580 Main Street Suite A ~ Dallas, OR 97338 ~ 503-623-9680, ext. 5
POLK SWCD BUDGET MESSAGE FOR 2015 -2016 BUDGET May 6, 2015 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 2015 - 2016. 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 2015 - 2016 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, collaborating partnerships, and tax revenues. The Polk SWCD overall budget for the 2015 - 2016 fiscal year is $590,312.00. 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 SWCD’s financial position. The budget is then published in the newspaper and presented for adoption at the District budget hearing June 10, 2015. The following budget message, worksheets, and supporting data are provided to the Budget Committee and public for their review; please do not confer with each other before the first budget committee meeting on May, 6 2015. The budget includes, as part of the overall Conservation Organizational Unit, a General fund, a Project fund, and a special Capital Project fund. All funds have Resources and Requirements sections that must balance and include a variety of categories and line items specific to the needs of each fund. Sincerely, Karin Stutzman (formerly Nembach) District Manager and Budget Officer Page 1 of 7
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. Technical Assistance: 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. Education and Outreach: to provide education and outreach related to natural resource issues within Polk County. 3. District Operations: administrative 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 obtaining memorandums of understanding (MOUs) or Intergovernmental Agreements (IGAs) between entities that contract with us to perform certain work for agreed upon payments. When we have them, the District is paid to manage grants for landowners in the form of OWEB small grants and larger, longer term OWEB Restoration grants. We are now also capable of providing assistance to landowners through our Natural Resource Conservation Service (NRCS) certified planning staff, utilizing a variety of programs offered through the NRCS, such as the new Regional Conservation Partnership Program (RCPP) which delivers competitive financial incentives thru the EQUIP program to landowners for meeting certain restoration practices to restore oak savanna and upland prairie ecosystems. The District has an MOU with Yamhill SWCD to perform certain work in the RCPP and will be paid for that work. CREP is now being offered in our county again and we hope to have more funding available next fiscal year to support a CREP technician. Lastly, we are beginning to collect fees for services through our in-house, licensed, public pesticide applicator, and forest management planner, all of which contribute sources of income to the District other than levied tax revenues. Additional resources include: contributions, donations, and other fund raising activities such as our annual plant sale. All these various revenue sources pay for staff, materials, equipment, and project administration. 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 the time the budget is created. 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 Page 2 of 7
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 3.75%. The following method for estimating tax revenues for 2015-2016 budgets was used. The 2014-15 Assessed Value (AV) $5,000,029,609 ** X 1.0375% = $5,187,530,719 estimated 2015-16 Assessed Value. This estimate includes the 3.75% increase and anticipated growth. 2015-2016 Estimated Assessed Value: $5,187,530,719 X $.00005 Permanent Tax Rate = $259,376.00 Estimated 2015-2016 Taxes 2015-2016 Estimated Taxes Less Estimated Un-Collected Taxes @ 4% Total Anticipated Tax Collection 2015-2016
$259,376 $ - 10,375 $249,001
** 2014-2015 Assessed Value is after Urban Renewal Value removed. **When developing the budget, $249,001 was used for Taxes Estimated to be Received Budget Categories and Detail Sheets The budget is categorized by a General Fund, a Project Fund, and a special Capital Project Fund. The Polk SWCD budget is prepared on seven (7) pages of budget detail sheets provided in this packet. The following is an overview and recommendations for each fund type. Description of the Funds 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. There are two account summaries in each fund, the Resources summary and the Requirements summary.
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Resources
The primary sources of revenue (RESOURCES, page 1) in the General Fund come from an ODA Administrative Grant, certain contracted services for in-house personnel work, Claudia rentals, plant sale revenue, and from an MOU with the Rickreall Watershed Council for their council coordinator. The District receives an inter-transfer from the Project Fund to cover grant administration fees, and the rest of the revenue comes from the District’s permanent taxing authority established by the 2002 tax rate election. Resources line item description The projected beginning fund balance (line 1 in Resources) in the General Fund is estimated at $230,331.00. The beginning fund balance represents funds dedicated as the 2014-2015 un-appropriated ending balance (The Board chooses to be very conservative when entering a new fiscal year, and the un-appropriated ending balance from the prior fiscal year is used to begin the new year instead of taking out a loan to get through the first months), unexpended funds budgeted for contingency, and carry over money allocated to specific grants. Previously levied taxes (line 2) are trailing taxes from previous years that trickle in as they are paid by landowners, interest (line 3) is derived from investing some of our resources in a savings account until needed, and inter fund transfers (line 5) are fees paid (generally about 10%-15%) to the Polk SWCD for being the fiscal agent for the administration of grants (required paperwork and billing). Most projects are for two or three years, although some can be five years long.
Requirements
The General Fund requirements (Requirements, page 2) account for many of the normal expenses associated with operating the Polk SWCD’s program, and those activities not associated with a specific grant commitment. The expenditures that make up the General Fund are comprised of: personnel services, materials and services, contingency, transfers, reserve for future expenditure, and an unappropriated ending fund balance which cannot be used until the next fiscal year as described previously. Requirements line item description For the Personnel Services category (line 1), the budgeted staff level is (1) full time equivalent (1.0 FTE) Manager, and (1) half time (0.5 FTE) Office Administrator position. Our staffing levels have been reduced from past years due to budgetary restraints. Over the course of this fiscal year the District Manager and staff will continue to work diligently to build on our newly created programming and budding partnerships to be able to maintain our current levels of funding, and to find opportunities to increase funding. PERS rates should remain stable. Our health insurance rates should also remain stable. In the Materials and Services category (line 19) bookkeeping is performed by the District Manager, and is regularly audited by a member of the fiscal committee. Internal controls are monitored to insure proper levels of separation. Payroll services are outsourced. 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 DC has authorized our two District Conservationists to use NRCS state vehicles when they go on field visits that pertain to NRCS sponsored programming. The District reduced its storage units down from two to one, reducing unnecessary costs. The Polk SWCD sublets office space from the NRCS, although no current contract is in place and we are following our 2012 contract as a month to month contract Page 4 of 7
until a new one is decided upon. As the Budget Officer, I am not anticipating any new office equipment to need to be purchased this year that is more than $5,000. Line items in this category as a whole are budgeted appropriately for the year, based on last year’s spending trends. The Contingencies category (line 69) is used for unforeseen costs that may arise during the fiscal year. Transfers to other funds (lines 71 and 73) and total transfers and expenditures (line 77 and 79) seem self-explanatory. The Project Fund The project fund was created so that the District can delineate expenditures associated with office and general SWCD program administration; and resources and requirements associated with SWCD educational and technical projects. The goal with this fund is to have most of the expenditures here supported by outside project funding and not by our tax base, although other funding sources can vary greatly from year to year and are unpredictable.
Resources (beginning on line 2)
Resources for projects can come from funds given directly to the Polk SWCD for specific projects, such as grant agreement funds from private foundations, state, federal, or non-profit agencies or entities; or intergovernmental agreements (IGAs), for contract writing or resource conservation planning. Polk SWCD Project Grants include: (Proposed) OWEB Water Quality Monitoring Grant- continued monitoring and collection of water samples from specific collection points from different streams in the county; designed to create a history of water quality characteristics to show deterioration or improvement over a good number of years. (Proposed) ODA (OSWB) Weed Grant- to help provide education regarding invasive plant species and methods of control. ODA Technical Assistance (ODA SOW)– 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. This is a biennial agreement (2015-2017). OWEB Restoration Grants- Smithfield Oak Restoration- this is the second year of a project that works to restore open oak woodland and savanna habitat structure by removing non-native invasive species, thinning of the woodlot, and enhancing understory herbaceous plant communities. We also have a new proposal in for a large woody debris (LWD) restoration grant in the Upper Rickreall Creek watershed that is awaiting award decision in the November 2015 grant cycle. (Proposed) OWEB Small Grants- with landowner participation as match, these grants are used to fund smaller projects less than $10k; like heavy use area platforms, manure storage facilities, or raptor perches in a vineyard. Bureau of Land Management (BLM) IGA- these are funds for (materials only) to implement on the ground forest management related projects. Page 5 of 7
Oregon Dept. of Forestry (ODF)- grant to fund a study of miccorizal inoculation of conifer root systems before planting, and how it may or may not influence growth. (Proposed) DEQ Groundwater Sourced Drinking Water – outreach over a two year period providing landowners with valuable information regarding raised levels of Nitrate in their groundwater drinking sources and how to prevent current or future contamination. Early Detection and Rapid response (EDRR) – district funded- is used to wipe out newly detected noxious invasive plant species before they get established (like garlic mustard or yellow flag iris). NRCS – (IGA) with Yamhill SWCD for the EQUIP funded Oak Savannah restoration (RCPP), funding should increase next fiscal year. (Proposed) NRCS – CIG grant – to develop more efficient irrigation systems or practical pest-management for geese in commercial farm fields. Other possible funding sources: Watershed Council partnerships, ODFW, NFWF, Foundations, Community Funds, and Government entities including other SWCDs.
Requirements (beginning on line 24) Personnel Services category
Employees who generally work to meet educational or technical project goals and activities are listed here. Personnel in this category are comprised of one and a half (1.5) FTE Resource Technicians, one (.75) FTE Stewardship Forester, and two (0.5) FTE Youth/Community Outreach Coordinators.
Materials and Services category (line 38)
The line items listed in this section are for project specific materials and services. As our project numbers increase, the complexity of this fund may 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 and bookkeeper) track this information in detail outside of our general budget descriptions.
Reserved for Future Expenditures (line 63) - grant funds that will be used in future years Transfer to General Fund (line 64) to the District for fiscal administrative fees. The Capital Project Fund (a temporary Special Fund) This fund is temporary and is being used as a placeholder for funds the District needs to close a grant funded conservation easement. The District has applied for a grant to purchase land that a landowner would like to place in perpetual conservation. The resources will Page 6 of 7
come from our General Fund, and expenditures are itemized under Materials and Services. When the transaction closes during 2016, the monies will be reimbursed to the District.
CONCLUSION
In developing this budget, the Polk SWCD is working to respond to the natural resource issues in Polk County. The 2015 – 2016 Budget was based on the Polk SWCD 2015 - 2016 Annual Work Plan.
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