580 Main Street Suite A ~ Dallas, OR 97338 ~ 503-623-9680
POLK SWCD BUDGET MESSAGE FOR 2014 -2015 BUDGET May 7, 2014 Members of the Budget Committee and Citizens of Polk County: Today, the Polk Soil and Water Conservation District (Polk SWCD) is pleased to submit the proposed budget for 2014 - 2015. The budget is in balance and complies with Oregon law, state statutes, and generally accepted accounting principles. The Directors of the Polk SWCD instructed the Budget Officer to prepare a budget that would effectively implement the SWCD’s Annual Work Plan. The 2014 - 2015 Budget is in compliance with the Polk SWCD’s priorities, direction, and annual plan. This document represents many hours of hard work and collaboration, a process that continues throughout the year. The Polk SWCD is a local unit of government managed by an elected board of seven directors. The Polk SWCD implements an Annual Work Plan utilizing a variety of resources, including grants, volunteers, and tax revenues. The Polk SWCD overall budget for the 2014 2015 fiscal year is $620,656.00 This amount includes remaining revenue, grants, expenditures, interest, and revenue from the SWCD’s permanent tax rate. As a taxing District, the Polk SWCD is required to hold an annual budget committee meeting for the review and approval of the upcoming year’s budget. The budget committee meets to review the budget, hear public comments and approve the budget. The budget message is intended to explain the proposed budget and outline any significant changes in the Polk SWCDs financial position. The budget is then published in the newspaper and presented for adoption at the District budget hearing June 11th, 2014. The following budget message, worksheets, and supporting data are provided to the budget committee and public for their review. The budget includes a General fund, and a Project fund. All funds have a Resources and Requirements section that must balance and include a variety of categories and line items specific to the needs of each fund. Sincerely Chad Woods, Vice Chair and Budget Officer Page 1 of 6
District Program The Polk Soil and Water Conservation District program is described by the following: District Mission: To promote the conservation and wise of use of natural resources in Polk County District Purpose: To find available technical, financial and educational resources, whatever their source, to meet the needs of the local resource user. Goals of the District‘s Annual Work Plan 1. Soil and Water Conservation District Technical; to offer technical assistance and conservation planning to resource owners and communities directed towards the conservation and wise use of Polk County natural resources including Ag Water Quality. 2. Soil and Water Conservation District Education; to provide education and outreach related to natural resource issues within Polk County. 3. Soil and Water Conservation District Operations; District operations will be effective, economical, and efficient to meet legal and grantor requirements. District Program Funding District activities are funded using tax revenues, state, federal, and local grants, and by forming partnerships with other local and state entities. Additional resources include contributions, donations, and other fund raising activities such as an annual plant sale. The various revenue sources pay for staff, materials, equipment, and project administration. The District manages grants for landowners in the form of small grants or other types of grants like OWEB Restoration grants, and we are in the process of developing new programming that will provide sources of income other than levied tax revenues. Project Funds are budgeted at levels high enough to allow for receipt and administration of unanticipated grant funding. The uncertainties of the level of grants may necessitate budget adjustments. Resource estimates are made with the best information available at this time. Budget Committee Approval – Tax Rate Levy or Amount of Total Tax The current law allows taxing Districts to approve the budget by an amount or permanent rate. If an amount is certified, that is the maximum the District can collect. If new growth exceeds expectations and the permanent rate generates more than expected, the District could not collect it. By certifying the rate, the District will be allowed to collect the total amount generated by the established Assessed Value. It is recommended that the budget committee levy the permanent rate when approving the budget. District Tax Revenue Calculation The Polk SWCD's Permanent Rate is 0.05/ $1000 of Assessed Value in the county. The law allows a maximum of 3% growth in Assessed Value in the county, not including new construction. According to Polk County Assessor, Doug Schmidt, the anticipated growth and new construction for the county is 3.0%. The following method for estimating tax revenues for 2014-2015 budget was used.
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The 2013-14 Assessed Value (AV) 3.0% = projected 2014-15 Assessed Value (AV) This estimate includes the 3.0% increase and anticipated growth. 2013-2014 (AV) Collected for Polk SWCD= $241,017 x 0.03 Less the estimated un-collectable taxes @ 4.0% Total anticipated tax collections in 2013 - 2014 budget
= $ 248,247.51 = $ - 9,930.00 = $ 238,317.51**
**When developing the budget, $241,000 was used for Taxes Necessary to Balance Budget Categories and Detail Sheets The budget is categorized by the General Fund and the Project Fund. The Polk SWCD budget is prepared on eight (8) pages of budget detail sheets provided in this packet. The following is an overview and recommendations for each fund type. THE GENERAL FUND The purpose of the general fund is to account for all activities for general overhead, operations, and certain contracted services of the District. The primary source of revenue (resources) in the general fund comes from specific grants the District receives, an intertransfer from the Project fund to cover grant administration fees, and the rest of the revenue (resources) comes from the District’s permanent taxing authority established by the 2002 tax rate election. Expenditure categories in the general fund include personnel services, materials and services, capital outlay, contingency, transfers, and un-appropriated ending balance. The general fund accounts for many of the normal expenses associated with operating the Polk SWCD’s program, and those activities not associated with a special grant commitment.
General Fund Resources
The projected cash carry-over in the General Fund is estimated at $243,366.00. The carry-over represents funds dedicated as the 20132014 un-appropriated ending balance; unexpended funds budgeted for contingency, money allocated to specific grants, and carry-over for beginning operations. The Board also chooses to be very conservative for beginning operations instead of taking out a loan to get through the first months without the revenue. Interest is derived from investing received resources in a savings account until needed. The Interfund Transfer, line 5, are fees paid to the Polk SWCD for being fiscal agent for grants. These Project administration fees (fiscal fees) cover aspects of management associated with conducting grant-funded work. Generally, it covers the fiscal management of grant funding such as billing for all services rendered and management of the SWCD checking account. As fiscal agent, the Polk SWCD enters into contracts on behalf of the Landowners. Grant funds are tracked and the entire process is audited annually to ensure fiscal responsibility. The District generally receives a 10% fiscal fee or charges for service on the grants. The full fiscal fee is received at the completion of the project. Most projects are for two or three years, although some finish sooner. These fiscal fees are accounted for in the General Fund.
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Contracted services include fees paid to the Polk SWCD to attend workshops or events. The Polk SWCD has an agreement with the Rickreall Watershed Council for Coordinator services. Charges for Services are charges for technical service in some grants for other agencies. Additional revenue comes from the Polk SWCD Annual Plant Sale, donations, and Misc. Misc. resources include Claudia rentals, rebates, and refunds. Provision is made for a loan, if needed, to assist with operations until tax revenue is realized in December. General fund Grants:
ODA Administrative Fund – recognizes the need for basic administrative support for the function of Polk SWCD.
Work Plan and budget are required with the application
A District Annual
General Fund Requirements Personnel Services
The budgeted staffing level for the General fund is at one (1) full time equivalent (FTE) and one (1) 0.5 FTE position. This is down from seven (7) FTE, and two (2)0.5 FTE, in previous years. Three (3) FTE and one (1) 0.5 FTE positions have been moved to our Project fund. Our staffing levels have needed to be reduced from past years due to budgetary restraints. The District would be facing a large deficit if more positions were maintained. We will be closely monitoring staff hours and related expenses this year as we work to rebuild our programming levels. We are not anticipating hiring any temporary staff this year and current staffing levels may be re-visited and adjusted later in the year. Over the course of this fiscal year the District Manager and the technical staff will work diligently to rebuild our programming and partnerships. PERS rates should remain stable. Our current health insurance contract with Regence is due to expire in December of 2014, so the District has decided to renew early, in June of 2014, so that we can lock in current rates until fiscal year 2015-2016.
Materials and Services
Budget levels have been gone over with a fine toothed comb and made to reflect only the most necessary expenses for the year. Bookkeeping fees should be lower this year as we found a new payroll administrator with lower rates. The Board of Directors outsources the payroll to maintain internal control. All other bookkeeping will be performed by the District Manager, and a member of the fiscal committee. Internal controls will be monitored to insure proper levels of separation. Monthly and Annual Meetings are supported by our ODA Administration grant. The Polk SWCD does rely on some personal auto use by staff. Mileage is reimbursed at the state rate. The District Manager highly encourages the use of the District truck, and the NRCS has authorized two of the District’s Conservationists to use NRCS state vehicles when they go to their trainings for their conservation planner course. The Polk SWCD sublets office space from the NRCS. The office is undergoing some mandatory upgrades and thus our rent has increased by about $6,000 a year. The NRCS worked closely with the District to keep remodeling costs as low as possible. We have kept line items for office equipment repair and purchase, as these items tend to need constant repair and upgrades. Staff/Director Page 4 of 6
training is being kept to a minimum this year but will still include the OACD/Connect Conference’s and some other professional training.
Capital Outlay
The District has adopted a policy to consider expenditures over $5,000 as capital expenditures. We are not expecting to make these types of purchases this year, but if necessary we can use the contingency appropriation to cover possible costs.
Other Requirements
Debt service, building reserve fund, and contingencies are included to acknowledge these budget items. The transfer to the new Project fund reflects funds needed this year to supplement staff salaries in that fund. The Unappropriated Ending Fund balance is the allocated carryover of funds for meeting next year’s costs until the tax revenue is available and to avoid taking out a loan.
The Project Fund
The project fund was created this year so that the District can begin to delineate costs associated with office and general SWCD program administration, and resources and costs associated with natural resource conservation technical projects. The goal in the future is to have a majority of this fund supported by outside project funding and not by our tax base.
Project Fund Resources
Resources for projects can come from funds given directly to the Polk SWCD for specific purposes designed to help the SWCD enact specific soil and water conservation projects, such as grant agreement funds from Foundations, State, Federal, or non-profit agencies or entities. Some of these funds are currently allocated from legislative appropriations either directly to the ODA or from OWEB and passed through ODA. The Oregon Soil and Water Conservation Commission annually make recommendations on the allocation of these funds to the Polk SWCD to the ODA Director. Polk SWCD Project Grants include: ODA Technical Assistance Fund/Local Management Agency– Polk SWCD participates in the implementation of both the Yamhill and Mid-Willamette Ag Water Quality Management Area Plans. Implementation involves promotion of voluntary compliance, planning assistance, technical assistance and the first level of enforcement. Funds supply technical assistance including developing management plans and financial assistance information. OWEB Restoration Grants- Smithfield Oak Restoration- this new project will work to restore open oak woodland and savanna habitat structure by removing non-native invasive species, and enhancing understory herbaceous plant communities. 3 year commitment. A separate proposal for a LWD restoration grant will be submitted in the November 2014 grant cycle. Soil Risk Management Grant- Working with Benton SWCD to host Soil Health Workshops (Proposed) NRCS WHIP Grants – Farmland Restoration/ Healthy Forest Reserves Page 5 of 6
(Proposed) City of Dallas -WATERS – water quality partnership with DEQ, City of Dallas, others (Proposed) BLM - Large Woody Placement Grant – partners include RWC, Hancock, and City of Dallas (Proposed) OWEB Water Quality Grants- one proposal with partners will be submitted for the Oct. grant cycle (Proposed)Special District Association Organization – This grant is for safety equipment. Past grants have paid for emergency radios using OR Department of Forestry frequency, a doorbell chime, and the front door crash bar, etc. This year we will be asking for a fire proof box to store backup computer files as well as pertinent paper documents. (Proposed) Education Grants- developing partnerships include the Paul Bunion Foundation, Ag First, Perrydale School, OSU Extension, Luckiamute Valley Charter School, LWC, and Marion SWCD – Salmon Watch (Proposed) OWEB/DEQ Invasive Species Control Grants- in development. These grants are used to inventory, treat, replant, and educate landowners about the infestation of invasive or noxious weeds in Polk County. Other possible grant funded sources: Watershed Council partnerships, ODFW, NFWF, Foundations, Community Funds, and Government entities including other SWCD’s.
Project Fund Requirements Personnel Services
Employees who generally work to meet technical project goals and activities are listed here. Three (3) FTE and one (1) 0.5 FTE positions are in the Project fund, comprised of two (2) Resource Technicians, one (1) Stewardship Forester, and one (1) 0.5 FTE Outreach Coordinator . We will be closely monitoring staff hours and related expenses this year as we work to rebuild our programming levels. We are not anticipating hiring any temporary staff this year and current staffing levels may be re-visited and adjusted later in the year.
Materials and Services
The line items listed in this section are for entity specific materials and services. As our project numbers increase, the complexity of this fund will be adapted to meet the demands of each project and reflect more specific line items pertaining to each project. As an aside, grant makers require their own budgeting formats and reporting procedures, and the project manager (resource technician) tracks this information in detail, along with the SWCD fiscal administrator.
Other Requirements
There is a transfer to the general fund to account for fiscal administrative fees.
CONCLUSION
In developing this budget, the Polk SWCD has tried to respond to the natural resource issues in Polk County. The 2014 – 2015 Budget was based on the Polk SWCD 2014 - 2015 Annual Work Plan. Page 6 of 6