LAKE CONROE DIVISION
December 20, 2011
IntroductionAn SJRA Board of Directors approved revision to the Lake Conroe Division fee structure became effective September 1, 2010.
This presentation addresses the following: Services provided by the SJRA Lake Conroe
Division and support staff (27 slides) Chronology of Events (3 slides) Source of revenue to fund those services (4
slides) Cost of those services (13 slides) Closing (2 slides)
SJRA Lake Division Services
Operations Maintenance and Repair Water Quality Invasive Species Management Safety Regulation Enforcement Residential/Commercial Licensing
Lake Conroe
• 444 Sq Mile Watershed
• 20,985 Surface Acres Water at Full Pool
• 159 Miles of Shoreline
• 11,350 Feet Long High Hazard Dam
• 3652 Permitted Docks
• 1855+ Permitted OSSFs
• 7 Major Marinas
Service Outlet
Service Outlet Pond
GateStructure
Earthen Dam
Earthen Dam
Lake Conroe Dam
Normal DailyOperations Facility/site surveillance Lake level, evaporation and
rainfall monitoring and recording Watershed conditions monitoring Piezometer and relief well monitoring
and recording Public Awareness
Emergency Operations
Hurricane Ike
1998 Flood
Hurricane Rita
Maintenance and Repair
Water Quality Clean Rivers Program Participation Onsite Sanitary Sewage Facility (OSSF)
Program Administration Marine Sanitation Certification Program Spill Mitigation & Emergency Response Water Sampling Watershed Mapping
OSSF Program• Administer
TCEQ Regs
• 2075’ from NPWS
• 1,767 at end of 2007
• 1,855+ Currently Licensed
• 1,921 Mapped
Invasive Species Management
Aquatic Plant Management Zebra Mussel Management
Aquatic Plant Management SJRA Activities
Monitoring Selected Chemical Spraying White Amur Management Native Plant Nursery & Habitat Restoration Active Participation in Texas Aquatic Plant Management
Society (President 2011, Board of Directors) Active Participation in Texas Invasive Plant and Pest Council Public Awareness
Significant External Contributions Lake Conroe Association Montgomery County Texas Parks and Wildlife US Fish and Wildlife Sports Groups
Zebra Mussels
Residential and Commercial Licensing Residential Docks
Allows residents to construct and maintain docks on property owned/controlled by the SJRA and convert these public areas to private “restricted access” use
Commercial Marinas and Businesses Allows commercial enterprises to construct and maintain
marinas and conduct business on property owned/controlled by the SJRA and convert large areas to private “restricted access” use
Land Lease Agreements Allows citizens to use property owned by the SJRA for private
enterprises
Single Family Lawn Irrigation Allows residents to divert water from Lake Conroe for
irrigation
Commercial Irrigation Allows commercial enterprises to divert water from Lake
Conroe for irrigation
Residential Docks 3652 Dock Licenses
Single and Multi-family Docks Based on square footage of dock area and
dedicated slip area Average 824 sqft
645 new Dock Licenses Jan. 2008-Nov. 2011 Aged backlog of 57 past due accounts 2006-
2010 333 past due accounts as of Jan. 1 - Nov. 15,
2011 Reduced from backlog of 1200 past due
accounts in 2007 Aggressive 30-60-90 day enforcement plan
Residential Docks
Map Legend:
Residential Dock Permitting
Monitor access and navigational safety
Ensure docks don’t extend across property lines
Enforce lake operational regulations
Residential Dock Permitting
Commercial 71 Commercial accounts Marina Leases
Based on square footage of dock and boat slip area
7 large marinas 9 subdivision marinas
Barges and Excursion Vessels Used for commercial purposes
Rental Vessels Includes personal watercraft
Courtesy Docks
Land Use Agreement
61 Land Lease Agreements With Renewal Provisions and > 100 Perpetual Agreements Use of SJRA property located immediately
adjacent to and between private property and normal pool
Single Family Residences Renegotiated upon transfer
Commercial Property 5 year escalation
20 Year Term
Residential Lawn Irrigation 404 Permitted Single Family Lawn
Irrigation Permits as of November 2011 120 Accounts at end of 2007 Unpermitted Irrigation Setups Identified
During Dock Monitoring
Resources – Tools - Process
GIS Database Title Company Searches MCAD Data Research Communication with POAs, ACCs Field Verification Resources
Manager Administrative Staff Field Staff
Field Verification
Challenges To Implementing Licensing Program
Property (associated with a dock) is sold without notification to SJRA Renewal is sent to previous owner Previous owners often discard renewal notices SJRA staff forced to search MCAD database and/or
conduct title search for new owner Renewal sent to new owner
Property owner retains property but relocates from primary residence (billing address) without notification to SJRA Renewal is sent to previous billing address If no forwarding address, SJRA staff forced to search for
new primary residence of property owner
Challenges To Implementing Licensing Program
New property owners construct dock or existing property owners modify (expand) dock without prior notification of SJRA Requires SJRA staff to conduct periodic surveillance of
entire shoreline to identify compliance violations.
Current marina owners modify (expand) facilities or change use of facilities without prior notification of SJRA Requires SJRA staff to conduct periodic surveillance to
identify compliance violations.
Challenges To Implementing Licensing Program
Residential/Commercial Enterprises do not respond to initial Renewal Notice Requires SJRA Lake Division Operations Manager to
send second notice 30 days after initial notice. If no response, requires SJRA Lake Division Manager to
send third notice 60 days after initial notice. If no response, requires SJRA to contract with third party
attorney to send final notice 90 days after initial notice. If no response, requires SJRA to take legal action.
Current Effort
Updating residential files to capture current conditions
Continue unbilled or overdue dock license backlog reduction
Continue to identify, research and bill for unlicensed docks
Install tags on all docks Public Awareness Campaign Concerned customer calls due to current
drought conditions
Chronology of Events
1973
2008
Sep
t 20
10
City of Houston Water Customers Subsidize Lake Conroe Services to Local Residential & Commercial Owners
COH Requests Subsidies Cease
Rate Increase Effective
Backlog of Accounts in Arrears Peaks
The Perfect Storm in 2008
COH Financial Crisis
Licensing System Non-compliance Peaks
Chronology of Events20
08
Aug
. 20
11
COH Requests Subsidies Cease
Dec
. 20
08
Aug
. 20
09
Aug
. 2
010
Lake Conroe Division costs manually separated into four work areas based on assumed allocation of resources
Firm request from COH to cease further subsidizing of certain Lake Conroe activities (Feb 9)
Update of Lake Division Rate Structure to SJRA Board (Feb 19)
SJRA Board deferred action on rate structure increase for FY 2010 (July)
Lake Division FY 2010 budget includes four separate areas
SJRA Board approved Lake Division Rate Structure revisions (June)
SJRA Board approved Lake Division FY 2011 budget with rate revisions effective Sept. 1, 2010
SJRA Board approved Lake Division FY 2012 budget
Budget
The SJRA maintains detailed financial records down to the individual transaction as required by GAAP, GASB and TCEQ accounting requirements and formats. These detailed records have always existed and are always available for staff to use in budgeting and auditing. However, governmental accounting standards do not prescribe that audits and annual financial statements be prepared in additional levels of detail due to the cost. Instead they prescribe reasonable, standard reports and formats to be used for financial reporting.
Sources of Revenue Fees
Contributions by local associations and individuals
Contributions by other governmental entities
City of Houston*
* City of Houston contributes to two-thirds of acceptable costs associated only with the operations and maintenance of Lake Conroe Dam. City of Houston strictly prohibits use of funds from City of Houston water customers to subsidize activities in and around Lake Conroe that are perceived to only benefit the residents and recreational users of Lake Conroe.
Lake Conroe Fee Structure
SJRA Board approved fee increase Approved June 2010 Approved Budget August 2010 Effective September 1, 2010 Approximately 50% increase Residential dock licenses implemented as
current licenses expire throughout the year Commercial leases implemented as current
contracts (5 year) expire Goal : Projected Revenue = Projected Expenses
Item Current Rate Per Unit
Proposed Term Approved Rate in FY 2011
Single Family Residential Use
Agreement
$500 20 year agreement with annual escalation
option and renegotiated upon
transfer, annual fee
$500
Commercial Use Agreement
$0.25 20 year agreement with annual escalation
option, annual fee
$0.375
Residential Dock License Fee
$0.125 Annual $0.188
$40 Min. $60 Min.Commercial License
Fee$250 Annual $375
Commercial Lease Fee $0.25/sf Annual $0.375/sf
Excursion Vessel and Commercial Barge
License Fee
$125 Annual $250
Rental Vessel License Fee
$50 Annual $100
On-Site Sewage Facility (OSSF) Permit
$200 One Time $300
OSSF Reinspection Fee
$50 Each Time $260
OSSF Transfer Fee $50 Each Time $100
Marine Sanitation Certification Fee
$30 Bi-annually $50
Single Family Residential Lawn
Irrigation Fee
$120 Annual 6 month $150
(April-September)
Cost of Services Wages and Benefits Professional Fees Purchased and Contracted Services Supplies, Materials & Utilities Rentals Maintenance, Repairs & Parts General & Administrative Capital Improvements
December 2008 Labor Analysis
Total
Residential/Commercial Boatslips
Including Backlog
OSSF License & Permitting & Water Quality
Aquatic Plant Management
Operation & Maintenance
(includes Admin)Division Manager 20% 10% 20% 50%Deputy Division Manager 20% 50% 10% 20%Ops/Maintenance Manager 10% 20% 20% 50%Aquatic Plant Mngnt Tech 30% 20% 30% 20%Admin Assistant I 50% 15% 0% 35%Admin Assistant II 60% 0% 0% 40%Senior Maintenance Tech 0% 0% 20% 80%Maintenance Tech I 0% 0% 10% 90%Maintenance Tech I 0% 0% 50% 50%Intern 25% 25% 25% 25%General Manager 5% 5% 5% 10%Deputy General Mgr – Ops 1% 3% 1% 5%Deputy General Mgr - Admin 10% 5% 5% 10%Controller 3% 2% 2% 2%Accountant 12% 6% 6% 10%Accountant Assistant I 15% 10% 5% 10%Accountant Assistant II 12% 6% 6% 10%Accountant Assistant III 20% 20% 20% 10%Accounting Admin Assistant 20% 10% 10% 10%Office Manager 3% 3% 3% 3%Benefits Coordinator 3% 3% 3% 3%HR/Admin Support Admin 5% 5% 4% 5%IT Manager 5% 5% 5% 5%IT Tech 5% 5% 5% 5%IT System Admin 5% 5% 5% 5%IT/Communication 5% 5% 5% 5%IT L1 3% 2% 2% 3%Receptionist 10% 5% 10% 5%Safety Specialist 3% 2% 2% 8%Wages $176,358 $140,853 $144,989 $291,018
Wages W/Benefits$1,144,5
00 $268,064 $214,097 $220,383 $442,347
December 2008 Expense Analysis
Total
Residential/Commercial
Boatslips Including Backlog
OSSF License & Permitting & Water Quality
Aquatic Plant Management
Operation & Maintenance
(includes Admin)
OUTSIDE SERVICES EMPLOYED
LEGAL SERVICES $24,000 $16,000 $2,000 $2,000 $4,000
AUDITING $7,600 $2,400 $1,400 $1,400 $2,400
MANAGEMENT AUDIT $0
ENGINEERING $297,500 $297,500
CRANE INSPECTIONS $7,500 $7,500
CONFINED SPACE INSPECTIONS $7,000 $7,000
WASTE DISPOSAL SERVICES $4,000 $4,000
STATE FEES $2,500 $500 $1,000 $1,000
PATROLLING SERVICES $150,000 $150,000
EMPLOYEE TESTING- NEW $300 $100 $50 $50 $100
RECRUITING EXPENSES $1,000 $300 $200 $200 $300
JANITORIAL SERVICES $4,000 $4,000
RAIN GAUGING FEES $1,200 $1,200
STREAM GAUGING & WATER QUALITY - USGS CO-OP $58,000 $20,000 $38,000
WATER QUALITY TESTING $20,000 $20,000
TOTAL OUTSIDE SERVICES EMPLOYED $584,600 $19,300 $24,650 $4,650 $536,000
December 2008 Expense Analysis
Total
Residential/Commercial
Boatslips Including Backlog
OSSF License & Permitting
& Water Quality
Aquatic Plant Management
Operation & Maintenance
(includes Admin)
OPERATING SUPPLIES & EXPENSEOFFICE SUPPLIES & PRINT $12,000 $4,000 $2,000 $2,000 $4,000OTHER OFFICE EXPENSE $2,000 $600 $400 $400 $600TRAVEL $4,000 $1,400 $600 $600 $1,400AUTOE & TRUCK EXPENSE $15,000 $4,000 $2,000 $2,000 $7,000POSTAGE $4,000 $2,000 $1,000 $500 $500SMALL TOOLS PURCH $2,000 $2,000TRAINING-EXTERNAL $5,000 $1,000 $2,000 $2,000TRAINING - EXTERNAL-IT $5,000 $1,000 $2,000 $2,000TRAINING-INTERNAL $1,200 $400 $200 $200 $400MANAGERS EXPENSE $1,200 $400 $200 $200 $400FUEL $43,000 $10,000 $6,000 $7,000 $20,000MEMBERSHIPS & SUBS $2,400 $800 $400 $400 $800SUPPLIES $20,000 $6,000 $2,000 $2,000 $10,000UTILITIES $50,000 $10,000 $10,000 $10,000 $20,000UTILITIES-LP GAS $1,500 $500 $200 $300 $500LABORATORY EXPENSES $1,500 $1,500SAFETY $18,100 $5,000 $2,000 $2,000 $9,100HEALTH PROGRAM EXP $600 $200 $100 $100 $200COMPUTER HARDWARE $20,000 $8,000 $2,000 $2,000 $8,000SOFTWARE & SUPPORT $12,000 $4,500 $1,500 $1,500 $4,500NETWORK COMM $9,000 $3,000 $1,000 $1,000 $4,000LOCAL PHONE SERVICE $3,600 $2,000 $600 $1,000LONG DISTANCE PHONE $600 $200 $100 $100 $200WIRELESS SERVICES $6,000 $2,000 $1,000 $1,000 $2,000INSURANCE PREMIUMS $14,600 $14,600AUTO INSURANCE EXP $7,700 $2,000 $1,000 $1,000 $3,700TOTAL OPERATING SUPPLIES AND EXPENSE $262,000 $67,000 $37,800 $38,300 $118,900
December 2008 Expense Analysis
Total
Residential/Commercial
Boatslips Including Backlog
OSSF License & Permitting & Water Quality
Aquatic Plant Management
Operation & Maintenance
(includes Admin)
RENTALSEQUIPMENT RENTALS $10,000 $10,000OFFICE RENT $7,200 $3,000 $1,200 $1,000 $2,000
RENT-U.S. FOREST LANDS- $18,000 $18,000TOTAL RENTALS $35,200 $3,000 $1,200 $1,000 $30,000
MAINTENANCE, REPAIRS & PARTS EXPENSE
OFFICE FURN & EQUIP $6,000 $3,000 $1,000 $1,000 $1,000INSTRUMENTATION $12,000 $12,000
OFFICE FURNITURE, FIXTURES $2,000 $1,000 $300 $200 $500BUILDINGS & GROUNDS $30,000 $10,000 $2,000 $3,000 $15,000
MACHINERY,TOOLS & EQUIP $10,000 $10,000DAM MAINTENANCE $700,000 $700,000
CHEMICALS / AQUATIC PLANT MANAGEMENT $250,000 $250,000
AQUATIC WEED CONT $0STREETS & ROADS $5,000 $5,000
AYER ISLAND MAINT $15,000 $15,000SECURITY REPAIRS $15,000 $15,000
TOTAL MAINT. REPAIRS & PARTS EXPENSE
$1,045,000 $14,000 $3,300 $254,200 $773,500
G & A EXPENSE ALLOCATED $460,695
December 2008 Expense Analysis
Total
Residential/Commercial
Boatslips Including Backlog
OSSF License & Permitting
& Water Quality
Aquatic Plant Management
Operation & Maintenance
(includes Admin)
CAPITAL OUTLAY
MOWING EQUIPMENT $13,000 $13,000
ALERT SYSTEM HARDWARE UPGRADE $50,000 $50,000
FUEL SHED $30,000 $30,000
SECURITY IMPROVE $25,000 $25,000
PICKUP $25,000 $25,000
DOCUMENT MANAGEMENT SYSTEM INFRASTRUCTURE $12,000 $4,000 $2,000 $2,000 $4,000
ACCOUNTING SOFT W $10,000 $4,000 $1,500 $1,500 $3,000
TOTAL CAPITAL OUTLAY $165,000 $8,000 $3,500 $3,500 $150,000
TOTAL EXPENSES $379,364 $284,547 $522,033 $2,050,747
December 2008 Analysis (FY 2009 Budget)
Expenses Wages/Benefits = $
702,544 Outside Services = $
48,600 Operating Supplies and Expenses = $
143,100 Rentals = $ 5,200 Maintenance, Repairs & Parts = $
271,500 Capital Outlay= $ 15,000 Total =
$1,185,944 Revenue
Residential = $ 340,851
Commercial = $ 200,352 Total = $
541,103 Deficit = $
644,841
FY 2008 Actual + Changes vs FY 2012 Budget
Starting revenue (FY 2008 Residential) = $340,851 Rate increase = $170,425 695 docks x 824 sf x $ 0.188/sf = $107,664 Subtotal $ 618,940 Starting revenue (FY 2008 Commercial) = $200,352 Rate increase = $100,176 Additions of licensed dock area (Approx.) $125,000 Subtotal $ 425,528 Starting revenue (FY 2008 Irrigation) = $10,826 Rate Increase = $ 5,413 276 x $150 = $41,400 Subtotal $ 57,639 TOTAL $ 1,102,107 Allowance for bad debt (assumed collection rate less than 90%
and limited lawn irrigation) $ 152,407
Total FY 2012 (assumed 90% collection rate and limited lawn irrigation)$ 949,700
2004 thru 2011Consumer Price Index
18.9% Increase 2004 thru Oct. 2011
• Previous Rate Structure Increase – June 24, 2004
FY 2008 thru FY 2011 Revenue Actuals
FY 2008 FY 2009 FY 2010 FY 2011$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
Permits, Licenses & Fees - ResidentialPermits, Licenses & Fees - CommercialMarine Sanitation InspectionsOSSF LicensesInvasive Species ManagementLawn Irrigation Fees Total
Aggressive Collection of Accounts in Arrears, ID of non-li-censed docks and new docks
Cost of Services (FY 2012)Non-Operations/Maintenance
Labor $ 424,153 Professional Fees $ 68,600 Purchased and Contracted Services $
34,096 Supplies, Materials & Utilities $ 180,493 Rentals $
40,800 Maintenance, Repairs & Parts $
113,650 Employee Benefits $
202,864 General & Admin. Expenses $
159,698 Total Expenses
$1,224,354 Capital Improvements $
8,333 Total $1,232,687
Revenue (FY 2012)Non-Operations/Maintenance
Permits, Licenses & Fees - Residential $ 518,700
Permits, Licenses & Fees – Commercial $ 426,000
Invasive Species Management $ 5,000
City of Houston Share of Lake Conroe * $ 183,103
Total $1,132,093
* COH share of Non-Operations and Maintenance costs proposed by SJRA
Rate Components
Basic Core Sources
Resolving Accounts in Arrears
Resolving Non-compliance Issues
Cost Control
Continued management of and limits on non-operations/maintenance costs FY 2008 (budgeted) Expenses = $1,185,944 FY 2012 (budgeted) Expenses = $1,232,687
Summary SJRA has consistently & reliably operated & maintained
Lake Conroe Dam in a safe, appropriate, and professional manner .
From 1973 thru 2010 COH water customers (residents) subsidized services provided to Lake Conroe residents.
The dock licensing program has transformed from an initial “honor system” to a more resource intensive program, including enforcement, due to lack of compliance.
The cost of the program has increased due to these resource requirements.
SJRA effort to bring non-compliant residential and commercial enterprises into compliance generated non-reoccuring revenue in FY 2008 thru FY 2011.
Without this non-reoccuring revenue, SJRA would have realized net losses.
SJRA Board delayed Rate Structure increase from 2008 until 2010.
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