Wasatch Energy Systems, operator of the Davis/Morgan county burn plant and landfill, is planning for the worst in its new 1998-99 budget - a $1.7 million loss in steam sales.
However, it's using reserves and holding the line on expenses to not increase fees for either residents or business customers in its $17.4 million budget, up 2.5 percent over last year.Hill Air Force Base is currently renegotiating its steam-sales contract and claiming it could generate steam much cheaper than the burn plant does. Thus, district officials are using a worst-case scenario - a 67 percent decrease in steam-sales revenue - in the new budget.
The district is transferring $1.8 million from its reserve fund to make up the shortfall.
Wasatch will approve its new budget at a public hearing set for 5 p.m. Wednesday, June 3, in Room 230 of the Davis County Courthouse, 28 E. State St.
District executive director LeGrand Bitter said there hasn't been a tipping fee increase at the plant for several years now, and he's not anticipating one for at least another few years - if ever.
He hopes Hill and Wasatch will reach an agreement on a new steam contact later this month.
The new budget's steam revenues are based on the worst case of Hill only continuing to purchase steam until November - when its current contact expires. Then, the steam revenue planned on for the rest of the fiscal year would be zero.
"It's a worst-case proposal," Bitter said, explaining he's still hopeful a new contract can be reached.
Bitter said the $1.8 million transfer from reserves will still leave the district with more than $5 million in reserves.
If Hill doesn't renew its steam sales contract, the 1999-2000 budget would also have to be balanced with reserve funds or a fee increase.
Payroll for the district will total $3.5 million, an increase of $237,000 or 7.3 percent over the current budget year. That includes a 5 percent wage increase for the 58 employees and covers increases in health and dental insurance.
The district has come under fire in recent years because of its supposedly extravagant payroll, where the average employee salary has been reported at almost $60,000.
However, Bitter said that figure represents not only all employee benefits, but also temporary labor costs as well. By adjusting salaries for those two factors, the average annual payroll for each district employee is $34,900.
A sidelight to the budget also examined the long-term costs of closing the burn plant and using the existing landfill or of exporting district waste.
Budget: Wasatch Energy
Total budget: $17.4 million
Total budget: $16.5 million
Where it comes from:
Household container fee $6.4 million
Last year: $6.1 million
Commercial container fee $3.1 million
Last year: $3 million
Tipping fees $3 million
Last year: $2.7 million
Steam sales $832,000
Last year: $2.4 million
Interest income $1.1 million
Last year: $1.1 million
Reserve transfer $1.8 million
Last year: $0
Other revenue $1.1 million
Last year: $1.2 million
Where it goes:
Payroll $3.5 million
Last year: $3.2 million
Supplies $1.1 million
Last year: $900,000
Maintenance $1.7 million
Last year: $1.7 million
Bond interest $2.6 million
Last year: $2.8 million
Bond funding $2.2 million
Last year: $2 million
Capital projects $1.9 million
Last year: $4 million
Other $4.1 million
Last year: $1.9 million