HomeMy WebLinkAboutVII(B) Water/Wastewater Fund Analysis Page 1 of 2
MayorLAgenda 7/6/04
��;uce.�of Good Commissioners g
S. Scott Vandergrift
c'',`400004.0‘.* Danny Howell, District 1 Item VII. B.
y ..._
.[� Scott Anderson,District 2
Acting City Manager C, » Rusty Johnson, District 3
V. Gene Williford ..= Nancy J. Parker, District 4
STAFF REPORT
TO: The Honorable Mayor and City._.Commissioners
FROM: Wanda Horton, Finance Director
DATE: June 7, 2004
RE: Water/Wastewater Fund Analysis
The rate study and"Financial Feasibility Report"conducted and prepared by Burton and Associates
summarizes the assumptions and projections of operations over a five-year period (2004-2008) for the
City of Ocoee Water and Wastewater Utility System.
Assumptions:
f • The City will continue to provide services to its current service area and no material changes will
occur to reduce significantly the number of customers served or their demand.
• Management has considered current and anticipated Federal and State government regulations
concerning environmental and other matters affecting operations of the System.
• Increases in rate revenue due to growth are expected to average about 2.85%per year for water
and 4.35% for sewer based upon a projection of an additional 300 equivalent residential units
connecting annually.
• Water and Sewer Impact fee revenue is projected to average $498,000 annually based upon 130
connections in addition to the pre-purchased capacity and/or impact fee credits.
• Cost of Operations and Maintenance are projected to increase 3% annually during this period.
• A working capital reserve equal to three months of Operation and Maintenance costs will be
maintained.
• Annual debt service payments of $1,471,000will be paid from impact and user fees
• An annual interest rate of 1.5%will be earned on the funds.
• Capital expenditures in addition to the projects identified in the 2003 bond issue will not exceed a
designated amount each year.
• No additional bonds/borrowings would be required during the five-year period.
• Net Revenues will be sufficient to meet the debt service coverage as required by the rate
covenant. (110%of annual debt service payment).
The rate structure presented to the Commission and subsequently adopted by them is projected
to:
• Provide revenues to fund the operations and maintenance required on the system for the period
file://Y:\Finance\SR waterwastewateranalysis_2004\SR waterwastewateanalysis_2004.htm 6/29/2004
Page 2 of 2
2004-2008
• Provide funds for designated capital projects not included in the bond projects through 2008
• Generate funds to pay the annual debt service payments on the bond issues
• Generate revenues sufficient to meet the rate covenant coverage on the bond
• Maintain a three-month working capital reserve (fund balance) in the operating fund.
• Generate an additional $1,500,000 in revenue the first year(2005) over the estimated annual
increase of$158,000 due to growth
Summary:
The $1,500,000 to be generated the first year would equal $125,000/month.
The projected additional revenue to be generated the next four years (as a result of the rate increase)
would average $198,500 a year.
The $158,000 annual increase (due to normal growth) is approximately $13,167/month.
Based upon the assumptions and projections in the pro-forma, this fiscal year, the City should realize
$138,167 more monthly in revenue than it did last year.
• The increase in revenue received for the first seven months of FY2004 for commercial and
residential utility service is $1,060,471.
• This averages to $151,496 per month compared to the projected$138,167 per month.
• This difference of$13,329 per month would result in an annual increase of$159,948 more than
projected if the current usage pattern continues.
• This amount will increase or decrease based upon usage.
file://Y:\Finance\SR waterwastewateranalysis_2004\SR waterwastewateanalysis_2004.htm 6/29/2004
�r
<,.., o
o CD
— N
N
do N
coa
(.„ CD O N CD p p Lckir r O_ O p r O
JI� COD_ N M coOCD ti 03 CO (A co r D) N co co coN
Q r r N it M N O N: CO
M r N O r If) r O M M N- 0) M LO N r M
H co co CA co N- In v) CO r r r N
O r
I-
EA 69 EA 69 69 ER
N- CO CO qt co O CD O Co 0 -
O 0 M N r C) M 0) in co co CA co r N r
Q r ti M C) Cr) N 1- CO CD CO 't O In CO r
Q CA C") N Qj M M O O N- O O r ti M r
I() O r v O N N N If) v N
r r r N
EA EA El) 69 EA ER ,t,
* * It * C
If) co N- 0 M
rcDCD
Cr) V'N � � BOO � O � tia)
co r CO O O Q) O O M M r N- y
O a) r O N If) N '- N N CD M
r N r cilN
69 EA fA EA EA d3
Z+ r' C)) CD 0) N ti O "
N CO CO CO COO0) r O N N N- N N r O in M c)
CD o N IC) M CY) N 00 ( C) co co in O co r ON
O a0 N- N ti Cn CA O N- r C) r h
y O O N O Co CD N C') N N N Cf) M •�
r 69 EA ER EA EA U,
03
CI
CO CO CO IC) U) N in N O O ")M
N- 0) CO r LO CO CO 0 03 0) N CD r r N CO C0 C
co N- O O M r O N CO CO O Co r r p N
cO O C) CO N N� N- CA C") CCS r r N N
0)
c O N Co CO N Cl N N N Ip ....co
69 EA di 69 EA 64
* * * #
` y
N r N O O co CO O) O N I1) O ti rra
_o N Co Co N- In C) CD O) CO CO M V
E OO t N M In In N N O In N co o0 ti
U O N- If) r Cf! m In N d O ''ti
o O C) r-- O O CD r N N N CD M CCD
O EA 69 1R EA 69 ER N
N CO r r N N- r N- N r CO CD I d --,
_c M O Co " N - Co 0 C") O) O r o O M r O •-�
E O N IC) N C) N N r In CO r O MCO CCS
N CA CD CD O Co N CO CO d' N- M Cr) r CO g
> N CO Cn r N N- N N N CD v M
o r r N N
Z EA EA d9 69 CO ER 4
•- O N CO O O O 0 N p N- rn
CU MIt7 NN 0N- OCA CDN i24ti CC
O O � NCDN NOM 1- CON V ON M0)
co'o O O M N C10 C) N- N
N 0 N N N CO M N
O o N
EA 69 ER EA EA 403 cri
0I
i
U) Cn
CCS L o
C co 0 C v 4) C Cy) L M N C N C C1 a. C) O it
d o E o o E o a) E C) p E o p E o to 0. c
N N N E N E t 7 E N % E NI'l E t
I— 1Y U y U N ca V V H C U U y m O u) C V V o c
C
5 G C _ 0 co .5 0 0 = O p = a�
It Um kUco kC) m kUcD Uoo *kUm W