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Home My WebLink AboutF-1. 2nd Qtr Budget RptINFORMATION ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES DATE: FEBRUARY 24, 2014 SUBJECT: FISCAL YEAR 2013-2014 SECOND QUARTER BUDGET REPORTS FOR WATER AND ELECTRIC FUNDS The attached reports include unaudited budget-to-actual performance for the Water and Electric Funds through December 31, 2013. HIGHLIGHTS Both Water and Electric yielded positive operating results (revenues exceeded expenses) for the second quarter ended of $1,458,798 and $477,473, respectively. Savings from refinancing the 2003 A & B Certificates of Participation are now being realized resulting in lower debt service requirements, which has allowed both Utilities to maintain healthy debt service coverage ratios. WATER Sales of water through second quarter were 3.0% lower than the same period last fiscal year. This decrease is primarily due to conservation efforts as a result of Phase II Drought conditions. The table below shows a 10-year trend of second quarter sales, billings, and number of billed accounts for the Water Utility: 2nd Quarter Water Sales/Billings FY CCF Sales Billings Billed Accounts 04-05 5,191,531 $8,321,053 28,222 * 05-06 5,236,280 $7,874,961 23,019 06-07 5,677,810 $8,815,286 22,927 07-08 5,083,893 $8,696,748 23,035 08-09 4,735,337 $7,841,814 23,013 09-10 4,503,313 $8,513,021 23,135 10-11 4,269,226 $9,248,071 23,037 F-1 * Number of units, not accounts; in FY 05-06 changed reporting from units to accounts. PRESENTED UTILITY BOARD 2/24/14 Quarterly Financial Report February 24, 2014 Page 2 11-12 4,248,276 $9,315,888 22,889 12-13 4,591,058 $9,972,924 23,239 13-14 4,453,167 $9,702,041 23,470 While the Water Utility’s reserve policy is set to $25 million, the Fund has adequate cash on hand with an estimated reserve of about $22.8 million. Positive operating results and lower debt service requirements has resulted in the Water Fund exceeding the minimum debt coverage requirement of 1.25 with estimated debt coverage of 2.15 for the period ended. ELECTRIC Sales of electricity through the second quarter ended were consistent with the same period last fiscal year. The table below shows a 10-year trend of second quarter sales, billings, and number of billed accounts for the Electric Utility: 2nd Quarter Electric Sales/Billings FY kWh Sales Billings Billed Accounts 04-05 133,339,089 $14,655,236 15,531 05-06 129,833,967 $14,380,345 15,433 06-07 139,649,981 $16,052,403 15,493 07-08 136,375,872 $15,872,058 15,735 08-09 139,176,034 $18,276,924 15,645 09-10 133,286,521 $16,229,555 15,520 10-11 126,364,551 $17,834,281 15,608 11-12 126,375,198 $19,286,751 15,696 12-13 133,442,520 $19,908,665 15,987 13-14 132,946,386 $19,930,370 16,169 Through the second quarter of FY 13-14, the Power Cost Adjustment (PCA) generated over $2.4 million and helped meet expenditure requirements. Positive operating results and lower debt service requirements has resulted in the Electric Fund exceeding the minimum debt coverage requirement of 1.10 with estimated debt coverage of 8.71 for the period ended. The minimum reserve policy requirement of $12.6 million has also been exceeded. Cash/Reserve is made up of cash on hand and cash held in rate stabilization fund. The total of these are approximately $19.7 million, a 2% increase from the unaudited financial report for Fiscal Year Ended June 30, 2013. Prepared by: Talika M. Graham, Utilities Administrative and Financial Services Manager Fiscal Year End 6/30/13 2nd Qtr Ended 12/31/13 Percent Consumption ‐ CCF:8,094,072 4,453,167 55% Cash and Investments: (1)21,393,067$ 22,851,865$ 107% Budget 13‐14 Actual Thru 12/31/13 Percent of Budget Retail Billing Amounts (3)17,853,365$ 9,702,041$ 54% Other Revenues 2,106,400 1,451,577 69% Interest Income 200,000 16 0% 20,159,765$ 11,153,634$ 55% Expenses: Production 2,736,945 1,496,370 55% Purchased Water 3,153,260 954,348 30% Transmission and Distribution 2,569,960 1,188,053 46% Customer Accounting and Sales (4)4,443,550 2,022,264 46% Administrative and Engineering 910,361 458,251 50% Franchise Fees 357,000 202,151 57% 14,171,076$ 6,321,437$ 45% Capital Expenditures / Debt Service: Debt Service Requirements (5)4,679,740 2,339,872 50% Capital Outlays and Projects 2,476,404 1,033,527 42% 21,327,220$ 9,694,836$ 45% Adjustments: Transfers Out(6)‐ ‐ N/A 21,327,220$ 9,694,836$ 45% (1,167,455)$ 1,458,798$ 1.36 2.15 Notes: (2) The Water Fund advances 100% of the General Fund negative cash balance at fiscal year end. Therefore, the balances shown above will be decreased by the amount of the advance. At 6/30/13, the advance totaled $4,649,377. (3) Based on Customer Information System Billing Amounts through 12/31/2013. (5) Estimated Principal and Interest obligation on 2006 and 2012A Revenue Bonds thru 2nd quarter of fiscal year. Debt Coverage Ratio(7) Water Utility Quarterly Budget Report 2nd Quarter Ended December 31, 2013 (UNAUDITED) Consumption and Cash Reserves Budget Line Item Revenues: Total Revenues Subtotal Expenses Total Expenses Total Expenditures and Transfers Out Net Increase (Decrease) in Cash (7) Total Revenues less Production, Purchʹd Wtr, T&D, Cust Acctg, & A&G divided by Debt Service Payments. Minimum debt coverage requirement is 1.25 per bond financing agreements. (1) Prior FY End Source: General Ledger Claim on Cash account from FY 12/13 unaudited trial balance. Reserve Policy is $25 (4) Includes 65% of Customer Service Fund Expenses less offsetting revenue and other miscellaneous costs. (6) Half of Interest Income may be transferred by policy if there is positive net income at fiscal year end. Fiscal Year End 6/30/13 2nd Qtr Ended 12/31/13 Percent Consumption ‐ kWh:247,422,942 132,946,386 54% Cash, Investments & Cash Reserves (1)19,194,561$ 19,672,034$ 102% Budget 13‐14 Actual Thru 12/31/13 Percent of Budget Revenue Retail Billing Amounts (2)36,827,290$ 19,930,370$ 54% Resale Revenue(3)7,500,690 3,412,666 45% Other Miscellaneous Revenue 95,000 123,915 130% Interest Income 120,000 20 0% 44,542,980$ 23,466,971$ 53% Purchased Power(3)29,871,320$ 14,862,297$ 50% Transmission/Dispatching 5,394,000 2,102,069 39% Operations and Maintenance 3,768,150 1,589,948 42% Administrative and General(4)2,440,010 1,119,895 46% Franchise and In‐Lieu‐Tax 3,683,800 2,016,827 55% 45,157,280$ 21,691,036$ 48% Capital Expenditures / Debt Service Debt Service Requirements(5)871,135$ 435,567$ 50% Capital Outlays and Projects 1,951,262 862,895 44% 47,979,677$ 22,989,498$ 48% Adjustments Transfers Out 28,915 ‐ 0% 48,008,592$ 22,989,498$ 48% (3,465,612)$ 477,473$ 3.52 8.71 Notes: (1) Prior FY End Source: Draft FY 12/13 CAFR. Includes Operating Cash and Cash held for Rate Stabilization. Reserve Policy is $12.6 million. (2) Based on Customer Information System Billing Amounts through 12/31/2013. (5) Estimated Principal and Interest obligation on 2003 and 2012B Revenue Bonds thru 2nd quarter of fiscal year. (6) Total Revenue less Cost for Purchʹd Pwr, T&D, O&M, and A&G, divided by debt service. Minimum debt coverage requirement is 1.10 per bond financing agreements. Electric Utility Quarterly Budget Report 2nd Quarter Ended December 31, 2013 (UNAUDITED) Consumption and Reserve Info Budget Line Item Net Increase (Decrease) in Cash/Reserve Debt Coverage Ratio(6) (3) Source: Power Resources Division. (4) Includes 35% share of Fund 31 ‐ Admin & Consumer Services Budget less offsetting revenues and other misc. costs. Total Revenues Expenses Subtotal Expenses Total Expenditures Total Expenditures and Transfers Out