPORTATION COST
INSTALL* TK)N COST
OTHER COST/FEES
TOTAL COST
BUH.O1NQ OR
OTHER LOCATION
RESPONSIBLE OFFICIAL
OR OTHER PERSON
FUND SOUBCC
DISPOSITION DATA
DATE OF DISPOSITION
METHOD OF DISPOSITION .
REASON FOB DISPOSITION .
ASSET VALUE
TRADE IN CREDIT
OR SALE PRICE _
TAC NO Of REPLACEMENT
TEAM
DEPRECIATION
gtSAN-
ASSET
Lift:
SALVAGE
VALUE:
OEPXECIATION
METHOD:
OATC
DELETIONS
COST
PERIOD
OEPREC.
ACCUU.
OEPREC.
RESIDUAL
VALUE
PHTS INVENTORY
MAINTENANCE COST
REFERENCE
Source: EPA "Comprehensive Diagnostic Evaluation and Selected Management
Issues"
C-17
-------
MAINTENANCE RECORD
EQUIPMENT NO..
MAKE OF UNIT-
MODEL NO
n
00
DATE
HOURS
WORK
ORDER NO
PARTS
COST
LABOR
COST
WORK
DONE BY
REMARKS
DATE
HOURS
WORK
ORDER NO
PARTS
COST
LABOR
COST
•
WORK
DONE BY
REMARKS
-------
Departmental Revenue Worksheet
DEPARTMENT: Police
(1)
RECEIPT ITEM
LEAA GRANT
(Drug Program)
Gov. Hwy. Safety
Program Grant
Parking Flow
Rebate
TOTAL
(2)
Fund
Special Revenue
(Federal)
Special Revenue
(State)
Special Revenue
(Police)
(3)
Amount
Anticipated
$121,000
31,000
30,000
$182,000
(4) (5) (6) (7)
Applied to What Activity
Admin.
$5,000
$5,000
Inveatig.
$11,000
5,000
$16,OOO
Patrol
$2O,000
20,000
$ 40,000
Youth Srs.
$121,000
$121,000
Source: "An Operating Budget Handbook'
C-19
-------
Sample Work Order
Date.
Work Order No.
Location
Requested By:
(Phone)
Priority:
Equipment Name
No.
Inspect Q Replace r~\ Service
Repair r~j Overhaul r~J Paint
Work-Description
Work Performed/Comments
Job Estimate
Labor $.
Material $
Maintenance Superintendent
Work Record
Personnel Assigned
Total
Hanhours
Date
Work Done
Parts 4 Materials
Work Completed By
Work Accepted By
Date
.D?te
Source: EPA, "Maintenance Management Systems for Municipal Wastewater
Facilities"
C-20
-------
PREVENTIVE; MAINTENANCE ^
[«•>?<••• »< M*w« »•* H«ota«
INCINERATOR NO.
urs «. "••"• * '— * •
i 1|1|1I-|D |1 ritlJtK
U.«h*u« • NMM
K
.'.. CHECK' OIL LtVtL - SiOMi
- TOP-BOTT. CENTER SHAFT
•., HI.
OT ».. ».«•
M. !•*•*• |C*«
Wa« there any indication of trouble?
Any change in operation of appearance? ....
Any fouling by foreign obje
Any improvement! to procedure.
Any improveroenti to tifety preca
ooli or partt? . . .
u 10 .
•ON.. 0-
1 1 1 1
* U »*• Q
a a
a a
a a
a a
a a
a a
a a
o °
i a a
IF ANY TROUBLE. FILL OUT REVERSE SIDE
Form M3, Preventive Maintenance Work Record
M. €*!>•> « T '*»»»*
Q •?•*•• M" Do. Mf, ••»!••
D w,,« **n Q »..!•»•
OM..I Qo.r..M
DM.... D ....„.«,
Di«Mii Oru. »M«
Dv.»r*IiW> D »•«•••«•
Qu**»tM Off..*
n^...
RrpQRT OF TROUBLE
• »»• Oi.tw«r«4
O •...!..,
a »•».••
Qo...^^.,^—
Q»i.f>iv« PM
Do...^ CK
Qo»*.<^ MOO
Oa":tOH
Dau.
(U... w T'^^ta
QHtMf«^tf /*•«*••
aM..X.,,)«.M«.
O r~.k/n»*MlM
a....
Q C^»i»m««» «•(««•
O '***•*•' .•Miim.^
O '-*'•*•' ••*»•«•«»••
O:»»f*«»i' *P*>MIM
Do.-,
=!•«* ,1 *^*ir<~M M* tAft** ««4 •. .*r...i Q
'"- "Hr.^r..,.»/t|
Form M3 (Reverse), Report of Trouble
Source: EPA "A Planned Maintenance Management System for
Municipal Wastewater Treatment Plants"
C-21
-------
DAILY UTILITY OPERATING REPORT
PUNT
FINAL
INI TIAL
TOTAL
GAS P
riNAL
INITIAL
TOTAL
HOUR
INFLUENT FLOW nETER
'OOUCEO
0. 0.
DESCRIPTION
SCREENINGS
GAIT
SCUM
USED
Clj RES. j
CLANTITY
CHECKLIST
AIR COW>. SPRAY »UMPS
BLOWCRS GAS CCNP.
GAS LINCS MCAT ElCH.
RETURN SLUDGE
SLUDGE PUMPED
CHLORINE
INITIAL
TOTAL
USED
BLCWCR NO. 1
FINAL
INITIAL
TOTAL
BLOWER NO. 2
f INAL
INITIAL
TOTAL
AIR TCKP. *r
SEWAGE TEMP. «r
WEATHER:
WASTE SLUDGE
HEAT EXCHANGER
TEMPERATURE
IN OUT
T T
svi
AIR SUPPLIES
DIGESTER
TEMPERATURE
*r
MLSS
REMARKS: 1ST SHin
OPERATOR :
0*TR;
PLANT INFLUENT FLOW ><*ER
FINAL
INITIAL
TOTAL
GAS PROOUCEO
FIMAL
INITIAL
TOTAL
HOUR
DESCR
0. 0.
JSEO
CLe RES.
i
OT ION
SCREENINGS
C^AKTl TY
GR T !
SCUM
CHECKLIST
AIR CO***". SPRA* »UMPS
BLOWERS GAS COM?.
GAS LINES HEAT CXCM.
RETURN SLUDGE
SLUOGC PUMPED
CHLORINE USED
FINAL
INI TIAL
TOTAL
BLOWER NO. t
FINAL
INITIAL
TOTAL
SLOWER NO. 2
FINAL
INITIAL
TOTAL
AIR TEMP. *F
SEWAGE TEMP. *F
WEATHER •
WASTE SLUDGE
«E*T EXCHANGER
TEMPERATURE
IN OUT
T *F
AIR SUPPLIES
i DIGESTER
TEMPERATURE
SVI
MLSS
REMARKS. z*o SHIFT
OPERATQR :
QATC.-
Source: EPA "Wastewater Utility Recordkeeping, Reporting and
Management Information Systems"
C-22
-------
DAILY LABORATORY RECORD/REPORT
GRAB SAMPLE
TIME
COLOR
TEMP.
pH
Satttaabla
Solldi. ml/1.
DiiMlvad
Oxyim. m|/l.
Raiidual
Chlorine, mg/|.
INFL.
COMPOSITE. 24 hr.
START/STOP
COLOR
PH
Salt. Solldi. ml/1.
TSS, nt|/l.
VSS. mg/l.
6 DAY B.O.O..mg/l.
% B.O.O. RMMM!
Tout Phoiphata. mg/l. P
Ammonia, mg/l N
Turbidity. NTU
Alkiliniiy, mg/l. u CaCO3
Prim. EH.
Tricklar
FlMl
DATE
FLOW: MM.
Wulhw
DIGESTER pH . . _
ALKALINITY
Mlii. Tof.l
Air Temp. . Praelpluikm
COj 0} CH1
, . mf ./I. u CaCOj
VOLATILE ACIDS.
.mg./l. M HOAc
Simpl*
* Solid*
%VoUllk
PH
Oimlal
Ami. In Storage
Ami. uud/24 hr.
Dota. mg/l
AERATION TANKS
TANK
MLTSS, mg/l
ML VSS. mgA
6mln.
^•"•"iBmU,.
aomhi.
60mln.
SVI. ml/g
cant. vol.. ml.
cant. factor
PH
tup. turbidity
RSTSS. mg/l
cant. vol.. ml.
cant, factor
S. B. D.. h.
1
2
•
3
Averaga
Inventory, Ibi. Wailing, gal. Ibt. MCRT
-------
ENERGY DATA FORM
o
YKAH
Tine of Day
or Unit Process
1OIAI
ELECTRICIIY
KWH
$
KW
J
TOTAL $
GAS
TIII:I^»*S
$
--—
OIL
GAL.
$
OTHER
UNITS
$
TOTAL
TOTAL $
Source: EPA "Energy Management Diagnostics"
-------
MONTHLY
PLANT PERFORMANCE REPORT
OAT*
OAV
or
NIK
RAM
ON
IN.
RAT!
TOTAL
RAW
PIMM
TOTAL
NAN
FINAL
UL.
CMLONWATWN
RESIDUAL
AJLl ML
tCTTUAM.!
HAN
IM.
M.IFINA
'• *»•
DA
TKN
RAN
TOTAL
NITROGEN
FINAt
TOTAL
mo*.
WORM
RAW
FINAt
10
if
M
11
31
WEEK
KAN
m.
«CAL
COLIFORM
KRIOOMl
trFLUCNTTUMrrV OTHf M ON VCCIAL ANALVStt
tcrric
AVI.
AVI.
AVI.
AVC.
AVI.
AVt.
AVL
NtMANU: CHLONIMf ON KWIN OUTAOU, LO«T THO. ACCIOtMTt, ITC.
Source: EPA "Wastewater Utility Recordkeeping, Reporting and Management Information
Systems"
C-25
-------
MAINTENANCE ACTIVITY REPORT
(Weekly)
n
to
WORK ORDER
NUMBER
DESCRIPTION
TYPE OF
ACTIVITY
REQUESTED
START DATE
ACTUAL
START DATE
SCHEDULED
COMPLETION DATE
ACTUAL .
COMPLETION DATE
ESTIMATED
COST
ACTUAL
COST
Source: EPA "Wastewater Utility Recordkeeping, Reporting and Management Information Systems"
-------
Operating Expense Worksheet
DEPARTMENT
ACTIVITY
PREPARED BY.
REVIEWED BY .
Increase % Change
Current Budget (Decrease) from
Prior Year Year Budget Recom- from Current
Expenditure Budget Request mendation Request Budget
Code/Object
30 Transportation, Postage.
Discussion/Justification
40 Utilities xxxx
Discussion/ Justification _
xxxx xxxx xx xx xx
50 Contractod Sorvteos xxxx
Discussion/Justification _
xxxx xxxx xx xx xx
Source: "An Operating Budget Handbook"
C-27
-------
Budget Activity Summary Worksheet
DEPARTMENT: Police
ACTIVITY: Investigation
No. of Positions
Prior Yr.
Actual
xx
Current
Year
Budget
xx
Budget
Year
Request
xx
Budget
Year
Recommended
xx
Funding Requirements
Code/Object
10 Salaries and Wages
20 Fringe Benefits
30 Travel, Transportation
Postage
40 Utilities
50 Contractual Service
60 Supplies and Materials
70 Equipment
80 Miscellaneous
Funding Sources
General Fund
Special Revenue Funds:
Department Receipts
Grant Fund
Objectives of Activity:
$xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
$xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
$xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
XXX
$xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
xxx
Work Plan Summary for Budget Year:.
iignificant Service and Funding Issues:
Source: "An Operating Budget Handbook"
C-28
-------
APPENDIX D
FILE SPECIFICATIONS
-------
APPENDIX D
FILE SPECIFICATIONS
The proposed financial management system for POTW's includes the
development and maintenance of 21 files. The specifications for these files
are addressed in this appendix and they include the following information:
1. Description of data;
2. List of accessing programs and related data retrieved for
program input or entered by program output; and
3. File organization and format which includes indexing codes
(access keys) and any inherent security process.
Certain terms will be used in this study in describing the components of
the proposed computer-based system. These terms and their specific definitions
for this study are provided below:
1. Access Keys - a unique string of alphanumeric characters
defined by a predetermined coding system. These strings
can be used along or in combination with other access keys
to rapidly "access" specific records maintained in a file.
2. File Maintenance - the task of keeping the permanent data
base updated which includes adding, deleting, or changing
(adjusting) data. Usually "temporary" files are created
during the updating process.
3. Temporary File - file used to accumulate data for a given
period and at the end of the period (at which time the data
has either been verified and entered into a specified
permanent file or processed for a particular purpose) the
data is deleted from the temporary file. Once utilized, it
D-l
-------
will be initialized and recreated during the next updating
or processing cycle.
The files proposed for this system were designed so that no duplication of
data storage would occur. It should be noted that one file may contain several
record types, each used by different programs, that were stored within the same
file. These record types were determined to be of the same information
category and therefore storing their data within the same file allowed for a
"natural" filing system. The files designed and presented Here include the
following:
1. Billing (F-l)
2. Budget (F-2)
3. Customer (F-3)
4. Debt History (F-4)
5. Employee (F-5)
6. Facilities Cost (F-6)
7. Financial Indicators (F-7)
8. General Ledger (F-8)
9. Inventory (F-9)
10. Invoice (F-10)
11. Journal Entry (F-ll)
12. Maintenance (F-12)
13. Operations (F-13)
D-2
-------
14. Purchase Order (F-14)
15. Rate (F-15)
16. Revenue (F-16)
17. Service Area (F-17)
18. Subsidiary Ledger (F-18)
19. Tax (F-19)
20. Timesheet (F-20)
21. Vendor (F-21)
D-3
-------
A. Billing File (F-l)
1. Accessing Program
o Billing (P-3) - Inputs data to selected customer
accounts concerning current and previous balance, due
date for current balance, payment history, and
delinquency history. Retrieves control data and
account data for printing statements, registers,
status reports, delinquency notice, etc.
2. Access Keys
o Customer Account ID Number
o Billing Cycle Code
o Dates (such as due date and payment date)
3. Data Description
Record 1
o Number of Cycles
o Cycle Dates (or length)
o Number of Meter Books (areas)
o Meter Book ID Number and Area Name (for each meter
book)
Record 2
o Customer Account ID Number
o Cycle Code
o Meter Book
o Bill Due Dates
D-4
-------
Record 2 (Continued)
o Codes (electricity, water, sewage, garbage)
o Statement Update
o Delinquency/Penalty History and Charges
B. Budget File (F-2)
1. Accessing Programs
o General Accounting (P-l) - accesses file to post
budgeted amounts (Record 2) to the appropriate
accounts of the General Ledger file. This is to flag
funds exceeding budgeted amounts which could lead to a
budget transfer.
o Purchasing (P-5) accesses file to obtain budgeted
expenditure data (Record 2) to check if dollars are
available to purchase requested items.
o Revenue Analysis (P-ll) - accesses file to retrieve
estimated revenue data from current budget period or
selected previous budget periods (Record 3) to compare
estimated revenues with actual revenues for the same
budget periods to determine the "historical ratio".
o Expenditure Analysis (P-13) - accesses file to
retrieve budget data of current and selected past
periods (Records 2 and 3) to generate a report
comparing these budgeted amounts to actual amounts.
o Budget Implementation (P-l4) - updates budget "policy"
data (Records 1), inputs data for departmental
proposed budget plans (Record 4), and maintains
approved budget (Record 2).
D-5
-------
o Cash Flow Forecasts (P-15) - accesses file to retrieve
projected expenditures for specified object category
and month of the budget period (Record 2) and to store
cash flow projection data (refer to Record 5).
o Financial Capability Analysis (P-17) - accesses file
to retrieve data on budgeted operating expenses,
annual debt services, and non-operating expenses for
current budget (Record 2) or for specified alternative
budget plans (Record 4).
o Budget Planning (P-19) - access file to retrieve
financial and manpower data of selected alternative
plan (Record 2) and to enter work schedule data
(Record 6).
2. Access Keys
o Policy Code Number
o Budget Period ID Number (i.e. fiscal year)
o Account Number (for retrieving data on fund type,
source of revenue, major object of expenditure, and
activity/department).
o Alternative Plan Number
o Department ID Number
o Cash Flow Projection Period (i.e. fiscal year)
D-6
-------
3. Data Description
Record 1
o Policy Code Number
o Description of Data (i.e. budget period dates; review
process dates, agency names, and sequence;
organization classifications; budget minimums;
flexible budget ranges; standard budget transfer
procedure; water conservation program; capital
improvement implementation schedule; and revenue use
constraint data)
Record 2 (Expenditures)
o Budget Period ID Number
o Account Number
o Account Name
o Budgeted Amount
Record 3 (Revenues)
o Budget Period ID Number
o Account Number
o Account Name
o Budgeted Amount
Record 4 (Alternative Plans)
o Alternative Plan Number
o Department ID Number -\
o Account Number(s) > (Repeat for each department)
o Budgeted Amount (s) -*
D-7
-------
Record 5 (Cash Flow)
o
o
o
o
o
o
Cash Flow Projection Period
Account Number
Historical Revenue Ratio (cash receipts/projected
revenues)
Historical Expenditure Ratio (Expenses/projected
expenditures)
Account Number (revenue and
expenditures)
Actual Account Amount
Projected Account Amount
Net Cash Balance
(Repeat for each
account type)
Record 6 (Work Schedule)
o Budget Period ID Number
o Department ID Number
o Account Number(s)
o Budget Amount(s)
o Employee ID Number(s)
o Manpower Requirement(s)
(Repeat for each
department)
C. Customer File (F-3)
1. Accessing Programs
Billing (P-3) - Retrieves meter-reading information
for each customer for generating meter-reading forms.
Inputs flow readings from meters into specified
customer accounts. Retrieves customer data
(classification, address, water consumption, sewage
flow and pollutant load) for generating customer
billings.
D-8
-------
o Service Area Analysis (P-9) - Accesses file for
individual customer accounts (coordinate data of
connection point and customer classification) and
for customer classification data (Record 4) including
annual water volume, annual sewage volume, strength
loading, I/I flow volume and stormwater volume.
o Sewer Service Charge Rate Setting (P-10) - Accesses
file for customer classification data (Record 4), in
particular the number of customers per meter size.
o Revenue Analysis (P-ll) - Accesses file to retrieve
data on customer delinqency history to assist in
determining the historical bad debt factor.
2. Access Keys
o Customer Account ID Number
o Customer User Classification Code
o Meter Size
o Meter Make
3. Data Description
Record 1
o Customer Account ID Number
o Name
o Mailing Address
o Service Address
o Customer User Classification (residential,
commercial, industrial, institutional and
governmental)
D-9
-------
Record 2
o Customer Account ID Number
o Last Meter Reading
o Name of Meter Reader (for last reading)
o Number of Consecutive Estimates
o Previous Reading
o Projected Low Reading
o Projected High Reading
o Number of Meter Dials
o Meter Make
o Meter Number
o Meter Size (inches)
o Service Number
o Remote Meter Serial Number (if applicable)
o Meter Location (general description for meter reader
and coordinate data which could represent the
connection point and not the meter itself)
o Special Instructions for Reading
Record 3
o Customer Account ID Number
o Water Usage Consumption (1, 3, 5 Year History)
o Sewage Flow Generation (1, 3, 5 Year History)
o Pollutant Load History (for industries or commercial
customers only)
Record 4
o Customer User Classification
o Number of Customers/Meter Size (and per billing cycle)
o Number of Customers/Bills Rendered
o Annual Water Volume
o Annual Sewage Volume
D-10
-------
o Strength Loadings
o I/I Flow Volume
o Stormwater Volume
D. Debt History File (F-4)
1. Accessing Programs
o Budget Implementation (P-14) - accesses file to
retrieve data from Record 1 to project long-term
indebtedness payable and maturities by fiscal year.
Results are then stored in Record 2.
o Financial Capability Analysis (P-17) - accesses file
to update Record 3 with data for each proposed
alternative plan and to retrieve from Records 1 and 2
bond rating data, present outstanding debt, the total
overall debt, overall net debt, direct net debt
outstanding, overall net debt outstanding and direct
net debt due within five years.
2. Access Keys
o Year or Budget Period
o Issue Number
o Alternative Plan Number
o Debt Code
3. Data Description
Record 1
D-ll
-------
o Issue Number (includes issue date)
o Debt Code (bonded, leases, unfunded pension
liabilities and notes)
o Final Maturity Date
o Original Average Life
o Effective Interest Rate on Sale Date
o 20-Bond Yield Index Nearest Sale Date
o Annual Interest
o Annual Principal
o Principal Balance Outstanding
Record 2
o Calendar Year (or budget period)
o Total Annual Debt Service Requirements (for all bonds)
o Total Amount Outstanding (for all bonds)
o Revenue Available for Debt Service
o Times Debt Service
o Rating Data (type of bond rating, rating value, and
date of rating)
Record 3
o Alternative Plan Number
o Budget Period
o Total Funding Amount
E. Employee File (F-5)
1. Accessing Programs
Payroll - Personnel Records (P-4) - updates employee
personnel records (Record 1) employee payroll records
(Record 2) and retrieves data to generate various
management reports.
D-12
-------
o Performance Analysis (P-18) accesses file to retrieve
data (number of employees: total, for specified
department, and/or for specified specialty) on
staffing limitations for evaluating workload
capabilities.
o Budget Planning (P-19) - accesses file to retrieve
manpower data (number of employees for each department
for all specialties to generate a work schedule for
the selected alternative plan.
2. Access Keys
o Employee ID Number
o Name
o Department ID Number
o Specialties Code
o Education Code
o Date of Hire
3. Data Description
Record 1
o Employee ID Number
o Name
o Address
o Phone Number
o Social Security Number
o Birth Date
D-13
-------
o Race
o Sex
o Citizenship
o Disability Date
o Marital Status
o Military Status
o Years of Experience
o Previous Employer Name
o Emergency Contact Information (name, phone number,
relationship)
o Date of Hire/Rehire
o Date of Termination
o Education Code/Data
o Certification/Registration Code/Data
o Specialties Code/Data
o Department ID Number
Record 2
o Employee ID Number
o Hourly Rate
o Salary
o Current Pay and Deductions
o Monthly Pay and Deductions
o Quarterly Pay and Deductions
o Yearly Pay and Deductions
o Leave Data
o Timesheet Data
Record 3
o Employee ID Number
o Gross Pay
o FICA Wages
o Federal Tax
D-14
-------
o FICA Tax
o State Tax
o Local Tax
F. Facilities Cost (F-6)
1. Accessing Programs
o Annual Replacement Reserve (P-7) - updates the
replacement cost values in Record 2.
o Revenue Requirements (P-8) - updates all cost of
service values and non-use revenue amounts for actual
conditions (from accounting records) and for the
selected budget (from the budget file, F-2).
o User Charge Rate Setting (P-10) - accesses file to
retrieve values for cost of service items to determine
revenue requirements for selected alternative plans.
o Financial Capability Analysis (P-17) - accesses file
to retrieve and update values for cost of service
items to determine total construction and O&M cost
estimates for various alternative plans and total
funding for annual costs.
2. Access Keys
o Cost of Service Code
o Alternative Plan Number
D-15
-------
3. Data Description
Record 1
o Cost of Service Code
o Cost of Service Description
- O&M Costs (collection system, pumping system,
treatment system, accounting and collection
expenses, administration expenses, transportation
equipment, etc.)
Debt Service Requirement
- Replacement Costs
Taxes, Payment in Lieu of Taxes
Contributions to Other Departments
Appropriations for Major Improvements
Income Availabile for Return
o Non-Use Revenue Code
o Non-Use Revenue Description
Record 2
o Alternative Plan Number (equal to zero for existing
conditions)
o Cost of Service Code 1 (Repeat for each cost
o Cost Amount j of service item)
o Non-Use Revenue Code "| (Repeat for each non-
o Non-Use Revenue Amount | use revenue item)
o User Charge Revenue Amount (total or by cost of
service code)
G. Financial Indicators (F-7)
1. Accessing Program
o Financial Capability Analysis (P-17) - updates Record
1 for specified plans using data from the facilities
D-16
-------
cost file (F-6), the revenue file (F-16) and the
service area file (F-17); - updates Record 2 for
specified plans; and updates Record 3 for specified
plans using data from the debt history file (F-4) and
updates Record 4, the indicator rating table, for
generating reports using the financial indicator
values of Record 2.
2. Access Keys
o Alternative Plan Number
o Indicator Number
3. Data Description
Record 1
o Alternative Plan Number (equal to zero for existing
conditions)
o Total Construction Costs
o Total Operation, Maintenance, and Replacement Costs
o Amount to be Borrowed
o Annual Debt Service Payment
o Total Estimated Annual Wastewater Facilities Costs
o Total Funding
o Annual Cost Per Household
o Median Household Income
o Total Annual Costs per Household (as % of median
household income)
Record 2
o Alternative Plan Number (equal to zero for existing
conditions)
D-17
-------
o Indicator Number
o Description
o Value
(Repeat for each indicator)
Record 3
o
o
o
o
o
Alternative Plan Number (equal to zero for existing
conditions)
Bond Ratings (includes date of rating)
Outstanding Debt (includes type of debt and amount
outstanding)
Debt Repayment Schedule
Debt limits
Percentage of Debt Limit Used
Record 4
o Indicator Number
o Weak Rating Value Range
o Average Rating Value Range
o Strong Rating Value Range
H. General Ledger File (F-8)
1. Accessing programs
(Repeat for each
indicator)
General Accounting (P-l) - updates descriptive data
for accounts maintained in the utility's general
ledger file and updates all financial data (posts
transaction amounts and budget amounts to the
appropriate accounts).
Revenue Analysis (P-ll) - accesses file to retrieve
data for actual revenues received, month-to-date and
year-to-date, to assist in modifying estimated cost
recovery amount by a percent factor that reflects the
D-18
-------
accuracy of previous estimates in comparison to actual
data.
o Expenditure Analysis (P-13) - accesses file to
retrieve current (to-date) and historical financial
records for budgeted accounts to generate an operating
budget report with both actual and budgeted data and
the variance amount and percent.
o Cash Flow Forecasts (P-15) - accesses file to retrieve
data for current expenses.
2. Access Keys
o Date (month, quarter, year) or Accounting Period
o Account Number
3. Data Description
o Account Number
o Account Name
o Opening Balance
o Year (or accounting/budget period)
o First Month Activity
o Second Month Activity
o Third Month Activity
o Final Month Activity
o Current Balance
o Budget Amount
o Encumbrances
o Unencumbered Balance
D-19
-------
I. Inventory (F-9)
As stated in Chapter III (Section B.I) the backbone of an efficient
computer-based inventory system is a carefully planned alphanumeric coding
(2)
system. This system should:
o Specity the physical area where the item or equipment is
located (i.e. dewatering building, laboratory, and
administration buildings)
o Identify the type of equipment (i.e. pump, truck, and
meter); and
o Identify a specific process unit (i.e. secondary
clarification, chlorination, and sludge digestion)
In implementing a coding system and developing a file, the utility manager
(3)
should:^ '
o Decide what constitutes a unit of equipment;
o Discuss coding system with accounting personnel;
o Perform a physical inventory of all items to be included in
the file; and
o Review the manufacturers' manuals for each equipment type.
1. Accessing Programs
o General Accounting (P-l) - accesses file to retrieve
purchase cost data and annual depreciation charge (or
accumulated depreciation value).
Thompson, William B., "Setting Up a Simplified P-M Program,"
WATER/Engineering & Management. January, 1983.
D-20
-------
o Facilities Inventory (P-2) - initiates records
(Records 1, 2, 3) for new inventory items, updates
coding schedule (Record 4), and updates stock item
quantities (Record 3). Also accesses file to generate
reorder notices and inventory reports.
o Equipment Life and Depreciation (P-6) - accesses file
to retrieve estimated service life, salvage value,
purchase cost and purchase date for specific items and
inputs updated depreciation values (accumulated and/or
annual charge).
o Annual Replacement Reserve (P-7) - accesses file to
retrieve depreciation data (by line-item or for
individual equipment) to generate annual replacement
reserve report.
o Operations Performance (P-rl2) - accesses file to
retrieve maintenance procedure data, including
frequency, for specified items.
2. Access Keys
o Item Code
o Vendor Code
3. Data Description
Record 1 - Fixed Assets
o Item Code
o Descriptive Name
o Date of Installation
o Purchase Cost
D-21
-------
o Vendor Code (or name)
o Capital Project Number
o Assessment Value
o Date of Assessment
o Accumulated Depreciation
o Estimated Service Life
o Annual Depreciation Charge
o Estimated Salvage Value
Record 2 - Machinery/Equipment
o Item Code
o Descriptive Name
o Nameplate Data
o Maintenance Procedures (includes frequency)
o Spare Parts List
o Date of Purchase
o Purchase Cost
o Vendor Code (or name)
o Accumulated Depreciation
o Estimated Service Life
o Annual Depreciation Charge
o Estimated Salvage Value
Record 3 - Stock Items
o Item Code
o Descriptive Name
o Quantity On Hand
o Vendor Code (and associated purchase dates)
o Minimum Quantity On Hand
o Maximum Quantity on Hand
o Reorder Point
o Issue Unit
o Purchasing Lead Time
o Cost (unit of quantity)
D-22
-------
Record 4 - Coding Schedule
o Number of Sets (group of digits or letters) per Item
Code
o Set 1
o Description
o Set 2
o Description
o Last Set
o Description
J. Invoice (F-10)
1. Accessing Programs
o Purchasing (P-5) - updates all data in invoice file by
manual input to automatically update the accounts
payable register and the invoice ledger (refer to
subsidary ledger file, F-18).
2. Access Keys
o Invoice Number
o Purchase Order Number
o Receiving Slip Number
o Date
o Vendor Name
P-23
-------
3. Data Description
Record 1
o Invoice Number
o Date (month, day, year)
o Terms
o Vendor Number
o Purchase Order Number
o Receiving Slip Number
o Salesman
o Shipped Via (description)
o Item Number
o Description
o Quantity
o Unit Price
o Unit Type
o Amount
o Total Invoice Amount
o Check Number
K. Journal Entry File (F-ll)
1. Accessing Programs
(Repeat for each
item type)
o
General Accounting (P-L) - enters all financial
transaction data (Record 1) for the accounting system
through this file and updates the Chart of Accounts
descriptive data (Record 2).
o Customer Billing (P-3) - provides accounts receivable
data from customer billing activities for the general
accounting program (P-l).
D-24
-------
o Payroll - Personnel (P-4) - provides accounts payable
data from payroll activities for the general
accounting program (P-l).
o Purchasing (P-5) - provides accounts payable data from
purchasing activites for the general accounting
program (P-l).
o Revenue Analyses (P-ll) - accesses file for cost data
on cash receipts.
2. Access Keys
o Account Number
o Date
3. Data Description
Record 1
o Account Number
o Date
o Journal Source (adjustment, cash payment, cash
receipt, journal entry, transfer, transaction,
accounts payable)
o Purchase Order Number
o Invoice Number
o Check Number
o Discounts
o Description
o Posted Indicator (posted to ledgers, yes or no)
o Debit/Credit Indicator
o Dollar Amount
D-25
-------
Record 2 (This record is the description of the Chart of
Accounts)
o Fund Number
o Fund Description
o Revenue Source Number
o Revenue Source Description
o Object of Expenditure Number
o Object of Expenditure Description
o Activity/Department Number
o Activity/Department Description
o Account Type Number
o Accounty Type Description
o Account Number (selected combination of above numbers)
o Account Description
L. Maintenance File (F-L2)
1. Acessing Programs
o Operations Performance (P-12) - updates file with:
data for new inventory items from the inventory file,
F-9; completed maintenance data from work order
summaries and maintenance logs; and schedule data from
the inventory file, F-9, and maintenance schedules.
Also generates data concerning maintenance activity
status and equipment repair history and enters it into
the file.
o Performance Analysis (P-18) - accesses file to
retrieve data on maintenance schedules to determine
current workload.
2. Access Keys
D-26
-------
o Equipment Code (same as item code in F-9)
o Date
o Work Order Number
3. Data Description
Record 1 - Maintenance Work Scheduled
o Date (week ending MM/DD/YY)
o Equipment Code
o Description of Maintenance
o Safety Precautions (Repeat
o Tools, Parts, Material, Test Equipment ( for each
o Maintenance Procedures equipment)
o Average Time and Skill Level
o Day of Week
Record 2 - Work Orders
o Work Order Number
o Date (intiated and completed)
o Equipment Code
o Type of maintenance (preventive, corrective,
emergency)
o Work Performed/Comments
o Personnel Assigned
o Labor (manhours and costs)
o Materials and Parts (amount and costs)
M. Operations File (F-13)
1. Accessing Programs
D-27
-------
o Operations Program (P-12) - updates NPDES standards
maintained in Record 1 and operations data in Record 2
which includes monitoring and laboratory data. Also
accesses this data to print operations reports and
summary and statistical/trend analysis reports and
store results in Record 6.
o Performance Ranking of Alternative Budget Plans (P-24)•
- updates units of work data in Record 3 and plant
configuration data in Record 4. Also accesses this
data for diagnostic modeling operations and stores
results in Record 5.
2. Access Keys
o Date
o Process Unit Number (for process units such as primary
clarification, sludge digestion, and chlorination)
o Equipment Code (same as item code in F-9)
o Alternative Plan Number
o Parameter Type (flow, BOD, SS, DO, etc.)
3. Data Description
Record 1 - Performance Standards
o NPDES standards (effluent characteristics or
efficiency removals)
Record 2 - Monitored Performance Data
D-28
-------
o
o
o
o
o
o
o
Date
Equipment Code (for monitoring
equipment such as rain gages,
flow meters, and D.O. probes)
Reading
Unit (such as inches, cfs, and
Ibs.)
Process Unit
Parameter (and unit)
Reading
(Repeat for
each piece
of equipment)
(Repeat for each
laboratory test)
Record 3 - Units of Work
o Alternative Plan Number (equal to zero if existing
conditions)
o Process Unit Number
o Performance Unit (such as gallons of
wastewater treated, volume of sludge
generated, and gallons of water pumped)
o Number of Work Units
o Total Costs of Operations (includes
energy, chemicals, and manpower)
o Manhour Requirements
(Repeat for
each process)
Record 4 - Plant Configuration
o Alternative Plan Number (equal to zero if existing
conditions)
o Process Unit Number
o Number of Structures
o Dimensions of Structures
Record 5 - Modeling Results
> (Repeat for each process)
0-29
-------
o Alternative Plan Number (equal to zero if existing
conditions)
o Plant Influent Characteristics
o Process Unit Number [(Repeat for
o Influent and Effluent Characteristics j each process)
Record 6 - Statistic Results
o Parameter Type
o Value I (Repeat for all
o Date/Time J values analyzed)
o Percent of Values Greater than Standard
o Standard Value (NPDES, State or user selected)
o Treatment Removal Efficiency 1 (When applicable)
o Loading Rate J
o Statistical Values (includes average, variance,
standard, deviation, etc.)
o Regression Results
N. Purchase Order File (F-14)
1. Accessing Programs
o Purchasing (P-5) - initiates a record for new purchase
orders by entering descriptive data into the file.
o Facilities Inventory (P-2) - updates file upon receipt
of new inventory items and initiates a record for a
new purchase order upon generation of a reorder
notice.
2. Access Keys
o Purchase Order Number
o Reorder Notice Number
D-30
-------
o Work Order Number
o Dates (initiated and required)
o Vendor Number
3. Data description
Record 1
o Purchase Order Number
o Work Order Number
o Reorder Notice Number
o Dates (initiated and required)
o Terms
o Vendor Number
o Item Number
o Description
o Quantity
. (Repeat for each item type)
o Unit Price
o Unit Type
o Amount
o Total P.O. Amount
o P.O. Preparer Name
o P.O. Approval (name and date)
o Date Item(s) Received (either date of receiving slip
or invoice)
0. Rate File (F-15)
1. Accessing Programs
User Charge Rate Setting (P-10) - updates code
descriptions maintained in Record 1; cost allocation
factors maintained in Records 2, 3 (cost of service
D-31
-------
data is retrieved from Facilities Cost File for Record
3), and 4 and maintains schedule data in Record 5.
o Revenue Analysis (P-ll) - accesses file to retrieve
data from Record 5 for actual or proposed user charge
rates.
2. Access Keys
o Schedule Code (A, B, C)
o Customer Type Code
o Cost Function Code
o Cost of Service Code
o Alternative Plan Number
3. Data Description
Record 1
o Cost Function Code
o Cost Function Description (base, extra-capacity,
extra-strength, or customer)
o Cost of Service Code
o Cost of Service Description (such as collection
system, pumping system, customer billing, treatment
system, etc.)
o Customer Type Code
o Customer Type Description (such as residential,
commercial, industrial, or public)
Record 2
D-32
-------
o Cost Function Code
o Extra-Capacity Factors (average, hour, and peak day)
o Extra-Strength Factors (for all parameters)
Record 3
o Cost of Service Code
o Total Costs
o Cost Function Code
o Allocation Factor (percent of total
costs assigned to cost function)
Record 4
(Repeat for
each cost
function type)
o Customer Type Code
o Annual Flow (total, average rate, and
percent)
o Extra-Capacity and Strength (percent
factor and rate)
o Equivalent Meter/Billing Factors
o Customer Responsibility Factor
(Repeat for
each customer
type)
Record 5
o
o
o
o
o
o
Alternative Plan Number (equal to zero for actual rate
schedules)
Schedule A
Title ("Cost Function Allocation Breakdown")
Cost of Service Code
Cost Function Code
Allocated Cost Amount
Schedule B
(Repeat for each
cost of service
type)
D-33
-------
o Title ("Customer Class Responsibility Distribution")
o Customer Classification J (Repeat for
o Cost Function Type > each customer
o Allocated Cost Amount I user class)
o Schedule C
o Title ("Sewer Service Rate Schedule")
o Block Number
o Level of Customer Flows
o Sewer Service Charge Rate/1000 Gallons
P. Revenue File (F-16)
1. Accessing Programs
o Revenue Requirements (P-8) - accesses file to update
and retrieve data on "non-use revenue", Record 1.
o Revenue Analysis (P-ll) - updates cost recovery amount
data for specified alternative plans in Record 2.
o Cash Flow Forecasts (P-15) - accesses file to retrieve
data from Records 1 and 2 to project revenues for a
selected alternative plan and specified months in the
accounting period.
o Financial Capability Analysis (P-17) - accesses file
to retrieve data from Record 1 to determine "Grantee
Contributions" for financing a selected alternative
plan; to retrieve data from Record 2 to determine the
"residential share" of costs of services (cost
recovery amount); and to retrieve data from both
Records 1 and 2 to determine operating revenues and
nonoperating revenues.
2. Access Keys
D-34
-------
o Non-Use Revenue Code (for revenues from general
property taxes, special assessments, interest,
connection fees, etc.)
o Alternative Plan Number
3. Data Description
Record 1 - Non-Use Revenue
o Alternative Plan Number (equal to zero for existing
conditions)
o Month
o Non-Use Revenue Code (Repeat for each non-use
o Description j revenue type and month
o Value of Income of accounting period)
Record 2 - User Revenue
o Alternative Plan Number (equal to zero for existing
condition/selected plan)
o Month
o Customer Type
o "Base" Cost Recovery Amount
o "Predicted Lost" Amount
o Total Cost Recovery Amount
o Correction Factor
o Modified Total Cost Recovery
Amount
(Repeat for each
customer type and
month of account-
ing period)
Q. Service Area File (F-17)
1. Accessing Programs
Service Area Analysis (P-9) - updates data in Records
1, 2, and 3 and accesses them to generate flow summary
reports and industrial waste reports.
D-35
-------
o Sewer Service Charge Rate Setting (P-10) - accesses
file to retrieve data for specified service areas
(Record 3) to assist in determining customer
characteristics.
o Revenue Analysis (P-ll) - accesses file to retrieve
flow data (Record 6) for determining the projected per
capita flow and industrial flow of a specified service
area.
o Populations Statistics (P-16) - updates population and
income data for Records 4 and 5.
o Financial Capability Analysis (P-17) - accesses file
to retrieve industrial flow data (record 2) , to
retrieve data on the number of households and the
median household income (Records 4 and 5) of the
service area(s) and to retrieve population data from
Record 4 to determine Indication 1 (Population
Charge), Indicator 7 (Direct Net Debt Outstanding per
Capita), and Indicator 8 (Overall Net Debt Outstanding
Per Capita).
o Performance Analysis (P-18) - accesses file to
retrieve industrial flow data (Record 2) and to
retrieve population data from Record 4 and per capita
flow data from Record 3 to determine service level
values which are then stored in Record 6.
2. Accessing Keys
o Equipment Code (same as Item Code in F-9)
o Service Area Code (or ID Number)
o Industry ID Number
o Dates
D-36
-------
Census Tract Number
3. Data Description
Record 1 - Flow Data
o Equipment Code
o Description (such as meter, pumping station or
overflow/bypass)
o Location (includes coordinate values)
o Meter Type
o Service Area Codes(s)
o Service Area Flow Factor(s)
o Reading Date | (Repeat for
o Meter Reading J each reading)
Record 2 - Industrial Flow/Strength Data
o Industry ID Number
o Description and Name
o Location (includes coordinate values)
o SIC Code
o Service Area Code(s)
o Parameter Code(s)
o Estimated Discharge Rate
o Sampling Dates (Repeat for each
o Parameter Code I parameter and
o Parameter Sampling Value each sampling)
Record 3 - Service Area Boundary Data
o Service Area Code
o Boundary.Coordinates
D-37
-------
o Total Area (acres)
o Land Use Code(s) (with associated acreage)
o Quarter (1,2,3, or 4)
o Year
o Maximum Daily Sewage Flow Value
o Peak Hourly Sewage Flow Factor
o Infiltration/Inflow Factor
o Average Daily Sewage Flow Value
o Residential Per Capital Flow Values
o Conanercial/Industrial Per Acre Flow Value
Record 4 - Population
o Census Tract Number
o Date (month and year)
o Population
o Number of Households
o Service Area Code
o Allocation Factor
o Population Value
(Repeat for each
service area)
Record 5 - Income
o
o
o
o
o
o
o
Census Tract Number
Median Household Income (or median family income)
Date (month and year)
Consumer Price Index
Service Area Code
Allocation Factor
Income Value
(Repeat for each
service area)
Record 6
o Service Area Code
o Date (hydrograph range)
D-38
-------
o Flow Rate Hydrograph
o Pollutant Concentration Pollutograph
R. Subsidiary Ledger File (F-18)
1. Accessing Programs
o General Accounting (P-l) - updates descriptive data
for accounts maintained in the subsidiary ledger fife
and updates all financial data (posts transaction
amounts and budget amounts to the appropriate ledger
accounts).
o Revenue Requirements (P-8) - accesses file to retrieve
data for operations and maintenance costs; interest,
principal, and stipulated reserves of debt service,
replacement reserve, and capital outlay.
o Financial Capability Analysis (P-17) - accesses file
to retrieve cost data for interest paid, repayments,
excess plan/design cost and cost incurred for issuance
and sale of bonds for all capital projects and cost
data for existing annual operations and maintenance
activities and discontinued operations and maintenance
activities.
2. Access Keys
o Subsidiary Ledger ID Number
o Account Number
o Date (month, quarter, year) or Budget Period
3. Data Description
D-39
-------
Record 1
o Subsidiary Ledger ID Number
o Subsidiary Ledger Descriptive Name (includes accounts
payable, accounts receivable, fixed assets, etc.)
Record 2
o Subsidiary Ledger ID Number
o Account Number
o Account Name
o Opening Balance
o First Month Activity
o Second Month Activity
o Third Month Activity
o Final Month Activity
o Current Balance
o Budget Amount
o Encumbrances
o Unencumbered Balance
S. Tax File (F-19)
1. Accessing Programs
o Payroll - Personnel (P-4) - updates all tax data for
both Records 1 and 2 and retrieves data from Record 2
to produce Payroll Deduction Register, Social Security
Report and W-2 forms.
2. Access Keys
o Employee Number
D-40
-------
o Employee Name
o Pay Period
3. Data Description
Record I
o Employee Number
o Employee Name
o Federal Tax Status
o State Tax Status
o Local Tax Status
o Occupational Tax Status
o Voluntary Deduction Status (i.e. credit union and
United Way)
Record 2
o Pay Period
o Employee Number
o Tax Amounts
o Voluntary Deduction Amounts
o W-2 Data
(Repeat for each
employee)
T. Timesheet File (F-20)
1. Accessing Program
o Payroll - Personnel (P-4) - accesses file (along with
employee file, F-5) to generate management reports
such as a timesheet summary report, performance
evaluation report, etc.; to input all timesheet data
(regular hours, overtime, vacation time, sick leave,
etc.) for each employee (Record 2) to generate
D-41
-------
paychecks and to maintain employee records for alloted
vacation time and sick leave (Record 1).
2. Access Keys
o Employee Number
o Pay Period
o Dates
o Activity Code (or subdepartment number)
3. Data Description
Record 1
o Employee Number
o Years of Service
o Pay Period
o Accrued Vacation Time
o Accrued Sick Leave
Record 2
o Employee Number
o Pay Period
o Date
o Regular Hours and Activity Code
o Overtime Hours and Activity Code
o Sick Leave
o Vacation Time
o Miscellaneous Time
(Repeat for
each day)
U. Vendor File (F-21)
D-42
-------
1. Accessing Programs
o Facilities Inventory (P-2) - updates file (change of
address, service rating, point of contact, etc.) upon
receipt of inventory items using receiving slip
information or other general sources (such as
salesman).
o Purchasing (P-5) - initiates both Records 1 and 2 of
the file with vendor information during generation of
purchase orders.
2. Access Keys
o Vendor Number
o Vendor Name
o Equipment Product Code(s)
3. Data Description
Record 1
o Vendor Number
o Vendor Name
o Payment Address
o Phone Number
o Point of Contact
o Equipment Product Code(s)
o Service Rating
o Cost Rating
Record 2
D-43
-------
Equipment Product Code
Equipment Type
Manufacturer Type
D-44
-------
APPENDIX E
OUTPUT DOCUMENT SPECIFICATIONS
-------
APPENDIX E
OUTPUT DOCUMENTS
List of Figures
(Applicable Program in Parentheses)
PAGE
Cash Receipts Journal (P-l) E-1
Cash Payment Journal (P-l) E-1
Accounts Payable Journal (P-l) E~2
Accounts Receivable Journal (P-l) E~2
Purchases Journal (P-l) E~2
General Journal (P-l) E~3
Sample Daily Cash Report (P-l) E-4
Accounts Receivable Subsidiary Ledger (P-l) E~5
Plant Asset and Accumulated Depreciation Subsidiary
Ledger Card (P-l) E-5
Balance Sheet (P-l) E~6
Income Statement (P-l) E~7
Statement of Retained Earnings (P-l) E~7
Statement of Revenues, Expenses and Charges in
Retained Earnings (P-l) E~8
Revenues Report (P-l) E~9
Inventory Stock Record (P-2) E-10
Inventory History Data (P-2) E-ll
Lead Time Report (P-2) E-12
Stock Status Report (P-2) E-13
Multiple Warehouse Report (P-2) E-14
Individual Customer Meter Reading Log (P-3) E-15
Billing Statement with Payment Stub (2 samples)(P-3) E-16
Summary Employee Profile Report (P-4) E-17
Employee Compensation Record (P-4) E-18
Payroll Register (P-4) E-19
Employee Timesheet Sumary Report (P-4) E-20
-------
APPENDIX E
OUTPUT DOCUMENTS
List of Figures
(Continued)
PAGE
Sample Purchase Order (P-5) E-21
Schedule of Bills (P-5) E-22
Service Life Schedule (P-6) E-23.E-24
Annual Depreciation Schedule and Annual Reserve
Requirement(P-7) E-25.E-26
Revenue Requirement Report (P-8) E-27
Sewer Service Rate Schedule (P-10) E-28
Statement of Actual and Estimated Revenues (P-ll) E-29
History of Repairs Card (P-12) E-30
Work Load/Accomplished Summaries (P-12) E-31
Statement of Actual and Budgeted Expenditures
and Encumbrances, by Department/Activity (P-13) E-32
Summary Statement of Actual and Budgeted
Expenditures and Encumbrances (P-13) E-33
Typical Wastewater Utility Line Item Budget (P-14) E-34
Debt Service Requirements and Coverage Report (P-14) E-35
Outstanding Indebtedness Report (P-14) E-36
Wastewater Treatment Utility Activity Budget (P-14) E-37
Structure of an Annual Operating Budget (P-14) E-38
Cash Flow Forecast (P-15) E-39
Cash Flow Results andForecast (P-15) E-40
Wastewater Facilities Financial Information Sheet
(P-17) E-41.E-42
Supplemental Information Sheet (P-17) E-43
Energy Cost and Consumption Report (P-18) E-44
-------
CASH RECEIPTS JOURNAL
f*
1983
Jan.
. '
1
10
15
Exjunction
invesUd-nKisiness
Paynwntinful
Cash sales
17.pP»ymeminfu8
22J Sorrowed from bank
30
JO
30
Cash sales
Payment on account
Totals
O*fciU
CM*
:~soo
588
1,000
392
600
950
100
6,130
tain
Ktoaunt
12
B
20
I
Account THl*
Notes Receivable
F
Amt.
200
200
1
Account
CrMkMd
J. Co; , Capital
FR Allen
Sales
S. Ltoyd
Notes Payable
Sales
LmdaWeavil
CfvOlta
Account*
Bo«ol»ob4«
»*
*•
**
*•
Ami.
600
400
300
1,300
Me*
1,000
950
1.950
OthM
Accounts
F
Amt.
2.500
600
i 3.100
1 II
CASH PAYMENTS JOURNAL
DM*
1983
Jun.
1
10
14
15
30
30
30
30
Clock
Ho.
1
2
3
4
5
6
7
E»|tlMthm
June rant
Payment in F i*
Payment mFu«
Cash Purchases
Partial Payment
WHMrawalofcaaft
Vinous items
Totals
CrMta
Cnh
150
882
392
200
300
400
100
2.424
Dticounto
18
8
26
OtH«f «ec»mH»
AeaoumTltl*
Notes Payable
F
Anrt.
200
Acc«m«O«hM«d
Rent Expose
Comfort Km) Co.
Denim Modems
Purchases
Casual Qomwrs
J. Cox, Orawmg
Misc. General Exp.
200]
1
O.biU
ACCWMU
Pxy«tU»
f
t*
V*
*
Ami.
900
400
500
n.Ki.n
200
1.8001 200
1
Ottar
r
Ant.
150
400
100
650
i i
Source: Reynolds, Slavin, Sanders "Elementary Accounting"
E-l
-------
ACCOUNTS PAYABLE JOURNAL
Date
Account Credited
Terms
F
Amount
ACCOUNTS RECEIVABLE JOURNAL
Date
Account Debited
Terms
F
Amount
PURCHASES JOURNAL
Pagel
tiat*
1983
Jun.
3
8
16
28
30
Account CrmHUd
Comfort Knit Company
Denim Modems
Casual Clothiers
Baxter Tailors
Total
T*rms
2/10,n/20
2/10,n/60
3/5, n/30
1/20,n/60
F
*•*
^
*
v»
Amount
900
400
500
700
2.500
(351)(201)
E-2
-------
GENERAL JOURNAL
Source: Reynolds, Slavin, Sanders "Elementary Accoimting"
E-3
-------
Sample Daily Cash Report
(Governmental Unit)
DATE
RECEIPTS
CASH BALANCE
DISBURSEMENTS
Source: EPA "Wastewater Utility Recordkeeping, Reporting
and Management Information System"
E-4
-------
ACCOUNTS RECEIVABLE SUBSIDIARY LEDGER
Date
Explanation
,f -:
V
• Balance
i
-------
New Haven Water Company
Balance Sheet*
December 31
ASSETS 1977 1976
UTILITY PLANT — at original cost —
Notes C and N
Organization $ 88,392 5 88,392
In service 107.862,139 102,222,854
Held for future use 97,668 97,668
108,u4fl!iflS 102,408,914
Less allowance for depreciation 30,603,604 28,662,876
77,444,595 73,746,038
Construction work in progress 3.543.678 1,260,837
80,988,273 75,006,875
INVESTMENTS — at cost
Physical property — other than Utility Plant 472,160 395,850
Less allowance for depreciation 124.086 119,117
348,074 276,733
Other 13.818 11,310
361,892 288,043
CURRENT ASSETS
Cash — Note D 2,077,242 2,282,578
Accounts receivable 3,633,428 3,387,683
Accrued water revenue — Note J 2,384,725- 1,767,090
Allowance for uncollectible accounts ( 250,000) ( 220,000)
Materials and supplies 367,084 395,236
Municipal taxes (1977—52,679,319; 1976—
$2,624,864) and prepayments 2.985.975 2,902,895
11,198,454 10,515,482
DEFERRED CHARGES
Unamortized debt discount and expenses.. 289,755 306,023
Preliminary engineering and survey 172 143 225,611
Other 22?!l25 109.054
eaa.Qgg 640,688
S 93.237.647 $ 86.451,088
CAPITALIZATION AND LIABILITIES
CAPITALIZATION — Notes B andC
Common Stockholders' Equity:
Common Stock $ 13,200,000 $13,200,000
Premium on Common Stock 1,764,244 1,764,244
Retained earnings 8.074.105 7,518,502
23,038,349 22,482,746
Cumulative Preferred Stock 8,000.000 5,000,000
Long-term debt 36.066.000 36,066.000
67,104,343 63,548,746
CURRENT LIABILITIES
(Exclusive of notes payable to banks)
Accounts payable and accrued expenses .. 1,340,573 1,185,136
Dividend payable 443.520 443,520
Federal income taxes payable — Note G .. 717,623 915,900
Other taxes payable 5,697,654 6,405,534
Accrued interest 907.541 906,003
9.106.911 9,856,093
NOTES PAYABLE TO BANKS EXPECTED
TO BE REFINANCED — Note D 3.100.000 500,000
Total Current Liabilities 12,206,911 10,356,093
DEFERRED CREDITS
Customers' advances for construction 5,153.383 4,677,690
Deferred investment tax credit 817,539 588,588
Other 466.233 292,377
6,437,155 5,558,655
CONTRIBUTIONS IN AID OF CONSTRUCTION 7489232 6-987,594
COMMITMENTS AND CONTINGENCIES —
Notes I, K and L
S93.237.647 586,451,088
See notes to financial statements.
•Source: 1977 Annual Report, New Haven Waier Company.
Source: AWWA "Water Utility Accounting - 2nd Edition"
E-6
-------
New Haven Water Company
Statement of Income*
Year ended December 31
OPERATING REVENUE 1977 1976
Water sales:
Residential and commercial $14.866,648 $14,220,121
Industrial 2,196,646 2,154,504
Fire protection 2,367,339 2,261,685
Public authorities 881,084 754,190
Other 52.036 20,368
Operating Revenue 20,363,753 19,411,368
OPERATING DEDUCTIONS
Operating expenses 6,598,648 5,772,742
Maintenance expenses 591,100 561,689
Depreciation — Note F 1,932,521 1,911,152
Taxes, other than Federal income taxes 4,596,037 4,684,575
Federal income taxes— Note G:
Currently payable 918,270 998,500
Deferred investment tax credit 228,951 188,100
Operating Deductions 14,865.527 14,116,758
Utility Operating Income 5,498,226 5,294,610
OTHER INCOME (DEDUCTIONS)
Allowance for funds used during
construction 184,046 89,223
Other 802 ( 152,434)
Other Income (Deductions) 184.848 ( 63,211)
Income Before Interest Charges 5,683,074 5,231,399
INTEREST CHARGES
Long-term debt 2,677,223 2,382,175
Other 56.463 253,740
Interest Charges 2.733.686 2,635,915
Income From Operations 2,949,388 2,595,484
Gain resulting from disposal of assets—NoteH 61.882 43,996
Net Income 3,011,270 2,639,480
Preferred Stock dividend requirement 620,000 499,200
Net Income Available to
Common Stockholders $ 2,391,270 $ 2,140,280
Per common share (after Preferred Stock
dividend requirement):
Income from operations $4.41 $3.97
Gain resulting from disposal of assets .12 .08
Net Income $4.53 ITol
See notes (o financial statements.
•Source: 1977 Annual Report, New Haven Water Company.
New Haven Water Company
Statement of Retained Earnings*
Year ended December 31
1977 1976
Balance at beginning of year
Net income
Deduct:
Cash dividends:
Preferred Stock
Common Stock (1977—$3.36; 1976—$3.24
per share)
Preferred Stock issuance expense
$ 7,518,502
3.011.270
10.529.772
597,450
1.774,080
84.137
2,455,667
Balance at end of year
See notes (o fmtnciil statements.
•Source: 1977 Annual Report, New Haven Water Company.
Source: AWWA "Water Utility Accounting
Edition"
E-7
$7,088,950
2,639,480
9,728,430
499,200
1,710,728
2,209,928
$ 8.074.105 $7,518,502
- 2nd
-------
STATEMENT OF REVENUES,
EXPENSES AND CHANGES IN RETAINED EARNINGS
WASTEWATER TREATMENT UTILITY
Operating Revenues
User Charges
Septage Disposal Fees
Total Operating Revenues
Operating Expenses
Personal Services
Operations
Maintenance
Depreciation
Capital Outlay
Other
Total Operating Expenses
Operating Income
Nonr-Operating Revenues (Expenses)
Operating Grants
Interest Revenue
1 Rent
Sewer Availability Charges
Connection Fees
Interest Expense
Total Non-Operating Revenues (Expenses)
Net Income (Loss)
Retained Earnings July 1
Retained Earnings June 30
Source: EPA "Wastewater Utility Recordkeeping, Reporting and Management
Information System"
E-8
-------
Eat Boy Municipal Utility District Wain Sysitm
Statement of Revenue
For lift Ytars Endtd June 30. 1977 and I97f*
Thousands of Dollars
OPERATING REVENUE:
Water (Note 1)
Power
Taxes, including state subventions
Total operating revenue
OPERATING EXPENSES:
Hydroelectric power generation
Source of supply
Raw water transmission and storage
Recreation areas, net
Treatment
Distribution
Customer accounting and collecting
Administrative and general
Contributions to retirement svstem (Note 3)
Property taxes
Depreciation of property, plant, and equipment (Note 1)
Total operating expenses
Total
ADD OTHER REVENUE:
Interest earned on investments
Other— net
Total other revenue
DEDUCT:
Interest expense (Note 2):
Interest and amortization of bond expenses
Less interest charged to construction
Interest expense — net
REVENUE INVESTED IN THE WATER SYSTEM:
For the year
At beginning of vear
At end of year
1977
$ 30.465
235
6.157
36.857
160
616
2,653
466
1.998
7.120
2.190
4.764
1.958
623
8362
31.110
5.747
1.124
217
1341
5,154
819
4.335
2.753
217.007
$219.760
1976
$ 31.763
370
5.965
38.098
185
552
1.852
414
1,598
6.206
1.908
4,144
1,670
597
8,218
27344
10.754
1.024
90
1.114
4.719
934
3.785
8,083
208.924
$217.007
See notes to financial statements
•Source: 1977 Anaaal Report, East Bay Municipal Utility DntricL
Source: AWWA "Water Utility Accounting - 2nd Edition"
E-9
-------
m
i
INVENTORY STOCK RECORD
REQUISITIONED
0*11
OUANT.
KANT *
MFD. MIT NO.
FAM NO.
0. P. MO.
ItOMHOUSI
0*11
W. O. NO.
P 0 HO.
*•
CATAUW HO
QUANTITY
RCVO.
USCD
LAJT COM
tltCltmO*
•AL
OAU
OUAM. OP U»lt»
STO*. LOC
W. 0
P. 0
NO.
NO.
p*m / UHII
o«w«
SHELF
001
QUANTITY
RCVO
MAX.
MIN.
usto
HIM.
ro*
ICVB
•*C
»». MU
NOHM
•
SPARE PARTS STOCK RECORD
-------
DATE: 03/23/84
INVENTORY HISTORY DATA
STOCK NUMBER: 142
DESCRIPTION: BULB 34 FLASHLIGHT
CAT. NO.: 41332 UNIT: EACH
ITEM TYPE: FINISHED GOOD
WAREHOUSE LOCATION: 04C
WEIGHT (LBS.): 0.25
ORIGIN: PURCHASED
VENDOR NO.: 27
VENDOR STOCK NO.:
LEAD TIME (DAYS):
SALES-YTD: 6
FLB923A
1
QUANTITY ON-HAND: 3
RESERVED: 0
ON-ORDER: 0
RECEIVED: 6
UNIT PRICE: 0.30
RETURNS-YTD: 0
DATE OF LAST SALE: 01/20/84
RECEIVED: 01/23/84
ORDER: 01/20/84
REORDER POINT: 3 ORDER QTY.: 6
CURRENT UTILIZATION RATE (PER WEEK):
CURRENT INVENTORY VALUE: 0.78
PROJECTED REORDER DATE: 04/06/84
SAFETY STOCK QTY:.
0.58
E-ll
-------
DATE: 03/23/84
LEAD TIME REPORT
STOCK SAFETY VENDOR t"D QUANTITY DATE LAST DATE LAST ' DATE LAST UNIT \lsvll ISSUED
NUMBER
•% — ••** -.*.«.» vn«. u unu A 1/ni.U L4/IO 1 4/ft J, Ci LiAD J. UN II
DESCRIPTION STOCK QTY. NUMBER TIME (DAYS) ON-HAND ISSUED ORDERED RECEIVED PRICE
YTD YTD
142 BULB 34 FLASHLIGHT 1 27 1 3 031284 012084 012384 0.30 1.82
-------
DATE: 03/23/84
STOCK STATUS REPORT
PROD. LAST UNITS AVERAGE REPLACEMENT STANDARD
NUMBER DESCRIPTION CAT. ISSUED ON-HAND UNIT COST VALUE UNIT COST VALUE UNIT COST VALUE
142 BULB 34 FLASHLIGHT 410 031284 3 0.26 0.78 0.30 0.90 0.0 0.000
-------
DATE: 03/23/84
MULTIPLE WAREHOUSE REPORT
STOCK NUMBER
140
141
TOTALS FOR THIS ITEM
142
WAREHOUSE
LOCATION
01A
01A
04C
CAT.
DESCRIPTION
CEMENT PVC 1
CEMENT PVC 2
BULB 34 FLASHLIGHT
AVG.
COST
1.90
2.10
0.30
QTY.
ON-HAND
8.0
3.0
11.0
3
QTY.
ON-ORDER
0
12.0
12.0
0
QTY.
RESERVED
2.0
1.0
3.0
0
ON-HAND
VALUE
15.20
6.30
21.50
0.90
I
I—'
4^
-------
INDIVIDUAL CUSTOMER METER READING LOG
WATER BILLING INQUIRY
ACCOUNT: 0343657 CUSTOMER: NAME: MR. JOHN DOE
READ DATE: 280378 CONSUMPTION: 033 METER READ:
A SEWER PERCENT: 100
BILL CLASS:
BILL DATE: 130478 AMOUNT BILLED: $28.71
BILL DUE DATE: 280478
BILLING: CURRENT
ITEM AMOUNT
WATER $28.71
WATER BILLING CONSUMPTION INQUIRY
ACCOUNT: 0343657 CUSTOMER:
1214 READ TYPE: C
BALANCE: $0.00
AMOUNT PAID: $28.71
PAYMENT
AMOUNT TYPE DATE BATCH
$28.71 N 280478 10
METER SIZE:
READ DATE
280378
100178
280977
110777
040477
030177
041076
120776
120476
120176
141075
1 UNIT: 6 SERIAL NO: 19733788 READ SEQ: 51310
TYPE
C
A
C
C
A
C
E
A
E
E
E
READING
1214
1181
1136
1096
1006
953
872
857
715
700
680
CONSUMPTION
Comput«r-G«n«rat«
-------
PAYABLE AT :
I RETURN POSTAGE
I GUARANTEED
AMOUNT ;COOE
FIRST CLASS MAIL
U.S. POSTAGE PAID
POST CARD RATE
PERMIT 9
PAY THIS AMOUNT •
S-SEWER
A-ARREARS
( PERIOD OF SERVICE )
(AMOUNT
BILLS ARE NOW DUE AND PAYABLE
r,TC nc 1 MO
BILL
SERVICE
TO
PENALTY
ADDED AFTER
DAY
YEAR
SERVICE LOCATED AT i
CUSTOMER NAME
AND
ADDRESS
KEEP THIS STUB - RETURN OTHER PORTION
QUARTERLY SEWER MLL
E-16
-------
SUMMARY EMPLOYEE PROFILE REPORT
Report #
For the Period of
Employee Name
John E. Doe
Number
05884
Date of
Hire
12/9/73
Career Profile
Date
12/9/73
12/8/74
6/30/75
Classification
Laborer I
Operator I
Operator II
Training
Hours/Date
40/3/1/75
6/12/76
Course
Certified Level I
Certified Level II
Salary History
Date
12/9/73
2/8/74
6/30/75
2/8/78
Salary Code
1-54-066
1-54-082
1-57-120
1-57-200
tn
Source: EPA "Wastewater Utility Recordkeeping, Reporting and Management Information Systems" (Revised)
-------
COMPENSATION RECORD
•v*. om »utcc
^
NAM K
-
CCO. •— 3in <5?
(•CHI00
KNOIPt*
1
1
FI»«O CAANiNai n* co o'coucriew* ??_.?*
.
1 i
I
!
i
1 ;
i
•r*ru*
C»*cr
. . —
"2? \ eiSi
- 1
1
-
TOTAL |
VCAM :
i
^_^^__
i —
1
I
j
1
TOTA4. I
YCAA
'(»OM TO HOTirr
E-18
-------
PAYROLL
TIME PERIOD
REGISTER
TO
M
1
VO
EMPL
NO.
EMPLOYEE NAME
§-
0
"jj
RATE
TOTALS
HO
JRS
EAR)
(INOS
0
eouc
1
TION
0
EOUC
2
TION
0
EDUCTION
3
DEDUCTION
4
DEDUCTION
5
DEDUCTION
6
TOTAL
GROSS
EARNINGS
TOTAL
NET
EARNINSS
-------
—Suspension
-Jury Duty
-Tnpl. Tim* - Holldiy
SUMMARY TIME SHEETS
PAYROLL NO PAY PERIOD
HOURLY.
*E«ch iptot muit thow
DAILY HOURS »nd codt II mcmuiy.
Signitura.
5 H -R«gu)w Holiday P«y 12 C -CMIdben n« L
• M -Mililvy LMvt 13V -DoubltTIm*-
T.WC -Wortnwi i Comp UP -P»rlon«l Dm
EMPL NO. NAME
m
i
Cf
»<•
Dv« 12 Houn
MON.
TUES.
WED.
THURS
FRI.
SAT.
SALARY Dir«lor
SUN.
1.
TOTAL
HOURS
WORKED
2.
TOTAL
BI-WEEKLV
REG. MRS.
WORKED
3.
TOTAL
OVERTIME
« TIME • H
4.
TOTAL
STRAIGHT
TIME
S.
TOTAL
.SO -III
SHIFT
6.
TOTAL
.M-M
Burr
7.
TOTAL
EMOCV
TIME
8.
TOTAL
DOUBLE
TIME
•
TOTAL
HOLIOA
TIME
-------
SAMPLE PURCHASE ORDER
Attn:
Ship Co:
Attn:
Vendor Name
Address
Phone:
Utility Name
Address
Phone:
Purchase Order #
Work Order #
Date Initiated
Date Required
Ship Via
F.O.B.
Terms
QUANTITY
STOCK NUMBER/DESCRIPTION
PRICE
PER
TOTAL
ACCOUNT NO.
AWARD AND CONTROL DATA
TYPE OF QUOTE: Verbal Written Sealed Bid
VERBAL QUOTES ONLY
Vendor No. Unit Pric
1.
2.
3.
Selection 1 2 3
e Description Reason
WRITTEN AND SEALED BID QUOTES ONLY
Completed
Purchase
Materials
RFQ attached
posted to fixed Asset Records
and spare parts list obtained
Yes No Reason:
Yes No Reason:
Yes No Reason:
Prepared
by Date Approved by Date
Title
Approved
for Payment Date
Paid Date Check #
IMPORTANT: Our Purchase Order Number must appear on Invoices, Packages and
Correspondence
SHEET
OF
Distribution: White - Vendor Pink - Utility Blue - Accounting Yellow - MIS
Derived from: Sample Purchase Orders in EPA, "Wastewater Utility Recordkeeping,
Reporting and Management Information Systems" and EPA "Maintenance
Management Systems for Municipal Wastewater Facilities".
E-21
-------
SCHEDULE OF BILLS
FOR PERIOD XX/XX/XX TO XX/XX/XX
CHECK NOS.
RECIPIENT
EXPENDITURE
DESCRIPTION
MAJOR
OBJECT OF
EXPENDITURE
CODE
AMOUNT
XXX
XXX
XXX
General Prepaids
Other Services
John Doe
WW Newsletter
Payroll
Sick Leave
Re imb ur s emen t
Subscription
100 $XXXXXX.XX
102
$ XX.XX
211 $ XX.XX
TOTAL
$XXXXXX.XX
E-22
-------
SERVICE LIFE SCHEDULE
DATE XX/XX/XX PAGE 1
UPDATE: XX/XX/XX
SERVICE 'AREA
SEWER SERVICE LINES
LENGTH (FEET) AND YEAR OF CONSTRUCTION
6-INCH 8-INCH 10-INCH 12-INCH 15-INCH 18-INCH 21-INCH 24-INCH 27-INCH
FFET YEAR FFFT YFAH PFPT vrAn nrrr vr»o Dun- vum uuuV — : — — ' "V" ,
. nm IE.JUV rc.c.i ir.au rtr.i IE.AK fKY.l YEAR FEET YEAR FEET YEAR FEET YEAR FEET YEAR FEET YEAR
TOTAL
FEET
TOTAL LENGTH
W
I
N3
OJ
6-INCH
8-INCH
10-INCH
12-INCH
15-INCH
18-INCH
21-INCH
24-INCH
27-INCH
TOTAL
1960
1965
LENGTH (FEET) OF SEWER SERVICE LINES BY YEAR TO BE DEPRECIATED
J97Q 1973 1975 1976 1980 1981
1982
TOTAL
-------
SERVICE LIFE SCHEDULE
DATE: XX/XX/XX PAGE 2
DOLLAR VALUE OF SEWER SERVICE LINES BY YEAR TO BE DEPRECIATED
1960 1965 1970 1973 1975 1976 1980 1981 1982 TOTAL
6-INCH
8-INCH
10-INCH
12-INCH
15-INCH
18-INCH
21-INCH
2A-INCH
27-INCH
TOTAL
SEWER CONNECTIONS AT XXX.XX EACH FOR XXXXXX CONNECTIONS.
W
M SEWER METERS USED TO REPLACE DEFECTIVE METERS
-C-
PURCHASE PURCHASE
DATE COST DESCRIPTION LOCATION
TOTAL
-------
UPDATED XX/XX/XX
ANNUAL DEPRECIATION SCHEDULE
FILE:5913AF
DATE XX/XX/XX PAGE 1
INVENTORY
EQUIPMENT
ID. NO.
DATE
PURCHASE
PURCHASE
COST
SERVICE
LIFE
SALVAGE
VALUE
ANNUAL
DEPR.
WEIGHT MANUFACTURER
MODEL
NUMBER
COLOR
DEPT. WATER/SEWER FUND
CODE X Z
Ul
-------
ANNUAL DEPRECIATION SCHEDULE
AND ANNUAL RESERVE REQUIREMENT
DATE XX/XX/XX PAGE 2
UPDATE: XX/XX/XX
EQUIPMENT
ID. NO.
PURCHASE
DATE
PURCHASE
COST
SERVICE
LIFE
SALVAGE
VALUE
INVENTORY
ANNUAL
DEPR.
ACCUM.
DEPR. DESCRIPTION
MODEL
MANUFACTURER NUMBER
LOCATION
CODE
TOTAL
COST SUMMARY FOR DEPRECIATION (AS OF XX/XX/XX)
TOTAL PURCHASE COST:
TOTAL SALVAGE VALUE:
TOTAL ACCUM DEPR. AS OF (MONTH) (YEAR);
SCHEDULE OF DEPRECIATION EXPENSES:
I
a! FISCAL YEAR AMOUNT
-------
SAMPLE REVENUE REQUIREMENT REPORT
REVENUE ITEM AMOUNT
Cost of Service:
o Operation expenses*
0 Maintenance expenses*
o Debt service requirement
o Taxes and payments in lieu of
taxes
o Replacement
Revenue Not Related to Use:
o General property taxes
o Special assessments
o Federal revenue sharing
o Interest revenue
o Septage disposal fees
o Land application fees
o Sewer availability charges
o Connection fees
o Development fees
TOTAL
Revenues to be Recovered Through
Sewer Use Charges
* Can be further broken down for more detail.
TOTAL
$
$
E-27
-------
SCHEDULE C
SEWER SERVICE RATE SCHEDULE
Water Consumption Quarterly Sewer Service Rate Per 1,000 Gallons
(gallons per quarter) User Charge Other Charge Total
First 10,000 $1.00 $0.60 $1.60
Next 20,000 $1.00 $0.45 $1.45
Next 270,000 $1.00 $0.30 $1.30
Over 300,000 $1.00 $0.10 $1.10
Minimum Quarterly Charge $5.00 $3.00 $8.00
based on 5,000 gallons/
quarter/customer
SURCHARGES
Establishments discharging sewage and industrial wastes to the sewer system
having an average five-day biochemical oxygen demand (BOD) greater than 200
parts per million (ppm), a suspended solids content greater than 250 ppm, a
total phosphorus (as P) content greater than 10 ppm or a total ammonia
nitrogen (as N) content greater than 20 ppm shall pay a strength of waste
surcharge, in addition to applicable volume charges, equal to 1/10 of one
percent for each part per million by which the BOD exceeds 200 ppm plus 1/10
of one percent for each part per million by which the suspended solids exceeds
250 ppm, plus one and 2/10 of one percent for each part per million by which
the phosphorus exceeds 10 ppm plus 6/10 of one percent for each part per
million by which the ammonia-nitrogen exceeds 20 ppm.
E-28
-------
WASTEWATEH TREATMENT FACILITY
STATEMENT OF ACTUAL AND ESTIMATED REVENUES
Current Month Year to Date
Over TotalOverBalance to
Revenue Sources Estimated Actual (Under) Estimated Estimated Actual (Under) Be Collected
Sewer Service Charges
General Property Taxes
M Federal Grants
I
NJ
MD State Grants
Septic Tank Disposal Fees
Interest Revenue
Rents
Sewer Availability Charges
Connection Fees
Development Fees
Other
Total Revenue
Source: EPA "Comprehensive Diagnostic Evaluation and Selected Management Issues"
-------
w
OJ
o
HISTORY OF REPAIRS
DATE
W. O NO.
(OuirMin no. i
DESCRIPTION OF REPAIRS
MAN-HOURS
MATERIALS
USED
Kscttrnoii
HISTORY OF REPAIRS CARD
-------
Work Load/Accomplished Summaries
Fairfax County Lower Potomac Pollution Control Plant
MAINTENANCE SUMMARY REPORT FOR WEEK ENDING
WORK LOAD SUMMARY
Line
A
B
c
D
E
F
C
H
I
J
K
Item
Regularly sci-ediilci: ior :"is week
Total outstanding work (AnB)
Accomplished this ueek
Backlog (or next week (C-D)
Corrective Maintenance
Backloc from previous week
Number
of
Actions
New work orders, this week '
Total outstanding work (FiG)
Accomolished this week
Backlog (or next week (H-l)
Total backlog (or next week (£&J)
Estimated Manhour*
Skill 1
Skill 2.
Skill 3
Total
WORK ACCOMPLISHED SUMMARY
Item
Number of Actions Completed
Preventive
Maintenance
Actual manhours expended '
Skill 1
Skill I ' ~>
Skill 3 !
Total
Labor costs
Regular
0. T.
Total |
Outside contractor costs \
Cost of part* and material* 1
Total costi I
Corrective
Maintenance
Total
Maintenance
Form M7-5/7Z
Source: EPA "A Planned Maintenance Management System for
Municipal Wastewater Treatment Plants"
E-31
-------
Statement of Actual and Budgeted Expenditures
and Encumbrances, By Department/Activity
For the Month of September, 19xx and Nine Months Ended September 30, 19xx
Department/
Object
Department Name:
Personal
Services
Supplies
Other Services
and Charges
Capital Outlays
TOTAL
Month of September, 19xx Jan. - Sept. 19xx
19xx Actual Actual
Appropri- Under Under Un* Unencum-
ation (Over) (Over) expected Encum- bered
(Revised) Budgeted Actual Budgeted Budgeted Actual Budgeted Balance brances Balance
(1) (2) (3) (4) (5) (6) (7) (8) • (9) (10)
$$$$$$$$$$
$ $ $*$ $ $ $ f $ *
Source: EPA "Wastewater Utility Recordkeeping, Reporting and Management Information Systems"
-------
Summary Statement of Actual and
Budgeted Expenditures and Encumbrances
For the Month of September, 19xx and Nine Months Ended September 30, 19xx
Month of September, 19xx
Jan. -Sept. 19xx
19xx Actual Actual
Department/ Appropri- Under Under Un-
Function/ ation (Over) (Over) expected
"" Activity (Revised) Budgeted Actual Budgeted Budgeted- Actual Budgeted Balance
(D (2) (3) (4) (5) (6) (7) (8)
Encum-
brances
(9)
Unencum-
bered
Balance
(10)
w
o Collection
o Pumping
o Treatment
Preliminary
Primary
Secondary
Advanced
Sludge
o General Admin-
istration
o Laboratory
TOTAL
Source: EPA "Wastewater Utility Recordkeeping, Reporting and Management Information Systems"
-------
TYPICAL WASTEWATER UTILITY
LINE ITEM BUDGET
DEPARTMENT
Line Item
Operation, Maintenance &
Replacement
o Personal Services
- Salaries
- Overtime
- Retirement Contributions
- Health Insurance
- Workmen's Compensation
Unemployment Insurance
- F.I.C.A. Contributions
Miscellaneous Fringe
Benefits (vacations, etc.)
Total Personal Services
o Expenses
- Insurance
- Vehicle Repairs, Fuel, etc.
- Supplies (tools, machinery,
parts, lab equipment,
samplers, meters, and
accessories)
- Power (electricity and fuel
requirements for treatment
works processing and pump-
Ing)
- Building Utilities (elec-
tric, heating, telephone,
water, refuse disposal)
Building and Ground
Maintenance
- Chemicals
- Transportation Equipment
(fuel, lubricants, tools,
parts and accessories,
maintenance, new vehicles)
- Equipment Replacement
- Employee Training, Travel,
and Professional Organiza-
tion Dues and Publications
- Sewer Maintenance (tools,
parts, equipment)
- Office Equipment Supplies
- Insurance
Contractural Services and
Rentals (legal, audit,
annual UCS review, engineer-
ing, other)
Replacement (plant, service
lines, and pumping appara-
tus)
Miscellaneous (publication
fees, franchise requirements.
security, etc.)
- Contingencies (unexpected
expenses)
Total Expenses
Capital Outlav
o Capital Improvements
o Debt Service
o Principal and Interest on
Existing Debt
Tota) Utility
1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Source: Based on EPA "Comprehensive Diagnostic Evaluation and Selected
Management Issues"
E-34
-------
City Water Board of San Antonio
Debt Service Requirements and Coverage*
SUMMARY OF DEBT CHARGES UNTIL MATURITY
Calendar
Yean
Balance 12-3
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
1.77
Average annual requirements:
1977
1978
$ 3,061,993
$ 3,447,633
Am
Total
$ 4,307,905
4,293,403
4,276,075
4,276,302
4,332,805
4,329,027
4,320,168
4,298,724
4,333,288
4,321,369
4,318,544
4,334,425
4,302,575
4,296,588
4,277,100
4,273,775
4,333,900
1,554,657
1,517,031
1,478,063
1,437,749
1,468,600
1,444,925
616,200
$82,743,198
mal Requirements
Interest
$ 2,502,905
2,423,403
2,341,075
2,256,302
2,167,805
2,074,027
1,975,168
1,868,724
1,753,288
1,631,369
1,503,544
1,369,425
1,227,575
1,071,588
902,100
723,775
533,900
404,657
342,031
278,063
212,749
143,600
69,925
16,200
529,793,198
to Retire
Principal
% 1,805,000
1,870,000
1,935,000
2,020,000
2,165,000
2,255,000
2,345,000
2,430,000
2,580,000
2,690,000
2,815,000
2,965,000
3,075,000
3,225,000
3,375,000
3,550,000
3,800,000
1,150,000
1,175,000
1,200,000
1,225,000
1,325,000
1,375,000
600,000
$52,950,000
Principal
Balance
Outstanding
$52,950,000
51,145,000
49,275,000
47,340,000
45,320,000
43,155,000
40,900,000
38,555,000
36,125,000
33,545,000
30,855,000
28,040,000
25,075,000
22,000,000
18,775,000
15,400,000
11,850,000
8,050,000
6,900,000
5,725,000
4,525,000
3,300,000
1,975,000
600,000
REVENUE BOND COVERAGE AS
DEFINED BY REVENUE BOND ORDINANCE
Calendar
Tear
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
Revenues
$ 9.492,767
9,119,056
9,479,574
9,970,966
11,924,401
11,071,491
12,868,775
14,009,345
14,423,374
17,535,093
20,221,593
Operating Revenue
Expenses Available for
Before Debt Service Average Annual
Depreciation and Other Debt Service
Expense Requirements Requirements
$ 2,987,686 $ 6,505,081 $ 1,599,318
3,409,385 5,709,671 1,593,885
3,863,165 5,616.409 - ' 1,587,721
4,343,638 5,627,328 1,577,298
5,028,557 6,895,844 2,417,539
5,348,196 5,723,295 2,432,264
5,578,621 7,290,154 3,199,125
7,136,442 6,872,903 3,221,214
8,197,928 6,225,446 3,226,449
9,066,997 8,468,096 3,223,709
10,795,965 9,425,628 3,061,993
Times
Debt
Service
4.07
3.58
3.54
3.57
2.85
2.35
2.28
2.13
1.93
2.63
3.08
•Source: 1977 Annual Report, City Water Board of San Antonio.
Source: AWWA "Water Utility Accounting, 2nd Edition"
E-35
-------
City Water Board of San Antonio
Outstanding Indebtedness*
The City has outstanding Water Revenue Bonds in seven parity series as
Effective 20-Bond
Issue
Series 1957-A
Series 1959
Series 1961
Series 1962
Series 1966
Series 1971
Series 1973
Series 1976
Series 1977
Final
Maturity
1984
1983
1989
1989
1990
1990
1994
2000
2001
Total Water Revenue Bonds
the Series 1977
* As published by
Bonds
"The Bond
Original
Average
Interest
Rate On
Life Sale Date
18.5 years
18.8 years
18.2 years
17.1 years
18.8 years
15.0 years
17.4 years
16.8 years
16.8 years
to Be Outstanding
Buyer".
3 . 78%
3.47%
3.52%
3.20%
4.12%
4 . 65%
5.10%
5 . 65%
, Including
Yield Index
Nearest
Sale Date*
3 . 38%
3.39",
3.53%
3.21%
4 . 03%
5.05%
5.27%
6.52%
follows:
Amount
Outstanding
$ 6,370,000
1,850,000
1,300,000
1,265,000
5,500,000
9,700,000
13,600,000
8,000,000
7,000,000
$54,585,000
•Source: Official Notice of Sale and Olficial Statement, $7,000,000 City of San Antonio, Texas, Water Revenue Bonds, Series 1977, dated
April 21, 1977.
Source: AWWA "Water Utility Accounting, 2nd Edition"
E-36
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WASTEWATER TREATMENT UTILITY
ACTIVITY BUDGET
ACTIVITY
LINE ITEM* ADMINIS-
COLLECTION PUMPING TREATMENT LABORATORY TRATION TOTAL
Personal Services
Salaries
Overtime
Fringe Benefits
Total Personal Services
Expenses
w
^ Insurance
^ Vehicle Repairs, Fuel, etc.
Supplies
Electricity
Gas, Oil and Diesel
Maintenance
Chemicals
Equipment Rental
Training
Travel
Parts
Equipment Replacements (capital outlays)
Contingencies
Total Expenses
Capttal-'Outlay
Improvements
Expansions
Principal and Interest on Existing Debt
Betterments
Source: EPA "Comprehensive Diagnostic Evaluation and Selected Management Issues" (revised)
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The Wilting Water Utility
Structure of an Annual Operating Budget
Statement of Estimated Revenue and Expense
(see Figure 9.3)
Budget
19BY
Operating Revenues $6,930,000
Operating Expenses:
(Operation Expense $1,663,200
(Maintenance Expense 346,500
Depreciation and Amortization Expense . . . 485,100
Taxes 2.564,100
Total Operating Expenses $5,058,900
Utility Operating Income $1,871,100
Budgeted Utility Operation and Maintenance Expenses
Cost Center
Office of the General Manager
Production Division
Transmission and Distribution Division
Commercial Division
General and Administrative Division
Total Budgeted Operation and Maintenance Expenses .
Transmission and Distribution Division
Budgeted Operating Expenses
Budgeted
Amount-19BY
$ 36,400
748,370
324,850
268,960
631,120
$2,009,700
Cost Center
Office of the Division Manager.
Operations Section
Maintenance Section
Total
Budgeted
Amount-19BY
$ 23,200
116,485
185.165
$324,850
Maintenance Section
Budgeted Operating Expenses
- (Budget or Responsibility Level 1)
(Budget or Responsibility Level 2)
Cost Center
r
Maintenance Supervision
Maintenance of Mains and Storage Facilities ,
Maintenance of Customer Services
Maintenance of Meters
Total ' ,
Budgeted
Amount-19BY
* 12,480
61,120
70,365
41,200
$185.165
Meter Maintenance Shop
Budgeted Operating Expenses
Salaries and Wages:
Foreman
Meter Repairmen
Laborers
Total Salaries and Wages
Materials and Supplies:
Small Tools
Maintenance Materials and Supplies
Other
Total Materials and Supplies
Other Expenses:
Maintenance of Meter Testing Equipment . .
Utility Services
Incidental Expenses
Total Other Expenses
Total Budgeted Operating Expenses
Budgeted
Amount-19BY
$ 5,150
13,435
10,105
$28,690
$ 200
10,900
710
$11,810
$ 210
360
130
700
(Budget or Responsibility Level 3)
(Budget or Responsibility Level 4)
Source: AWWA "Water Utility Accounting - 2nd Edition"
E-38
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The Ci/.r Water Department
Cash Flow Forecast
For the Year 19BY
LO
1st Quarter—19BY
January
February
March
2nd
Quarter
-19BY
Estimated Cash Balance, Beginning of Period $250,000 $174,000 $ u9,000 $ 142.000
Estimated Cash Provided By.
Sale of Water Service $500,000 $500,000 $ 670,000 $1.630,000
Rent of Property 3,000 3,000 3,000 9,000
Interest on Investments 1,000 2,000 3,000 12.000
Sale of Plant Assets and Other Property 12,000 5,000 '8,000 25,000
Advances and Contributions in Aid of Construction (net of re-
payment of Customer Advances) 10,000 12,000 14,000 50,000
Customer Meter Deposits (Net of repayments) 1,000 1,000 1,000 3,000
Use of Restricted Assets—Revenue Bond Proceeds 380,000
Short-Term Borrowings 300,000
Issuance'of Bonds 1,.072,000
Other 5,000 5,000 5,000 15,000
Estimated Total Cash Provided'During'Period' $532.000 $528,000 $2.5*6. OOP $2.424.000
Estimated Total Cash Available During Period $782,000 $702,000 $2,655.000 $2.566.000
Estimated Cash Disbursements:
Salaries and Wages $ 80,000 $ 80,000 $ (5,000 $ 250,000
Materials and Supplies 160,000 165,000 150,000 670,000
Payments to Outside Contractors for Construction 200,000 250,000 150,000 930,000
Purchase of Plant Assets and Other Property 75,000 60,000 65,000 225,000
Interest (Payments From Other Than Restricted Assets) .... 15,000 10,000 25,000 50,000
Taxes 8,000 10,000 20,000 75,000
Repayment of Short-Term Borrowings 15,000 5,000 10,000 20,000
Transfers to Restricted Assets-Bond Debt Service 40,000 40,000 35,000 200,000
Transfers to Restricted Assets-Customer Meter Deposits ... 1,000 1,000 1,000 3,000
Transfers to Restricted Assets-Proceeds from Sale of Bonds . 1,972,000
Other 14,000 12.000 10,000 47,000
Estimated Total Cash Disbursements During Period $608,000 $633,000 $2,513.000 $2,470.000
Estimated Cash Balance End of Period $174.000 $ 69,000 $ 142.000 $ 96,000
3rd 4th
Quarter Quarter
-19BY -19BY
$ 96,000 $ 75,000
$1,720,000
9,000
15,000
30,000
60,000
3,000
420,000
15,000
$2,272.000'
$2.368,000'
$ 255,000
540,000
870,000
210,000
75,000
32,000
60,000
195,000
3,000
53.000
$2,293,000
$ 75.000
$1,790,000
9,000
10,000
10,000
60,000
3,000
200,000
15,000
i2,097,000
12,172,000
$ 235,000
450,000
530,000
100,000
60,000
98,000
310,000
190,000
3,000
32,000
$2,008,000
$ 164.000
Source: AWWA "Water Utility Accounting - 2nd Edition"
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Cash Flow Results and Forecast
Results for and Forecast through
Results for (Current Month)
Projected for
(Each Projected Month)
Fund
Beginning
Balance
Receipts
Disburse-
ments
Ending
Balance
Beginning
Balance
Receipts
Disburse-
ments
Ending
Balance
(Additional
Projected
Months)
w
-O-
o
TOTAL-ALL FUNDS
Source: EPA "Wastewater Utility Recordkeeping, Reporting and Management Information Systems"
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Wastewater Facilities Financial
Information Sheet
What Roles And Responsibilities Will Local Governments Have?
Cooperative arrangements between various entitles may be required to meet the management needs of wastewater treatment facilities.
• What agency will:
D Own the facilities
Q Operate
Q Finance
(101)
• Will there be financial contribution* by: Q Other agencies D Industry
• Have participating agencies been asked Q Wastewater D Population
to review: facilities plan projections
• Have agreements been sought between Q Participating Q Other agencies
the operating agency and: agencies
How Much Will The Facilities Cost At Today's Prices?
O Service aree
boundaries
Q Industy
(103)
(105)
(107)
The following figures are estimated costs for construction, operation, and maintenance of the proposed facilities. Dollar amounts are
unlnflated and reflect today's prices.
B. Estimated annual operation, maintenance, and replacement
^^ (O -»• M -t- R) costs for the proposed facilities
A. Construction costs estimate
• Wastewatsr treatment plant
• Pump stations
• Interceptor sewers
• Collection sewers
• On-slte systems
• Land acquisition
• Other
• Total construction costs
(201)
(202)
(203)
(204)
(205)
(206)
(207)
(208)
How Will The Facilities Be Financed?
• Utilities
•.Materials
• Outside services
• Misc. expenses
• Equipment replacement
• Total operation,
maintenance and
replacement costs
. per year (209)
(210)
(211)
(212)
(213)
per year (215)
A. Amount to be borrowed
.to. B. Methods of financing the amount to be borrowed
• CrantM shara al catMtrueHan easts
• Construction-related costs ~
(309)
(31S)
(321)
C. Total estimated annual wastewater facilities costs
• Nat existing a .bM 4. ft
• Existing annual debt sarviea
• Q-hM+R (arnroaasad faeilltfoa _ ... . _..
• Debt service for proposed facilities ._ ., ., ...
• Total estimated annual wastewater
facilities costs
a««.iii>.
(328)
(329)
(33D)
(331)
(332)
Financing
method
Genera.
obligation
bond
Revenue
bond
Loan
Total
Amount
borrowed
Interest
rate
-:?&•&•
Term of
maturity
S^;ri|
Annual
debt service
pavmant
(322)
(323)
(324)
(325)
0. Sources of funding for total an
facilities costs
• Sewer service charges
• Surcharge
• Special assessments and fees
— connection fee
— betterment assessments
— other
• Transfers from other funds
• Other
• Total funding
nual wastewater
C*"*")
(33R)
(337)
(33BJ
(339}
(340)
Source: GFRC, PMM & Co. "Financial Capability Guidebook"
E-41
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(Continued)
Wastewater Facilities Financial
Information Sheet
What Are The Annual Costs Per Household?
• Total estimated annual wastewater *„.«» • Total annual costs per household (40
facilities charges (40°) ' «««"»" household Income -. («n
• Nonresidentlal share of total annual charges (401) • Total annual costs per household
•Residential share of total annual charges (402) as a % of median household income (40
•Number of households <403>
• Annual costs per household for
— wastewater collection and treatment (404)
-oO.ee
Can Your Community Afford Tne Proposed Wastewater Treatment racilitlos?
The financial capability of a community Is the measure of its existing financial commitments and legal financial capacity to provide services
Listed below Is a series of questions that will provide Information about your community's financial condition and its ability to pay for the pro-
posed facilities. The answers will give you a "snapshot" of the financial resources at your disposal to construct operate, maintain the pro-
posed facility.
• Over the past five years, has your community's population been stable, growing or falling?
• What Is the current outstanding indebtedness of your community?
• How much additional debt can your community legally Incur?
• What are your community's property tax revenues relative to the full market value of real property In your community?
• If your community proceeds with this prelect can It still afford other proposed projects?
• What Is your community's bond rating? Has It changed within the last two years?
The Financial Capability Guidebook has an added supplemental section to assist you In finding and Interpreting the answers to these and
ether questions. Collectively, the information will provide assistance - but not the answer -to whether your community has the financial
capability to undertake the proposed project
E-42
-------
Supplemental
Information Sheet
This Supplemental Information Sheet may be used by your community as the basis for an in-depth evaluation of
financial condition. It outlines a method for assessing a community's relative financial strengths and weaknesses.
Instructions for completing this Supplemental Information Sheet can be found in the Financial Capability
guidebook, which Is available from the Government Finance Research Center, 1750 K St., N.W., Suite 650,
Washington, D.C. 20006 202/466-2494.
What Is The Community's Debt History?
A. Bond Rating*
• Community's moat recent general obligation bond rating
Rating
Date of rating
Amount outstanding
before project
• Community's most recent revenue bond rating
3. Outstanding Debt
Type ol debt
• General obligation bond*
• rteww* bond*
• Gross direct debt
• Other debt
• Direct net debt
• Overlapping debt
• Overall net debt
C. Debt Repayment Schedule
• Total Overall Net Debt Due
(Including new issue) within next S yearn
D. Debt Limits
• Briefly describe any limit* on debt that apply to your community.
Rating
Date of rating
IrMMM
(500)
(S01)
New debt for
proposed project
Total debt
outstanding
(5Q2)
(503)
(504).
(SOS)
(506)
(507)
(508)
(514)
(515)
What % of your debt limit Is currently used?.
_% (516)
What Is The Community's Financial Condition?
Indicator
Indicator value
1. Annual rate of change In population
2. Current surplus as a */• of total
current expenditures
3. Real property tax collection rate
4. Property tax revenues as a % of hid
nwritet value of real property
5. Overall net debt as a % of full market
value of real property
6. Overall net debt outstanding as a % of
P«i«onal Income
7. Direct net debt per capita
8. Overall net debt per capita
». % direct net debt outstanding due
wKMn next 5 years
10. Operating ratio
11. Coverage rath*
%
%
%
*fm
%
%
%— —
»l
%
%
Indicator rating
Weak Average Strong
FUlOV — 1%
Below 0%
Below 96%
A box* 4%
Abova S«A
Abov» 1?%
Ahnm S75Q
Abov"$i 000
ft*'""" 1
-------
ENERGY COST AND CONSUMPTION REPORT
FACILITY OR OPERATING UNIT:
MONTH:
u
q
A
Li
E
P
p
I
p
E
C
0
S
T
P
E
R
F
U
R
M
A
N
C
E
i
USAGE (YEAR TO DATE)
BASE YEAR TO DATE
PERCENT ABOVE (BELOW) BASE YEAR
PRICE PER ENERGY UNIT (CURRENT MONTH)
BASE YEAR COST PER ENERGY UNIT
PERCENT ABOVE (BELOW) BASE YEAR
COST (YTD) DOLLARS
BASE YEAR COST (YTD)
PERCENT ABOVE (BELOW) BASE YEAR
USAGE PER 1000 GALLONS OR POUND
OF BOD REMOVED, ETC.
BASE YEAR USAGE PER 1000 GALLONS
PERCENT ABOVE (BELOW) BASE YEAR
COST PER 1000 GALLONS OR POUND
OF BOD REMOVED, ETC.
BASE YEAR COST PER 1000 GALLONS
PERCENT ABOVE (BELOW) BASE YEAR
ELECTRIC
.
GAS
OIL
OTHER
TOTAL
Source: EPA "Wastewater Utility Recordkeeping, Reporting and Management Information Systems"
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