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Home My WebLink AboutF-1 Fiscal Year 2014-2015 Third Quarter Budget Reports Information Item Presented 611,U)( 1 5 F-1 AZURNATERS.A IIGNT " INFORMATION ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE USA UTILITY BOARD FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIE DATE: MAY 26, 2015 SUBJECT: FISCAL YEAR 2014-2015 THIRD QUARTER BUDGET REPORTS FOR WATER AND ELECTRIC FUNDS The attached reports include unaudited budget-to-actual performance for the Water and Electric Funds through March 31, 2015. Both Water and Electric yielded net increases in cash for the third quarter ended of$887,901 and $2,313,732, respectively. WATER Sales of water through second quarter were 10.5% lower than the same period of the prior fiscal year. This decrease is primarily due to conservation efforts as a result of Phase III Drought conditions. The table below shows a 10-year trend of third quarter sales, billings, and number of billed accounts for the Water Utility: 3rd Quarter Water Sales/Billings FY CCF Sales Billings Billed Accounts 05-06 7,157,757 $11,096,241 22,605 06-07 7,689,683 $12,205,584 22,891 07-08 6,488,230 $11,844,582 22,868 08-09 6,325,483 $10,660,371 22,645 09-10 6,021,086 $11,673,295 22,594 10-11 5,650,960 $12,536,448 22,298 11-12 5,832,676 $13,163,020 22,472 12-13 6,138,787 $13,665,652 22,707 13-14 6,091,647 $13,540,042 22,950 14-15 5,452,349 $13,176,832 23,198 Cash reserves after advances to other funds increased $887,901 to $22.6 million, which exceeds the Utility's $19 million minimum reserve target. Financial results include $3.1 million in revenues from the leasing of excess Main Basin water rights to other water agencies. Revenues from water rights leases help fund the Utility's Capital Improvement Program. Additionally, the UB-152 bC3 Quarterly Financial Report _,. ..._._ '1'' May 26,2015 Page 2 Water Utility has receivables of$3.9 million for advances to other funds. Overall, Water Utility operations for the third quarter ended were consistent with budget. With 75% of the year complete, revenues and expenses were at 77%and 68% of budget, respectively. Positive operating results helped the Utility to exceed its minimum debt coverage requirement of 1.25 with estimated debt coverage of 1.71 for the period ended. ELECTRIC Sales of electricity through the third quarter ended were 4.5% higher than the same period last fiscal year. This increase is partly attributed to weather and to consumption by the new Waste Management Facility and new homes in the Rosedale development. The table below shows a 10-year trend of third quarter sales, billings, and number of billed accounts for the Electric Utility: 3rd Quarter Electric Sales/Billings FY kWh Sales Billings Billed Accounts 05-06 187,307,423 $20,923,915 15,507 06-07 198,360,951 $22,360,051 15,531 07-08 191,906,326 $22,220,740 15,650 08-09 194,575,820 $24,636,827 15,669 09-10 189,042,374 $23,173,576 15,567 10-11 181,142,283 $25,165,128 15,577 11-12 180,099,346 $27,116,305 15,760 12-13 190,501,254 $28,129,703 16,017 13-14 189,279,818 $27,842,470 16,273 14-15 197,733,299 $30,404,653 16,571 The third quarter cash increase of $2.3 million is mainly due to the increase in sales of electricity. Cash/Reserves are made up of cash on hand and cash held in rate stabilization fund. The total of these two are approximately $21.4 million for the period ended and exceeds the Utility's minimum reserve target of$12.6 million. The Power Cost Adjustment(PCA) continues to help the Utility meet expenditure requirements. The effective rate of$0.02737 per kWh generated nearly $4.8 million through the third quarter ended. Positive operating results and lower debt service requirements has resulted in the Electric Utility exceeding the minimum debt coverage requirement of 1.10 with estimated debt coverage of 10.08 for the period ended. Prepared by: Talika M. Johnson, Utilities Administrative and Financial Services Manager Attachments: 3`d Quarter Water Utility Operating Budget Report 3rd Quarter Electric Utility Operating Budget Report UB-153 Water Utility Quarterly Budget Report 3rd Quarter Ended March 31, 2015 (UNAUDITED) Fiscal Year End 3rd Qtr Ended Consumption and Cash Reserves 6f30/14 3J31115 Percent Consumption-CCF: 8,020,459 5,452,349 68% Cash and Investments before transfers:(1) $ 25,589,908 $ 26,477,809 103% Cash and Investments after loans to other funds: (2) $ 21,662,182 $ 22,550,083 104% Budget Line Item Budget Actual Thru Percent o FY 14-15 3131115 Budget Revenues: Retail Billing Amounts(3) $ 17,930,605 $ 13,176,832 73% Other Revenues(41 4,468,170 4,144,446 93% Interest Income 150,000 112,500 75% Total Revenues $ 22,548,775 $ 17,433,778 77% Expenses: Production 6,059,945 3,827,924 63% Purchased Water 2,019,000 2,019,000 100% Transmission and Distribution 2,651,680 1,862,922 70% Customer Accounting and Sales (5) 4,509,825 3,151,876 70% Administrative and Engineering 951,980 568,729 60% Franchise Fees 347,145 275,121 79% Subtotal Expenses $ 16,539,575 $ 11,705,572 71% Capital Expenditures/Debt Service: Debt Service Requirements(6) 4,651,790 3,503,841 75% Capital Outlays and Projects 3,135,318 1,223,965 39% Total Expenditures $ 24,326,683 $ 16,433,377 68% Adjustments: Transfers Out l'i - 112,500 N/A Total Expenditures and Transfers Out $ 24,326,683 $ 16,545,877 68% Net Increase(Decrease)in Cash $ (1,777,908) $ 887,901 Debt Coverage Ratio(8) 1.37 1.71 Notes: (1)Includes Cash and investments and Due from other funds.Reserve Policy was updated from$25 to$19 million in November 2014. (2)Loans and Advances to other funds at FYE 6/30/14 were$3,927,726. (3)Retail Billing Amounts based on Customer Information System billed amounts through 3/31/15. (4)Other Revenues include$3,072,245 in Water Right Leases. (5)Includes 65%of Customer Service Fund expenses less offsetting revenue and other miscellaneous costs. (6)Principal and Interest payment obligations on the 2006 and 2012A Revenue Bonds for Fiscal Year 2014/15 thru 3/31/2015. (7)Interest Income will be transferred to the CIP Fund by policy if there is positive net income at fiscal year end. (8)Total Revenues less Production,T&D,Cust Acctg,&A&G divided by Debt Service Payments.Minimum debt coverage requirement is 1.25 per bond financing agreements. UB-154 Electric Utility Quarterly Budget Report 3rd Quarter Ended March 31, 2015 (UNAUDITED) Consumption and Cash Reserves Fiscal Year End 3rd Qtr Ended Percent 6/30114 3/31/15 Consumption-kWh: 250,280,276 197,733,299 79% Cash, Investments&Cash Reserves:(1) $ 19,067,404 $ 21,381,136 112% Budget Line Item Budget Actual Thru Percent of FY 14-15 3/31/15 Budget Revenues: Retail Billing Amounts(2) $ 38,417,300 $ 30,404,653 79% Resale Revenue(3) 7,086,980 5,979,936 84% Other Miscellaneous Revenue 305,750 112,613 37% Interest Income 135,000 102,735 76% Total Revenues $ 45,945,030 $ 36,599,937 80% Expenses: Purchased Power(3) 31,114,030 22,112,293 71% Transmission/Dispatching(3) 4,108,890 3,046,345 74% Operations and Maintenance 2,916,650 2,042,948 70% Administrative and General(4) 4,605,755 2,791,771 61% Franchise and In-Lieu-Tax 3,841,150 3,061,391 80% Subtotal Expenses $ 46,586,475 $ 33,054,748 71% Capital Expenditures/Debt Service: Debt Service Requirements(5) 838,550 655,161 78% Capital Outlays and Projects 2,358,530 553,533 23% Total Expenditures $ 49,783,555 $ 34,263,442 69% Adjustments: Transfers Out 30,350 22,763 75% Total Expenditures and Transfers Out $ 49,813,905 $ 34,286,205 69% Net Increase(Decrease)in Cash/Reserve $ (3,868,875) $ 2,313,732 Debt Coverage Ratio(6) 3.82 10.08 Notes: (1)Includes Cash and investments and Cash held for Rate Stabilization. Reserve Policy is$12.6 million. (2)Retail Billing Amounts based on Customer Information System billed amounts through 3/31/2015. (3)Source for Resale Revenues,Purchased Power,and Transmission/Dispatching: Power Resources Division. (4)Includes 35%of Customer Service Fund expenses less offsetting revenue and other miscellaneous costs. (5)Principal and Interest payment obligations on the 2003 and 2012B Revenue Bonds for Fiscal Year 2014/15 thru 3/31/2015. (6)Total Revenue less Cost for Purch'd Pwr,T&D,O&M,and A&G,divided by debt service.Minimum debt coverage requirem is 1.10 per bond financing agreements. UB-155