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Home My WebLink AboutF-1. Fiscal Year 2013-2014 Third Quarter Budget Reports Information Item , 477.,:ci Presented _1 { Al -A 'A - f ki�'" : me J:-.2 AZUSA .IGNT A :ATEk INFORMATION ITEM TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY BOARD FROM: GEORGE F. MORROW,DIRECTOR OF UTILITIES DATE: APRIL 28, 2014 SUBJECT: FISCAL YEAR 2013-2014 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, 2014. Both Water and Electric yielded net increases in cash for the third quarter ended of$522,268 and $166,604,respectively. WATER Sales of water through third quarter were less than 1.0% lower than the same period last fiscal year, in spite of a slight increase in the number of billed accounts. This decrease in sales is primarily due to conservation efforts. 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 04-05 6,833,381 $11,301,004 27,891 * 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 $12,636,448 22,298 11-12 5,832,676 $13,163,020 22,472 12-13 6,138,787 $13,665,652 22,707 13-14 6,090,656 $13,528,065 22,950 *Number of units,not accounts;in FY 05-06 changed reporting from units to accounts. Quarterly Financial Report April 28,2014 Page 2 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 $21.9 million, compared to $19.9 million for the third quarter ended last fiscal year. This increase is due to positive operating results (revenues exceeded expenses), which has aided in the Water Fund exceeding the minimum debt coverage requirement of 1.25 with estimated debt coverage of 1.62 for the period ended. ELECTRIC Sales of electricity through the third quarter ended were less than 1.0% lower than the same period last fiscal year, in spite of an increase in the number of billed accounts. This decrease in sales is partly attributed to increased solar production. 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 04-05 190,471,748 $20,612,795 15,572 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 Through the third quarter of FY 13-14, the Power Cost Adjustment (PCA) generated over $3.4 million and helped meet expenditure requirements. With 75% of the fiscal year passed, only 70% of the operating budget and a conservative 52% of capital outlays and project budgets have been expended. The fiscal year to date financial performance and low debt service requirements has resulted in the electric fund exceeding the minimum debt coverage requirement of 1.10 with estimated debt coverage of 7.21 for the period ended. The minimum reserve policy requirement of$12.6 million has also been exceeded. Cash/Cash Reserves is made up of cash on hand and cash held in rate stabilization fund. The total of these are approximately$19.4 million. Prepared by: Talika M. Graham, Utilities Administrative and Financial Services Manager Attachments: 3rd Quarter Water Utility Operating Budget Report 3rd Quarter Electric Utility Operating Budget Report Water Utility Quarterly Budget Report 3nd Quarter Ended March 31,2014 (UNAUDITED) Fiscal Year End 3rd Qtr Ended Consumption and Cash Reserves Percent 6/30/13 3/31/14 Consumption-CCF: 8,094,072 6,090,656 75% Cash and Investments:4121 $ 21,399,456 $ 21,921,724 102% Budget Actual Thru Budget Line Item Percent of Budget 13-14 3/31/14 Revenues: Retail Billing Amounts(3) $ 17,998,365 $ 13,528,065 75% Other Revenues 1,961,400 824,692 42% Interest Income 200,000 52,029 26% Total Revenues $ 20,159,765 $ 14,404,786 71% Expenses: Production 2,736,945 2,104,741 77% Purchased Water 3,153,260 1,372,443 44% Transmission and Distribution 2,569,960 1,791,188 70% Customer Accounting and Sales(4) 4,443,550 3,104,729 70% Administrative and Engineering 910,361 583,437 64% Franchise Fees 357,000 282,608 79% Subtotal Expenses $ 14,171,076 $ 9,239,146 65% Capital Expenditures I Debt Service: Debt Service Requirements(5) 4,679,740 3,352,831 72% Capital Outlays and Projects 2,476,404 1,290,541 52% Total Expenses $ 21,327,220 $ 13,882,518 65% Adjustments: Transfers Out(6) - - N/A Total Expenditures and Transfers Out $ 21,327,220 $ 13,882,518 65% Net Increase(Decrease)in Cash $ (1,167,455) '$ 522,268 Debt Coverage Ratio° 1.36 1.62 Notes: (1)Prior FY End Source:FY 12/13 CAFR.Includes Cash and investments and Due from other funds.Reserve Policy is$25 million. (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 6130/13,the advance totaled$4,649,377. (3)Based on Customer Information System Billing Amounts through 3/31/2014. (4)Includes 65%of Customer Service Fund Expenses less offsetting revenue and other miscellaneous costs. (5)Estimated Principal and Interest obligation on 2006 and 2012A Revenue Bonds thru 3rd quarter of fiscal year. (6)Half of Interest Income may transferred by policy if there is positive net income at fiscal year end. (7)Total Revenues less Production,Purch'd Wtr,T&D,Cust Acctg,&A&G divided by Debt Service Payments. Minimum debt coverage requirement is 1.25 per bond financing agreements. UB-76 Electric Utility Quarterly Budget Report 3rd Quarter Ended March 31, 2014 (UNAUDITED) Fiscal Year End 3rd Qtr Ended Consumption and Reserve Info Percent 6/30/13 3/31/14 Consumption-kWh: 247,422,942 189,279,818 77% Cash,Investments&Cash Reserves (1) $ 19,273,967 $ 19,440,571 101% Budget Line Item Budget Actual Thru Percent of 1344 3/31/14 Budget Revenue Retail Billing Amounts(2) $ 36,827,290 $ 27,842,470 76% Resale Revenue(3) 7,500,690 5,487,966 73% Other Miscellaneous Revenue 95,000 127,556 134% Interest Income 120,000 60,026 50% Total Revenues $ 44,542,980 $ 33,518,018 75% Expenses Purchased Power(3) $ 29,871,320 $ 21,639,064 72% Transmission/Dispatching 5,394,000 3,098,148 57% Operations and Maintenance 3,743,150 2,362,855 63% Administrative and General(4) 2,440,010 1,705,838 70% Franchise and In-Lieu-Tax 3,683,800 2,815,214 76% Subtotal Expenses $ 45,132,280 $ 31,621,117 70% Capital Expenditures I Debt Service Debt Service Requirementsi5) $ 871,135 $ 653,350 75% Capital Outlays and Projects 2,046,262 1,055,261 52% Total Expenditures $ 48,049,677 $ 33,329,728 69% Adjustments Transfers Out 28,915 21,686 75% Total Expenditures and Transfers Out $ 48,078,592 $ 33,351,414 69% Net Increase(Decrease)in Cash/Reserve $ (3,535,612) $ 166,604 Debt Coverage Ratio(6) 3.55 7.21 Notes: (1)Prior FY End Source:FY 12/13 CAFR.Includes Cash and invstments and Cash held for Rate Stabilization.Reserve Policy is$12.6 million. (2)Based on Customer Information System Billing Amounts through 3/31/2014. (3)Source: Power Resources Division. (4)Includes 35%share of Fund 31-Admin&Consumer Services Budget less offsetting revenues and other misc.costs. (5)Estimated Principal and Interest obligation on 2003 and 2012B Revenue Bonds thru 3rd quarter of fiscal year. (6)Total Revenue less Cost for Purch'd Pwr,T&D,O&M,and A&G,divided by debt service. Minimum debt coverage requirement is 1.10 per bond financing agreements. UB-77