United States Office of Water August 1989
Environmental Protection (WH-546)
Agency
4>EPA Financial Management
Evaluation
Appendices
Primed on Recycled Paper
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United States August 1989
Environmental Protection
Agency
Office of Water (WH-546) . ~
Financial Management
Evaluation
Handbook For
Wastewater Utility
EPA
8007
1989.3
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Table of Contents
Page
Introduction' 2
' ->r
Financial Evaluation Questions .... 4
J.. 5 Year Budget Costs . ...-*k. .6 f
2. Budget Comparison .. *. 8
*
3. Budget Process 10
/y '
4. Budget increa.se ...4- 12
« 5. Equipment Replacement 14
6. Energy Costs 16
7. Total Debt 18
8. 'Debt Retirement 20
9. Revenue Review 22
10. Residential Water Usage ... 24
11. Commercial/IndustrialiUsers 26
12. Minimum Billing 28
13. Cash Flow 30
14. Rate Increase 32
15. Delinquent Accounts 34
Glossary 36
Appendices 43
References ....; 48
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This document was prepared after a series of
one-day Financial Management Workshops were
conducted in the various regions of the U.S.
Environmental Protection Agency.
The author wishes to thank John H. Samson,
U.S. EPA, Office of Municipal Pollution Control,
Washington, DC; Dr. William T. Engel, Jr.,
Director, South Carolina Environmental Training
Center, Sumter, SC; and Richard I. Phillips, P.E.
and Gary Champy, Vermont Department of
Environmental Conservation, Waterbury, VT, for
their assistance in preparation of this document.
This document was developed under EPA Grant
No. CT 901659-1-0 and South Carolina Contract No.
7-793-92139-12/27/87.
Larry A. Parker
December 30, 1988
Larry A. Parker, P.E., GET
Larry A. Parker & Associates, Inc,
6 Lee Drive
Wheeling, WV 26003
(304)242-9600
Consultant for:
South Carolina
Environmental Training Center
Sumter Area Technical College
Sumter, SC 29150
(803)778-1961
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o>
o
CM
Table of Contents
Financial Management Evaluation
Introduction ................................. ......... 5
Basic Management Considerations ............... ........ 7
Use of Appendices ..................................... 8
Facility Review Outline ............................... 9
I . Management ......................................... 11
A. Financial Management Program .................. 13
B. Program Objectives ............................ 14
C. Organizational Structure ...................... 15
D. Staffing ...................................... 16
E. Personnel Policies ............................ 17
F. Employee Relations ............................ 18
G. Office Procedures ............................. 19
H. Operation Plans ............................... 20
I . Regulations Review ............................ 21
J. Treatment Facilities .......................... 22
K. Safety Program ................................ 23
L. Financial Documents ........................... 24
M. Management Summary ............................ 25
II . Budgeting ......................................... 27
A. Second Visit .................................. 29
B. Remaining Financial Data ...................... 30
C. Budget Review ......... . ....................... 31
D. Overall Budgets .-; ............................. 32
E . Revenue Budget ................................ 33
F. Operations Budget ............................. 34
G. Maintenance Budget ............................ 35
H. Budget Control ................................ 36
I . Equipment Replacement Budget .................. 37
J. Capital Improvement Budget .................... 38
III . Cost Recovery .................................... 39
A. Accounting Issues ............................. 41
B. Cash Flow ..................................... 42
C. Purchasing Control ............................ 43
D. Sewer Use Ordinances .......................... 44
E. Rate Structure ................................ 45
F. Cost Recovery Procedures ...................... 46
G. Cost Recovery Status .......................... 47
H. Billing & Collection .......................... 48
I . Delinquent Accounts ........................... 49
J. Wastewater Collection ......................... 50
K. Equipment Reserve Fund ........................ 51
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Wastewater Utility
FINANCIAL
MANAGEMENT
EVALUATION
HANDBOOK
December 30, 1988
Prepared for
U.S. Environmental Protection Agency
Office of Municipal Pollution Control
Washington. DC
cr>
O
CM
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This document was prepared after a
series of one-day Financial Management Work-
shops were conducted in the various regions of
the U.S. Environmental Protection Agency.
The author wishes to thank John H.
Samson, U.S. EPA, Office of Municipal Pollu-
tion Control, Washington, DC; Dr. William T.
Engel, Jr., Director, South Carolina Environ-
mental Training Center, Sumter, SC; and
Richard I. Phillips, P.E., and Gary Champy,
Vermont Department of Environmental Conserva-
tion, Waterbury, VT, for their assistance in
preparation of this document.
This document was developed under EPA
Grant No. CT 901659-1-0 and South Carolina
Contract No. 7-793-92139-12/27/87.
Larry A. Parker
December 30, 1988
Larry A. Parker, P.E., GET
Larry A. Parker fi Associates, Inc.
6 Lee Drive
Wheeling, WV 26003
(304) 242-9600
Consultant for:
South. Carolina
Environmental Training Center
Sumter Area Technical College
Sumter, SC 29150
(803) 778-1961
-------
IV. Planning 53
A. Past Planning 55
B. Planning Policy 56
C. Operations Planning 57
D. Capital Improvement Plans 58
E. Capital Improvement Schedule 59
V. Financing 61
A. Current Financing 63
B. Future Financing Needs 64
C. Financing Options 65
VI. Financial Reporting 67
A. Current Financial Reports 69
APPENDICES
Appendix A - Management 71
Introduction 73
Management Responsibilities 74
Problem Solving Outline 75
Organization Chart 76
Typical Staffing 77
Brief Job Description 78
Employee Appraisal 79
Benefit Items 80
Office Procedures 81
Purchase Policy 82
Wastewater Utility Description 83
Management Audit 85
Key Management Issues 86
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Appendix B - Budgeting 89
Financial Documents 91
Budgeting Procedures 92
Direct & Indirect Costs 93
Budget Process Steps 94
Ranking Budget Requests 95
Typical Budget Outline 96
. Budget vs. Actual 97
Cost of Service 98
Revenue Budget 99
Estimates of Revenue Requirements 100
Electrical Energy 101
Typical Operating Costs 102
Training Expenditures 102
Identifying High Cost Areas 103
Replacement Reserve 104
Replacement Inventory 105
List Major Items 106
Typical Future Expansi m Costs 107
Major Expenditure Ex? >le 108
Sinking Fund Example 109
Sinking Fund Factor 110
Loan Example Ill
Capital Recovery Factors 112
Borrowing vs. Savings 113
Sinking Fund Work Sheet 114
Typical Sinking Fund Policy 115
Appendix C - Cost Recovery 117
Accounting Systems 119
Accounting Files 122
Cash Management 123
Purchasing System 124
User Charge System 125
Cost Recovery Concepts 128
Cost Recovery Outline 129
User Fee Projection 131
User Charge Summary 132
User Charge Distribution 133
User Charge Comparison 134
Current Debt Summary 135
Financial Condition Summary 135
Cost Recovery Summary 136
Customer Billings 138
Connection Fee Computation 139
Repair Computation 140
Collection Procedures 141
Collection Policy 142
Delinquent Account Policy 143
Water Disconnect 144
Tax Sale 145
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FINANCIAL MANAGEMENT
Evaluation Handbook
WASTEWATER UTILITIES
Introduction
Wastewater facilities are Capital
intensive and highly complex systems
involving management techniques that are
not typical of normal government
operations. The United States Congress
expects these wastewater utilities to
have sophisticated management procedures,
since these facilities are governed by
the laws and regulations of the country.
Many systems were built using funds
appropriated by the Congress requiting
that they be managed properly for the
benefit of the people.
The U.S. Environmental Protection
Agency and most state agencies have found
in their inspections and contacts that
many wastewater facilities do not have
the necessary staff, skills, operation
and maintenance budgets, and overall
management plans to operate their systems
as they were intended. Sometimes at
great expense to the communities, the
xisting management concept has had to be
reevaluated and completely reorganized
since the utilities were constantly in
trouble. This has caused a poor image,
the loss of needed new commerce and
industry to the community, and increased
user fees for the customers' wastewater
treatment service. The community often
has to pay higher rates because of past
mistakes and overdye improvements.
-------
During the last few years, the U.S.
EPA, state agencies, and many state
training 'center have become more
involved with training in basic
management concepts needed to operate
these facilities. Many communities have
participated in some of these training
efforts and several positive changes have
been made to improve the management of
these systems. This handbook is based
upon the findings and actions that have
been taken by the author and several of
the state agencies in conducting
investigations of wastewater facilities.
This handbook has been specifically
designed for on-site inspectors to use in
evaluating the financial management
capability of wastewater utility systems
that have been funded by federal
construction grants. It has been
specifically designed for small systems
treating less than 5 mgd of wastewater
per day.
When the term management is used, it
refers to a municipal sanitary board,
commission of public works, mayor and
council, or any other appointed or
elected body responsible for the overall
management of the wastewater utility.
Day-to-day operations are usually
supervised by a superintendent or chief
operator at a middle management level.
This financial management evaluation
is based on answering a series of yes or
no questions about the utility and
determining basic information on its
status. This evaluation also requires
the use of Appendices dated December 30,
1988, and the attendance at a one-day
Financial Management Workshop.
3
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Appendix D - Planning 147
Utility Planning 149
Basis for Planning 150
Operations Planning 151
Capital Planning Steps 152
Financing an Expansion Project 153
Capital Project Schedule 154
Appendix E - Financing 155
Debt Management 157
Types of Financing 158
Financing 159
Debt Service Factor Table 160
Inflation Factor Table .- 161
Financial Indicators 162
Balance Sheet Analysis 163
Financing Sources 166
Types of Bonds 166
Appendix F - Record Keeping 167
1. Record Keeping Concept 169
2. Types of Reports 169
3. Report Information 170
4. Operations Reports 170
5. Maintenance Reports 171
6. Plant Performance Reports 171
7. Performance Records 172
8. Financial Reports 172
9. Balance Sheets 173
10. Purchase Orders 174
References 175
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Introduction
This booklet contains an outline for making
an intensive financial management evaluation of a
wastewater utility and a compilation of various
materials in associated Appendices that aid in
such an evaluation.
This publication, however, is actually an
extension of a condensed booklet entitled
Wastewater Utility Financial Management Evaluation
Handbook, December 30, 1988. The Handbook was
designed for on-site inspectors to use in
evaluating the financial management capability of
small wastewater utilities treating less than 5
mgd of wastewater per day.
The use of this booklet is also dependent on
the attendance at a one-day Financial Management
Workshop.
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Wastewater Utility
Financial Management
Evaluation
(Facility)
Date:
Follow the accompanying Response
Outline to aid in answering the following
questions:
1. Are the last 5 years of budget
information available? Y or N
2. Are actual vs. budget comparisons
made at least quarterly? Y or N
3. Are officials and operators involved
in the budget process? Y or N
4. Has the budget increased > 5%/year
for the last 5 years? Y or N
5. Is there an equipment replacement and
rehabilitation budget item? Y or N
6. Are total energy costs < 10%
of the 0 & M budget? Y or N
7. Is the debt paid by billing
< 25% of the total budget? Y or N
8. Will present debts be retired
within 20 years of issuance? Y or N
9. Do revenues cover OM & R and
debt service at all times? Y or N
10. Are revenues based on metered
or estimated water use? Y or N
4
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11. Do commercial and industrial
'isers pay on volume/strength? Y or N
12. Is the minimum residential billing
> ?6.00/jno. or $72/yr.? Y or N
13. Is there always sufficient cash
for all "accounts payable"? Y or N
14. Has there been a rate increase
within the last 24 months? Y or N
15. Are delinquent accounts < 3%
\
of the total budget? Y or N
Count the number of questions
answered "Yes."
Rate the "Yes" answers according to
the following:
14 - 15 - No major problems
12 .- 13 = Some problems exist in
areas answered "No"
10 - 11 = Significant problems
exist in "No" areas
< 10 = Major financial
management problems
exist
The on-site inspector should use
information in this booklet, the
Appendices, and the references to help
resolve any financial management
problems.
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FINANCIAL MANAGEMENT APPENDICES
WASTEWATER UTILITIES
Basic Management Considerations
Wastewater facilities are capital intensive and highly complex
systems involving management techniques that are not typical of
normal town government operations. The United States Congress
expects these utilities to have sophisticated management procedures,
since these facilities are governed by the laws and regulations of
the country. Many systems were built using funds appropriated by the
Congress requiring that they be managed properly for the benefit of
the people.
The U.S. Environmental Protection Agency and most state agencies
have found in their inspections and contacts that many wastewater
facilities do not. have the necessary staff, skills, operation and
maintenance budgets, and overall management plans to operate their
systems as they were intended. Sometimes at great expense to the
communities, the existing management concept has had to be
reevaluated and completely reorganized, since the utilities were
constantly in trouble. This has caused a poor image, the loss of
needed new commerce and industry to the community, and increased user
fees for the customers' wastewater treatment service. The community
often has to pay higher rates because of past mistakes and overdue
improvements.
During the last few years the U.S. EPA and many state training
centers have become more involved with training in basic management
concepts needed to operate these facilities. Many communities have
participated in some of these training efforts and several positive
changes have been made to improve the management of these systems.
This publication is based upon the findings and actions that have
been taken by the author and several of the state agencies in
conducting financial management audits of many communities.
These Financial Management Appendices are intended for expanding
the evaluation of the financial management capability of wastewater
utility systems that have been funded by federal construction
grants. They have been specifically designed for small systems
treating less than 5 mgd of wastewater per day.
When the term management is used, it refers to a municipal
sanitary board, board of selectmen, commission of public works, mayor
and council, or any other appointed or elected body responsible for
the overall management of the wastewater utility. Day-to-day
operations are usually supervised by a superintendent or chief
operator at a middle management level.
The financial management investigation is based on reviewing a
series of topics with the utility and answering basic questions on
their status to obtain the necessary information.
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FINANCIAL MANAGEMENT EVALUATION
Use of Appendices
These Appendices are designed to assist in the investigation of
the financial status of the wastewater utility. After an initial
financial review has been made using the small Financial Management
Evaluation Handbook, a more complex investigation may be desirable
using the following intensive evaluation. This type of evaluation
would normally require about four visits by the investigators. More
visits may be made depending on the complexity of the system or the
amount of time provided during each visit.
The in-depth Facility Review Outline starting on the next page
contains a suggested schedule of activities to discuss on each of
four visits. The visits may change due to a number of factors. It
is merely presented as a starting schedule.
The series of questions starting on page 11 are intended to guide
the interviewer in the intensive evaluation of the various units that
make up a typical wastewater management system. Each of the
questions may be answered yes or no to determine the status of the
topic. If the utility is in perfect condition, all five questions
for each topic would be answered yes.
Count the "yes" answers for each five-question unit:
5: Unit appears satisfactory
4. Minor problems
3: A few problems need attention
2: Detailed attention needed
1: Very serious problems need attention
0: Unit needs full scale training effort
The overall status for each major secton indicates which areas
need special emphasis:
Average "Yes" Answers
Management
Budgeting
Cost Recovery
Planning
Financing
Record Keeping
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FINANCIAL MANAGEMENT
Response Outline
This response action outline
corresponds to each question asked in the
evaluation form on Pages 4-5 and provides
further information on how to obtain
necessary financial information, on the
wastewater collection and treatment
utility. The Appendices dated December
30, 1988, must be used to aid in
obtaining the necessary financial
information
All questions answered "No" on the
evaluation indicate areas of concern in
the utility's financial management.
These areas must be further investigated
using the outline below.
1. 5-Year Budget Costs
It is important to obtain as much
historical financial information as
possible from the utility to aid in the
evaluation. This should include actual
cost figures, rate schedules, annual
audits, and other financial reports.
a. Try to obtain the last 5 years of
budget and actual expense data.
b. Place the information into an
annual wastewater budget format.
(Appendix B-96)
c. Compare the annual cost
information over the years of
record to determine significant
cost areas.
d. Recommend, future budget line items
for any costs that currently do
not have their own budget line.
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TYPICAL BUDGET OUTLINE
Collection Treatment
Personnel Services.
Salaries/wages $ $
F.I.C.A.
Unemploy- ins.
Worker's gomp,
Health insurance
Retirement
Subtotal: $ $
0 & M Expenses
Office supplies $ $
Postage
Telephone
Electricity
Natural gas
Water
Veh. gas & oil
Chemicals
Operating sup.
Equipment rep.
Training
Travel
Subtotal: $ $
Capital Outlay
Replacement ace. $ $
Improvement ace.
Expansion account
Depreciation ace. r £ __
Subtotal: $ $
Debt Service
Debt & interest $ %
Cushion fund
Contingency fund
Subtotal: $ $
TOTAL: $ S
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FINANCIAL MANAGEMENT EVALUATION
FACILITY REVIEW OUTLINE
Possible Schedule
(Use Rating Sheets that correspond to outline)
I. Initial Visit - Management Review
A. Explain financial program to management officials
B. Provide program objectives to utility staff
C. Review organizational structure
D. Review staffing
E. Review personnel policies
F. Review employee relations
G. Review utility procedures
H. Review sewer collection and treatment plant operations plan
I. Review regulatory procedures
J. Tour collection and treatment facility
K. Review safety program
L. Collect important financial documents
M. Summary
II. Second Visit - Budget Review
A. Discuss any remaining guestions from the first visit
B. Collect any remaining financial data
C. Review budget information for last 5 years
D. Review overall budget
E. Review revenue budget
F. Review operations budget
G. Review maintenance budget
H. Review budget control
I. Review equipment replacement budget
J. Review capital improvement budget
9
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III. Third Visit - Cost Recovery
A. Review accounting issues
B. Review cash flow procedures
C. Review purchasing control
D. Review cost recovery procedures
E. Review billing and collection
F. Review delinquent accounts
G. Review wastewater volumes
H. Review rate structure
I. Review sewer use ordinances
J. Review cost recovery status
K. Review equipment reserve fund
IV. Final Visit - Planning, Financing, and Financial Reporting
1. Planning
A. Planning policy
B. Capital improvements
2. Financing
A. Current financing
B. Future financing
3. Financial Reporting
Current financial reports
10
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2. Budget Comparison
The last 5 years of budget
information' can provide some valuable
Information of the financial condition, of
the utility. The wastewater utility's
budget roust b© completely separate from
any other activities. Actual
expenditures must be used instead of the
forecast budget figures tfor all previous
years.
a. Tabulate the budget and actual
cost information.
(AppendiK B-97.)
b. Compare the budget vs. actual
expenses to determine if past
budgets have been within 5% of
actual costs.
c. Determine if consistent
differences occurred with any
specific expense items. '
d. Recommend that the utility perform
this review at least quarterly and
make adjustments as required.
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BUDGET vs. ACTUAL
EXPENDITURES
(Period of Record)'
% of
Budget jBudget. Actual. ±_or__n
Per. Serv.
F.I.C.A.
Benefits
Subtotal:
Q & M Exp.
Office % $
Chemicals
Supplies
Energy
Vehicles
Repairs
Operation
Maint.
Subtotal: ?~
Capital Outlay
Replace. % $
Improve.
Deprec.
Subtotal: $"
Debt Service
Debt & int. % § $
Cont. funds
Subtotal: $ $"
TOTAL: $ $
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I. Management
It is important to review the overall
management of the wastewater treatment
facility. Each major activity must be
carefully evaluated using the numerical
rating system. Important information
must be collected to facilitate the
evaluation.
Additional information is provided in
Appendix A to aid the investigator.
11
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I. MANAGEMENT
A. Explain the Financial Management Program to Officials
It is important to obtain complete cooperation of the utility
management, which can consist of a sanitary board, board of
selectmen, mayor and council, commission of public works, or some
other type of controlling board. Explain in detail that the purpose
of the survey is to determine if the financial management status of
the wastewater utility may be improved. Determine if management has
a concept for solving problems. If improvement is needed, additional
steps will be taken to suggest possible action.
There must be complete understanding and support by the
management officials. This may have to be developed over a period of
two or three meetings for some organizations. After completion of
the initial meeting. answer the following questions according to
instructions on page 8.
(1) Was there a majority of members present?
(2) Did they seem interested?
(3) Was there a positive attitude?
(4) Did they ask good questions?
(5) Do they seem willing to cooperate?
Score:
Summary:
(1) Do you feel there will be good cooperation?
(2) Does the score indicate any problems?
(3) See Appendix A: 73 - 75.
(4) Comments:
13
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3, Budget Process
it is important that budgets be
prepared based on actual need and not
what management feels that customers will
pay without complaining* Budgets should
have exact reasons for every expenditure
and include a companion section .to
discuss the budget document. The
operation of the utility is budget
driven. This is the primary course of
operation.
The budget process includes the
operator, superintendent, clerk, and
officials working together. The operator
and superintendent must present the needs
for the coming year to the officials for
a realistic budget preparation.
a. Discuss the budget process with
officials, clerks, and operators.
(Appendix B 94).
b. Discuss any specific information
found in item 1 on Page 6 that
is appropriate for any problem
areas.
c. Recommend that future budgets be
developed using all leading
staff members, if they are not
currently involved.
10
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BUDGET PROCESS STEPS
Estimate Operating
Expenses and
Capital Improvement
Requests
Rank and Prioritize
Budget Requests
Develop a Budget
Framework and
Structure by:
* Item
* Activity
Identify Revenue
Sources
Prepare Budget
Document
Approve and
Adopt Budget
Implement
Budget
11
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I. MANAGEMENT (cont.)
B. Discuss Program Objectives with Utility Staff
Meet separately with utility staff, if possible. At a minimum,
this should consist of the superintendent, chief operator, sewer
supervisor, and office manager or billing clerks. Explain that the
purpose of the survey is to determine if the financial management
status needs improvement and that you will need their full
cooperation.
(1) Was the Superintendent or Chief Operator present?
(2) Was the chief billing clerk available?
(3) Did you meet all necessary staff?
(4) Does the billing office appear efficient?
(5) Does the office have adequate billing equipment?
Score:
Summary:
(1) Did you obtain good cooperation?
(2) Does the score indicate any problems?
(3) Comments:
14
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I. MANAGEMENT (cont.)
C. Review Organizational Structure
It is important to determine the organizational structure, since
many times a poor organization can contribute to overall financial
management problems. Often, small systems have a very loose
organization that does not always put authority at the right level.
This needs to be formally addressed. Management should supervise
with one voice. The superintendent or chief operator should report
to just one person and not receive requests from each member of
council or a commission.
(1) Is there a distinct line of authority?
(2) Did you obtain a formal organizational chart?
(3) Does management supervise by one authority?
(4) Does management review organization needs yearly?
(5) Is the organizational structure satisfactory?
Score:
Summary:
(1) Is the organizational structure satisfactory?
(2) Does the score indicate any problems?
(3) See Appendix A: 76.
(4) Comments:
15
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4. Budget Increase
Budgets should increase yearly at
least by the national inflation rate of 4
to 7%. Every part of" the wastewater
utility operations must be evaluated to
determine the areas that will require
additional increases.
a. Calculate the percent of budget
change for the decrease or
increase for each line item for
each year of record.
(Appendix B-97).
b. List any budget line item that has
not increased more than 5% for any
year.
c. Determine if there are any
significant reasons why these
items have not had any increases.
d. If necessary, recommend budget
increases in areas where a
deficiency could be causing
problems with OM t ft.
12
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BUDGET INCREASE
198 198 198
Personnel Services
Wages %
F.I.C.A.
Unemploy. ins.
Worker's Comp.
Health Insurance
Retirement
Subtotal: %
Q& M Expenses
Office supplies %
Postage
Telephone
Electricity
Natural gas
s Hater
Veh. gas & oil
Chemicals
Operating sup.
Equipment rep.
Training
Travel
Subtotal: %
Capital Outlay
Replacement ace. %
Improvement ace.
Expansion account
Depreciation ace.
Subtotal: %
Debt Service
Debt & interest %
Cushion.fund
Contingency fund
Subtotal: . %
TOTAL:
13
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I. MANAGEMENT (cont.)
D. Review Staffing
Staffing size and expertise are extremely important for the
proper operation of any wastewater utility. Many times people are
hired for positions without any prior experience or training.
An evaluation of the current staffing is important to determine
if it contributes to any management problems. A well-staffed and
trained organization can often implement good cost effective
operations.
(1) Is the present staff size sufficient?
(2) Are adequate salaries paid for their experience?
(3) Are all wastewater treatment operators certified?
(4) Is adequate training provided?
(5) Do key operators belong to the WPCF?
Score:
Summary:
(1) Is the present staffing satisfactory?
(2) Does the score indicate any problems?
(3) See Appendix A: 77.
(4) Comments:
16
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I. MANAGEMENT (cont.)
E. Review Personnel Policies
It is important that each employee have a detailed job
description that shows exactly what is required. Job descriptions
are also necessary for each council member or board member stating
his/her job function with respect to the utility activities. All job
descriptions must be reviewed annually and updated as necessary.
The utility should have an employee appraisal system that is used
at least annually. Management should have personnel procedures that
include visiting the operators at the treatment plant to discuss
important topics and reviewing financial needs. There should also be
a training plan to allow each operator to attend at least one formal
short course during the year.
(1) Does each employee have detailed job description?
(2) Are job descriptions updated annually?
(3) Is there a formal employee appraisal system?
(4) Is annual training allowed for each employee?
(5) Does management visit employees on the job site?
Score:
Summary:
(1) Are there any personnel policy problems?
(2) Does the score indicate any problems?
(3) See Appendix A: 78 - 80.
(4) Comments:
17
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5. Equipment Replacement and
Major Rehabilitation Line Item
An equipment replacement budget
should include all pumps, motors,
vehicles, and any other equipment that
has a useful life less than the life of
the total facility. The listed equipment
should show date placed -into service,
useful life, and expected replacement
cost. All equipment expected to be
replaced within the next 5 years should
be itemized by year. Set aside costs can
be prorated throughout the life of the
equipment.
a. Obtain a list of all equipment and
major rehabilitation that costs
more than $1,000.
b. List year each equipment piece was
placed into service.
c. Project the remaining service life
of each equipment piece.
d. Estimate current replacement cost.
e. Summarize this information.
(Appendix B-105).
f. Determine the current set aside
budget cost to replace
equipment using appropriate
Sinking Fund factors.
(Appendix B-110).
g. Recommend this line item in
B-96 be recalculated each year
and included- in the budget.
14
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EQUIPMENT REPLACEMENT
INVENTORY
Equip. Otig. , Year Remain. Replac.
& Reh. Cost Ser. Life Cost
1.
2.
3.
t
4.
5.
6.
7.
8.
9.
10.
15
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I. MANAGEMENT (cont.)
F. Review Employee Relations
Morale of wastewater treatment personnel is very important.
Management sometimes does not make any particular employee relations
effort, which leads to dissatisfied operators.
It is important to evaluate the current staff to determine if
this causes any financial management problems.
(1) Has there been a low turnover of personnel?
(2) Has employee absenteeism been very low?
(3) Do all employees know exactly what is expected?
(4) Are there good communications from management?
(5) Are all salaries and benefits competitive?
Score:
Summary:
(1) Are there any employee relations problems?
(2) Does the score indicate any problems?
(3) See Appendix A: 80.
(4) Comments:
18
-------
I. MANAGEMENT (cont.)
G. Review the Utility Office Procedures
It is important to review, in the beginning, the office where the
utility bills are prepared and revenue is collected. Determine if
billing procedures appear adequate and if collection procedures are
uniform for all customers. Review the size of the office and number
of employees. Collect some basic information on number of new sewer
taps during the last 5 years, user charges increases, and the number
of delinquent accounts. Review any financial reports.
(1) Is the ratio of clerk(s)-to-customers < 1:800?
(2) Is the office well organized?
(3) Are bills prepared using efficient equipment?
(4) Do customer relations appear satisfactory?
(5) Have office procedures kept pace with needs?
Score:
Summary:
(1) Do the office procedures appear satisfactory?
(2) Does the score indicate any problems?
(3) See Appendix A: 81 - 82.
(4) Comments:
19
-------
6. Energy Costs
Energy costs are often the largest
single expenditure. Electrical and fuel
costs have been steadily rising every
year. These must be adequately forecast.
List electrical equipment
nameplate voltage and amperage £qc
all motors.
Include energy requirements for
lighting, heating, air
conditioning, and major laboratory
equipment.
Estimate current yearly operating
time for all units and determine
percent in-use time.
Calculate estimated KWH for each
unit and determine daily average.
Summarize the information.
(Appendix 'B-101).
Review any equipment class that
exceeds usage > 10% of the total
energy used.
Recommend, if possible, that these
high energy use items be
investigated for possible energy
reduction without losing operation
efficiency. Reduce power use
during peak periods.
If necessary, recommend a detailed
energy audit.
16
-------
ELECTRICAL ENERGY
Lift Sta.
% of Cost/ Total
KWH Total KWH Cost
A
B
C
Total:
Treatment
Plant
Raw Sew.Pump.
Pretreat.
Primary
Secondary
Sludge
Other
Total:
Summary;
Cost/KWH
Peak Demand
Total KWH
Total Cost
Cost/day
Total flow/mo,
Cost/MG
17
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I. MANAGEMENT (cont.)
H. Review Sewer Collection and Treatment Plant Operation Plans
It is important that the utility have a formal operation policy
that includes statements about keeping the utility in compliance by
providing proper operation of the collection system and wastewater
treatment plant. This written plan should be updated when
significant changes are made and should be reviewed at least
annually.
The operations plan should include review of any long range needs
such as sludge deposition or upgrading operations. The operations
plan should include topics on performance of certain units or process
control goals.
(1) Is there a good written operations plan?
(2) Are long range operational problems addressed?
(3) Does the operator keep operation plans updated?
(4) Does the operator understand process control?
(5) Is present sludge disposal practice satisfactory?
Score:
Summary:
(1) Are there any operational problems?
(2) Does the score indicate any problems?
(3) Comments:
20
-------
I. MANAGEMENT (cont.)
I. Review Regulation Procedures:
Management need to be familiar with state and federal regulations
as they apply to the operation of the collection and wastewater
treatment facilities. They should routinely review Discharge
Monitoring Reports (DMRs) and know why any parameter may be out of
compliance. Out of compliance items should have internal reports
citing the reasons for NPDES violations.
The utility should have a proper sewer use and pretreatment
ordinance, so that if violations are caused by any of these factors,
they may be swiftly enforced. If any compliance problem is caused by
lack of money to correct the situation, it must be properly funded.
These regulatory policies may need to be emphasized during the course
of the assistance program.
(1) Does management understand fed./state regulations?
(2) Was the WWTP in NPDES compliance during last year?
(3) Does management review DMRs monthly?
(4) Is a report prepared when out of compliance?
(5) Is there a sewer use/pretreatment ordinance?
Score:
Summary:
(1) Are there any regulatory problems?
(2) Does the score indicate any problems?
(3) Comments:
21
-------
7. Total Debt
The total debt owed by the wastewater
utility is extremely important. The
total debt service should be less than
25% of the total budget paid by customer
billing. Debts that exceed this amount
place a severe burden on the customer for
past capital costs.
a. Determine the percentage that the
total debt service payment
represents of the total budget.
(Appendix B-97).
b. If the debt service payment is
> 25% of the total budget,
recommend review by a financial
consultant.
c. If short-term debts are not being
paid off on time, adjust the
budget to pay off these short-term
debts.
18
-------
TOTAL DEBT SERVICE
% of
Budget Budget" Actual
Per. Ser.
Subtotal:
0 & M:
Subtotal:
Cap. Out.:
Subtotal:
Debt
Interest
Cushion
Contingency
Subtotal: % $
TOTAL:
19
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I. MANAGEMENT (cont.)
J. Tour Collection and Treatment Facilities
It is important to tour the entire wastewater utility during the
first visit/ if you are not familiar with its operations. This tour
should start with a visit to lift stations and a review of the sewer
system to determine if there are any major problems which will
require large expenditures in the future.
A visit should be made to the wastewater treatment plant to
determine overall status with respect to equipment condition,
immediate and long term needs, and compliance status.
A survey should also be made of the laboratory to determine if
there are any problems with testing, equipment, and general reporting
procedures.
(1) Do sewers appear adequate?
(2) Do lift stations appear satisfactory?
(3) Does operation & maintenance appear satisfactory?
(4) Is there an absence of odor at the fence line?
(5) Does the laboratory appear satisfactory?
Score:
Summary:
(1) Does the system have problems that need attention?
(2) Does the score indicate any problems?
(3) See Appendix A: 83 - 87.
(4) Comments:
22
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I. MANAGEMENT (cont.)
K. Review Safety Program
The utility should have a written safety policy that includes all
activities of every employee. Separate safety rules should be
written for each important operation and posted at the job site in
addition to being compiled in a safety manual.
Employees should have had some type of formal safety training.
It is important to review any lost time accidents, since these often
affect the budget and can usually be prevented. All accidents
involving the injury of any employee or the damage of equipment
should have a formal report.
A good operating facility will have a safety file of reports and
safety publications, such as those produced by the Water Pollution
Control Federation.
(1) Does management have a formal safety program?
(2) Are safety rules written for each major operation?
(3) Is there a formal accident report system?
(4) Does management review each accident?
(5) Does management receive any safety publications?
Score:
Summary:
(1) Are there any safety problems?
(2) Does the score indicate any problems?
(3) Comments:
23
-------
8. Debt Retirement
A wastewatec treatment plant often
lasts only about 20 to 25 years with good
maintenance. If the years of the debt
exceed this amount, an extreme financial
burden will be placed on the customers
for a facility that has outlived its
usefulness.
a. List all outstanding short-term
and long-term debts, interest
rates, issuance years, and year of
retirement.
(Appendix C-135)
b. Determine if any debts will not be
retired within 20 years of
issuance.
c. Determine from officials if
facility will need any equipment
replacement or major
rehabilitation before debt
retirement that is not being
funded from'current set-aside
funds.
d. If major improvements are required
before debt retirement, recommend
that a consultant be used to
evaluate and determine
future costs.
20
-------
CURRENT DEBT SUMMARY
Type of Year Int. End
Debt Amount Start Rate Yr.
1.
2.
3.
4.
5.
21
-------
I. MANAGEMENT (cont.)
L. Collect Important Financial Data Documents
It is necessary to collect some basic documents such as user
charge schedules/ budgets, monthly financial reports, and other
important documents that should be readily available for a
well-managed facility. It is ideal to collect these reports for the
last 5 year period for future use.
(1) Did you obtain rate schedules for last 5 years?
(2) Did you obtain budget records for last 5 years?
(3) Did you obtain financial reports for last 5 years?
(4) Did you obtain any other important documents?
(5) Did you find the clerks willing to cooperate?
Score:
Summary:
(1) Do you feel there are sufficient documents?
(2) Does the score indicate any problems?
(3) Comments:
24
-------
I. MANAGEMENT (cont.)
M. Summary
1. The utility is managed by a:
2. This organizational structure is:
3. Management cooperation will probably be:
4. The physical condition of the overall utility is:
5. The fiscal condition of the utility is:
6. The total staff number is:
7. Personnel policies are:
8. The operations plan is:
9. Management's concept of state/federal regulations is:
10. The safety program is:
25
-------
9. Revenue Review
The revenue musk meet all budgeted
financial requirements of the facility.
It is important that all utility revenues
remain in the system and are never used
for any other purpose. Revenues must be
based on actual need of the. utility to
meet its responsibility, for providing a
service to the customers and meeting both
short-term and long-term regulatory
commitments.
a. Determine if annual revenues were
sufficient to meet expense budget
requirements for each record
period.
(Appendix B-96 and B-99)
b. List any period that had deficient
revenues.
c. Determine reason for revenue
shortages.
d. Recommend changes that would help
increase revenue required for
critical areas.
22
-------
REVENUE BUDGET
The annual revenue budget reflects
how much money the utility will receive
from " customers and other revenue sources
to spend on the operation of the utility.
Estimated billing:
Penalties & Int. :
Connection fees:
Other:
TOTAL:
0 & M Budget
The revenue budget must reflect the
needs of the operation, maintenance, and
replacement budget, which include at
least these important factors:
Administration
Billing & collection
Operations
Maintenance
Replacement
Support services
Debt services
Dedicated funds
Capital Budget
The . capital budget reflects long-term
objectives resulting from capital
projects and generally relies on specific
financing.
23
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II. BUDGETING
Budgeting is the process where all
revenues and expenditures are separated
into appropriate categories for managing
the funds. Estimates are made for each
item and then compared to actual
operation.
The budget should be strictly
followed to determine if revenues match
actual expenditures. If revenues
decrease from expectations, adjustments
will have to be made for revenues and
expenditures.
Additional information is provided
in Appendix B to aid the investigator.
27
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II. BUDGETING
A. Discuss Any Remaining Questions from the First Visit
A follow-up meeting with some members of management may be
necessary during the second visit, since they are sometimes not clear
on the objectives after just one meeting. It is also advisable not
to overwhelm them with too many questions in the first session.
A second meeting is also advisable so that some questions may be
asked a second time and to expand on some of the earlier comments.
You should also be prepared to offer some minor suggestions during a
second visit from the findings found during the first visit.
It is ideal to again probe for answers that are not always easily
obtained, such as number and amount of delinquent accounts, certain
budget items, and hidden financial problems.
(1) Does management understand their role?
(2) Are delinquent accounts under control? (< 3%)
(3) Are all single line items <20% of budget?
(4) Is the minimum bill for 3,000 gals. > $6.00?
(5) Is the utility free of any financial problems?
Score:
Summary:
(1) Does management fully understand their system?
(2) Does the score indicate any problems?
(3) Comments:
29
-------
10. Residential Hater Usage'
It is. important that water usage
figures used for wastewater charges be
accurately measured or estimated, so that
proper billing will be provided.
Customers must pay their fair share of
actual services used.
a. Obtain copy of residential rate
structure document.
b. Review billing records to
determine if charges are based on
usage data.
(Appendix C-127)
c. If flat rates are used, recommend
that all wastewater billing be
performed on actual or estimated
wastewater volumes discharged to
sewers.
-------
USER CHARGE
METHODOLOGY
The users must be divided into proper
classes, so that it is known how many
users are in each class and their
respective volumes.
Management must determine:
All classes of users
Factors that determine classes
Characteristics of all users
Individual user volumes
Appropriate rate
User classes:
Residential
Commercial
Industrial
Institutional
Residential rates:
1. Equivalent dwelling unit -
Used for unmetered water
Determined from best estimates
2. Volume measurements -
Actual metered usage
Similar waste concentration
25
-------
II. BUDGETING (cont.)
B. Collect Any Remaining Financial Data
It is important to obtain all necessary documents and reports
from the utility to aid in the evaluation. Any corrections should be
made and the data become part of the investigation file. The basic
documents include the last 5 years of rate schedules, annual budgets,
and financial reports. Other information should include number and
amount of delinquent accounts, and debt service information showing
principal, interest rate, and duration of the loan or bonds.
If any of this information is not available, it indicates that
some problems exist in their overall financial management.
(1) Did you obtain rate schedules for last 5 years?
(2) Did you obtain the last 5 years of budgets?
(3) Did you obtain delinquent accounts information?
(4) Did you obtain all financial reports requested?
(5) Did you obtain all debt service reports?
Score:
Summary:
(1) Did you obtain all necessary information?
(2) Does the score indicate any problems?
(3) See Appendix B: 91.
(4) Comments:
30
-------
II. BUDGETING (cont.)
C. Review Budget Information for Last 5 Years
The last 5 years of budget can provide some valuable information
of the financial condition of the utility. First, review the budget
to determine if the wastewater utility is completely separated from
any other activities. Then, review the budget totals to determine
the percent of yearly increases to see if they appear reasonable.
Other important factors to consider include the number of line
items and if actual expenditures are compared monthly with the
prescribed budget amount. It is also important to determine if they
keep a fixed asset inventory and make yearly calculations of present
worth.
(1) Is there a separate wastewater utility budget?
(2) Does the budget have sufficient line items?
(3) Is there a monthly actual-to-budget comparison?
(4) Is there a fixed asset inventory?
(5) Does the inventory include present worth?
Score:
Summary:
(1) Does the information indicate proper budgeting?
(2) Does the score indicate any problems?
(3) See Appendix B: 92 - 95.
(4) Comments:
31
-------
11. Commercial" and Industrial Users
v f'Vf'
It is important that 'all'commercial
and industrial customers pay for the
services , they are provided. "' Volume
discounts , are usually 'not justified.
Some wastewater discharges from these
sources may require extra treatment that
should not be passed on to residential
users. Instead, they must have
surcharges depending on the strength and
type of waste.
a. Interview the superintendent and
chief operator to determine if
there are high strength wastes
from industries that exceed
concentrations of > 300 mg/L BOD
or TSS.
b. Obtain commercial and industrial
rate structure documents to
determine if surcharges are
included for high;strength wastes.
c. Review the surcharge information
to determine if it is adequate for
all commercial and industrial
users. . -
» i'
d. Recommend that appropriate
surcharges be used where
applicable and that commercial and
industrial volume discounts not be
used.
26
-------
COMMERCIAL &
INDUSTRIAL USERS
It must be known if the wastewater
treatment plant has had any changes in
the average and peak influent BOD,
suspended solids, and other important
characteristics. If these data are above
normal values, it indicates that the user
charges must be reevaluated.
User Charge Rates;
1. Surcharge -
Use for any wastewater that has a
concentration over set values, such
as 250 - 300 mg/L BOD or suspended
solids.
2. Quality/Quantity -
Determine costs for unusual wastes
Incorporate minimum and/or maximum
volumes charges
3. Establish Pretreatment Ordinance
27
-------
II. BUDGETING (cont.)
D. Review Overall Budgets
This should include the review of the OM & R line items to
determine if sufficient funds are available to provide adequate
operations. A special contingency fund should also be available for
unplanned events that might require substantial maintenance. A
review should also be made to determine if previous line item
activities have been neglected because of lack of money.
The investigator should determine if the accounts appear
satisfactory for the size of the system. This can be done by making
a comparison with some similar situations and knowing the needs of
the utility.
(1) Has the revenue budget always matched expenditures?
(2) Is there a sufficient OM & R budget?
(3) Is there a contingency fund for special needs?
(4) Do all line items have sufficient funds?
(5) Are all accounts satisfactory?
Score:
Summary:
(1) Does the overall budget appear satisfactory?
(2) Does the score indicate any problems?
(3) See Appendix B: 96 - 98.
(4) Comments:
32
-------
II. BUDGETING (cont.)
E. Review Revenue Budget
The revenue budget should be reviewed by management to determine
if the expected revenue from billing and any other sources will cover
the needs. If the revenue does not match the total expenditure
budget, a rate survey will be necessary.
It is extremely important that all utility revenues remain in the
system and are never used for other purposes. There have been times
when some salaries of councils or commission members that do other
functions are paid totally from the utility. This should never
happen.
(1) Is there a separate revenue budget?
(2) Is there a forecast of future customer needs?
(3) Is the revenue budget compared with actual income?
(4) Are revenues recovering total costs?
(5) Are all revenues used only for the utility?
Score:
Summary:
(1) Is there a satisfactory revenue budget?
(2) Does the score indicate any problems?
(3) See Appendix B: 99 - 100.
(4) Comments:
33
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12. Minimum Billing
The minimum bill sshouHd ^ay ffor fixed
costs that ace not depeiwlent on the
volume of .wastewater 'di&cha&g&d,. This
should include such &ac.to;i8S as normal
salaries, office expenditures, lighting,
heating, and debt service. ?Any customer
cost less than about .$12 per iyeax usually
indicates tremble.
a. Obtain minimum residential,
commercial, and iindustrial /.rates.
b. If mifv-imum billing ;i3oes-aot cover
routine Efcx-ed expenses, reecosromend
a finasnccial consultant .Eavli?ew of
the minimum .billing jSt:cj£d,bure to
cover such cexpenses.
-------
TYPICAL MINIMUM
BILLING
NO.. Oft
Cust.
15&
450
500^
6002
ftOO
1,000
lf.13BO?
l.&to
1,1003
I, SOU)
1.909
2,0080?
2 600
Kim Rate per
'MM.- 1000 gal
$? G'iQ&. $ 1.00
£*50 2*50
8,311 1.70
5*50 Oi50
4^5* Iv25
3IOK 0*85
U2Si U43
6^00^ 1,20ft
GF> 1*1 \ ' A ?
V*f* -J-«J-' JL * Tl *
241^ .0,95
Ts 73^ Vl: >^i
J * ft &-1. A-«- 4feV»
2i jss? 11 2r
31 1& 1.12?
3000 gal
Example
$ 8.00
14.00
8.31
5,50
5.75
3.00
5.54
6.00
6.33
4.95
3.72
6.22
4.27
-------
II. BUDGETING (cont.)
F. Review Operations Budget
The operations budget should include all activities required to
operate the system properly and to stay in compliance. One of the
key elements in the operation is the amount of energy and its
associated costs. Energy costs should be measured on a monthly cost
per wastewater unit treated, so that it is easier to determine
differences and their causes.
Energy cost often is the single most important expenditure in
operating a wastewater utility. If these costs exceed 10% of the
total operations budget, there is probably a need for an extensive
investigation to determine if these costs can be reduced. It is also
important to review the overall operations budget to determine if it
is sufficient.
(1) Are all operating budget items satisfactory?
(2) Is there a specific energy budget?
(3) Does energy budget show costs by units (kwh/gal)?
(4) Are power costs < 10% of the operations budget?
(5) Is the operations budget satisfactory?
Score:
Summary:
(1) Does the operations budget appear satisfactory?
(2) Does the score indicate any problems?
(3) See Appendix B: 97, 102.
(4) Comments:
34
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II. BUDGETING (cont.)
G. Review Maintenance Budget
The maintenance budget must be adequate to keep all equipment
operating in its best condition. The budget should reflect exact
line items for certain pieces of equipment. The maintenance budget
must be based on preventive maintenance, not just corrective
maintenance.
Other important factors include a running inventory of small
parts on hand and the use of good preventive maintenance records that
show when maintenance is performed and its associated costs.
(1) Is the maintenance budget satisfactorily itemized?
(2) Is there an inventory of small parts?
(3) Is Preventive Maintenance routinely performed?
(4) Are there formal Preventive Maintenance records?
(5) Do employees always have sufficient small parts?
Score:
Summary:
(1) Does the maintenance budget appear satisfactory?
(2) Does the score indicate any problems?
(3) See Appendix B: 97.
(4) Comments:
35
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13. Cash Flow
A utility that has an adequate rate
structure and collects all bills in a
timely manner usually does not have a
cash flow problem. Factors that
contribute to lack of proper cash flow
are.,usually poor revenue estimates and
unplanned expenditures not properly
forecast in the budget.
a. Interview clerk and review records
to determine if there* has always
been sufficient cash flow for all
"accounts payable."
b. Determine if the billing cycle is
too long for proper cash flow,
such as 30 days or longer.
c. Compare current billing cycle with
any state laws or regulations to
determine if cycle may be
shortened.
d. List periods where cash flow was a
problem.
e. Determine if cash problems may be
caused by poor budgeting.
30
-------
CASH MANAGEMENT
Cash management is a system used to
control the following items of the
wastewater utility:
Receipts
Deposits
Surpluses
The elements of a cash flow system
should include the establishment of
cash information systems
timely billing
short-term payment period
proper disbursement procedures
Excess funds should obtain the best
interest rate for the time the funds are
available. Some of these funds may only
be available for short-term benefits,
while others may be available for
long-term investments.
Short-term funds:
Excess monthly cash
Uncommitted accounts
Operating accounts
Long-term funds:
Deposit fees
Improvement reserves
Replacement set-a-sides
31
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II. BUDGETING (cont.)
H. Review Budget Control
It is important that budgets are prepared based on actual need
and not what management feels customers will pay without
complaining. Budgets should have exact reasons for every expenditure
and include a companion narrative section to discuss the budget
document.
A review of past budgets and the time given to them would be
important to know. If it is indicated that budgets are always a last
minute activity, it generally means that very little thought is given
to them. In addition to the line items, there should be a separation
of certain activities such as sewer, treatment plant processes,
laboratory, and administration.
(1) Are annual budgets always prepared on time?
(2) Are there sufficient line items for each area?
(3) Does the budget contain activity levels?
(4) Are new line items easily added as required?
(5) Does the operator help prepare the budget?
Score:
Summary:
(1) Is the budget control process satisfactory?
(2) Does the score indicate any problems?
(3) See Appendix B: 96 - 99.
(4) Comments:
36
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II. BUDGETING (cont.)
I. Review Equipment Replacement Budget
An equipment replacement budget should include all pumps, motors,
vehicles, and any equipment that has a useful life less than that of
the total facility. All equipment expected to be replaced within the
next 5 years should be itemized by year. Costs can be prorated
throughout the life of the equipment, so that funds will be available
when needed for replacement.
It is important that all equipment be listed with its date of
placing in service, useful life, and its expected replacement cost.
These costs should include installed value, since labor is an
important part of the total cost.
(1) Are there line items for specific equipment?
(2) Is there a listing of replacement equipment?
(3) Does the listing include a useful life column?
(4) Is the replacement cost prorated in the budget?
(5) Does the replacement cost include labor?
Score:
Summary:
(1) Are replacement costs included in the budget?
(2) Does the score indicate any problems?
(3) See Appendix B: 104 - 105, 108 - 115.
(4) Comments:
37
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14. Rate Increase
A well-maintained facility is one in
which all necessary costs will be
recovered through proper user charges
that are increased as needed. The rate
structure should be reviewed at least
yearly.
It is important that there is an
official policy stated in writing that
the wastewater utility will be operated
on a self-supporting basis,
a. Obtain the date of the last rate
increase.
b. Determine why there has not been a
rate Increase for more than 24
months.
c. Recommend a rate increase if the
current rate does not adequately
support the budget. An
independent consultant may have to
be used to' provide adequate rates,
if budget and rate structure are
unknown.
32
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WASTEWATER
TREATMENT RATE
, 19
(Gallons treated/month: X 1,000)
Per. Expenses:
Salaries $
. F.I.C.A.
Benefits $
Utilities:
Electric
Telephone
Supplies:
Chemicals
Repairs:
Maintenance:
$
Capital Exp.:
Replacement $
Expansion
Debt Service:
Debt & Int. $
Cont. Fund
Total Expenses: $
Cost/1,000 g.:
Gals, treat.: X 1,000
-'-$ '
33
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II. BUDGETING (cont.)
J. Review Capital Improvement Budget
Capital improvement projects should be reviewed at least once per
year and an estimated budget developed for the various activities.
Many projects can be divided into several small parts and implemented
over a period of a few years.
It is important to have a capital improvement policy with the
goals to be accomplished. Long range projects should have their
funding included as a part of the regular user charges.
(1) Is there a capital improvement plan?
(2) Is there a capital improvement budget?
(3) Is the capital improvement budget sufficient?
(4) Are capital improvements considered in user fees?
(5) Is there a capital improvement schedule?
Score:
Summary:
(1) Is there a satisfactory capital improvement budget?
(2) Does the score indicate any problems?
(3) See Appendix B: 107.
(4) Comments:
38
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III. COST RECOVERY
Cost recovery is the process by which
all operations/ maintenance, and
replacement costs are easily recovered
through proper user charges.
The cost recovery procedure defines
the need for revenue and determines how
it will be met. The procedure includes
adeguate accounting technigues to track
all financial transactions and generates
the necessary status reports. Good cash
management consists of forecasting,
tracking, and investing of temporary
surplus funds.
Additional information may be found
in Appendix C.
39
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15. Delinquent Accounts
Proper procedures must be enacted
that provide for a termination of
services for any customer that does not
pay in a timely manner. An adequate
advanced deposit system will also aid in
providing the payment when termination
does not produce a payment.
If termination of services is not
feasible, other procedures such as
property sale may be considered.
a. Obtain delinquent account policies
and procedures.
b. Compare policies with appropriate
state statutes.
c. Determine the average number of
delinquent accounts for each of
the last 5 years or period of
record.
d. Determine the delinquent dollar
amount for the last several
billing periods.
e. Calculate the percentage of the
total budget that represents
delinquent accounts.
f. Recommend strong implementation of
the collection of delinquent
accounts.
34
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DELINQUENT ACCOUNT
PROCEDURES
The U.S. Supreme Court stated in 1978
in the Memphis Light, Gas, and Water vs.
Willey s. Craft that there must be "DUE
PROCESS" in any action against a
delinquent utility customer. To help
provide proper "DUB.PROCESS," there must
be proper procedures guided by legal
council. Some of the items for these
procedures include the following:
1. Bills must be submitted on a
routine schedule.
2. Statements must show amount due
and when payment is due.
3. A "Past Due Notice" must be
mailed when account is
delinquent.
4. A "Turn-off" notice must be
mailed within stated time.
5. An attempt must be made to
contact the head of the
household by telephone or in
person.
6. If customers have illness or some
unusual conditions, time must be
given for them to move in with
friends or relatives or into
public assistance shelters.
7. Services can be terminated only
during normal business hours
Monday to Friday.
35
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III. COST RECOVERY
A. Review Accounting Issues
A wastewater utility must have an appropriate accounting system
that has been set up by someone familiar with acceptable accounting
practices. The overall method of accounting can be on a cash basis,
accrual basis, or a modified accrual system. It is extremely
important that every transaction be carefully recorded and that all
financial activities are known.
A wastewater utility is generally operated as an enterprise fund,
since it should be treated like a business. There should always be
knowledge of the financial status. If possible, a visit to the
accountant who maintains or audits the facility's books may provide
useful information.
(1) Is the utility set up as an enterprise fund?
(2) Are proper journals and ledgers used for accounts?
(3) Are total OM & R costs known?
(4) Are indirect costs properly identified?
(5) Is the accounting system reviewed by a CPA firm?
Score:
Summary:
(1) Is the present accounting system satisfactory?
(2) Does the score indicate any problems?
(3) See Appendix C: 119 - 122.
(4) Comments:
41
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III. COST RECOVERY (cont.)
B. Review Cash Flow Procedures
A utility that collects sufficient user charges in a timely
manner will generally have an adequate cash flow and will not have to
be concerned with meeting its normal financial commitments. It will
also be able to meet all OM & R costs without difficulty. If there
is any indication that expenditures are directly controlled by cash
in bank, then the utility has a cash flow problem.
Other factors to consider are the number of outstanding
delinquent accounts. These overdue funds are sometimes the
difference between good and poor cash flow. Such overdue accounts
must be actively pursued and charged penalties and interest. It is
also important that billing is timely and mailed as quickly as
possible, since revenues are always behind the service provided.
(1) Does the utility always have sufficient cash?
(2) Are all OM & R costs recovered by user fees?
(3) Is expense control related to available cash?
(4) Are delinquent accounts charged penalties & int.?
(5) Are billings timely & payment due within 30 days?
Score:
Summary:
(1) Does the utility have a cash flow problem?
(2) Does the score indicate any problems?
(3) See Appendix C: 123.
(4) Comments:
42
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GLOSSARY
ACCOUNTING; The procedure that tracks
all financial transactions and generates
status reports.
ACCOUNTS RECEIVABLE: An amount that is
owed to the utility by its customers that
has not yet been received.
ACCRUAL BASIS: The method of accounting
under which revenues are recorded when
they are earned (whether* or not cash is
received at that time) and expenditures
are recorded when goods and services are
received (whether cash disbursements are
made at that time or not).
AMORTIZATION; The process of allocating
an asset, a liability, or an amount over
future accounting periods. It is the
gradual reduction or liquidation of an
account according to a specified schedule
of times and amounts.
ANNUITY;/ A series of equal money
payments made at equal intervals during a
designated period of time.
ASSESSMENT; (1) The process of making the
official valuation of property for tax
purposes.
(2) The valuation placed on property.
(3) The charge placed against property
for the. purpose of constructing
improvements such as water and sewer.
36
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ASSETS (Capital): Property of a permanent
nature or intended for long continued use
or possession, such as pumps, motors,
trucks, and meters.
ASSETS (Fixed): Permanent property such
as land, buildings, sewer collection
pipes, and tanks.
ASSETS (Intangible); Any element of value
applied to permanent property of a
non-physical nature such as cost of
organization and development.
ASSETS (Tangible): Permanent property of
a physical nature such as lands,
buildings, wells, plant eguipraent, and
permanent improvements.
AUTHORITY; A government or public agency
created to perform a single function such
as a sewer authority. Usually such'units
are financed from service charges or
fees.
BALANCE SHEET; A statement showing 'the
financial position of an enterprise at a
specific date, prepared from records to
show assets, liabilities, and equities.
BETTERMENT; An addition or change made to
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. The cost is added to the
book value of the asset.
BILLING CYCLE; The time from date of
bill to end of payment period, usually
about 20 days.
37
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III. COST RECOVERY (cont.)
C. Review Purchasing Control
It is important that the utility have a formal purchasing policy
that includes the use of numbered purchase requisitions. Formal
policies are necessary to outline the types of approval that are
required for various levels of purchasing. It is important that a
purchase cost review be made before any item is ordered, so that the
best price may be obtained.
The chief wastewater operator should be authorized to make
certain expenditures without prior approval, providing they are
normal budget items. This would allow important items to be ordered
without waiting several days for a formal council or board meeting.
It is also important to have a formal record system showing when any
item was received after purchase and what its condition is.
(1) Is there a formal purchase requisition procedure?
(2) Can the operator order items within the budget?
(3) Is there accountability for items received?
(4) Is there a satisfactory cost comparison?
(5) Are all P.O.s entered into a specific journal?
Score:
Summary:
(1) Is there a satisfactory purchasing policy?
(2) Does the score indicate any problems?
(3) See Appendix C: 124.
(4) Comments:
43
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III. COST RECOVERY (cont.)
D. Review Sewer Use Ordinance
All wastewater utilities must have a proper sewer use ordinance,
which includes the types of wastes that can be introduced to the
sewer. The ordinance should include conditions when the wastes
require a surcharge because of abnormal conditions. The sewer
ordinance should contain prescribed pretreatment conditions.
It is important that the ordinance meet all local, state, and
federal legal requirements. The ordinance must be available for all
customers. The wastewater management must also have procedures to
fairly enforce the ordinance.
(1) Is ordinance on file for all customers to review?
(2) Is current management aware of its requirements?
(3) Is the ordinance being actively enforced?
(4) Are the surcharges adequate for special wastes?
(5) Are public meetings held to inform customers?
Score:
Summary:
(1) Is the sewer use/pretreatment ordinance adequate?
(2) Does the score indicate any problems?
(3) Comments:
44
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BONDS; A written promise to pay.a debt by
specified sums of money at ' specified
future dates* Bonds are typically used
for long-term debt.
BONDS, GENERAL OBLIGATION; When a
government pledges its full faith and
credit to the repayment of bonds which^it
issues through Various means including
taxes or other revenues in sowe cases.
BUDGETING; Identifies needs for spending
and allocates resources among needs.
CAPITAL BUDGET; A plan of proposed
capitalexpenditures that is
usually part of the complete annual
budget, which includes both operating and
capital outlays.
CAPITAL COSTS; Costs of major
rehabilitation, betterments, expansion or
upgrading.
CAPITAL OUTLAYS; Expenditures which
result in the acquisition of or
addition to fixed, assets.
CASH BASIS; The method of accounting
under which revenues are recorded when
received in cash and expenditures are
recorded when paid.
CASH MANAGEMENT; Forecasting, tracking,
and investing of temporary surplus funds.
COMMERCIAL USER; All retail stores*
restaurants, office buildings, laundries,
and other private establishments.
38
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COST RECOVERY; The system that defines
the need for revenue and determines how
it will be met.
DEBT MANAGEMENT; Includes locating funds
for capital construction and the
repayment of borrowed funds.
DEBT SERVICE; Payment of interest and
repayment of principal to holders of a
debt instrument.
DIRECT EXPENSES; Those expenses which can
be charged directly as a part of the cost
of materials or service, or charged
directly to a department or operating
unit, as distinguished from overhead and
other indirect costs which must be
prorated through many activities.
ENCUMBRANCES; Obligations in the'form of
purchase orders/ contracts or salary
commitments which are chargeable to an
account that is reserved.
.ENTERPRISE FUND; A fund established to
account for water and sewer operations
that are financed and operated in a
manner similar to private business
enterprises. The intent of the governing
body is that all costs of providing
services be financed or recovered through
user charges.
EQUITY; The difference between assets
and liabilities.
FLAT RATE; A rate that is not based on
water usage, but is usually based on a
fixed price.
GRANTEE; A municipality that has executed
a federal grant agreement.
39
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III. COST RECOVERY (cont.)
E. Review Rate Structure
The rate structure includes the necessary user charges that are
required for the operation, maintenance, and replacement costs of
equipment. This must be reviewed at least annually to determine if
adequate revenues will be available to recover all costs. Some
utilities establish the user charges and then adjust the expense
budget accordingly. This, of course, is a very poor practice and
usually catches up with the utility at some later period. The saying
of "pay now" or "pay more later" is certainly very true of wastewater
utilities.
There have been some cases where low rates have caused customers
to use much more water than necessary and place a great burden upon
the wastewater treatment plant. Proper user charges can promote or
inspire water conservation in some cases.
(1) Do charges include unusual treatment requirements?
(2) Do the charges consider high power demand costs?
(3) Do the user charges promote water conservation?
(4) Do the user charges reflect demands on the system?
(5) Do the user charges separate types of customers?
Score:
Summary:
(1) Are the user charges properly reviewed annually?
(2) Does the score indicate any problems?
(3) See Appendix C: 125 - 134.
(4) Comments:
45
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III. COST RECOVERY (cont.)
F. Review Cost Recovery Procedures
Complete cost recovery is based on the premise that all
wastewater utility costs will be recovered through proper user
charges. In order to obtain this goal, the user charges must be
reviewed each year to establish the proper level.
It is important that there is an official policy stated in
writing that the wastewater utility will be operated on a
self-supporting basis. This should also include a policy requiring
the use of meters for measuring all water used by customers and
ultimately discharging to the sewers. Special high strength waste
should have a surcharge since treatment may be more costly.
(1) Is there an annual user fee evaluation?
(2) Is there a written self-supporting policy?
(3) Is there proper public education on user charges?
(4) Is there a surcharge for high strength wastes?
(5) Are all users properly and accurately metered?
Score:
Summary:
(1) Are there proper cost recovery procedures?
(2) Does the score indicate any problems?
(3) Comment:
46
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GENERAL ACCEPTED ACCOUNTING PRINCIPLES
JGAAPJ;Uniform minimum standards of
guidelines for financial accounting and
reporting. .
INDIRECT COST; A cost necessary for the
functioningof the organization as whole,
but which cannot be directly assigned to
one activity.
* . f
INFILTRATION; Water other than wastewater
that enters a sewer system from the
ground through such means as defective
pipes, connections, or manholes.
INFLOW; Water other than wastewater that
enters a sewer system from such areas as
roof leaders, yard drains, cooling
towers, storm water, -.and surface
drainage.
INSTITUTIONAL; Includes . schools,
churches, hospitals, nursing homes, penal
facilities and other similar users.
JOURNAL; A record in which entries are
recorded in chronological order..
LIABILITIES; Amounts the utility owes to
others.
LIABILITIES (current); Amounts due in
the near future such as payroll earned,
but not paid, and upcoming payments to
vendors for goods received.
LIABILITIES (long-term); Items due
beyond ' the end of the current fiscal
year. This is almost always the amount
of outstanding debt that is not due until
the following years.
40
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LIABILITIES (restricted); This would
consistofanyamounts due from other
current assets such as bond payments.
MINIMUM BILLING; A fee charged even when
services are not used.
MODIFIED ACCRUAL BASIS; The basis of
accounting under which expenditures and
liabilities are recorded when services
are incurred, and revenues are recorded
when received or when both measurable
and/or available.
OPERATION & MAINTENANCE; Functions that
result in expenditures during the useful
life of the treatment works for
materials, labor, utilities, and other
items necessary for managing and
maintaining the facility.
OVERHEAD; Those elements of cost
necessary to. perform the activity which
cannot be determined readily, such as
management services.
PURCHASING; The system that allows the
utility to procure and store needed goods
and services.
REHABILITATION/REPLACEMENT; Expenditures
for obtaining and installing replacement
or rehabilitated equipment, accessories,
or appurtenances, which are necessary
during the useful life of the treatment
works to maintain the performance for
which the works were designed.
41
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III. COST RECOVERY (cont.)
G. Determine the Cost Recovery Status
There should be enough financial information available throughout
the year to show if the wastewater system has proper cost recovery
without waiting until the end of the year. Some questions to answer
include what revenue would be available if everyone just paid the
minimum bill or will individual customer deposit funds pay for all
delinquent accounts.
(1) Does the monthly cash balance indicate the status?
(2) Is the minimum bill adequate for all fixed costs?
(3) Is the cost of operating each activity known?
(4) Is a cost recovery analysis determined annually?
(5) Are industries paying by concentration of wastes?
Score:
Summary:
(1) Can the cost recovery status be determined?
(2) Does the score indicate any problems?
(3) See Appendix C: 128 - 130.
(4) Comments:
47
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III. COST RECOVERY (cont.)
H. Review Billing and Collection Procedures
A formal policy should be provided that outlines the billing
dates and collection procedures. These should also be incorporated
in a customer information sheet, so that each customer knows exactly
what is expected. It is important that all bills be mailed on time
and overdue notices go out on time.
It is important that water cut-off be performed when required and
that adequate payment be made when the water is turned back on. It
is important that all customers know their rights as well as the
rights of the utility.
(1) Are bills mailed within 5 days after reading?
(2) Are there information sheets for customers?
(3) Are overdue notices mailed within 5 days?
(4) Do late payments include interest and penalties?
(5) Is there a formal cut-off procedure?
Score:
Summary:
(1) Are bills and notices mailed on time?
(2) Does the score indicate any problems?
(3) See Appendix C: 138 - 139.
(4) Comments:
48
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REHABILITATION/REPLACEMENT COST; The cost
of major rehabilitation or replacement of
property as of a certain date, which can
render similar service as originally
intended. Major rehabilitation and
replacement are incremental elements of
operating costs. They are variable,
depending upon levels of expenditures for
maintenance. These are the expenditures
to maintain the capacity and performance
for which the works were designed. It is
not a capital cost and does not increase
the book value of an asset.
SERVICE CHARGE: A charge levied on a user
of the treatment works which includes a
user charge, a charge for capital reserve
and debt service.
SOLVENCY; The ability to meet long-term
obligations.
SURCHARGE; An additional or premium
charge for services beyond the normal
charges.
TRANSACTION; A business event that is
recorded in the accounting records.
USER CHARGE: A charge levied on users of
a treatment works for the costs of
operation, maintenance, and replacement.
42
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APPENDICES to HANDBOOK
This is a separate document entitled*
FINANCIAL MANj^EMENT EVALUATION
APPENDICES, December 30, 1988.
Introduction P....... 5
Basic Management Considerations .... 7
Use of Appendices .,.,..,..,,.. 8
Facility Review Outline 9
I. Management , 11
A. Financial Management Program 13
B. Program Objectives '.......... 14
C. Organizational Structure .... 15
D. Staffing , 16
B. personnel Policies 17
F. Employee Relations , 18
G. Office Procedures .'. 19
H. Operation Plans 20
I. Regulation Review 21
J. Treatment Facilities' 22
K. Safety Program 23
L. Financial Documents 24
M. Management Summary 25
II. Budgeting 27
A. Second Visit 29
B. Remaining Financial Data .... 30
C. Budget Review 31
D. Overall Budgets 32
E.'Revenue Budget .............. 33
F. Operations Budget , 34
G. Maintenance Budget .......... 35
H. Budget Control ,.,..,, 36
I. Equipment Replacement Budget 37
j. Capital improvement Budget ,. 38
43
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III. COST RECOVERY (cont.)
I. Review Delinquent Accounts
Some systems have problems with customers not paying on time or
moving away without paying their bills.
It is important that there be a sufficient deposit system to pay
for any uncollectable bill before a turn-off procedure is initiated.
This is usually a two-month period. There should also be a penalty
fee and interest fee for overdue bills.
(1) Is there a proper delinquent account policy?
(2) Does billing require payment within 30 days?
(3) Are delinquencies < 5% of operating budget?
(4) Is there a penalty and interest policy?
(5) Does the deposit always pay for unpaid accounts?
Score:
Summary:
(1) Are delinquent accounts a problem?
(2) Does the score indicate any problems?
(3) Comments:
49
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III. COST RECOVERY (cont.)
J. Review Wastewater Collection
Normal wastewater billing does not account for inflow and
infiltration problems. There needs to be an adequate study and
correction of this issue, so that this extra water does not enter the
wastewater treatment plant. Another souce of extra wastewater that
is not billed is the use of private water supplies that may discharge
into the collection system. Some customers use both public water and
their own water for some large volume uses.
It has also been found in some areas that illegal sewer
connections have been made without knowledge of the utility.
Wastewater flow measurements in the collection system may help catch
any of these situations. At the time of these measurements, sampling
near some industries could help find any high strength wastes.
(1) Are sewer flows compared to actual billings?
(2) Have all infiltration/inflow problems been solved?
(3) See Appendix C: 140.
(3) Have all private water sources been identified?
(4) Is there a surcharge policy for industrial wastes?
(5) Is there an on-going program to find illegal taps?
Score:
Summary:
(1) Are all wastewater collections accounted?
(2) Does the score indicate any problems?
(3) Comments:
50
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III. Cost Recovery 39
A. Accounting Issues 41
B. Cash Flow 42
C. Purchasing Control 43
D. Sewer Use Ordinances 44
E. Rate Structure 45
F. Cost Recovery Procedures 46
G. Cost Recovery Status 47
H. Billing &'Collection 48
I. Delinquent Accounts 49
J. Wastewater Collection 50
K. Equipment Reserve Fund 51
IV. Planning 53
A. Past Planning 55
B. Planning Policy 5i
C. Operations Planning 57
D. Capital Improvement Plans .... 58
E. Capital Improvement Schedule . 59
V. Financing 61
A. Current Financing 63
B. Future Financing Needs 64
C. Financing Options 65
VI. Financial Reporting 67
A. Current Financial Reports .... 69
44
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Appendix A - Management 71
Introduction 73
Management Responsibilities 74
Problem Solving Outline 75
Organizational Chart 76
Typical Staffing 77
Brief Job Description ...» 78
Employee Appraisal 79
Benefit Items 80
Office Procedures ... 81
Purchasing Policy 82
Wastewater Utility Description .. 83
Management Audit 84
Key Management Issues 85
Appendix B - Budgeting 89
"i
Financial Documents 91
Budgeting Procedures .'.. | 951
Direct & Indirect Cost's * 9$
Budget Process Steps 94
Ranking Budget Requests ......... 95
Typical Budget Outline 96
Budget vs. Actual 97
Cost of Service 98
Revenue Budget 99
Revenue Requirements 100
Electrical Energy 101
Typical Operating Costs 102
Training Expenditures 102
Identifying High Cost Areas 103
Replacement Reserve 104
Replacement Inventory 105
List Major items 106
Typical Future Expansion Costs .. 107
Major Expenditure Example ....... 108
Sinking Fund Example 101
Sinking Fund Factors lift
Loan Example , Ill
Capital Recovery Factor JIJI
Borrowing vs. Savings 113
Sinking Fund Work Sheet 114
Typical Sinking Fund Policy 115
45
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III. COST RECOVERY (cont.)
K. Determine If There Is a Sufficient Equipment Reserve Fund
There should be a reserve, fund for future replacement of
equipment such as pumps, motors, and other important equipment. This
reserve fund should be based on useful life of equipment, and it
should provide for immediate replacement when needed. The reserve
fund should be based on the normal life cycle. Salvage value of the
original equipment should be considered.
(1) Is there an equipment replacement policy?
(2) Does the policy include specific equipment lists?
(3) Is the fund set aside as a separate account?
(4) Has the fund been sufficient in the past?
(5) Is there a sufficient future reserve fund?
Score:
Summary:
(1) Is the equipment replacement fund satisfactory?
(2) Does the score indicate any problems?
(3) See Appendix C: 108 - 115.
(4) Comments:
51
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IV. PLANNING
Planning is the process that a
utility uses to determine future needs.
A systematic plan is developed rather
than just allowing the utility to react
to situations as they occur.
Additional
in Appendix D.
information may be found
53
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Appendix C - Cost Recovery 117
Accounting Systems 119
Accounting Files 122
Cash Management ...,. 123
Purchasing System .... 124
User Charge System 125
Cost Recovery Concepts.......... 128
Cost Recovery Outline ,»... 129
User Pee Projection 131
User Charge Summary .'.-...... 132
User Charge Distribution 133
User Charge Comparison..... 134
Current Debt Summary 135
Financial Condition Summary .... 135
Cost Recovery Summary 136
Customer Billing 138
Connection Fee Computation 139
Repair Computation 140
Collection Procedure 141
Collection Policy 142
Delinquent Account Policy ...... 143
Water Disconnect -. 144
Tax Sale 145
~^> , -
Appendix D - Planning 147
Utility Planning 149
Basis for Planning 150
Operations Planning 151
Capital Planning Steps 152
Financing an Expansion Project . 153
Capital Project Schedule 154
46
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Appendix E - Financing 155
Debt Management 157
Types of Financing 158
Financing 159
Debt Service Factor Table ...... 160
Inflation Factor Table 161
Financing Indicators'..... 162
Balance Sheet Analysis 163
Financing Sources 166
Types of Bonds 166
Appendix F - Record Keeping ........ 167
1. Record Keeping Concept 169
2, Types of Reports ........... 169
3, Report Information 170
4. Operating Reports 170
5. Maintenance Reports 171
6. Plant Performance Reports .. 171
7. Performance Records 172
8. Financial Reports 172
9. Balance Sheets 173
10. Purchase Orders ............ 174
47
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IV. PLANNING
A. Review Past Planning
Management sometimes does not know why existing facilities were
constructed or what criteria were used for design purposes. A well-
planned utility will have records from consultants and meeting
minutes outlining previous planning actions.
It is important to know the background of the facility and if
management has any interest since this may affect the future
operation of the utility.
(1) Are minutes or records available for past actions?
(2) Is there an adequate set of as-built drawings?
(3) Are cost data available for the current facility?
(4) Does planning of the facility appear satisfactory?
(5) Is planning for the next 5 years adequate?
Score:
Summary:
(1) Do past planning activities appear satisfactory?
(2) Does the score indicate any problems?
(3) See Appendix D: 149.
(4) Comments:
55
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IV. PLANNING (C0nt.)
B. Review Planning Policy
Many wastewater utilities do not adequately plan for the future.
They often just drift along until some major incident happens that
requires them to take corrective action.
Determine if there is a written planning policy that states any
planning goals for at least the next 5 years. It is important to
review the utility to observe if any problems need an immediate
planning effort. The treatment plant operator should be a part of
the overall planning effort.
(1) Is there a written planning policy?
(2) Are long range plans free of problems?
(3) Does the operator participate in planning?
(4) Does management understand planning policies?
(5) Will the facility be satisfactory for next 5 yrs.?
Score:
Summary:
(1) Is there adequate planning for the future?
(2) Does the score indicate any problems?
(3) See Appendix D: 150.
(4) Comments:
56
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REFERENCES
1. Government Financial Research
Center, Financial Capability
Guidebook, May 1978.
2. Government Financial Research
Center, Wastewater Utility
Management Manual, July 1981.
3. Maine Training Institute, The
Financial Management Process.
4. U.S. Environmental Protection
Agency, A Guide to the Selection
o£ Cost-Effective Wastewater
Treatment Systems, Technical Report
430/9-75-002, July 1975.
5. U.S. Environmental Protectibn
Agency, Analysis of Operations &
Maintenance Costs for Municipal
Wastewater Treatment Systems,
430/9-77-015, May 1978.
5. U.S. Environmental Protection
Agency, An Instructional Delivery
System for Manpower Management, A
Report for Water Pollution Control
Agencies, April 1979.
7. U.S. Environmental Protection
Agency, Construction Costs for
Municipal Wastewater Conveyance
Systems: 1973-1977, 430/9-77-015,
May 1978.
48
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8. U.S. Environmental Protection
Agency, Construction Costs for
Municipal Wastewater Treatment
Plants; 1973-1977, 430/9-77-013,
MCD-37, January 1978,
9. U.S. Environmental Protection
Agency, Costs, of Wastewater
Treatment by Land Application,
Technical Report 430/9-75-003,
June 1976.
10. U.S. Environmental Protection
Agency, Estimating Water Treatment
Costs, Volume 1 Summary,
600/2-79-162a, August 1979.
11. U.S. Environmental Protection
Agency, Estimating Water Treatment
Costs, Volume 2, Cost Curves
Applicable to 1 to 200 mqd
Treatment Plants, 600/2-79-1626,
August 1979.
12. U.S. Environmental Protection
Agency, Estimating Water Treatment
Costs, Volume 3, Cost Curves
Applicable to 2,500 qpd to 1 mqd
Treatment Plants, 600/2-79-162c,
August 1979.
13. U.S. Environmental Protection
Agency, Estimating Water Treatment
Costs, Volume 4, Computer User's
Manual for Retrieving and
Updating Cost Data, 600/2-79-162d,
August 1979.
14. U.S. Environmental Protection
Agency, Financial Management
System for Publicly-Owned Treatment
Works (Accounting Options),
430/9-84-005, June 1984.
49
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IV. PLANNING (cont.)
C. Review Operations Planning
Operations planning includes specific, measurable objectives such
as compliance criteria to meet the NPDES permit. Resources are
estimated to meet these requirements, so that the objectives may be
met.
Certain cost factors should be estimated such as cost for
treating 1,000 gallons of wastewater or cost for removing each pound
of BOD or total suspended solids.
(1) Does the utility perform operations planning?
(2) Are managers involved in operations planning?
(3) Does the planning establish operating objectives?
(4) Does the planning estimate the resources needed?
(5) Have performance standards been identified?
Score:
Summary:
(1) Is the operations planning satisfactory?
(2) Does the score indicate any problems?
(3) See Appendix D: 151.
(4) Comments:
57
-------
IV. PLANNING (cont.)
D. Review Capital Improvement Plans
Most wastewater collection and treatment utilities should have
some capital improvements plans that need implementation. It is
important to review any actions that are pending and determine if a
long range capital improvements budget has been initited.
An important step for any utility is to have a schedule for
future capital improvement projects. A capital improvement budget
should be part of the overall budget.
(1) Is there a formal capital improvement program?
(2) Are there capital improvement plans for next 5 yrs?_
(3) Are capital improvements > 5% of operation budget?_
(4) Are improvement costs included in the next budget?__
(5) Is there a capital improvement reserve fund?
Score:
Summary:
(1) Are there adequate capital improvement plans?
(2) Does the score indicate any problems?
(3) See Appendix D: 152 - 153.
(4) Comments:
58
-------
15. U.S. Environmental Protection
Agency, j^novatiye and Alternative
-_
430/9-78-009, February 1980.
16, U.S. Environmental Protection
Agency, L-ogking at User Charges, A
___
430/09-87-0008, September 1987.
o
17. U.S. Environmental Protection
Agency, Management of Small-to-
M_e_d i um__S_i_ze__d Hun icJL pa 1 Wa s t ewa t e r
Treatment Plants/ 430/9-79-013
June 1979.
18S U.S. Environmental Protection
Agency, Ma i n t e_na nee _ Ma na_geroenj:
Systems f gr_M_u n i ci PJJ _1_ W a s te wa t e r
Facilities, 430/9-74-004,
October 1973.
19. U.S. Environmental Protection
Agency, Mu n i c i pa 1 Wa s t ewa t e r
Fac i 1 i ty__ F ' i n a ncj._al Man axemen t Wo c k
Booj<, 1986,
20, U,s. Environraental Protection
Agency, Package W a t e c T r ea_tin_e nt
Plants, Volume 2, A Cost
Evaluation, 600/2-80-008b,
July 19BO,"
21. U.S. Environmental Protection
Agency, Touch i nq A3. 1 The Bases , A
Financial Management Handbook
Your Wastewater Treatment
Prolect, 430/9-86-001,
September 1986.
50
-------
22. U.S. Environmental Protection
Agency, Wastewater Utility
Recordkeeping, Reporting and
Management Information Systems,
430-9-82-006, July 1982.
23. Virginia Tech Center for Urban and
Regional Studies, Costing and
Rate-Setting Workshop for Virginia
Water and Sewer Utilities, Draft -
July 1987.
51
-------
IV. PLANNING (cont.)
E. Review Capital Improvement Schedule
Capital improvement plans must have a schedule for implementing
the necessary improvements. It should be based on an actual needs
schedule, not on other factors, such as elections.
The capital improvement schedule should also be based on specific
objectives and priorities. These should be developed for at least
the next five years with an annual review and updating.
(1) Is there a capital improvement project schedule?
(2) Is the schedule based on adequate priorities?
(3) Does the 5 year plan include annual expenditures?
(4) Does the schedule include a method of financing?
(5) Does the budget include these scheduled costs?
Score:
Summary:
(1) Is the capital improvement schedule adequate?
(2) Does the score indicate any problems?
(3) See Appendix D: 154.
(4) Comments:
59
-------
V. FINANCING
Financing is the process that allows
the utility to borrow money that is not
already available to complete a project.
Today's financial market permits
opportunity to consider many different
financing options.
Additional information may be found
in Appendix E.
61
-------
V. FINANCING
A. Review Current Financing
Most utilities have had to finance some portion of the
construction of the facility . They often think that borrowing money
is a way of life which will always be with them. Thousands of
dollars are spent for interest each year.
It is crucial that utilities do not have debts that exceed 25% of
their total budget. Utilities should not always be borrowing money
to the maximum time limit, which is often 40 years. Many facilities
last a much shorter period, and thus require refinancing at a later
date.
(1) Is the present debt payment < 25% of total budget?
(2) Is the present principal < 3 times total budget?
(3) Will the present loan be paid off in < 20 years?
(4) Will the present WWTP outlast the current loan?
(5) Is the present interest rate < 6 per cent?
Score:
Summary:
(1) Is there a financing problem?
(2) Does the score indicate any problems?
(3) See Appendix B: 96 - 97, E: 157 - 158.
(4) Comments:
63
-------
V. FINANCING
B. Review Future Financing Needs
It is important to determine if the wastewater treatment facility
will last at least as long as the loan or outstanding bonds. If it
is apparent that major capital improvements or replacements will be
necessary that require financing, the amount of future loans must be
determined.
(1) Is there a financial debt policy limit?
(2) Is the current financing adequate for next 20 yrs?
(3) Is it possible to reduce the current loan period?
(4) Will any loan be paid off during next 20 years?
(5) Will the facility be adequate after loan pay-off?
Score:
Summary:
(1) Will future financing be required?
(2) Does the score indicate any problems?
(3) Comments:
64
-------
V. FINANCING
C. Review Financing Options
Today's financial market presents many options for financing the
initial construction, rehabilitation, or upgrading of wastewater
utilities. Often a utility only looks at one conventional money
source and does not review the many options or creative financial
situations that are available.
Financing alternatives provide several choices to communities.
They may include private participation in construction, ownership,
operation, and financing. These alternatives must be evaluated.
(1) Is the present financing arrangement satisfactory?
(2) Will it be satisfactory for the next 5 years?
(3) Is the utility capable of reviewing future options?,
(4) Can the utility obtain increased financing? _
(5) Can the customers afford additional financing? _
Score:
Summary:
(1) Can the utility handle future financing?
(2) Does the score indicate any problems?
(3) See Appendix E: 159 - 166.
(4) Comments:
65
-------
VI. FINANCIAL REPORTING
It is important that all financial
actions be carefully reported, reviewed,
and analyzed.
Additional information is available
in Appendix F.
67
-------
VI. FINANCIAL REPORTING
A. Review Financial Reports
A properly managed utility will have certain routine financial
reports readily available. Detailed cost information and an
understanding of operations are necessary to make an accurate
assessment of operating costs. These reports should be reviewed to
determine the true financial status.
Determine if the current reports are adequate to show important
aspects of the utility.
(1) Are all transactions posted daily?
(2) Are all cash receipts deposited daily?
(3) Are revenues & expenses compared with the budget?
(4) Do delinquent accounts appear in monthly records?
(5) Are adequate monthly financial reports prepared?
Score:
Summary:
(1) Are there adequate financial reports available?
(2) Does the score indicate any problems?
(3) See Appendix F: 169 - 174.
(4) Comments:
69
-------
Appendix A
MANAGEMENT
-------
INTRODUCTION
A well-run wastewater utility happens only
when there is good management. Good management
consists of a governing board that takes an active
interest in all phases of the operation of the
utility. This requires active review and problem
solving of the utility activities. On-the-job
visits to lift stations, sewer repair sites, and
wastewater treatment facilities must be made.
Good management will speak with one voice,
reward those who have performed above average, and
discipline those who perform poorly.
73
-------
MANAGEMENT
RESPONSIBILITIES
Meet legal NPDES requirements
Provide adequate accounting system
Provide proper budgeting
Plan for future
Implement adequate user charges
Provide adequate record system
Provide good public relations
Provide good working conditions
-------
MANAGEMENT PROBLEM SOLVING OUTLINE
Define Problems
D e t e r rn i n e C a u see
....I.
C o n s i d e r A11 e r n a t i v e s
T o El :i. rn i n a t e Cause
C onsid e r 8ene f i t s a nd
. i a b i 1 i t i e
-------
IYPiCAL_ORGANIZAIION_CHART
Uastewater Collection and Treatment-
Chief
Operator
Operator I
Operator I I
|0
Operator III
Laboratory
Technican
Official
Board
Super intendent
Maintenance
Foren'ian
Elec tr i cian
Mechanic I
Mechanic II
Office
Manager
Billing Clerk
A c c OLI n t i n g C1 e r k
76
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TYPICAL STAFFING
Administration
Superintendent
Billing Clerk
Accounting Clerk
Subtotal:
Operations
Chief Operator
Operator I
Operator II
Operator III
Laboratory Technician
Subtotal:
Maintenance
Electrician I
Mechanic I
Mechanic II
Laborer
Subtotal:
Estimated Annual Requirements
Manhours No. of Employees
Total Requirements:
(Manhours divided by 2080 = number of employees per year)
77
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BRIEF JOB DESCRIPTION
Wastewater Utility
Superintendent: Responsible for administration, operation, and
maintenance of entire wastewater utility. Exercises
direct authority over all functions and personnel.
Organizes and directs activities for planning,
budgeting and operating the facility to keep in NPDES
compliance.
Office Manager:
Billing
Responsible for all office activities including
billing, collection, accounting, purchasing, budget
control, and payroll.
Clerk: Responsible for billing, collection, and associated
record keeping.
Accounting Clerk:
proper
transactions.
Chief Operator: Supervises and
operators and other plant
schedules and
NPDES limits.
Assists with billing and collection, and keeps
journals and ledgers for recording all financial
coordinates activities of plant
UI.UCL. plant personnel. Prepares work
determines process control needs to meet
Operator I:
Performs duties of normal operations, takes samples, and
makes process changes as required.
Operator II: Assists Operator I as needed, records measurements such
as flow, waste loads, and sludge return rates.
Operator III: Assists Operators I and II as directed and performs
routine tasks.
Lab Technician: Performs all bacteriological, chemical, and physical
tests as required to provide process control and final
effluent data.
Foreman: Supervises all preventive and corrective
maintenance for entire plant. Plans, schedules, and
directs all maintenance work. Submits maintenance
budgets and keeps maintenance records for all
equipment.
Maintenance
Electrician:
Mechanic:
Performs all electrical preventive and corrective
maintenance. Keeps adequate spare parts and records.
Performs preventive and
machinery and equipment.
corrective maintenance on all
Installs new equipment.
Laborer: Performs general cleaning tasks at plant,- performs building
and grounds maintenance, paints equipment and
facilities, and operates equipment such as backhoes.
78
-------
TYPICAL EMPLOYEE APPRAISAL
Job Knowledge:
Poorly informed
Lacks knowledge in some areas
Moderately informed
Understands almost all phases
Has complete mastery
Quality of Work:
Usually below minimum acceptable quality
Often below minimum acceptable quality
Acceptable quality most of time
Often above acceptable quality
Consistently exceeds acceptable standards
Quantity of Work:
Does not meet minimum requirements
Does just enough to get by
Volume of work satisfactory
Very industrious: does more than required
Superior work production record
Stability During Crisis and Under Pressure
Goes "to pieces"
Occasionally "blows up"
Has average tolerance for crisis
Tolerates most pressure
Thrives under pressure
Accuracy in Work Duties
Makes frequent errors
Makes recurrent errors
Usually accurate
Is precise most of time
Is almost always accurate
Creativity in Finding Better Ways to Perform Work
Rarely has a good idea
Occasionally has new idea
Has average number of new ideas
Frequently suggests new ways to perform work better
Continually seeks new and better ways of doing things
79
-------
TYPICAL BENEFIT ITEMS
Benefit Time
Holidays
Sick Leave
Training
Vacation
Fringe Benefit Costs
Hospital Insurance
Life Insurance
Retirement
Typical Hours (Annual)
72
56
40
80
Typical Amount (% of Pay)
5
3
6
80
-------
TYPICAL OFFICE PROCEDURES
A. Contacts with the customer should be friendly and courteous both
in person and on the telephone.
Good office procedures should include:
* Answering telephone calls promptly
* Extending a pleasant greeting to customers
* Identifying yourself
* Showing a real interest in the conversation
* Being sympathetic with problems
* Being responsive
* Being patient
B. Office correspondence is important to good public relations.
The following points should be apparent:
* Friendly style writing
* Clear, brief and accurate points
* Important points first
* Good language
* Neat letters and reports
C. Office Appearance
The office should have a pleasing appearance to the public.
The following items are important:
* Neat and clean
* Not cluttered
* Good file system
* Easy access to records
* Customer information easily available
81
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TYPICAL PURCHASE POLICY
Plant Operator Spending Authority
1. The plant operator can make purchases up to $200 as long as a
single purchase does not either exceed $200, or cause the
budgeted line item amount or the total budget to be exceeded.
2. The plant operator cannot make expenditures if expenses exceed
the budgeted line item amount, the total budget, or $200. The
plant operator will submit quotes and data to officials
concerning such purchases. Officials will make financial
decisions and allocate the necessary funds for the plant operator
to make necessary purchases.
3. The plant operator will give necessary purchase orders, invoices,
and receipts to the treasurer within five days of the purchase.
4. The treasurer will then post the purchase in the treasurer's
ledger and forward the purchase orders, invoices or receipts to
the Board members within ten days.
5. The officials shall approve vouchers, purchase orders, invoices,
receipts and return them to the treasurer.
6. In an emergency situation, when a major breakdown occurs and the
facility would remain unoperable until expenditure is made, the
plant operator has the authority to make the minimum expenditure
necessary to achieve operable status after notifying one of the
Board members.
Plant Operator:
Date:
Board Officials:
Date:
82
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WASTEWATER UTILITY DESCRIPTION
Town:
Mailing address:
Contact Person:
Telephone:
Collection System
A. Number of customers:
1. Residential -
2. Commercial -
3. Industrial -
B. Area of collection system (acres or sq. miles):
C. Size of collectors: in. X lin. ft,
in. X lin. ft,
in. X lin. Ft,
in. X lin. ft,
D. Separate or combined sewers:
E. Any overflow devices:
F. Latest I/I study:
G. Any I/I problems:
H. Any corrective sewer sealing action performed:
I. Type of collection system:
1. Gravity -
2. Number of lift stations -
3. Pressure system -
4. Number of pressure points -
5. Vacuum system -
J. Date collection system constructed:
K. Last modifications:
Type of action -
83
-------
UTILITY DESCRIPTION (cont.)
L. Is system adequate?
1. Present -
2. Future -
M. List sewer use ordinance and conditions
1. Residential -
2. Pretreatment -
II. Treatment System
A. Design size: MGD
B. Average flow: MGD
C. Type of system:
D. Describe each process unit (type, size, retention time)
1.
2.
3.
4.
5.
6.
E. Permit limits:
Permit DMRs
1. 5 day BOD -
2. Suspended solids -
3. pH -
4. Ammonia-N -
5. Nitrate-N - _____
6. Phosphorus -
7. D.O. -
Treatment Problems:
1.
2.
3.
84
-------
MANAGEMENT AUDIT
Institutional Status
A. Organizational structure:
B. Positive conditions:
C. Negative conditions:
D. Is there adequate management?
E. Any changes needed?
II. Operations Personnel
A. Collection system personnel:
1. Number of people - _
2. Adequate? - _
3. Total years of service - _
B. Treatment Personnel:
1. Number of people - _
2. Adequate? - _
3. Total years of service - _
III. Administration
A. Organization:
1. Number on board, commission or council
2. Elected or appointed -
3. Term -
4. Overall interest -
B. Office:
1. Number of clerks - _
2. Number of supervisors - _
3. Total years of service - _
85
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KEY MANAGEMENT ISSUES
I. Are there Organizational Plans for both the wastewater facility
and the governing body?
A. Shows lines of authority?
B. Reporting requirements?
C. Staff responsibilities?
D. Inter-department relationship?
II. Are there Job Descriptions with appropriate Work Standards?
A. Work goals?
B. Performance evaluations?
C. Incentives?
III. Does the Superintendent or Chief Operator have direct contact
with the governing body?
A. As an organization?
B. With particular individuals?
IV. Does the ^Superintendent or Chief Operator help develop the
wastewater budget?
A. What is the involvement?
B. Is the routine staff informed?
C. Is there long range planning?
V. Is there a formal comprehensive budget document?
A. Identify the cost of major function
B. Is there a contingency reserve?
C. Are the budget items realistic?
VI. Is there a capital replacement fund?
A. Increasing accumulations?
B. Capped amount?
C. Has the fund been raided?
86
-------
VII. Does the Superintendent or Chief Operator have purchasing
authority within the budget without further approval?
A. Is there a maximum amount?
B. How are emergency situations handled?
VIII. Is an annual independent audit conducted?
IX. Are routine budget-to-actual reports made?
X. Are sewer user fees adequate?
A. Are they based on the system needs?
B. Are the revenues autonomous from other funds?
C. Are costs fairly distributed?
V,
XI. Are billing and collection procedures adequate?
XII. Is the budget adequate to meet personnel needs?
A. Staffing?
B. Training?
C. Incentives?
XIII. Are Operation and Maintenance records adequate?
XIV. Is there a formal documented safety program?
XV. Is there a sewer use ordinance and pretreatment program?
87
-------
Appendix B
BUDGETING
-------
IMPORTANT FINANCIAL DOCUMENTATION TO REVIEW
Documents usually available by copies:
- Annual audits
- Annual budgets
- Budget vs. actual costs
- Debt summary
- Delinquent accounts by billing periods
- Rate schedules
Documents usually too voluminous to copy:
- Account ledgers
- Bank documents (check registers, statements)
- Billing records
- Daily journals (cash receipts, disbursements)
- Income statements
- Payroll records
- Purchasing records (invoices)
91
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BUDGETING PROCEDURES
Management should first define what constitutes a
capital expense and what items are considered operation,
maintenance and replacement (OM & R) expenses.
A capital program involves development of short and
long term plans to refurbish and expand the utility's
physical facilities. This includes planned expenditures for
improvements and betterments to buildings, land, sewers and
major pieces of equipment which have significant value and
extend the useful life of the treatment works.
The current operating expense budget includes those
items considered to be routine operation, maintenance, and
replacement expenses. The current budget generally involves
a one-year plan for the day-to-day operations of the
treatment system.
The budget should identify 0,M & R costs for each
activity such as the collection system, primary treatment,
secondary treatment, laboratory, and administration.
Once the unit process costs have been established, the
next step is to divide these costs by the total annual
volume and/or loadings, as appropriate to produce unit
costs.
Utilities need to be concerned with three types of
budgets:
* Revenue
* Operation, Maintenance, and Replacement
* Debt Service
92
-------
DIRECT and INDIRECT COSTS
A Budget Is a Management Tool
Use it to :
PLAN
ADMINISTER
Budget Process:
Illustrate how much will be spent
Establish work priorities
Measure the quality of work performed
Ensure availability of resources
Line items may be direct or indirect:
Direct Indirect
Operating expenses
Maintenance expenses
Equipment purchases
Salaries and wages
Debt Service
Fringe benefits
Bill collection
Overhead for office, etc
93
-------
Develop A Budget
Framework and
Structure by:
* Item
* Activity
Identify Revenue
Sources
Review Operating
Expenses and
Capital Improvement
Requests
Rank and Prioritize
Budget Requests
Prepare Budget
Document
Approve and
Adopt Budget
Implement
Budget
94
-------
RANKING BUDGET REQUESTS
Are Costs Realistic?
Are They Based on Past Performance?
Is Staff Being Used Efficiently?
Who Is Involved in Budgeting?
Chief operator
Clerk
Board, commission, or council
Problems in Budgeting
Not enough money
Capital budget cuts
Inadequate revenue budget
Excessive transfers from reserves
Inadequate budget controls
No activity budgets
95
-------
TYPICAL BUDGET OUTLINE
Activity
Lift Primary Secondary
Sewers Station Treat. Treat. Lab Admin.
Personnel Services
Salaries/wages
F.I.C.A.
Unemploy. Ins.
Worker's Comp.
Health Insur.
Retirement
Total:
O & M Expenses
Office supplies
Postage
Telephone
Electricity
Natural gas
Water
Vehicle gas & oil
Chemicals
Operating supplies
Equipment repairs
Training
Travel
Total:
Capital Outlay
Replacement ace.
Improvement ace.
Expansion ace.
Depreciation fund
Total:
Debt Service
Debt & interest
Cushion fund
Contingency fund
Total:
TOTAL:
96
-------
BUDGET VS. ACTUAL EXPENDITURES
(Period of Record)
Per. Services
Salaries
Benefits
Subtotal:
0 & M Expenses
Office
Chemicals
Energy
Operation
Maintenance
Subtotal:
Capital Outlay
Expan./improv.
Replace./rehab.
Sinking Fund
Subtotal:
Debt Service
Debt & int.
Cont. funds
Subtotal:
TOTAL:
% Of
Budget
Budget
Actual
+ or -
% Change
97
-------
COST of SERVICE
Total Cost
Direct Cost
Overhead Cost
Direct
Operating
Cost
General
Overhead
Cost
Department
Overhead
Cost
98
-------
Revenue Budget
The annual revenue budget reflects how much money the
utility will receive from customers and other revenue sources
to spend on the operation of the utility.
Estimated customer billing: $
Penalities and interest:
Connection fee:
Other:
Total:
OM & R Budget
The operations, maintenance, and replacement budget should
reflect the major activities of the utility and include a
listing of other important factors:
Administration
Billing and collection
Operations
Maintenance
Replacement
Support services
Debt services
Dedicated fund
Capital Budget
The capital budget reflects long-term objectives resulting
from capital projects and generally relies on specific
financing.
99
-------
ESTIMATES of REVENUE REQUIREMENTS
Allocating annual costs and estimating the revenue
requirements of each user group is a three-step process.
First, the unit costs of collection and treatment are
developed/ which include:
* Collection Costs
Lift stations
Sewer repairs
* Pre-Treatment
Bar screens
Grit chamber
* Primary Treatment
Physical
Sludge
* Secondary Treatment
Aeration
Sludge removal
Second, the unit costs are multiplied by the loadings
for each user group:
- Residential
- Commercial
- Industrial
Third,- other factors are considered such as:
Administration
Billing and Collection
Dedicated Funds
100
-------
ELECTRICAL ENERGY
Lift Stations
A
B
C
Total:
Treatment Plant
Raw sewage pumping
Pretreatment
Primary treatment
Secondary treatment
Sludge treatment
Other
Total:
Summary
Cost/KWH
Peak Demand
Total KWH
Total Cost
Cost/day
Total flow/month
Cost/MG
% of
KWH Total
Cost/KWH
Total Cost
101
-------
TYPICAL OPERATING COSTS
OPERATION
Collection
Primary
Secondary
Advanced
Sludge
Laboratory
Customer
Service
LABOR
Pump station & sewers
Plant operations
Plant operations
Plant operations
Condition & transport
Testing
Meter reading
Billing operations
Administration Managers
OTHER
Repair parts, powers
Parts, power, chemicals
Parts, power, chemicals
Parts, power, chemicals
Parts, power, chemicals
Supplies, power
Billiing supplies
Postage
Office supplies, insur.
TYPICAL TRAINING EXPENDITURES
* WAGES DURING TRAINING
* REPLACEMENT DURING TRAINING
j. s\t\ v ji jj
* REGISTRATION
* BOOKS
102
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IDENTIFYING HIGH COST AREAS
The line items of the operating budgets (not
including debt service) should be reviewed to
determine if any item constitutes more than 20% of
the total operating cost. The debt service
accounts should not be more than 25% of the total
budget. If these items exceed the stated amounts,
this indicates a major financial problem that
needs attention.
Another purpose of reviewing budget to actual
costs is to determine if monthly costs are
significantly higher than projections. If any
operating cost exceeds the annual prorated cost by
20%, this indicates a significant overrun.
A third indication of high cost areas relates
to any excessive item that is 20% or more than the
previous year or when compared with a similar size
plant.
The high cost items of most treatment plants
are labor and energy. If these two items exceed
50% of budget, it is a sign of problems. If it
exceeds 75%, it shows a very significant problem.
103
-------
REPLACEMENT RESERVE
Section 212(3) of the Clean Water Act defines equipment
replacement as 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
the POTW was designed. The level of replacement reserve needed to
meet these costs is that required to maintain capacity and
performance of the physical plant. .
To determine an annual reserve amount with an accounting basis, a
calculated annual depreciated system can be used. This requires
determination of the depletion of an asset's value. Most small POTWs
do not practice any form of asset depreciation.
These replacement costs may be determined by:
Straight-line method - distributes the replacement cost of
an asset in equal amounts in each
accounting period during the
estimated service life.
The annual replacement costs may be upgraded using EPA inflation
factors or Engineering News-Record cost index.
104
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EQUIPMENT REPLACEMENT INVENTORY
and
MAJOR REHABILITATION
Equipment Original Year Placed Remaining Current Estimated
& Rehab. Cost in Service Life(yrs.) Replacement Cost
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
ESTIMATED ANNUAL COST FOR EQUIPMENT REPLACEMENT FOR NEXT 5 YEARS
a. 198
b. 198"
c. 198"
d. 198"
e. 198"
GROWTH PROJECTIONS (Next 10 years)
1. Population
2. Industrial
105
-------
LIST MAJOR MAINTENANCE or REPLACEMENT ITEMS
(10 Year Period)
Major Units
Lagoons
Oxidation-ditch
Sludge handling
Grounds & Buildings
Riding mowers
Electrical panels
Heating system
Roofs
Ventilation
Pumps
Grinders
Raw sewage
Sludge
Sewers
Trunk lines
Lift stations
Treatment
Aerators
Blowers
Chlorinators
Diffusers
Flow meters
Gages
Valves
Safety
SCBA
Oxygen meters
106
-------
TYPICAL FUTURE EXPANSION COSTS
Collection System Costs
Sewers
. Lift Stations
Treatment Plant Costs
Pretreatment facility
Primary facility
Treatment
Sludge pumping
Secondary facility
Aeration
RAS pumping
WAS pumping
Sludge dewatering
Chlorination
Laboratory
Miscellaneous
Engineering cost
Legal cost
Financing cost
Subtotal
Subtotal
$
$
Subtotal
Total Construction Cost:
107
-------
AJOR EXPENDITURES
1988-1998
(Assume 3% Inflation)
ITEM
Lagoon Cleaning
3 Blowers ($5,330 ea.)
2 Chlorinators ($1,500 ea)
Flow Meter & Recorder
2 Pump Sta. Pumps ($5,000)
Assorted Valves & Gages
5 Diffusers
Reroof Building
Rebuild Electrical Panel
TOTAL:
1988
$ 20,000
15,990
3,000
3,450
10,000
3,000
3S120
2,400
3,000
$ 63,960
1998
$ 27,000
21,490
4,030
4,640
13,440
4,030
4,190
3,250
4,030
$86,100
108
-------
SINKING FUND EXAMPLE
A, SAVINGS ASSUMPTIONS
- 6% Savings interest rate compounded annually
- Yearly payments
- Expenditures occur within 10 or 20 year period
- 3% inflation rate
B. SINKING FUND PAYMENT EQUATION
- F,V. x S.F.F. = Yearly payment
- F,V. = Future Value of estimated expenditures
- S.F.F. = Sinking Fund Factor (Interest Factor
Table)
C. USING SINKING FUND EQUATION
i, 100 X .07587 = $6,532/year
109
-------
SINKING FUND FACTORS
Interest
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
5%
1.000
0.487
0.317
0.232
0.180
0.147
0.122
0.104
0.090
0.079
0.070
0.062
0.056
0.051
0.046
0.042
0.038
0.035
0.032
0.030
00
80
21
01
97
02
82
72
69
50
39
83
46
02
34
27
70
55
75
24
6%
1.000
0.485
0.314
0.228
0.177
0.143
0.119
0.101
0.087
0.075
0.066
0.059
0.052
0.047
0.042
0.038
0.035
0.032
0.029
0.027
00
44
11
59
40
36
14
04
02
87
79
28
96
58
96
95
44
36
62
18
7%
1.000
0.483
0.311
0.225
0.173
0.139
0.115
0.097
0.083
0.072
0.063
0.055
0.049
0.044
0.039
0.035
0.032
0.029
0.026
0.024
00
09
05
23
89
80
55
47
49
38
36
90
65
34
79
86
43
41
75
39
8%
1.000
0.480
0.308
0.221
0.170
0.136
0.112
0.094
0.080
0.069
0.060
0.052
0.046
0.041
0.036
0.032
0.029
0.026
0.024
0.021
00
77
03
92
46
32
07
01
08
03
08
70
52
30
83
98
63
70
13
85
9%
1.000
0.478
0.305
0.218
0.167
0.132
0.108
0.090
0.076
0.065
0.056
0.049
0.043
0.038
0.034
0.030
0.027
0.024
0.021
0.019
00
47
05
67
09
92
69
67
80
82
95
65
57
43
06
30
05
21
73
55
1.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
10%
000 00
476 19
302 11
215 47
163 80
129 61
105 41
087 44
073 64
062 75
053 96
046 76
040 78
035 75
031 47
027 82
024 66
021 93
019 55
017 46
110
-------
LOAN EXAMPLE
A. BORROWING ASSUMPTIONS
- 8% Interest Rate
- Yearly Payments
- 10 Year Loan
- 3% Inflation Rate
B. LOAN PAYMENT EQUATION
- L x CRF = Yearly payment
- L = Loan amount
- CRF = Capital Recovery Factor (Table of interest
factors)
C. USING LOAN PAYMENT EQUATION
i,100 x .149 = $12,828/year
111
-------
CAPITAL RECOVERY FACTORS
Interest
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
*% f\
21
22
23
24
25
5
1.05
0.538
0.367
0.282
0.231
0.197
0.173
0.155
0.141
0.130
0.120
0.113
0.106
0.101
0.096
0.092
0.089
0.086
0.083
0.08G
0.078
0.076
0.074
0.072
0.071
6
1.06
0.545
0.374
0.289
0.237
0.203
0.179
0.161
0.147
0.136
0.127
0.119
0.113
0.108
0.103
0.099
0.095
0.092
0.090
G . 087
0.085
0.083
0.081
0.080
0.078
7
1.07
0.553
0.381
0.295
0.243
0.210
0.185
0.167
0.153
0.142
0.133
0.126
0.120
0.114
0.110
0.106
0.102
0.099
0.097
O.OS4
0.092
0.090
0.089
0.087
0.086
8
1.08
0.561
0.388
0.302
0.250
0.216
0.192
0.174
0.160
0.149
0.140
0.133
0.126
0.121
0.117
0.113
0.110
0.107
0,104
0.102
0.100
0.098
0.096
0.095
0.094
9
1.09
0.569
0.395
0.309
0.257
0.223
0.199
0.181
0.167
0.156
0.147
0.140
0.134
0.129
0.124
0.120
0.118
0.114
0.112
G.103
0.108
0.106
0.104
0.103
0.102
10
1.10
0.576
0.402
0.315
0.264
0.230
0.205
0.187
0.174
0.163
0.154
0.147
0.141
0.136
0.131
0.128
0.125
0.122
0.120
0.117
0.116
0.114
0.112
0.111
0.110
12
1.12
0.592
0.416
0.329
0.277
0.243
0.219
0.201
0.188
0.177
0.168
0.161
0.156
0.151
0.147
0.143
0.140
0.138
0.136
0.134
0.132
0.131
0.130
0.128
0.127
112
-------
BORROWING VS.
SAVINGS
Comparison
Fund Method
Yearly Payments
User Cost:
lnt.(Exp.)/Earn
Pres. Val. Cost
i
Borrowing
$ 12,828
128,280
(34,728)
81,422
Savings
$ 6,532
65,320
20,780
55,719
Difference
$ 6,296
62,960
25,703
1998 Expenditures: $86,100
113
-------
SINKING FUND
Accounting Work Sheet
Year Action Deposit Withdrawal Interest Balance
1988 Payment $6532 $ 0 $ 6532
1989 " 6532 392 13456
1990 " 6532 807 20795
1991 " 6532 1248 28575
1992 " 6532 1714 36821
1993 " 6532 2207 45563
1994 " 6532 2734 54829
1995 " 6532 3290 64650
1996 " 6532 3879 75061
1997 " 6532 4504 86097
1998 Withdrawal 86097 0 0
llh
-------
TYPICAL SINKING FUND POLICY
For Wastewater Facility Major Expenditures
The purpose of the Sinking Fund Policy is to
establish a list of expenditures, the time of
expenditure saving, estimated expenditure costs
and payment amounts for expenditures as required
by the local sinking fund ordinance.
Attached is a list of major
maintenance/replacement expenditures likely to
occur within a 10-year period. By the year 1998,
an estimated expenditure of $ will be
needed for these major maintenance/replacement
expenditures. Starting in the year 1989 in the
months of June and December, an amount of
$ shall be deposited in a savings account
semi-annually. The funding for the expenditures
will come from users, and payments will terminate
to this fund when expenditures have been made or
when the fund is at the acceptable level to cover
the cost. The accumulated assets shall be
liquidated only for the original purpose of this
policy with the dedication of payment amounts set
forth by authorized officials according to the
sewer ordinance regulating a sinking fund.
Duly adopted by on
, 1989.
Officials:
115
-------
Appendix C
COST RECOVERY
-------
ACCOUNTING SYSTEMS
Wastewater utilities must establish an accounting system that
reflects the budget system and conforms with generally accepted
accounting principles. Installing such a system requires:
Establishing the books of account
Plans for gathering information
Determining types of accounts
Establishing a chart of accounts
Determining types of records
Establishing billing and collection procedures
The revenue structure of the accounting system should list
revenues by user classes, compare actual receipts to estimates and
include amounts billed but not yet received.
The accounting system must allow separation of capital expenses
from 0,M & R expenses and include a formal encumbrance system so
management can determine assets and outstanding liabilities in
addition to the account balance. The cost structure should also
reflect the operating budget of the wastewater utility and its unit
processes. The accounting system should permit reports to be
developed which compare budget figures to actual expenses.
Enterprise fund accounting is used to account for wastewater
operations where there is a significant need for financing the
utility's cost through service charges. An enterprise fund is
designed to gather total costs and to indicate the extent to which
user charges are sufficient to recover total costs.
The objectives of an accounting system include:
Recording revenue receipts
Billings by individual users
Reporting total 0,M & R costs
Determining changes in assets, liabilities, & fund balances
119
-------
ACCOUNTING SYSTEMS Cont.)
Each accounting transaction generates a source document, which
includes the amount of money involved, who paid or received it, the
purpose of the transaction, and the activity that is responsible.
Source documents are summarized by the accounting system for the
utility into "books of original entry."
Accounting reports provide a broad range of information necessary
for effective financial management. These reports show what has been
received in revenues and what was spent. They also show revenue and
expenses for the year to compare with the budget. These records are
summarized into "books of final entry" for monthly or annual reports.
The final stage of the accounting cycle is the audit process.
This usually happens at the end of the fiscal year with a visiting
auditor reviewing the accounting reports.
One important aspect of accounting is when a transaction is
recorded in the books, which is the basis of accounting. In the cash
method, revenues are entered when actual cash is received and
expenditures are entered when checks are written. Some small
wastewater systems operate in this manner, while many utilities use
the accrual basis of accounting.
The accrual method means that revenues are accounted when billed
rather than when payment is actually made. Expenses are obligated
when purchased, not when the check is actually written.
The principle of accrual accounting methods is to match revenues
and expenses that result from activities of a given month or year.
It gives a clear picture of the financial implications of the
facility's operations within a given period.
Items needed to generate source documents include:
* Current chart of accounts
* Forms for reporting transactions
- Payroll checks
- Purchase orders
- Invoices
- Customer bills
- Customer receipts
In order tc evaluate financial performance, the following
accounting reports are needed:
* Balance sheet which reports assets, liabilities -and
account balance at the end of the month.
* Budget vs. actual reports for both revenue and expenses.
* Operating statement on whether revenues exceed or fall
short of expenses.
120
-------
ACCOUNTING SYSTEMS MUST PROVIDE:
General Accounting
Ledgers updated
Journal entry
Customer billing
Inventory
Purchasing
Payroll data
Financial reports
Facilities Inventory
Existing assets
Updated purchases
Customer Billing
Meter data
Billing statements
Cash receipts
Delinquency
Reports
Payroll
Timesheet processing
Paycheck processing
- Salary & wages
- Health insurance
- Life insurance
- Social security
- Unemployment
- Wage tax
- Workers' compensation
Personnel Records
Awards
Applications
Payroll register
Performance evaluation
Promotion
Purchasing
Ordering
Receiving
Payment
121
-------
INTEGRATED ACCOUNTING SYSTEM FILES
* Billing
* Budget
* Customer
* Employee
* General Ledger
* Inventory
* Invoice
* Journal Entry
* Purchase Order
* Timesheet
* Vendor
122
-------
CASH MANAGEMENT
Cash management is a system used to control the wastewater
utility's receipts and deposits to ensure that cash will be available
to meet obligations when due and to invest excess cash on a short
term basis. The goal of a cash management program is to maximize the
amount of cash available for short term investment.
Surplus cash for investment can often be found in a variety of
fund accounts (e.g., sewer operating accounts, collection funds,
deposit fees, construction reserves, and capital improvement
accounts). Any idle funds should be obtaining the best interest rate
for the time the funds are available.
Interest earned from the investment of surplus funds can be an
important source of supplemental income for the utility. It is
prudent to maintain cash for unexpected demands and contingencies.
Before initiating a cash management system, it is advisable to review
local ordinances, state statutes, and federal regulations for any
applicable restrictions.
The elements of a cash flow system should include the
establishment of effective cash information systems, timely billing
and collection, disbursement procedures, and cash budgeting.
123
-------
PURCHASING SYSTEM
Purchasing involves buying required goods and
services in the proper quantity at the right time
for the most competitive price from the best
supplier. Most small wastewater treatment
facilities purchase at the last minute, preventing
the most cost-effective procurement. These crisis
purchases aid in keeping the facility in financial
trouble.
All purchases should have numbered Purchase
Orders or Requisitions. Small parts purchases may
be set up at local vendors using "blanket"
purchase orders for specific items often needed
for routine repairs, sewer taps, and other
recurring situations.
PURCHASING
* Requisition form
* Bids (Quotation)
* Receipts documents
* Invoice
INVENTORY
* Inventory number system
* Receiving report
* Inventory number assignment
* Maintenance data
* Annual report
124
-------
USER CHARGE SYSTEM
(40 CFR 35.2140)
The user charge system must be designed to produce adeguate
revenues reguired for operation and maintenance including
replacement. The user charge system includes:
(a) User Charge System Based on Actual Use
This system shall provide that each user pays its
proportionate share of OM & R costs of treatment based on
actual usage. This is the most common form of charges.
(b) User Charge System Based on Ad Valorem Taxes
(1) System must have been in existence on December 27,
1977.
(2) The ad valorem user charge system is for users that
introduce no more than 25,000 gal/day of domestic
sanitary wastes.
(3) Each industrial and commercial user class which
discharges more than 25,000 gal/day of sanitary wastes
pays its share based upon actual use.
(c) Notification
Each user charge system must provide that each user be
notified at least annually in conjunction with a regular
bill of the rate and that portion of the user charges or ad
valorem taxes which are attributable to wastewater
treatment services.
(d) Financial Management System
Each user charge system must include an adeguate financial
management system that will accurately account for
generated revenues. The system should show expenditures
for operation and maintenance including replacement based
on an adeguate budget that identifies the basis for
determining the annual OM & R costs, the costs of
personnel, material, energy and administration.
(e) Charges for Operation and Maintenance for Extraneous Flows
The user charge system shall provide that the costs of
0 & M for all flow not attributable to users (I/I) be
distributed among all users.
USER CHARGE GOAL
MUST MEET NPDES PERMIT LIMITS
AT ALL TIMES
OM & R costs are reguired to be paid by user charges to
operate the facility at a specific treatment level to meet NPDES
permit conditions.
125
-------
USER CHARGE REQUIREMENTS
* The community must require that adequate revenues
be collected for the operation, maintenance, and
replacement (OM & R) of the treatment works.
(Replacement generally refers to equipment which has a
useful life of < 20 years).
* The community must require that each user which
discharges pollutants that cause an increase in the cost
of managing the effluent or sludge from the treatment
works shall pay for such increased cost as a surcharge.
* Each user must pay its proportional share of the
OM & R cost of the treatment works based on the user's
proportionate contribution to the total wastewater
loading. Flat rate charges and volume discounts are not
acceptable.
* Each user must be notified at least annually of
the sewer rates.
* The community must have an accurate record of
revenues and expenditures for the wastewater treatment
works, which must be separate from water service.
* The system must account for charges due to
infiltration and inflow (I/I).
* The user charge must be enforceable for all
customers.
* The user charge must take precedence over any
terms or conditions of any other contracts which are
inconsistant with federal laws.
* The user charge must be reviewed at least
annually to insure that is accurate for the life of the
project.
126
-------
USER CHARGE METHODOLOGY
It must be known if the wastewater treatment plant has had any
changes in the average and peak influent BOD, SS and other important
characteristics. If these data are above normal values, it indicates
that the user charges must be reevaluated. The users must be divided
into proper classes so that it is known how many users are in each
class, their discharge characteristics, and their respective volumes.
Management must determine:
All classes of users
Factors that determine different classes
Characteristics of all users
Individual user wastewater volumes
Appropriate rates
User Classes:
1. Residential
2. Commercial
3. Industrial
4. Institutional
User Charge Rates:
1. Equivalent Dwelling Unit Rate -
Used for unmetered water from private wells
Determined from best estimates of water use
2. Volume rates -
Determined from actual water usage
Knowledge of waste strength
3. Surcharge -
Used for high strength wastes
Used with normal volume rates
4. Quality/Quantity -
Determine costs for unusual waste
Incorporate minimum volumes
Establish User Charge Ordinance
127
-------
COST RECOVERY CONCEPTS
The management of every wastewater utility
should understand cost recovery concepts and have
a definite policy. Utilities need to recover
enough money to pay the annual cost of operating,
maintaining, and replacing equipment. Recouping
all costs is essential if a wastewater utility is
to be self-sufficient.
A program needs to be established to generate
sufficient revenues to recover all system costs.
The utility must operate as a business enterprise
system.
The steps to develop a cost recovery system
include:
1. Identification of each cost item
2. Allocation of costs
3. Compilation of facility operating data
4. Estimation of annual revenue requirements
5. Classification of users
6. Establishment of user charges
7. Billing and collection
128
-------
COST RECOVERY OUTLINE
1. Identification of Cost Items
All expense items must be identified to
recover 100% of the utility's costs. The major items
include:
* Labor
* Materials, supplies, and equipment
replacement
* Capital costs
* Administrative costs
* Debt service
2. Allocation of Costs
Costs should be allocated to specific cost
centers after the cost of treatment has been identified
and classified. These centers reflect particular
activities or processes that account for different
types of treatment such as:
* Collection
* Primary treatment
* Secondary treatment
* Sludge disposal
* Customer costs
3. Compilation of Facility Operating Data
The operating data must be compiled to
provide the basis for allocating costs and establishing
rates. Operating data include wastewater parameters
such as:
* Flow
* BOD
* Suspended solids
* Heavy metals
129
-------
COST RECOVERY OUTLINE (cont.)
4. Estimation of Annual Revenue Requirements
Annual revenue requirements are the amount of
cash needed for the utility operations to be recovered
through user charges. Federal regulations require that
the user charge portion of the revenue requirements be
identified.
5. Classification of Users
Customers must be identified individually or
by user class to provide a basis for allocating utility
cost to users in proportion to their use and wastewater
strength. Commercial and industrial users should be
charged according to the actual waste load to the
system.
6. Establishment of User Charges
Sewer service charges, including the user
charge portion, are established to recover the revenue
requirements from each user or user class in proportion
to their use of the system.
The type of rate structure used depends on the
types of customers using the system and the ability to
measure wastewater characteristics and/or water
consumption. The common types of rate structures
include:
* Flat rate
* Volume rate
* Volume rate plus surcharge
* Quantity/quality rates
7. Billing and Collection
The final step in developing a cost recovery
system is to develop procedures for billing and
collecting sewer service charges.
Billing procedures are established to collect
usage data from individual customers, to compute bills
based on the selected rate structure, and to prepare
and mail invoices.
Collection procedures include tracking outstanding
bills and following up on delinquent accounts.
130
-------
USER FEE PROJECTION
Last Year
Actual
Last Year
Budget
Next Year
Projection
Personnel Services
Salaries & wages
F.I.C.A.
Unemployment insurance
Worker's compensation
Health insurance
Life insurance
Retirement
Total:
0 & M Expenses
Office supplies
Postage
Telephone
Electricity
Natural gas
Water
Gas & oil
Chemicals
Operating supplies
Equipment repairs
Training
Travel
Subscriptions
Uniforms
Professional dues
Total:
Capital Outlay
Depreciation fund
Expansion account
Improvement account
Replacement account
Total:
Debt Service
Debt & interest
Cushion fund
Contingency fund
Total:
TOTAL:
Rate per 1,000 gal
Total Cost
Total gal. per yr.71,000
131
-------
USER CHARGE SUMMARY
1. No. of customers:
Residential -
Commercial -
Industrial -
2. Percent of total revenue:
Residential - %
Commercial - %
Industrial - %
3. Daily wastewater volume:
Residential - mgd
Commercial - mgd
Industrial - mgd
4. Minimum charge: $ for gallons/month.
5. $ / 1,000 gallons per month over gallons/month
6. $ / Ibs. BOD (surcharge for extra BOD loading)
7. $ / s/s (surcharge for extra s/s loading)
8. $ / customer/month for debt retirement (for each class)
9. What is the average total sewer charge per user?
Residential - $ '
Commercial - $
Industrial - $
132
-------
WASTEWATER USER CHARGES
Distribution of Customers
(Total Customers or Accounts:
0-30 31-100 101-500 >500
Customer Class No. (1000 gal.) (1000 gal.) (1000 gal.) (1000 gal.)
Residential
5/8 in.
3/4 in.
1 in.
Commercial
3/4 in.
1 in.
1 1/4 in.
1 1/2 in.
Industrial
2 in.
3 in.
4 in.
6 in.
133
-------
USER CHARGE COMPARISON
NO. Of
Community Customers
A 155
B 450
C 500
D 600
E 800
F 1,000
G 1,100
H 1,100
I 1,100
J 1,500
K 1,600
L 2,000
M 2,600
Minimum
Charge
$ 6.00
6.50
8.31
5.50
4.50
3.00
1.25
6.00
6.33
2.10
3.72
2.35
3.15
Rate Per
1,000 qal.
$ 1.00
2.50
1.70
0.50
1.25
0.85
1.43
1.20
1.42
0.95
1.24
1.29
1.12
Example Bill
3,000 qal.
$ 8.00
14.00
8.31
5.50
5.75
3.00
5.54
6.00
6.33
4.95
3.72
6.22
4.27
134
-------
CURRENT DEBT SUMMARY
Type of Debt Amount Year Started Interest Rate Ending Year
1.
2.
3.
4.
5.
FINANCIAL CONDITION SUMMARY
I. Initial Cost:
A. Collection - $
B. Treatment - $
C. Debt -
1. Initial date - $
2. Original loan amount - $
3. Interest rate - $
4. Loan duration - $
5. Current loan principal owed - $
6. Any changes needed in financing - $
II. Budget:
A. Last 5 years breakdown - 198
198"
198"
198"
135
-------
COST RECOVERY SUMMARY
1. How many wastewater customers are there in the system?
Residential:
Commercial:
Industrial:
2. What is the current average flow treated? mgd
3. What is the current estimated wastewater flow for each category?
Residential: mgd
Commercial: mgd
Industrial: mgd
4. What is the level of wastewater treatment at the facility?
% Primary
% Secondary
% Advanced
5. How much money was required for constructing the treatment plant?
Total: $
Local share:
Federal grant:
Federal loan:
State grant:
State loan:
6. What are the annual operating costs? $
(Do not include debt service)
7. How much money is reserved annually for equipment replacement?
$
136
-------
8. How much money is required for annual debt service?
Principal: $
Interest:
Total:
% of Budget:
9. What are annual revenues?
Connection fees: $
Customer penalties:
Interest:
User charges:
Other:
Total:
10. What is the current average annual sewer service charge?
Residential: $ /household
Commercial: /establishment
Industrial: /facility
137
-------
CUSTOMER BILLINGS
* Meter Reading Books
* Payment Notice
* Connection Application
BILLING DOCUMENTS
Billing summary
Statements
Delinquency notice
Penalty register
Shut-off notice
Customer status
Individual meter log
Customer listing
138
-------
CONNECTION FEE COMPUTATION
Connection Address:
A.
B.
D.
Date of Connection:
Labor :
1. hours X $ . /hr.
2. hours X $ . /hr.
3. hours X $ . /hr.
4. hours X $ . /hr.
Equipment:
1. Vehicle(
2. Vehicle(
3. Vehicle(
4. Equip. (
5. Equip. (
6. Equip. (
Parts & Supplies:
1. Part( );
2. Part( . );
3. Part( ):
4. Part( ):
5. Part( ):
6. Part( ):
Administration & Management:
1. Clerk( ):
2. Clerk ( ):
3. Mang. ( ) :
4. Ch.0p( ):
5. Other ( ):
6. Other ( ):
(Name:
(Name:
(Name:
(Name:
)
)
)
)
Labor subtotal:
) miles X $0. /mile
) miles X
) miles X
) hours X
) hours X
) hours X
Equipment
: No. X $
: No. X $
: No. X $
: No. X $
: No. X $
: No. X $
Parts & Suppl
hours X $
hours X $
hours X $
hours X $
hours X $
hours X $
$0. /mile
$0. /mile
$ . /hour
$ . /hour
$ . /hour
subtotal :
/unit
/unit
/unit
/unit
/unit
/unit
ies subtotal
/hour
/hour
/hour
/hour
/hour
/hour
Administration subtotal:
= $
=
=
=
$
= $
=
=
=
=
=
$
= $
= $
= $
= $
= $
= $
: $
= $
= $
= $
= $
= $
= $
$
.
a
.
.
.
.
m
t
m
.
Total Connection Cost:
Prepared By:
Date:
139
-------
REPAIR COMPUTATION
Repair Item:
A.
B.
D.
Dat
Lai:
1.
2.
3.
4.
Eqi
1.
2.
3.
4.
5.
6.
Parl
2!
3.
4.
5.
6.
Adm:
1.
2.
3.
4.
5.
6.
:e of Repair:
:>or :
hours X $ . /hr.
hours X $ . /hr.
hours X $ . /hr.
hours X $ . /hr.
aipment :
Vehicle*
Vehicle*
Vehicle*
Equip. (
Equip. (
Equip. (
:s & Supplies:
Part* ):
Part* );
Part* ):
Part* ):
Part* ):
Part* );
Lnistration & Management:
Clerk* ):
Clerk* ):
Mang. ( ) :
Ch.Op* ):
Other* ):
Other* ):
(Name:
(Name:
(Name:
(Name:
)
)
)
Labor subtotal:
) miles X $0. /mile
) miles X $0.
) miles X $0.
) hours X $
) hours X $
) hours X $
/mile
/mile
/hour
/hour
/hour
Equipment subtotal:
: No. X $ . /unit
: No. X $
: No. X $
: No. X $
: No. X $
: No. X $
Parts & Supplies
hours X $
hours X $
hours X $
hours X $
hours X $
hours X $
/unit
/unit
/unit
/unit
/unit
subtotal
/hour
/hour
/hour
/hour
/hour
/hour
Administration subtotal:
= $
= .
= .
= .
$
= $
=
= .
= .
= .
= .
$
= $
= $
= $
= $
= $
= $
: $
= $
= $
= $
= $
= $
= $
$
Total Repair Cost:
Prepared By:
Date:
140
-------
COLLECTION
PROCEDURES
Delinquent Utility Accounts
1. DISCONNECT SERVICE
2. PERFORM TAX SALE
3. ATTACH A LIEN
4. SMALL CLAIMS COURT
ill
-------
COLLECTION POLICY
* WRITTEN
* ADOPTED BY GOVERNING BODY
* PROVIDES A PLAN
* ESTABLISHES FUNCTIONS
- AMOUNT OF INTEREST
- WHICH COLLECTION PROCEDURE
- RESPONSIBILITIES
- LEEWAY OF TAX COLLECTORS
* INVOLVE KEY PARTICIPANTS
- TAX COLLECTORS
- TREASURER
- WATER/SEWER PERSONNEL
- COMMISSIONERS/TRUSTEES/SELECTMEN
- HEALTH OFFICER
Hi2
-------
DELINQUENT ACCOUNT COLLECTION POLICY
(By Sale of Property)
EXAMPLE
1. SEWER CHARGES ARE DUE ON THE DATE INDICATED ON THE SEWER BILL AND
ARE DELINQUENT AFTER THAT DATE.
2. DELINQUENT ACCOUNTS WILL BE CHARGED A 10% TAX COLLECTOR'S FEE AND
INTEREST OF 1% MONTHLY OR PARTIAL MONTH FROM THE DUE DATE.
3. THE MUNICIPAL TREASURER SHALL FILE A LIEN ON THE PROPERTY AND
ISSUE THE WARRANT ON DELINQUENT ACCOUNTS, IDENTIFYING ALL
DELINQUENT PAYERS TO THE TAX COLLECTOR WITHIN 20 DAYS OF THE DUE
DATE.
4. UPON RECEIPT OF THE TREASURE'S WARRANT, THE TAX COLLECTOR SHALL
IMMEDIATELY GIVE NOTICE TO EACH DELIQUENT RATE PAYER OF THE
FOLLOWING:
AMOUNT DELINQUENT
MONTHLY INTEREST CHARGE
TAX COLLECTOR'S FEE
DATE AND LOCATION WHERE PAYMENT CAN BE MADE
TOTAL AMOUNT INCLUDING FEES AND CHARGES
THE NOTICE SHOULD INCLUDE THE FOLLOWING STATEMENT:
IF YOUR BILL REMAINS UNPAID AFTER THE DUE DATE ON
THIS NOTICE, YOU WILL BE RESPONSIBLE FOR ANY
ADDITIONAL FEES AND COSTS ASSOCIATED WITH THE TAX
SALE ACCORDING TO STATE STATUTES. THIS NOTICE SHALL
BE GIVEN AT LEAST 20 DAYS BEFORE PAYMENT DATE.
5. IF PAYMENT IN FULL IS NOT RECEIVED WITHIN 90 DAYS OF THE ORIGINAL
DUE DATE, THE TAX COLLECTOR SHALL BEGIN THE TAX SALE PROCESS BY
FILING A FORMAL NOTICE AND AN ATTESTED COPY OF THE WARRENT IN THE
TOWN CLERK'S OFFICE UNLESS AN ACCEPTABLE ARRANGEMENT TO MAKE A
PAYMENT IS MADE WITHIN A 30-DAY PERIOD. IF FULL PAYMENT IS NOT
MADE WITHIN 6 MONTHS OF THE ORIGINAL DUE DATE, THE TAX COLLECTOR
SHALL BEGIN THE TAX SALE PROCESS.
DULY ADOPTED BY THE BOARD OF FOR THE
OF
ON THIS DAY OF , 19
CONCURRENCE: TAX COLLECTOR
(This document must drafted according to state and local statutes.)
143
-------
WATER DISCONNECT
A. IMPLEMENTATION DEPENDS ON
- IS WATER SYSTEM MUNICIPALITY OWNED?
- WHAT IS THE QUALITY OF THE WATER SYSTEM?
B. ATTRIBUTES:
- NORMALLY RAPID PAYMENT
- LESS EFFORT THAN TAX SALE
- MORE EFFORT THAN LIEN
- CAN BLOCK SEWER SERVICE
C. IMPORTANT PROCEDURES
- BILL MUST BE DELINQUENT
- DISCONNECT NOTICE MUST BE SENT TO OWNER &
RENTERS
- DEBTORS MUST BE GIVEN TIME TO PAY BY
INSTALLMENT
- SERVICE MUST BE RESTORED WITHIN 24 HOURS
AFTER PAYMENT
-------
TAX SALE
A. IMPLEMENTATION DEPENDS ON FIRM
POLICY OF TAX COLLECTOR
- CAN RESULT IN CONSISTENT COLLECTION
- NOT AS RAPID AS WATER DISCONNECT
- SAME PROCEDURE AS DELINQUENT PROPERTY TAX
COLLECTION
- DON'T NEED A WATER SYSTEM FOR
IMPLEMENTATION
B. IMPORTANT PROCEDURES
- WARRANT MUST BE FILED BY SPECIFIED DATE
- MUST ADVERTISE IMMEDIATELY THE LAND FOR SALE
AT PUBLIC AUCTION
- MUST GIVE SUFFICIENT NOTICE TO TAXPAYER
- MUST GIVE NOTICE TO LENDING INSTITUTIONS
- MUST POST SALE NOTICE IN PUBLIC PLACE IN
TOWN OF SALE
Ilt5
-------
Appendix D
PLANNING
-------
UTILITY PLANNING
1. Wastewater utilities must:
- Know their future direction,
- Have planning document:
a. Have written policy
b. List future needs for next 5 years
c. Tabulate estimated costs
d. State progress bench marks for each year
e. State present wastewater treatment demands
(1) Present treatment volume: mgd
(2) Number of customers:
(3) Total wastewater budget: $
(4) Average user charge per household: $
f. Predict factors for next 5 years for item e.
g. Include sewer and plant operators, clerks, and
management in all planning activities.
h. Include public hearing with newspaper coverage.
2. Planning elements:
* Policy setting
* Problem identification
* Implementation
3. Two major planning units:
* Operations
* Capital improvements
149
-------
BASIS for PLANNING
RECORDS
Performance
Maintenance
LONG RANGE
O & M Budgets
Capital Budgets
EMERGENCY PLANNING
Standby Power
Operating Plan
Preventive Maintenance
150
-------
OPERATIONS PLANNING
* Determine Operating Objectives
* Estimate Staff Needs
* Set Performance Criteria
* Set Priorities
* Develop Operations Plan
* Analyze Financing Options
* Review and Evaluate
151
-------
STEPS IN CAPITAL PLANNING
Determine the Utility
Activity, Goals, and
Obj actives
Estimate Capital
Requirements
Determine the
Acceptable Capital
Outlay Level
Set Priorities
Develop Capital
Improvement Plan and
a Capital Budget
Analyze Financing
Options
Review and
Evaluate
152
-------
FINANCING AN EXPANSION PROJECT
EXAMPLE
Capital Project Cost Per Customer
Capital Cost = $ 100,000
No. of Customers = 100
Cost/customer = $ 1,000
Customer Cost
Years to pay: 5 yrs. 10 yrs.
Interest rate: 10 % 10 %
Debt service factor: 0.231 0.130
(From debt table)
Annual cost/customer: $ 231.00 $ 130.00
Total cost/customer: $ 1,155.00 $ 1,300.00
153
-------
CAPITAL PROJECT SCHEDULE
Project Current Forecast Year
Category Estimate _
Collection
Primary
Secondary
Advanced
Sludge
Customer
Service
Administration$
$"
154
-------
Appendix E
FINANCING
-------
DEBT MANAGEMENT
Some form of financing is usually necessary to construct any new
wastewater treatment facility or to provide for treatment expansion.
Debt management consists of repaying loans, deciding on future loans/
and considering a quicker pay back on existing loans.
Borrowed money may be in the form of government guaranteed loans,
conventional loans or various types of bonds. Some government
sponsored loans may have lower than regular market interest rates,
while conventional bank loans will have slightly higher interest
rates. Bonds often have attractive interest rates, since they
usually provide some tax advantage to the investors.
The most common type of bond is the revenue bond, which repays
its value from the revenue of the utility. The pay back of these
bonds is based on appropriate user charges.
Bonds may mature up to 40 years after issue. This maximum period
is not the ideal period, since many wastewater treatment facilities
may not last 40 years without spending great sums of money.
157
-------
TYPES OF FINANCING
Capital financing may be used to expand, improve, or rebuild an
existing facility or to build an entirely new plant.
Financing may be in the form of grants, loans, or existing
set-a-side funds.
Types of financing for capital projects are:
* U.S. EPA Construction Grants
* Farmer's Home Administration
* Housing & Urban Development
* State Grants
* State Loans
* Investment Banks
* Local Banks
* Private Leaseback
* Various Types of Bonds
* Special Assessment
158
-------
FIWANCIKG
COST RECOVERY
From all users
CAPITAL COSTS
Obligation
Bonds
Revenue
Bonds
Assessment
Bonds
Federal
Loans
159
-------
Debt Service Factor Table
Interest Term (in years)
Rate
8
10
11
12
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
5
212
225
231
237
244
250
257
264
271
277
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
10
111
123
130
136
142
149
156
163
170
177
0
0
0
0
0
0
0
0
0
0
15
.078
.090
.096
.103
.110
.117
.124
.131
.139
.147
0
0
0
0
0
0
0
0
0
0
20
.061
.074
.080
.087
.094
.102
.110
.117
.126
.134
0.
0.
0.
0.
0.
0.
0.
0.
0.
0.
25
051
064
071
078
086
094
102
110
119
127
0
0
0
0
0
0
0
0
0
0
30
.045
.058
.065
.073
.081
.089
.097
.106
.115
.124
160
-------
INFLATION FACTOR TABLE
Inflation affects costs each year a project is planned but not
started. Generally, inflation for the years 1986 to 1988 have been
between 4 and 6%. A value should be chosen when making 5-year
projections.
Inflation Year 1 Year 2 Year 3 Year 4 Year 5
2 % 1.000 1.020 1.040 1.061 1.082
4 1.000 1.040 1.082 1.125 1.170
6 1.000 1.060 1.124 1.191 1.262
8 1.000 1.080 1.166 1.260 1.360
10 1.000 1.100 1.210 1.331 1.464
12 1.000 1.120 1.254 1.405 1.574
161
-------
FINANCIAL INDICATORS
(Balance Sheet Analysis)
Indicator/ %
Debt Ratio
Measure
Relation to assets
Desired Level
20%
Current Ratio
Solvency of fund
Ideal: 200%
Min. : 100%
Quick Ratio
Solvency of fund
100%
Debt/Equity
Ratio
Receivables
as % of
Current Assets
Investments
As a % of
Current Assets
Reliance on debt
for capital
financing
Unpaid user charge
Whether max. assets
are invested to
earn interest
Warning
Rapid increase in
ratio indicates
over reliance on
debt financing.
Falling ratio
indicates
inability to pay
future
obligations.
Falling ratio
indicates
inability to pay
future
obligations.
Increasing ratio
indicates bond
financing that
should be
monitored.
Increase implies
falling rate of
collection and
need to improve
billing
Decrease implies
need for
aggressive cash
management
162
-------
BALANCE SHEET ANALYSIS
(Worksheet)
Current Assets 3 yrs. ago 2 yrs. ago Last yr.
1. Cash $ $ $
2. Investments
3. Accounts receivable
4. Other current assets
5. Total current assets
(Lines 1-4)
Restricted Assets
6. Customer deposits
7. Construct, ace. bal.
8. Funds for debt ser.
9. Other restrict, assets
10. Total restrict, assets
(Lines 6-9)
11. Property, plant & Equip.
(Net of accum. deprec.)
12. Total restricted assets $
(Lines 5 + 10 + 11)
Current Liabilities
13. Accounts payable
14. Accrued bond interest
15. Current portion of bonds
16. Current lease-purchase
17. Other cur. liabilities
18. Total current liabilities $
(Lines 13-17)
163
-------
BALANCE SHEET ANALYSIS
(Worksheet - cont.)
Current Liabilities 3 yrs. ago 2 yrs. ago Last yr.
Payable from
Restricted Assets
19. Matured revenue bonds $ $ $
20. Revenue bond interest
21. Accrued bond interest
22. Current bond portion
23. Other current liabilities
payable from rest, assets
24. Total current liabilities $
(Lines 19-23)
Long-Term Liabilities
25. Revenue bonds
26. Gen. obligation bonds
27. Lease purchase agreements
28. Other long term liab.
30. Total liabilities
(Lines 18 + 24 + 29)
Eguity & Totals
31. Contributed capital
32. Retained earnings
33. Total fund equity
(Line 31 + 32)
34. Total li-abilities
and fund eguity
(Lines 30 +33)
164
-------
BALANCE SHEET ANALYSIS
(Worksheet - cont.)
Ratios 3 yrs. ago 2 yrs. ago Last yr
35. Net funded debt $ $ $
[(Lines 14-16 + 19-22
+ 25-27) - line 8]
36. Net working capital
+ net fixed assets
(Line 5 + 17 - 18)
37. Debt ratio
(Line 35 + 36)
38. Current ratio
(Line 5 + 18)
39. Cash investments
& receivables
(Line 1-3)
40. Quick ratio
(Line 39 + 18)
41. Debt/Equity ratio
(Lines 30 + 33)
42. Receivables as %
of current assets
(Lines 3+5)
43. Investments as a
% of current assets
(Lines 2+5)
165
-------
FINANCING SOURCES
Source
General
obligation
bonds
Revenue
bonds
Capital
fees
Repayment
10-30 years,
10-30 years,
Assessment 10-30 years
bonds
Revolving 10-20 years
loans
Paid by new
customers.
Advantages
Immediate benefits.
Lower interest rates,
Immediate benefits
Immediate benefits
Immediate benefits.
Provides additional
funds.
Disadvantages
Tied to property
tax base.
Property owners
liable.
Higher interest.
Requires
legislative
approval.
Increased rates.
Requires
customer to pay
for late
hook-up.
TYPES OF BONDS
General Obligations
Usually based on property value
Low interest
May need voter approval
May have debt limitations
May have additional requirements over other methods
Financing costs are lower because less documentation
required
Revenue Bonds
Supported directly by user charges only
Usually do not require voter approval
May have higher rates
May not lend as much as other methods
Require specified reserve funds
Can be used to finance projects beyond boundaries
166
-------
Appendix F
RECORD KEEPING
-------
1. RECORD-KEEPING CONCEPTS
All utility record keeping starts with customer usage and
includes all facets of accounting.
Costs must be recorded for each piece of equipment and every
treatment unit.
A normal accounting system usually uses an enterprise fund, which
is treated like a business.
There should be a chart of accounts, which includes all items in
the budget.
Record keeping includes equipment inventory, chemical usage,
energy consumption, and all matters pertaining to the utility
operation.
Assembling monthly expenditures of plant operations involves
recording monthly expenses and disbursements. These include
personnel services, energy, chemicals, and other normal operating
costs.
Keeping records is important for the long-term operation of the
system. Good records should:
* Verify unit process efficiency.
* Assist in making decisions affecting plant operations.
* Assist in planning and maintenance.
* Provide a basis for budgeting and staffing.
* Provide a basis for justifying system expansions.
Are the following present?
* Operating reports.
* Work schedules.
* Activity reports (i.e., time cards).
* Expenditure reports (i.e., lab, supplies, energy).
* Cost analysis reports.
2. TYPES OF REPORTS
* Operating Reports
* Financial Reports
* Maintenance Reports
* Purchasing Reports
169
-------
3. REPORT INFORMATION
Reports should tell:
* How the WWTP is operating
* How much it is costing
* If there is enough money to operate
* When equipment needs maintenance
* When equipment needs replacement
4. OPERATING REPORTS
* Compliance Status
* Treatment Efficiency
* Energy Use
* Chemical Use
170
-------
5. MAINTENANCE REPORTS
* What maintenance has been performed?
* What maintenance needs to be performed?
* Was the spare parts inventory reduced?
* How much time was spent on individual equipment?
* Does some equipment need replacement?
* Are there inventory records?
* Are there maintenance records?
Preventive
Corrective
Contract
6. PLANT PERFORMANCE REPORTS
How is the WWTP performing?
What volume of flow is treated?
What is the raw wastewater strength?
What is the compliance status?
Are there sufficient chemical and physical data?
- Are there energy records?
Rates by month?
Usage by month?
171
-------
7. PERFORMANCE RECORDS
Measure
Wastewater
Customers
Workload
Efficiency
Effectiveness
Gallons treated
Cost/gallon
Days out of compliance
No. of contacts
Manhour/contact
Response time
8. FINANCIAL REPORTS
* Statements for management
* Information to control costs
* Show:
Monthly budget to actual costs
Monthly revenue
Balance sheet
Cost of service
Trial balance
Encumbrances
Cash reconciliation
Bond report
Contingency fund
172
-------
9. BALANCE SHEET
Assets
Cash on hand
Investments
Accounts receivable
Prepared expenses
Materials & supplies
Equipment (less depreciation)
Facility (less depreciation)
Improvements progress
Total Assets
Liabilities
Accounts payable
Notes payable
Bonds payable
Customer deposits
Debt service
Total
Liabilities
173
-------
10. PURCHASE ORDERS
Purchase orders become expenditure records
All P.O.s must have consecutive numbers
Separate records are ideal for:
Purchased equipment
Vendor supplies
Operating services
Purchasing guidelines:
Standards of conduct
- unprejudiced buying
- no hidden deals
- use proper conduct
- use quotations for high expenditures
Purchasing Limits & Authority
- Limited Purchase Item - used for goods or services
costing < $100. (No higher approval).
- Verbal Quotation - for goods or services costing
< $1,000 (at least three quotes).
- Written Quotation - for goods or services costing
< $5,000 (at least three written quotes and full
approval).
- Sealed Bid Items - for goods or services costing
> $5,000 (formal public advertisement for bids and
full approval).
- Emergency Orders - when the public health or safety
is in jeopardy, order from the nearest vendor.
174
-------
REFERENCES
1. Government Financial Research Center, Financial Capability
Guidebook, May 1982.
2. Government Financial Research Center, Wastewater Utility
Management Manual, July 1981.
3. Maine Training Institute, The Financial Management Process.
4. U.S. Environmental Protection Agency, A Guide to the Selection of
Cost-Effective Wastewater Treatment Systems, Technical Report
430/9-75-002, July 1975.
5. U.S. Environmental Protection Agency, Analysis of Operations &
Maintenance Costs for Municipal Wastewater Treatment Systems,
430/9-77-015, May 1978.
6. U.S. Environmental Protection Agency, An Instructional Delivery
System for Manpower Management, A Report for Water Pollution
Control Agencies, April 1979.
7. U.S. Environmental Protection Agency, Construction Costs for
Municipal Wastewater Conveyance Systems: 1973-1977, 430/9-77-015,
May 1978.
8. U.S. Environmental Protection Agency, Construction Costs for
Municipal Wastewater Treatment Plants: 1973-1977, 430/9-77-013,
MCD-37, January 1978.
9. U.S. Environmental Protection Agency, Costs of Wastewater
Treatment by Land Application, Technical Report 430/9-75-003,
June 1976.
-£
10. U.S. Environmental Protection Agency, Estimating Water Treatment
Costs, Volume 1 Summary, 600/2-79-162a, August 1979.
11. U.S. Environmental Protection Agency, Estimating Water Treatment
Costs, Volume 2, Cost Curves Applicable to 1 to 200 mqd Treatment
Plants, 600/2-79-162b, August 1979.
12. U.S. Environmental Protection Agency, Estimating Water Treatment
Costs, Volume 3, Cost Curves Applicable to 2,500qpd to 1 mqd
Treatment Plants, 600/2-79-162C, August 1979.
13. U.S. Environmental Protection Agency, Estimating Water Treatment
Costs, Volume 4, Computer User's Manual for Retrieving and
Updating Cost Data, 600/2-79-162d, August 1979.
14. U.S. Environmental Protection Agency, Financial Management System
for Publicly-Owned Treatment Works (Accounting Options),
430/9-84-005, June 1984.
175
-------
15. U.S. Environmental Protection Agency, Innovative and Alternative
Technology Assessment Manual, 430/9-78-009, February 1980.
16. U.S. Environmental Protection Agency, Looking at User Charges, A
State Survey and Report, 430/09-87-0008, September 1987.
17. U.S. Environmental Protection Agency, Management of Small-to-
Medium Sized Municipal Wastewater Treatment Plants, 430/9-79-013,
June 1979.
18. U.S. Environmental Protection Agency, Maintenance Management
Systems for Municipal Wastewater Facilities, 430/9-74-004.
October 1973.
19. U.S. Environmental Protection Agency, Municipal Wastewater
Facility Financial Management Work Book, 1986
20. Environmental Protection Agency, Package Water Treatment Plants,
Volume 2, A Cost Evaluation, 600/2-80-008b, July 1980.
21. U.S. Environmental Protection Agency, Touching All The Bases, A
Financial Management Handbook for Your Wastewater Treatment
Project, 430/9-86-001, September 1986.
22. U.S. Environmental Protection Agency, Wastewater Utility
Recordkeepinq, Reporting and Management Information Systems,
430-9-82-006, July 1982.
23. Virginia Tech Center for Urban and Regional Studies, Costing and
Rate-Setting Workshop for Virginia Water and Sewer Utilities,
Draft - July 1987.
176
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