Topic: FWD? (Read 472 times)

Boomer · « **on:** October 13, 2009, 04:06:35 pm »

OK Monthly we're paying for water and sewage thru sevren trent. Why are we paying additional taxes to FWD for the same services? Why do I have to pay them an aditional $168.00 a month when they arent doing any services in WMF?

Laura5871 · « **Reply #1 on:** October 13, 2009, 04:14:54 pm »

At the very basic level, you're paying for USAGE on a monthly basis, whereas you're paying for the cost of infrastructure, maintenance and operation via your property taxes. It's exactly what you'd be paying if you lived in the City of Forney. ETA: It's exactly the type of expenses you'd be paying if you lived in the City...not the same $ amounts.

I think you're in 1-C (Phase 2 and 3), but 1-B (Phase 1) is having a town hall meeting to discuss our revenue, expenses and projected budget shortfall tonight at the Forney Sub-courthouse. Our board can't speak for your board, and we have two separate budgets. But the responsibilities and types of expenses are exactly the same. Additionally, our consultants are the same for 1-B and 1-C so they could answer any questions that you have.

Our meeting is at 7pm. You're more than welcome to attend.

I'm sure Josh will chime in with more thoughts.

outspoken · « **Reply #2 on:** October 13, 2009, 09:39:00 pm »

http://twentypeacefulminutes.com/forums/windmill-farms/when-was-the-vote/

Josh posted information in this other thread recently about the Fresh Water Supply District.

Josh · « **Reply #3 on:** October 14, 2009, 07:18:21 pm »

Quote from: Boomer on October 13, 2009, 04:06:35 pm

OK Monthly we're paying for water and sewage thru sevren trent. Why are we paying additional taxes to FWD for the same services? Why do I have to pay them an aditional $168.00 a month when they arent doing any services in WMF?

Check the thread that OS posted a link to - the same info there applies here...basically - if you're interested in seeing our budget or our audit report, let me know, and you're more than welcome to (openly invited, and at this point, I'm just about begging you to) attend our meetings and run for a seat on the Board of Directors in May.

Technically, you're not paying STS for water and sewage - STS sends out the bills, but the payments are deposited into a bank account controlled by KCFWSD 1-C.

As explained in the thread OS linked to above, a vast majority of the property taxes that you pay to KCFWSD 1-C are going to our debt service fund, to pay off bonds that were issued to pay for the infrastructure in the district relating to water, sewer and roads.

State law and TCEQ regulations strictly limit what a Fresh Water Supply District can use their funds for - for instance, that's why despite my best attempts, it looks like the FWSD's can't put in additional street lights, but we were able to put in the stop sign to make the 4-way stop on Iron Gate towards the new elementary school. Other districts, such as MUDs, can use their money for security services, but in most cases, FWSD's can't. Each year, an independent, third-party accountant/auditor conducts a thorough audit of our books to ensure that we're complying with the law regarding the use of the funds we receive.

Also, while it's not substitute for actually looking at a copy of the audit report or budget yourself, let me summarize our current fiscal year budget for you...this is our general fund budget - this DOES NOT include the debt service portion of your property taxes (revenue) or the debt service payments (expenses). We do have a debt service budget as well, if anyone's interested. Also, while I'm doing my best to type this correctly, there may be typos, so don't consider this an official KCFWSD 1-C document in any way. A simple call to our book keeper or legal counsel should get you an official copy of the budget, if you're interested.

KCFWSD 1-C General Fund Budget...
Annual Property Tax Revenue: 112,139.50
Water Revenue (excl fees listed below): 949,901
Water - Late Fees: 24,000
Water - Misc Income: 46,000
Water - Reconnect Fees: 11,400
Water - Transfer Fees: 1,020
Gross Permit Income: 0
Easement/Franchise Fees: 0
Investment Income: 1,505.87
Interet Income: 0.00

Total Income: 1,145,966.37

Costs of Goods Sold
Bad Debt - Water Revenue Writeoffs - 0
Permit expense - 0
Cost-Sharing/Operations to KCFWSD 1-A - 569,395.65
Water Expense - 118,800
Trash Pickup Expense - 143,100

Total COGS: 831,295.65

Expenses
Accounting - 18,000
Auditing - 15,000
Bank Charges - 360
Delivery/Courier Services - 30
Directors Fees & Expenses - 12,600
Election Expenses - 2,500
Engineering - 6,000
Insurance - 5,000
Legal - 72,000
Meeting Expenses - 1,200
Office Supplies - 0
Outside Services - 0
Professional Training - 1,050
Repairs & Maintenance - 24,000

Total Expenses (Excluding COGS): 157,740

Income less COGS and expenses leaves 156,930.72 at the end of the year, if we hit our budget right on. As our infrastructure ages and, at the same time, collections become so...questionable, we've been advised to maintain an operating reserve of one year of expenses - that's what that 156,930.72 is set aside for. It also allows us a bit of a cushion in the budget in case of unexpected damage/repairs - for instance, we've had both a water main break and a sewer main break in the past couple of months, one of which involved having to dig up and replace quite a bit of sidewalk and driveway area (my thanks to the very understanding homeowners that were effected by that situation!)

That also protects us against bad debt (unfortunately, as the economy has tanked, we've seen more and more people go past due on their water bills - not to mention past due bills of homes that then go into foreclosure) and fraud (there's been a least one case recently that we've had to refer to our attorney and possibly the sheriff's office that involved tampering with district property and the water supply system to avoid paying for water that was being used).

If you have any more questions, let me know or, please, attend a meeting!

Josh · « **Reply #4 on:** October 14, 2009, 07:37:41 pm »

Oh, and I almost forgot - as you can see above, our biggest budgeted expense is the 569,395.65 that goes to KCFWSD 1-A under our cost sharing agreement.

Windmill Farms has 4 FWSD's - 1-A thru 1-D. 1-A operates the water and sewer systems for the benefit of the other districts. 1-B covers Phase 1 and 1-C covers Phases 2 & 3. 1-D doesn't do much, just yet, as it's the district for a few future phases that are as of yet undeveloped (although I do believe the new elementary school is located within 1-D, so they do have at least 1 customer).

When the FWSD's were first setup, there was no clear agreement between the districts concerning who paid for what - money was transferred between the districts and it apparently gave the auditor quite a few headaches. When the new developer switched the FWSD's to a new law firm, book keeper, etc., they worked with the auditor to setup a more...transparent...way of sharing the costs between the districts.

The 4 districts have entered into an agreement that allocates the costs that 1-A incurs in operating our water and sewer facilities between the various districts based on the number of current and potential connections in each district.

As the largest district, 1-C pays the most towards 1-A's expenses. Here's the current fiscal year budget for 1-A, so you can see where those cost sharing dollars are going...and just how expensive it is to operate our water and sewer plants in Windmill Farms.

Income
KCFWSD 1-B Cost Sharing: 354,365.36
KCFWSD 1-C Cost Sharing: 569,395.65
KCFWSD 1-D Cost Sharing: 38,555.07

Cost of Goods Sold
Wastewater
Water Plant Lease 169,200
Water Plant - R&M 120,000
Sewer Plant/Sludge Haul 60,000
Sewer Plant-Chemicals 48,000
Wastewater Treatment Plant Electric 90,000
Telecomm 1,800
TCEQ Licenses & Permits 0.00
Total Wastewater 489,000
Water
Water - City of Forney 330,616.08
Water Plant - Repairs & Maint 21,600
Water Plant Electric 28,800
Utilities - CoServ 1,500
Total Water 382,516.08
Operator's Expenses
Basic Fees - 36,000
Total Operator's Expenses 36,000

Total COGS 907,517.08

Expenses
Repairs & Maintenance 0
Accounting 7,800
Auditing 11,000
Bank Charges 0
Delivery/Courier Services 0
Legal 36,000
Office Suplies 0

Total Expenses (Not including COGS) 54,800

The goal under the profit sharing agreement is for KCFWSD 1-A to operate at no net loss/gain, so this budget balances income versus expenses to leave exactly $0 at the end of the year.

FYI, KCFWSD 1-A engaged a company that specializes in negotiating the best electric rates for commercial/industrial firms (if I'm not mistaken, the principal in the company lives in Windmill Farms, so he has a vested interest in getting us the best rate) to find the best rate possible for the wastewater treatment plant electric service (the water plant is located within the FEC service area, so its serviced by the coop). They entered into a multi-year contract with StarTex a few years back and locked in a great rate that really saved us some money in the summer of '08, especially.

Boomer · « **Reply #5 on:** October 17, 2009, 11:30:15 am »

so they're collecting way more in taxes then they're spending?

outspoken · « **Reply #6 on:** October 17, 2009, 02:18:37 pm »

Quote from: Boomer on October 17, 2009, 11:30:15 am

so they're collecting way more in taxes then they're spending?

No. . . . they are required to have a one year surplus. It's called being financially responsible. . . . so when something breaks they can fix it because they have money. . . then that way you don't have to live out of water jugs.

The first year we lived here a boil water notice came about every three months. . . . and it was the ENTIRE community that would be on a boil notice. . . . that was absolutely NO FUN!

Josh · « **Reply #7 on:** October 17, 2009, 05:18:50 pm »

If you read the other thread that OS linked to, Boomer, you'll see that this year, 97% of the taxes we collect, unfortunately, go to our debt service budget. Only 3% of the taxes go to operations. The budget figures I posted above were for operations, not debt service. We review the operations budget monthly, so I had those figures handy. Since our debt service payments are known, we don't review that budget as often. I can get it for you if you're interested, but it's basically income from tax collections and expenses for bond payments.

The budget I posted above was from before we adjusted the operations tax rate down, but under that budget, we estimated $120,000 total tax revenue for operations in the year; we estimated a total income for operations of nearly 1.2 million. So, no, we're not collecting more taxes than we're spending.

Our debt service tax rate is set on the advice of our financial adviser; it's a simple calculation, actually. You add up all the bond payments the district has to make in the next year to figure out the total debt service in the year. You then take the total taxable value of all the property in the district, adjust for the people who don't pay their taxes on time and from that number you get the debt service tax rate we need to meet our debt service obligations for the year.

Basically, the debt service tax rate is set to equal exactly what we need to collect to meet our debt service obligations. So, again there, we're not collecting 'way more in taxes than we're spending'.

Twenty Peaceful Minutes

Author Topic: FWD? (Read 472 times)

Boomer

FWD?

Laura5871

Re: FWD?

outspoken

Re: FWD?

Josh

Re: FWD?

Josh

Re: FWD?

Boomer

Re: FWD?

outspoken

Re: FWD?

Josh

Re: FWD?