Budget Background

The South Granville Water and Sewer Authority (SGWASA) annual budget was approved by SGWASA’s 7-member Board of Directors at a public meeting. The budget provides the financial plan to implement SGWASA’s necessary programs, projects and work plan for the fiscal year. SGWASA’s fiscal year is from July 1st through June 30th. 

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Role of the Budget

SGWASA’s budget serves as the primary tool in allocating financial resources to programs and services. The budget can serve as a policy making tool, a management tool, a financial tool, and a communication tool.  Like other public utilities, SGWASA must balance its resources and programs to meet the ever-changing needs of the communities we serve, a fluctuating economy, and adherence to state and federal water quality rules and regulations.

 

Budgeting is essentially the process of allocating scarce resources to fund services and projects benefiting the customers within our service area.

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• Link to Previous SGWASA Budget Ordinances and Audits.

 

 

FY24-25 Adopted Budget

• FY24-25 Complete Budget Book

• FY24-25 Updated Fee and Rate Schedule

• Capital Improvement Program (CIP) Schedule

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FY24-25 Budget Summary: 

The Approved Budget for Fiscal Year (FY) 2024-2025 is balanced, provides sufficient funds to meet the debt obligations of the organization, and provides for the annual operations of the utility systems. The proposed FY24-25 Budget does not use fund balance to offset the increased operating costs associated to the proposed budget.   

 

To meet the debt obligations and the increased operational costs of the organization, the proposed FY24-25 Budget includes a rate increase applied to all base rates and volume rates. As a reminder, on July 1, 2023, (start of FY23-24) SGWASA implemented a new rate model. Prior to implementation of the new rate model, SGWASA increased rates on July 1, 2021 (FY21-22).   

 

The approved rate increase is necessary to offset the inflation-based operating costs SGWASA has experienced during the past few fiscal years. During the past few fiscal years, SGWASA managed to absorb the costs associated to inflation due to a variety of factors. One major contributing factor to absorbing the inflationary costs included using the available fund balance from vacant jobs (i.e., professional engineers x 2).   

 

With respect to staffing, the proposed budget includes a request for two new entry-level utility operator positions. Of these two new positions, one operator will be added to SGWASA’s wastewater treatment facility, and one operator will  be added to the water treatment facility. The water and wastewater facilities will be able to utilize the position on various shifts.  

  

Adding the two positions helps SGWASA gain on the much-needed staffing of the utility, however, it still falls short of the additional resources needed across the organization.  The need for additional resources has been documented for several years now. For example, nine positions were requested by SGWASA’s Utility Operations Superintendent’s in FY’s 21-22, 22-23, 23-24, and 24-25.  

 

To date, none of the additional requested positions have been funded/approved. In summary, although additional utility operators are needed, SGWASA’s revenues have not been sufficient to fund the needed resources. Within the next 10 years this trend may change when additional revenues are realized from residential/commercial growth following the completion of the I-85 Sanitary Sewer System Improvement Project.    

 

Key Revenue Elements in the Approved FY24-25 Budget 

A rate increase to meet anticipated increases to operating expenses.  

The rate increase projects water revenue to increase by $600,000 compared to FY 23-24. 

The rate increase projects sewer revenue to increase by $550,000 compared to FY 23-24. 

The rate increase projects Capital revenue of $2.4 million to fund utility infrastructure asset depreciation at 95%. The near-term goal (5-years) is to increase this value to 100%. 

Fee categories included in the FY24-25 Rates, Fees, and Charges Schedule were reviewed, expanded, and updated as necessary to reflect the actual costs of service.  

 

Key Payroll & Benefits Expense Elements in the Approved FY24-25 Budget 

• Add two new positions: 

  • One water treatment plant operator  

  • One wastewater treatment plant operator  

• Modify one existing position: 

  • Engineering Director to Asst. Executive Director 

• A 3% wage schedule adjustment. 

• A 4% performance merit increase for employees:  

  • Based on merit pay up to 4% as related to annual review performance standards. 

• A NC State requirement increase of 0.75% for Local Government Employees Retirement System. 

• Projected increases of 15% to medical premiums, and 5% to dental and vision premiums. 

• The SGWASA-matching contribution for the 401k program increases to 3%. 

• A medical insurance out-of-pocket cap of $500/month per employee for out-of-pocket costs. 

 

Key Expenses and Capital Outlay in the FY24-25 Budget 

Sizable increases in: 

• supplies costs, fuel costs, and chemical costs are due to inflationary factors. 

• electricity costs due to provider rate increases. 

• professional services for general legal and engineering services. 

• A projected 12% increase in property and liability insurance premiums. 

• Replacing or purchasing operating equipment totaling $202,397. 

• Includes $2.4 million for depreciation expense, funded at 95%. 

 

Key Programs in the FY24-25 Budget 

• Continued focus on mitigating the PFAS problems with the drinking water. 

  • Performing the needed chemical water analysis bench testing to determine which PFAS removal technique(s) will be used for the water treatment plant upgrade project. SGWASA recently received a $500,000 Grant from NCDEQ to perform this work. This work will start in June 2024. 

• Continued focus on the I-85 Sanitary Sewer System Improvement Project. 

  • Goal this FY is to get the project under construction. 

  • SGWASA Received a $35M ARPA Grant  and was awarded a $35M low interest loan from the USDA. 

• Continued focus on the lead & copper service line identification plan and removal process. 

• Continued upgrades across the service area with respect to capital improvement projects.  

  • Wastewater Treatment facility improvements. 

  • Water Treatment facility improvements. 

  • Distribution system improvements.  

• Implementation of the new financial software. 

  • The new financial software will provide enhancements to customers and to the business operations of staff at SGWASA. 

• New Project: Entering an agreement with Spectrum to provide high speed internet connectivity via fiber optic lines to all SGWASA facilities.  

  • Enhanced service will provide a virtual private network between facilities, greater file sharing and business continuity, and a faster network for business applications.

• This technological upgrade along with the new financial software will allow SGWASA to operate in a truly modern business environment.  

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Respectfully,

Scott N.Schroyer

Scott N. Schroyer, Executive Director