HomeMy WebLinkAboutF-4. Fiscal Year 2013-2014 Fouth Quarter Budget Reports Information Item F-4
Presented. 61 Ii2I 14-
AZuWAT1RSA
114MT A
1.1
INFORMATION ITEM
TO: HONORABLE CHAIRPERSON AND MEMBERS OF THE AZUSA UTILITY
BOARD
FROM: GEORGE F. MORROW, DIRECTOR OF UTILITIES
DATE: SEPTEMBER 22,2014
SUBJECT: FISCAL YEAR 2013-2014 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, 2014.
Cash in the Water Fund increased by$3,285,038 and decreased in the Electric Fund by $621,586
for the fourth quarter ended.
WATER
A
Sales of water through the fourth quarter were about 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 fourth quarter
sales,billings, and number of billed accounts for the Water Utility:
4th Quarter YTD Water Sales/Billinp
FY CCF Sales Billings Billed Accounts
04-05 9,044,164 $14,999,031 28,403*
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
+Number of units,not accounts;in FY 05-06 changed reporting from units to accounts.
UB-160
Quarterly Financial Report
September 22,2014
Page 2
The Water Utility's cash reserve policy is set to $25 million. Cash balances before loans to the
City's General Fund were about $24.7 million at June 30, 2014, compared to $21.4 million at
June 30, 2013. Historically, the Water Utility loans the General Fund 100% of its negative cash
balance at year end. Cash balances after loans to the General Fund are estimated to decrease
from $24.7 to $18.7 million for the FY 13/14 CAFR presentation, compared to $16.4 million
presented in the FY 12/13 CAFR. Although the loans are typically reversed in the following
year, the Water Utility's cash balances in the CAFR are presented at the lower amount.
Excessive short-term or long-term loans from the Water Fund can affect future credit ratings and
delay the Utility's ability to meet its financial targets. Therefore, loans to other funds must be
monitored closely in order ensure the Utility is able to meet future financial needs and is able to
maintain satisfactory credit ratings.
The increase in cash is due to positive operating results (revenues exceeded expenses), mainly
attributed to lease of"paper"water rights totaling $2.9 million and savings in production related
costs, which aided the Water Fund in exceeding the minimum debt coverage requirement of 1.25
with estimated debt coverage of 2.11 for the period ended.
ELECTRIC
Sales of electricity through the fourth quarter ended were 1.15%higher than the same period last
fiscal year. This increase is partly attributed to the ramping up of the Waste Management Facility
and home sales in Rosedale, offset by residential customers' conservation and increased solar
production. The table below shows a 10-year trend of fourth quarter sales, billings, and number
of billed accounts for the Electric Utility:
4th Quarter YTD Electric Sales/Billings
FY kWh Sales Billings Billed Accounts
04-05 251,265,870 $26,782,803 15,529
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
12-13 247,422,942 $36,270,465 15,749
13-14 250,280,276 $36,415,546 15,955
Through the fourth quarter of FY 13-14, the Power Cost Adjustment (PCA), which helped meet
expenditure requirements, generated over $4.4 million. Net power supply costs of$25.0 million
were lower than budget by$1.5 million or 4.6%. Resale revenues of$8.0 million were 6%higher
than budget due to successful optimization/trading strategies that were substantially enhanced by
the San Onofre shutdown and power price swings. Purchased Power costs were slightly under
budget at 99% and Transmission costs were also below budget by 20% due to changes to SCE
rates and fewer available points of transmission.
UB-161
Quarterly Financial Report
September 22,2014
Page 3
Although the Electric Utility had an estimated cash deficit of $621,586, the fiscal year-end
financial performance and low debt service requirements resulted in the electric fund exceeding
the minimum debt coverage requirement of 1.10 with estimated debt coverage of 6.13 for the
period ended. The minimum reserve policy requirement of $12.6 million was also exceeded.
Cash/Cash Reserves is made up of cash on hand and cash held in rate stabilization fund. The
total of these were approximately$18.7 million.
More information can be found in the footnotes of the attached reports.
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
UB-162
Water Utility Quarterly Budget Report
4th Quarter Ended June 30, 2014
(UNAUDITED)
Consumption and Cash Reserves Fiscal Year End Fiscal Year End
6/30/13 6/30/14 Percent
Consumption-CCF: 8,094,072 8,020,459 99%
Cash and Investments before transfers:(1) $ 21,399,456 $ 24,684,494 115%
Cash and Investments after transfer to General Fund: (2) $ 16,423,051 $ 18,684,494 114%
Budget Line Item Budget Actual Thru Percent of
FY 13-14 6/30/14 Budget
Revenues:
Retail Billing Amounts(3) $ 17,998,365 $ 17,933,551 100%
Other Revenues(4) 1,961,400 4,034,881 206%
Interest Income 200,000 184,256 92%
Total Revenues $ 20,159,765 $ 22,152,688 110%
Expenses:
Production 5,885,205 4,941,468 84%
Transmission and Distribution 2,531,460 2,431,372 96%
Customer Accounting and Sales(5) 4,443,550 4,165,337 94%
Administrative and Engineering(6) 973,296 762,114 78%
Franchise Fees 357,000 373,842 105%
Subtotal Expenses $ 14,190,511 $ 12,674,133 89%
Capital Expenditures/Debt Service:
Debt Service Requirements(7) 4,679,740 4,679,747 100%
Capital Outlays and Projects(8) 2,476,404 1,329,515 54%
Total Expenditures $ 21,346,655 $ 18,683,394 88%
Adjustments:
Transfers Out(9) - 184,256 N/A
Total Expenditures and Transfers Out $ 21,346,655 $ 18,867,650 88%
Net Increase(Decrease)in Cash $ (1,186,890) $ 3,285,038
Debt Coverage Ratiot10l 1.35 2.11
Notes:
(1)Includes Cash and investments and Due from other funds.Reserve Policy is$25 million.
(2)The Water Fund loans 100%of the General Fund negative cash balance at fiscal year end.Loans to the General Fund
were$4,976,405 at 6/30/13 and estimated to be$6,000,000 at 6/30/14.Note,the FY 12/13 loan was reversed in FY 13/14.
(3)Retail Billing Amounts based on Customer Information System billed amounts through 6/30/14.
(4)Other Revenues include$2,937,750 in Water Leases,which were$1,437,750 over the budgeted amount of$1,500,000.
(5)Includes 65%of Customer Service Fund Expenses less offsetting revenue and other miscellaneous costs.
(6)A&E actuals lower than budget primarily due to salary savings and lower Consumer Services expenses than anticipated.
(7)Total Principal and Interest payment obligations on the 2006 and 2012A Revenue Bonds for Fiscal Year 2013/14.
(8)Capital Outlays and Projects under budget due to ongoing construction of the Sludge Handlg Facility and Main Rplcmnts.
(9)Interest Income will be transferred to the CIP Fund by policy if there is positive net income at fiscal year end.
(10)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-163
Electric Utility Quarterly Budget Report
4th Quarter Ended June 30, 2014
(UNAUDITED)
Consumption and Cash Reserves Fiscal Year End Fiscal Year End Percent
6/30/13 6130/14
Consumption-kWh: 247,422,942 250,280,276 101%
Cash,Investments& Cash Reserves: (1) $ 19,273,967 $ 18,652,381 97%
Budget Line Item Budget Actual Thru Percent of
FY 13-14 6/30/14 Budget
Revenues:
Retail Billing Amounts(2) $ 36,827,290 $ 36,415,546 99%
Resale Revenue(3) 7,500,690 7,983,466 106%
Other Miscellaneous Revenue(4) 95,000 201,796 212%
Interest Income 120,000 89,330 74%
Total Revenues $ 44,542,980 $ 44,690,138 100%
Expenses:
Purchased Power(3) 29,871,320 29,696,423 99%
Transmission/Dispatching(3) 4,167,755 3,332,898 80%
Operations and Maintenance(5) 2,800,870 2,353,559 84%
Administrative and General(6) 4,602,000 3,966,667 86%
Franchise and In-Lieu-Tax 3,683,800 3,676,827 100%
Subtotal Expenses $ 45,125,745 $ 43,026,374 95%
Capital Expenditures/Debt Service:
Debt Service Requirements(7) 871,135 871,164 100%
Capital Outlays and Projects(8) 2,163,252 1,385,271 64%
Total Expenditures $ 48,160,132 $ 45,282,809 94%
Adjustments:
Transfers Out 28,915 28,915 100%
Total Expenditures and Transfers Out $ 48,189,047 $ 45,311,724 94%
Net Increase(Decrease) in Cash/Reserve $ (3,646,067) $ (621,586)
Debt Coverage Ratio(9) 3.56 6.13
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 6/30/2014.
(3)Source for Resale Revenues,Purchased Power,and Transmission/Dispatching: Power Resources Division.
(4)Other Misc.Revenues higher than budget due to more temporary services and customer installations that anticipated.
(5)O&M expenses lower than budget primarily due to salary savings.
(6)A&G Includes 35%share of Fund 31 -Admin&Consumer Services Budget less offsetting revenues and other misc.costs.
Actuals are lower than budget due to lower legal fees than anticipated,salary savings,and lower Consumer Services expenses
(7)Total Principal and Interest payment obligations on the 2003 and 20126 Revenue Bonds for Fiscal Year 2013/14.
(8)Capital Outlays and Projects under budget due to ongoing construction of Metro Gold line and SCADA system.
(9)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-164