Fiscal Year 2022/2023

Sewer Utility Fund

The Key Largo Wastewater Treatment District (“District”) was formed as an autonomous independent Special District and political body formed in 2002 by the Legislature of the State of Florida by House Bill 471, enacted as Chapter 2002-337, Laws of Florida, for the purpose of carrying out the planning, acquisition, development, operation, and management of a wastewater management system within the District’s boundaries in Key Largo, Monroe County, Florida.

The District operates and maintains a wastewater utility from mile marker 91 to 106 and southern portions of C-905 in North Key Largo. It provides service to approximately 10,500 improved parcels and approximately 10,200 accounts are billed monthly, representing approximately 15,100 EDUs. Operating as an enterprise fund, customer charges and assessments pay for the cost of operations and maintenance, debt service, and administrative costs.

Fund Overview

The District is structured on the basis of one individual enterprise fund. An enterprise fund is established by a government to account for activities similar to private business operations. The intent is that user charges make up for the costs of providing goods or services to the public. Enterprise funds use the accrual basis of accounting. Under this method of accounting revenues are recorded when earned and expenses are recorded when the liability is incurred, regardless of when the cash is received or paid. Also, all assets and liabilities associated with the entity are included on the balance sheet. Generally, accepted accounting principles applicable to enterprise funds are similar to those applicable in the private sector.

Budget Development

The annual budget is considered one of the most important documents adopted by the District’s Board of Commissioners each year. The budget reflects the District’s financial policies for the upcoming year by allocating the sources of funds for District services, and projecting expenditures for those services.

The District is focused on improvements that will continue to supply high quality service to our customers. Staff will continue to focus on the collection and disposal of wastewater in the most effective and efficient methods available. External funding sources, including grants, will continue to be aggressively sought.

Revenue Overview

The FY22-23 projected revenues and other sources of the District are as follows:

FY 2022-23
Budget
% of Total FY 2021-22
Budget
% of Total
Wastewater Service Revenue $7,410,000 29.66% $7,800,000 42.45%
Non Ad Valorem Assessments 3,265,000 13.07% 3,540,865 19.27%
Grant Revenue – Stewardship 6,475,000 25.92% 3,406,300 18.54%
Grant Revenue – ACOE 2,000,000 8.01% 0.00%
Monroe County ILA 2,125,000 8.51% 2,125,000 11.57%
Islamorada ILA Revenue 1,358,000 5.44% 1,365,302 7.43%
SDC Prepayments 150,000 0.60% 100,000 0.54%
Interest Income 175,000 0.70% 36,000 0.20%
Miscellaneous Revenue 50,000 0.20% 0.00%
Planned Use of Repair & Replacement Reserves 1,132,000 4.53% 0.00%
Use of/(Addition to) Reserves 842,792 3.37% 0.00%
$24,982,792 100% $18,373,467 100%

Where the Money Comes From

Wastewater Service Revenue ($7,410,000)

The District’s revenues, charges for wastewater services represent the largest source of budgeted revenues for the District. This revenue is derived by providing sewer collection and treatment services to the public. Users are charged for this service on their monthly water bill from the Florida Keys Aqueduct Authority (“FKAA”). Customers are charged a base service charge and a usage charge, which is based on their monthly water consumption.

Non Ad Valorem Assessments ($3,265,000)

Non ad valorem assessments revenue is the annual assessments of system development charges to customers for providing the sewer infrastructure. Initially, assessments were levied in phases and customers were given the option to prepay the assessment in full, or to have the assessment spread over 20 years as a non ad valorem assessment on their tax bill from Monroe County. The assessment charge is calculated on the number of equivalent dwelling units (“EDU”) for the serviced parcel. An EDU represents the equivalent to a single family unit and is based on 167 gallons per day of potable water usage.

Stewardship Grant Revenue ($6,475,000)

The District was awarded Stewardship funding from the State of Florida. This cost reimbursable grant program will fund several of the District’s capital projects.

ACOE Grant Revenue ($2,000,000)

The District anticipates that it will receive $2,000,000 from the Federal Government through the Army Corps of Engineers for the reimbursement of capital project expenditures that are included in the project cooperation agreement (PCA).

Monroe County ILA ($2,125,000)

The District successfully negotiated an interlocal agreement with Monroe County to exchange the $17,000,000 of Stan Mayfield funding that the State allocated to the District in FY13/14. In FY15/16 the District exchanged $1,250,000 of Stewardship funding in return for annual payments from the County of funds that have an unrestricted use.

Stan Mayfield funding exchange $ 17,000,000
Stewardship Bill Funding Exchange 1,250,000
Payments received from Monroe County (11,500,000)
Balance due Monroe County $6,750,000
Expected Mayfield $17M &
Stewardship
2023 $2,125,000
2024 2,125,000
2025 2,125,000
2026 125,000
2027 125,000
2028 125,000
$6,750,000

Islamorada Wastewater Service & Insurance Surcharge Revenue ($1,358,000)

The District and Islamorada, Village of Islands (“Village”) have an interlocal agreement for the use of 32% of the District’s plant capacity. The Village is charged a base rate of $4.65 per 1,000 gallon of influent, not including any rate surcharges, at the District’s advanced wastewater treatment plant. That rate is calculated at $4.30 for treatment cost and $0.35 for repair and replacement funding. The District began receiving flows from the Village on June 16, 2014.

The Interlocal agreement with the Village requires them to pay 32% of the insurance expense for the advanced treatment plant. The District invoices the Village annually for this surcharge.

System Development Charge Advance Payoff Revenue ($150,000)

Customers have the option to pay off their system development charge at any time. Although substantially all of the serviced parcels have been assessed, customers may choose to either pay down or pay off their assessment in advance.

Interest Income ($175,000)

The District is projected to earn interest income in FY22/23 from its interest bearing accounts and investing activities.

Miscellaneous Income ($50,000)

The District is projected to earn miscellaneous income in FY22/23 from various sources.

Expenditure Overview

The total projected appropriations of this budget are $24,982,792. The following chart shows a summary of the budgeted appropriations by category:

FY 2022-23
Budget
% of Total FY 2021-22
Budget
% of Total
Personnel Services $3,354,120 13.43% $2,914,376 15.86%
Operating Expenses 5,222,003 20.90% 4,515,212 24.57%
Capital Outlay 12,587,708 50.39% 4,400,193 23.95%
Transfers 2,260,000 9.05% 2,260,000 12.30%
Debt Service 1,558,961 6.24% 4,283,686 23.31%
$24,982,792 100% $18,373,467 100%

Where the Money Goes

Personnel Services ($3,354,120)

Personnel Services includes all salaries and benefits (including workers compensation insurance) for District employees.

Department FY22-23
FTE
FY22-23
Budget
FY21-22
FTE
FY21-22
Budget
Commissioners NA $62,433 NA $56,449
Administrative 6 648,764 6 609,518
Plant 6 578,777 6.5 519,795
Field 14 1,350,645 13 1,176,340
Facilities 7 713,501 6 552,247
Total 33 $3,354,120 31.5 $2,914,376

Operating Expenses ($5,222,003)

FY22/23 will be the thirteenth year of full operations.

Capital Outlay ($12,587,708)

The FY22/23 budget includes appropriations for capital outlay. The following chart provides the details on the specific capital outlay items requested.

Capital Outlay Items

Administrative
IT Equipment 3,000
3,000
Plant
IT Equipment 3,000
3,000
Field
IT Equipment 3,000
3,000
Facilities
IT Equipment 3,000
3,000
Capital Outlay Items ($12,587,708) – continued
Capital Improvements (includes Engineering Design & CEI)
Vac System Monitoring 3,574,000
Effluent Filtration Upgrade 1,652,250
Headworks & Screening Upgrades 915,000
Service Connection Revisions 860,000
VPS Piping Modification 838,000
Vac Pit Valve Rebuild 822,000
Piping & Valve Upgrades @ Vac Stations 425,000
Lift Station Replacement KL Trailer Park 365,000
Vac Stations Lightning Protection 270,000
Power Conditioning @ WWTP/ Electrical Upgrades 235,000
Ventilation Upgrades @ Vac Stations 199,000
SBR & DCU PLC Upgrades (SCADA) 185,000
Influent EQ Tank 120,000
SBR Blower Spare Parts 105,000
Vac I Driveways (2) 105,000
Soft Start Upgrade Vac Station to VFD 100,000
Direct Potable Reuse Demonstration Preliminary Work 87,500
Effluent injection Pump Repair 50,000
Cameras (Plant, Admin, Field) 42,000
Cabling Plant & Vac Stations 36,000
Plant Combined Record Drawings 35,000
Sewage Pump Replacement/Piping Modificatio 30,000
Tanks Coating 25,500
SCADA Upgrade Software 25,258
Preliminary Design and Budgeting 25,000
GIS GPS Equipment 25,000
Replacement Stainless Steal Air Flex Joints 22,000
Spare Flow Meters for Plant 21,000
Digester Blower VFD 20,000
Digester Motive Pump VFD 20,000
Vac Pump Rebuild & Spares 20,000
Lift Station Spare Pumps 20,000
Inspection Camera 17,000
Spare Injection Well Pump VFD 15,000
Spare Booster Pump VFD 11,000
Grinder Pumps (3) 8,200
Spare Dump Pad Pump 7,000
$ 12,575,708
Total Capital Outlay $ 12,575,708

These projects, while budgeted, are still subject to board approval

Debt Service ($1,558,961)

The FY22/23 budget includes appropriations for debt service on the District’s one State Revolving Fund (SRF) loan. The SRF loan is paid semi-annually.

Debt Obligation Loan Balance @
9/30/22
Required Annual
Debt Service
Loan Balance @
9/30/23
SRF Loan 46401P $9,922,146 $1,558,961 $8,363,185

Transfers ($2,260,000)

The FY22/23 budget includes transfers to the District’s following reserve accounts: repair and replacement, self-insurance and insurance deductible. $1,200,000 is projected to be transferred to the reserve for future repairs and replacements. The ILA with the Village also requires that $0.35 of the $4.65 flow charge be set aside for future repairs and replacements. The District is also going to reserve $1,060,000 for insurance deductibles and for self-insurance. FY22/23 is the fifth year a contribution will be made to the self insurance & insurance deductible fund. At the end of FY22/23, the District expects to have $7,693,450 in funding designated for repairs and replacements, $3,420,000 for insurance deductibles and self-insurance.

Budgeted Transfer to R&R fund $1,200,000
$0.35 of Islamorada Flow Charge (100,055)
Total Required Transfer to R&R fund (100,055)
Amount in EXCESS of minimum requirement $1,099,945

Excess reserve funding is required to meet the actual reserve and replacement funding necessary based on the engineering estimates. These reserve categories are important due to the District’s unique island location. The District’s goal is to maintain twelve months of operating expenses in unassigned cash as a reserve balance.

Unassigned Cash Balance as of Sept 30, 2021 $12,579,364
Projected Revenues & Planned Used of Reserves FY21-22 $17,352,442
Projected Expenditures & Reserve Transfers FY21-22 (17,350,729)
Projected Revenues in excess of Expenditures & Reserve Transfers FY21-22 1,713
Expected Unassigned Cash Balance as of Sept 30, 2022 12,581,077
Budgeted Revenues & Planned Use of Reserves FY22‐23 $24,139,634
Budgeted Expenditures & Reserve Transfers FY22‐23 (24,982,426)
Budgeted Revenues in excess of Expenditures & Reserve Transfers FY22‐23 (842,792)
Expected Unassigned Cash Balance as of Sept 30, 2023 $11,738,285