HomeMy WebLinkAboutF-1 Fiscal Year 2014-2015 Fourth Quarter Budget Reports Information Item F-1
Presented 112N6
AZUS.A
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INFORMATION ITEM
TO: HONORABLE CHAIRPERSON ANI) MEMBERS OF TH USA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: SEPTEMBER 28, 2015
SUBJECT: FISCAL YEAR 2014-2015 FOURTH QUARTER BUDGET REPORTS FOR
WATER AND ELECTRIC FUNDS
The attached reports include unaudited budget-to-actual performance for the Water and Electric
Funds through Fiscal Year End June 30, 2015.
Both Water and Electric yielded net increases in cash for the fourth quarter ended of$99,716 and
$1,256,417, respectively.
WATER
FY 14-15 sales of water were 11.5% lower than 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 fiscal year sales, billings, and number of billed accounts for the Water Utility:
FY CCF Sales Billings"' Billed Accounts
05-06 9,086,631 $14,302,732 23,126
06-07 9,971,443 $15,912,915 22,895
07-08 8,502,994 $15,641,966 22,868
08-09 8,333,649 $13,988,554 23,014
09-10 7,853,732 $15,303,213 23,036
10-11 7,384,003 $16,600,100 23,100
11-12 7,598,788 $17,199,870 23,104
12-13 8,094,910 $18,043,742 23,302
13-14 8,020,459 $17,933,551 23,597
14-15 7,094,934 $17,209,924 23,871
*Excludes unbilled receivables.
Cash reserves after advances to other funds increased $99,716 to $21.7 million, which exceeds
the Utility's $19.0 million reserve target. Positive operating results helped the Utility to meet its
minimum debt coverage requirement of 1.25 with estimated debt coverage of 1.40 for the period.
Highlights from the 2014/15 budget year that resulted in the slight increase in cash include: 1)
Water Rights Leases - leasing of 5,000 acre feet of excess "paper" water rights to other water
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Quarterly Financial Report
September 28, 2015
Page 2
agencies yielded $3.1 million in revenues. These revenues help to fund capital improvement
projects; 2) Water Purchase - 3,000 acre feet of supplemental "wet" water was purchased from
Upper San Gabriel Municipal Water District through the Main San Gabriel Basin Watermaster
for $2.0 million; and 3) Retail Sales Revenues — retail billing revenues decreased by over
$700,000 due to water conservation. Also formalized during the year was a $4.0 million loan to
the General Fund with a repayment term of 7 years through June 30, 2021 .
Overall, the Water Utility was able to meet its minimum financial targets during FY 2014/15.
However, drought conditions and state mandated conservation levels have resulted in revenue
losses that could pose challenges in meeting future debt coverage requirements. Such impacts are
currently being examined in a Water Cost of Service Study.
ELECTRIC
Sales of electricity through the fourth quarter ended were 2.8% higher than the same period last
fiscal year. This increase is partly attributed to weather and new homes in the Rosedale
development. The table below shows a 10-year trend of fiscal year sales, billings, and number of
billed accounts for the Electric Utility:
FY kWh Sales Billings* Billed Accounts
05-06 245,181,632 $27,355,550 15,358
06-07 255,560,858 $28,484,178 15,531
07-08 252,240,704 $29,809,429 15,650
08-09 253,116,501 $31,274,785 15,403
09-10 245,616,149 $30,099,992 15,276
10-11 238,728,205 $32,829,429 15,362
11-12 236,527,153 $35,315,430 15,567
12-13 247,477,942 $36,270,465 15,749
13-14 250,280,276 $36,415,546 15,955
14-15 257,361,329 $38,763,711 16,226
*Excludes unbilled receivables.
The FY14-15 cash increase of$1.3 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 $20.3 million for the period ended and well exceeds the Utility's
minimum reserve policy requirement of $12.6 million. Nearly 68% of the Utility's costs are
comprised of net power supply costs of$25.5 million. Although consistent with prior year, net
power supply costs were $2.6 million lower than expected due successful optimization/trading
strategies, enhanced by power price swings and lower availability of San Juan generation.
Positive operating results and low debt service requirements has resulted in the Electric Utility
exceeding the minimum debt coverage requirement of 1.10 with estimated debt coverage of 8.08
for the period ended.
Prepared by: Talika M. Johnson, Utilities Administrative and Financial Services Manager
Attachments: 4th Quarter Water Utility Operating Budget Report
4th Quarter Electric Utility Operating Budget Report
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Water Utility Quarterly Budget Report
4th Quarter Ended June 30,2015
(UNAUDITED)
Fiscal Year End 4th Qtr Ended
Consumption and Cash Reserves 6/30114 6130115 Percent
Consumption-CCF: 8,020,459 7,094,934 88%
Cash and Investments before transfers:(1) $ 25,589,908 $ 25,689,624 100%
Cash and Investments after loans to other funds:(2) $ 21,662,182 $ 21,689,624 100%
Budget Line Item Budget Actual Thru Percent of
FY 14-15 6/30/15 Budget
Revenues:
Retail Billing Amounts t') $ 17,930,605 $ 17,209,924 96%
Other Revenues(4) 4,468,170 4,373,732 98%
Interest income 150,000 140,062 93%
Total Revenues $ 22,548,775 $ 21,723,718 96%
Expenses:
Production 6,044,525 5,812,307 96%
Purchased Water 2,019,000 2,019,000 100%
Transmission and Distribution 2,656,680 2,483,618 93%
Customer Accounting and Sales(b) 4,509,825 4,187,661 93%
Administrative and Engineering 951,980 703,039 74%
Franchise Fees 357,565 359,080 100%
Subtotal Expenses $ 16,539,575 $ 15,564,705 94%
Capital Expenditures!Debt Service:
Debt Service Requirements)b) 4,651,790 4,671,788 100%
Capital Outlays and Projects") 3,135,318 1,247,447 40%
Total Expenditures $ 24,326,683 $ 21,483,940 88%
Adjustments:
Transfers Out(8) - 140,062 N/A
Total Expenditures and Transfers Out $ 24,326,683 $ 21,624,002 89%
Net Increase(Decrease)in Cash $ (1,777,908) $ 99,716
Debt Coverage Ratio(8) 1.37 1.40
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 and$4,000,000 at FYE 6/30/15.
(3)Retail Billing Amounts based on Customer Information System as of 6/30/15(does not include unbilled revenue accruals).
(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 6/30/2015.
(7)Capital Outlays and Projects under budget due to ongoing construction of Main Replacements and Reservoir Rehabilitation.
(8)Interest Income will be transferred to the CIP Fund by policy if there is positive net income at fiscal year end.
(9)Total Revenues less Production,T&D,Cust Acctg,&ABG divided by Debt Service Payments.Minimum debt coverage requirement
is 1.25 per bond financing agreements.
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Electric Utility Quarterly Budget Report
4th Quarter Ended June 30, 2015
(UNAUDITED)
Consumption and Cash Reserves Fiscal Year End 4th Qtr Ended Percent
6/30/14 6130/15
Consumption -kWh: 250,280,276 257,361,329 103%
Cash, Investments&Cash Reserves:(') $ 19,067,404 $ 20,323,821 107%
Budget Line Item Budget Actual Thru Percent of
FY 14-15 6/30/15 Budget
Revenues:
Retail Billing Amounts(2) $ 38,417,300 $ 38,763,711 101%
Resale Revenue(3) 7,086,980 7,309,935 103%
Other Miscellaneous Revenue 305,750 160,154 52%
Interest Income 135,000 131,309 97%
Total Revenues $ 45,945,030 $ 46,365,109 101%
Expenses:
Purchased Power(3) 31,114,030 28,835,815 93%
Transmission/Dispatching(3) 4,108,890 3,983,535 97%
Operations and Maintenance 2,906,650 2,667,297 92%
Administrative and General(4) 4,509,905 3,817,693 85%
Franchise and In-Lieu-Tax 3,902,000 3,897,297 100%
Subtotal Expenses $ 46,541,475 $ 43,201,637 93%
Capital Expenditures/Debt Service:
Debt Service Requirements(5) 873,550 873,548 100%
Capital Outlays and Projects(6) 2,368,530 1,003,157 42%
Total Expenditures $ 49,783,555 $ 45,078,342 91%
Adjustments:
Transfers Out 30,350 30,350 100%
Total Expenditures and Transfers Out $ 49,813,905 $ 45,108,692 91%
Net Increase(Decrease)in Cash/Reserve $ (3,868,875) $ 1,256,417
Debt Coverage Ratio") 3.78 8.08
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 as of 6/30/15(does not include unbilled revenue accruals).
(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 6/30/2015
(6)Capital Outlays and Projects under budget due to ongoing construction of the Gold Line parking structure,SCADA system
and Electric System Master Plan.
(7)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.
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