HomeMy WebLinkAboutAnnual Reports - 4/1/1997ANNUAL REPORT
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ORO VALLEY WATER UTILITY COMMISSION
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April 1997
Oro Valley Town Council
Cheryl Skalsky, Mayor
Paul Parisi, Vice Mayor
Frank Butrico, Councilmember
Bill %autenburger, Councilmember
Vacant, Councilmember
Oro Valley Water Utility Commission
Wendell Cheek, Chair
Valerie Hoyt, Vice Chair
John Dohogne, Member
John Mc Gill, Member
Ron Sloan, Member
David Wagner, Member
Vacant, Member
Town Staff
Chuck Sweet, Town Manager
David Hook, Public Works Director
Shirley Seng, General Manager, Canada Hills
Art Sprinkle, General Manager, Rancho Vistoso
Jim Peterson, Intergovernmental Relations Administrator
David Andrews, Finance Director
Ron %zoman, CPA, Consultant
TOWN OF ORO VALLEY
ORO VALLEY WATER UTILITY COMMISSION
ANNUAL REPORT
APRIL 1997
EXECUTIVE SUMMARY
In October, 1996 the Oro Valley Town Council formed the Oro Valley Water Utility Commission
to act as the official advisory body to the Council regarding water related issues. The functions
and duties of the seven member commission, among other things, include reviewing and
developing recommendations for water revenue requirements, water rate and fee structures, and
water system capital improvement planning. The Oro Valley Water Utility Commission is
required to prepare an annual report to the Town Council regarding its recommendations. This
report is the first of such reports and includes analyses and recommendations related to revenue
and cash requirements, possible rate adjustments, system operations and maintenance costs, a five
year capital improvements plan, alternative water supply options and future organizational
structures.
This executive summary contains specific recommendations regarding water rates, utility cash
flows, organizational operations, and alternative water resource options. More detailed
explanations and financial analyses may be found in the body of the report.
-Water Rates - A 3% rate increase for all customer classes is recommended. The proposed rate
increase would allow costs to keep pace with inflation and allow positive cash balances for both
Canada Hills and Rancho Vistoso. The Commission recommends that the Town have a cost of
services study performed to identify costs associated with monthly minimum, equalize the water
rates based on the study and consolidate budget administration into one utility.
-Consolidation of Water Operations - Currently, both the Canada Hills and Rancho Vistoso
Water Systems operate as separate utilities. Infrastructure is not connected, rates and fees differ
and the utilities' operations are accounted for and administered separately. Consolidation would
provide economies of scale both in field operations and administration. The Commission
recommends that the operations of both systems be consolidated.
Rancho Vistoso Depreciation Expense - When the Town purchased the Rancho Vistoso Water
Company, it was assumed that depreciation expense would be unfunded for the first five to eight
years, based on system quality and excess capacity. The Commission is recommending that the
Town update and perform long range financial projections to ensure the timely recovery of
depreciation and continued system reliability and capacity.
-Alternate Water Resources - The Commission recommends the phased -in use of effluent to
water golf courses. Use of effluent would lower the total consumption of groundwater and allow
continued residential consumption of groundwater within the ADWR "gallons per capita per day"
requirements. Additionally, the Commission recommends that the Town continue joint alternative
water resource planning with neighboring jurisdictions and other water resource agencies to take
advantage of economies of scale. Additionally, the Commission recommends that the Town
purchase incentive priced CAP water while it is available for long term storage.
-Capital Improvements Plan - The Commission recommends that the CIP project list be
adopted as presented within the report. recognizing that actual expenses for the current fiscal year
and FY 1997/98 will be limited to funds available. Available funds will be a function of actual
revenues collected based on the adopted rate structure.
-Master Planning Reports - These reports identify future infrastructure requirements based on
projected population growth. The amounts charged for connection fees are based on these
reports. The Commission recommends that the Town update its Master Planning Reports to
ensure future system adequacy.
ANNUAL REPORT - APRIL 1997
Revenue/Cash Requirements
The Commission and Town staff analyzed the revenue and cash flow requirements necessary to
operate and maintain the system, fund needed capital improvements and make debt service
payments on the municipal water system acquisition bonds. Revenues and cash flows were
projected through June 30, 1998 based on anticipated growth in customer bases and water
consumption patterns similar to FY 1996/97. Projected operating expenses were developed by
the Water Utility Division of the Public Works Department. Operating expenses and capital
improvements will be discussed in greater detail in subsequent sections of this report.
The following table indicates the amount of water sales revenue that would be realized by a 3%
rate increase and an increase in the number of service connections:
System
FY 1996/97
Estimate
FY 1997/98
Estimate
Dollar
Increase
Canada Hills
$2,745,000
$2,850,000
$105,000
Rancho Vistoso
$1,274,000
$1,308,000
$34,000
Combined
$4,019,000
$4,158,000
$139,000
No adjustments to other fees and service charges are recommended until further studies are
conducted to justify potential changes.
Revenue estimates for 0% - 5% rate increases may be found in Exhibit A.
Rate Impact
The Commission recommends an across-the-board 3% increase in water rates. Monthly
minimums and commodity charges would both be increased by 3% for all customer types.
Additionally, the minimum charge for Canada Hills "city" customers (primarily Highlands Mobile
Home Park residents) would be increased from the current $5.75 to $6.92. The Council has
directed that the minimum charge for "city" customers be equalized with "non -city" customers
over a four year period.
This increase will be necessary so that operating costs can keep pace with the moderate inflation
rates forecasted for the upcoming year.
1
The following table summarizes the proposed rate increase for a typical residential customer:
Customer
Current
Minimum
Current
Commodity
Proposed
Minimum
Proposed
Commodity
$5.75
$1.71
$6.92
$1.76
t
$9.75
$1.71
$10.04
$1.76
$9.00
$1.70
$9.27
1 $1.75
The water included in the monthly minimum would remain at 2.000 gallons per month for all
customers for FY 1997/98. This recommendation could change based on a cost of services study.
Water Utility Operations and Maintenance and Debt Service Requirements
The following is a comparative summary of expenses and debt service requirements for both
utility funds. Estimated actuals for FY 1996/97 are compared to estimated figures for FY
1997/98:
Canada Hills
FY 1996/97
Estimated
FY 1997/98
Estimated
Change
Personnel
$260,000
$362,000
$102,000
O & M
694,000
1,063,000
369,000
Depr. & Amort.
630,000
675,000
45,000
Interest Expense
847,000
843,000
(4,000)
Principal Payments
100,000
325,000
225,000
Totals
$2,531,000
$3,268,000
$737,000
N
FY 1996/97
Estimated
FY 1997/98
Estimated
Change
Ran;9M
Per$168,000
$232,000
$64,000
O
406,000
463,000
57,000
Dep
538.000
553,000
15,000
Inte
651,000
651,000
-0-
Pris
-0-
-0-
Tot$1,763,000
$1,899,000
$136.000
The above figures are based on the Town Engineer's initial budget estimate. Because of the
timing of this report and the Town's budgeting process, it is recognized by the Commission that
these figures will need to be revised to fit the final estimate of revenues based on the action of
the Town Council on the rate structure for FY 1997/98. Revised figures, not available at the time
of preparation of this report will be included in the Town Engineer's initial budget request to the
Town Manager. They are subject to further change based on the Town Manager's review and
recommendation to the Town Council and final action by Town Council.
Estimated FY 1997/98 personnel costs would be increased for both systems to fund an estimated
4% - 5% salary increase, increase the time allocation of the Town Engineer and Civil Engineer.
add one system operator to each system and a clerical position to Canada Hills. As mentioned
above, these are subject to change as the iterative process of budget development is completed.
The request for increased operations and maintenance costs reflect, among other items, increased
expenses for electrical power for pumping, water recharge projects, well testing, regulatory
expenses, equipment repair and consultants. For FY 1997/98 only, this category also includes
a 5% operating contingency pursuant to Town water policy. As mentioned above, thses are
subject to change as the iterative process of budget development is completed.
Principal and interest payments reflect debt service pursuant to bond repayment schedules.
5 Year Capital Improvements Plan (CIP)
The Oro Valley Water Utility Commission undertook extensive analysis and public input to
develop a 5 Year Capital Improvements Plan. Funding sources include water rates, connection
fees, and for Canada Hills, bond proceeds of approximately $1 million.
3
The following table summarizes total amounts by year for the CIP:
System
FY
96/97
FY
97/98
FY
98/99
FY
99/00
FY
00/01
FY
01/02
Totals
Caaada
$967.500
$549,000
$953.000
$485.000
$1.220.000
5235,000
$4.409,500
Hills
Rancho
90,500
1.533.000
833.000
1.081.000
577,000
796.000
4.910.500
V istoso
Comb.
$I,O58,000
$2,082.000
$1.786.000
$1.566.000
$1.797.000
$1.031.000
$9,320.000
The Water Capital Improvements Plan identified $9,320,000 of system improvements and
equipment purchases through the fiscal year 2001/02. This figure includes $1,058,000 in the
current fiscal year and $2,082.000 in FY 1997/98. As with many capital improvement plans.
funding needs usually exceed financial resources. Recommended projects to actually be funded
are reflected in the utility funds' operating budgets for rate funded improvements and the
connection fees budgets for connection fee funded improvements.
The Oro Valley Water Utility Commission is recommending that Master Planning Reports be
updated to ensure the adequacy of connection fees. The report should address the timing of when
improvements will be needed and factor in the cost of financing infrastructure that may be needed
before connection fees are actually collected.
Detail to the Water Capital Improvements Plan may be found in Exhibit B.
Financial Summary
Retained earnings is the cumulative measure used by enterprise funds to determine the amount
of earnings remaining after expenses are deducted from revenues since the inception of
operations. The following table represents the estimated retained earnings at June 30, 1998:
-------------
System
7/1/97
Retained Earnings
Net Income
(Loss)
6/30/98
Retained Earnings
Canada Hills
$605,000
$44,000
$649,000
Rancho Vistoso
($366,000)
($526,000)
($892,000)
Combined
$239,000
($482,000)
($243,000)
The Canada Hills Water Utility is projected to have a positive retained earnings of $649,000.
The Rancho Vistoso Water Utility is projected to have a net loss since the beginning of
operations of $892,000. This does not come as a surprise because it was assumed that Rancho
Vistoso's depreciation expense would be unfunded for the first five to eight years of Town
operation. Accumulated depreciation and amortization is estimated to be $1,173,000 at June 30,
1998. If depreciation had been funded, the net income and change in cash balance for FY
1997/98 would be positive.
n
Cash flow is an analysis of all changes that effect the cash account. The following table reflects
the estimated cash balances at June 30, 1998:
System
7/l/97
Cash Balance
Change in
Cash Balance
6/30/98
Cash Balance
Canada Hills
$2,018,000
$60,000
$2,078.000
Rancho Vistoso
$623,000
($187,000)
$436,000
Combined
$2,641,000
($127,000)
$2,514,000
Canada Hills cash balance is estimated to increase to $2,078,000 at the end of FY 1997/98. The
cash balance for Rancho Vistoso is projected to decrease by $187,000 and end up the year at
$436,000. The cash decrease may be attributed to cash payment of $214,000 for capital items
and the non -recovery of depreciation expense.
Exhibit C contains estimated income and cash flow statements and a comparison of funding
requirements with projected revenues for both enterprise funds. Estimated income statements for
connection fees funds are also included in the exhibit.
Alternative Water Resources
The Town of Oro Valley and its neighboring Southern Arizona jurisdictions have historically
relied on pumping groundwater as the sole supply of water for all uses. The Arizona
Groundwater Management Act of 1980 requires that all water users participate in Arizona
Department of Water Resources (ADWR) Management Plans to annually replace, or compensate
for, groundwater pumping through the use of alternative water sources such as CAP water and
reclaimed effluent. The goals of the ADWR Management Plans require that the groundwater
tables be stabilized by recharging an amount of water equal to the amount that is pumped.
The Oro Valley Water Utility Commission recommends that the Town continue joint alternative
water resource planning for permanent long term water supplies with its neighboring jurisdictions
of Marana, the Metropolitan Domestic Water Improvement District (MDWID) and the City of
Tucson, along with the US Bureau of Reclamation (BuRec), ADWR and the Central Arizona
Project (CAP) to take advantage of economies of scale.
The Utility Commission recommends to the Town Council that the first phase for alternative
water use consider use of reclaimed effluent on turf areas, particularly golf courses, located within
Oro Valley Water Utility service area. Use of effluent would lower the total consumption of
groundwater and allow continued residential consumption of groundwater within the ADWR
"gallons per capita per day" requirements.
The Commission further recommends that the Town purchase incentive priced CAP water in the
coming fiscal years, while it is available for long term storage through agreements with local
agriculture, for use in future years during drought conditions or vastly increasing prices.
5
The Town Council has adopted an alternative water resources development impact fee to explore
alternative water resource options. Estimated impact fee collections through June 30, 1998 are
included in Exhibit D.
Conclusion
In conclusion, we recommend the following:
• A 3% rate increase for all customer classes
• Consolidation of water operations including a cost of services study
• Update and perform long range financial projections for recovery of Rancho Vistoso
depreciation expense
• The phased -in use of effluent to water golf courses, continued joint water resource
planning and purchase of incentive priced CAP water for recharge
• The CIP list be adopted for implementation, subject to available funds
• Update of Master Planning Reports related to future system adequacy
The Oro Valley Water Utility Commission is proud to serve the Town of Oro Valley and present
its Annual Report to the Town Council for consideration. While much has been accomplished,
the Commission looks forward to direction from Council regarding those items mentioned in the
Executive Summary, particularly the issues of utility consolidation, cost of service analysis and
strategies for recouping depreciation in Rancho Vistoso. We thank the Council for their
consideration, direction and guidance.
3
Town of Oro Valley Exhibit A
Canada Hills Water Utility Page 1 of 2
Revenue Summary To
June 30, 1997 and June 30, 1998
Summary of Possible Rate Increases
Dollar
Percent
Dollar
Percent
Increase In
Increase In
Estimated
Projected
Increase In
Increase In
Average
Average
Percent
Revenues
Revenues
Revenues To
Revenues To
Residential
Residential
Increase
6130197
6130198
6130198
6130198
Bill
Bill
0%
$2,744,500
$2,767,358
$22.858
0.833%
0.00
0.00%
1%
$2,744,500
$2.794,963
$50.463
1.839%
0.21
1.00%
2%
$2.744,500
$2.822.568
$78,068
2.845%
0.41
2.00%
3%
$1744,500
$2.850,173
$105,673
3.850%
0.62
3.00%
4%
$2,744,500
$2.877,778
$133,278
4.856%
0.83
4.00%
5 % Increase
With 1%
Conservation
* $2,744,500
$2,905,383
$2,905.383
5.862%
1.03
5.00%
* In the context of this exhibit, conservation indicates the estimated decrease in customer
consumption due to price increase.
Town of Oro Valley Exhibit A
Rancho Vistoso Water Utility Page 2 of 2
Revenue Summary To
June 30, 1997 and June 30, 1998
Summary of Possible Rate Increases
Dollar
Percent
Dollar
Percent
Increase In
Increase In
Estimated
Projected
Increase In
Increase In
Average
Average
Percent
Revenues
Revenues
Revenues To
Revenues To
Residential
Residential
Increase
6130197
6130198
6130198
6130198
Bill
Bill
0%
$1,274,411
$1,269.502
($4,909)
-0.385%
0.00
0.00%
1%
$1,274,411
$1,282.197
$7,786
0.611%
0.17
1.00%
2%
$1.274,411
$1,294.892
$20,481
1.607%
0.34
2.00%
351c
$1,274,411
$1,307,587
$33,176
2.603%
0.51
3.00%
4%
$1,274,411
$1,320.282
$45,871
3.599%
0.68
4.00%
5 % Increase
With 1 %
Conservation
*$1,274,411
1 $1,332.977
1 $1,332,977
4.596%
0.85
5.00%
* In the context of this exhibit, conservation indicates the estimated decrease in customer
consumption due to price increase.
Town of Oro Valley Exhibit B
Canada Hills Water Utility Page 1 of 2
5 Year Capital Gnprovernent Plan
Rank
Funding
96197
97198
98199
99100
0oloi
oi/02
Taro)
Project Name
SO,OW
50,000
La Canada td/Conflicts & Interconnects
1
Rates
10,500
Meter Readine Unit (1) & Software
2
Rams
10.500
10.000
Meter Reading Units lA
3
Rates
10.000
25.000
25.OW
CH -RV System Interconnects 50% of Cost
4
Rates
55.000
Utiliry Trocks (2)
5
Rates
55.000
7,0p0
Pool Vehicle 50% of Cost
6
Rates
7•�
33.000
33.000
Road Upgrades/1000' Tangerine
Rates
� 000
000
Aoad Upgrades/800' Lambert Lane
Rates
25.000
25,000
Computer Systems & Software
Rates
28 000
28.000
Dump[ruck & Trailer 50% Cost
Rates
35•�
35,000
Utility Truck
Rates
25.000
23.000
Service Truck
Rates
60,500
97.000
148.000
25.000
0
0
330.500
Subtotal Rates
1
Hook Up Fees
530.000
530.000
Water Plan[ 18
90•�
90,000
Booster at Well 18 2800 Zone
2
Hook Up Fees
12.000
25,000
23.000
25.000
25.000
23.000
I37.000
Main Overstzing Refunds
3
Hook Up Fees
100.000
12' Main Extension/Riven Rivers Edge
Hook Up Fees
100.000
5.000
35,000
Water Plant 19 - Well & Facilities
Hook Up Fees
200.000
200.000
Water Plant 19 -Well &Facilities
Hook Up Fees
223_gp
223,000
1.5 a" Gal. Reservoir - Design
Hook Up Fees
35.OW
33,000
V lant 20 -Well &Facilities
Hook Up Fees
1.150.000
I.ISO.OW
1.5 m Gal. Reservoir - Construction
Hook Up Fees
200.000
200.000
Water Plant 20 -Well &Facilities
Hook Up Fees
542.000
215.000
60.000
450.000
1,210.000
223.000
2,702.000
Subtotal Hook Up Fees
1
Bond
160.000
160.000
Posen Ridge Interconnect/Fazio
80.000
Water Plant 2/Upgrade - Well. Main
2
Bond
80•�
25.000
La Reserve Pressure Reducing Valve
3
Bond
25.000
20.000
Well 8Dnsign-Replacement
4
Bond
20.000
215,000
213,C00
Construction -Weil 8 Replacement
5
Bond
20,000
Well IS Design -Replacement
6
Bond
20,000
2 15 000
215.000
Construction -Well 15 Replacement
7
Bond
Water Plant I -Rehab Well
g
Bond
10.000
50,000
10.000
10.000
10.000
10,000
10,000
00.000
Fire Protection Upgrade
9
Bond
�'�
400.000
��
Countryside Reservoir
Bond
000
g0,0p0
Water Plant I - Rehab Well
Bond
365.000
225,000
665,000
10.000
10.000
1 10,000
1,285.000
Subtotal Bond
Main[. Building/Design 33.3% of Cost
Other
12.000
12.000
80,000
Mamt. Building/Const. 33.3% of Cost
Other
80 0�
p 12.000
80.000
0
0
0 92,000
Subtotal Other
5967,500
E549.000
5953.000
3485.000
81.220.000
5235.000
54,409.500
I - 'ND TOTAL
rojec[ Na,
ooster 2l Upgrade
rell 2 Rehab. Drill & Case. Equp.
leter Readine Unit
Itili[v Truck
IH-RV Interconnects 50% of Cost
ool Vehicle 50% of Cost
Veil 3 Rehab. Drill & Case & Equip.
Veil 1 Rehab. Drill & Case & Equip.
toad Upgrade/12" Tangerine Relocate
3umptruck & Trailer 50'7c Cost
iervice Truck
Subtotal Rates
Booster 24
New Well #I8 Drill. Case. Equip.. Pa
F Zone 16- Main to # 13
F Zone Storage Reservoir # 13
Booster 21 Upgmdel5000 Tank Piping
E Zone Storage at #10
Equip. New Well #5
Po-- --i Piping New Well #5
p dl #5 Drill & Case
MWeil#g
eservoir #14
4
l #8 Drill & Case
ping New Well #8
ew Well #8Reservoir - Additional14
Town of Oro Valley
Rancho Vistoso Water Utility
5 Year Capital Improvements Plan
a
ng 96197 97198
s 10.000
s 120.000
s 10.500
s 40•000
s 25.000
ssssses
Hook Up Fees
Hook Up Fees
Hook Up Fees
Hook Up Fees
Hook Up Fees
Hook Up Fees
Hook Up Fees
202.000
Exhibit B
Page 2 of 2
98199 1 99100 1 00/01 1 01102 1 Totat
110.000
25,000 1 ao•VUU
35.000 1 25.000 1 0 635.500
248.000
870,000
21.000
390.000
60,000
96,000
146.000
=60.00060,�
New Well #4 Drill & Case
" "" ' -'"
_ 60,000
b0u
11A
Equip. New Well #4
Hook Up Fees
000
60,000
Power/Piping New Well #4
Hook Up Fees
1801100
180.000
D Zone Reservoir
Hook Up Fees
340.000
340.000
H Zone Reservoir
Hook Up Fees
96000
96000
Hook Up Fees
Booster 4
80.000 1.319.000
390.000
1.046.000
552,000
796.000
4,183.000
Subtotal Hook Up Fees
Other
12.000
12.000
Main Building/Design 33.3% of Cost
80.000
80.000
Main Buildina_rConsi. 33.3% of Cost
Other
0 12,000
80,000
0
0
0
92,000
Subtotal Other
$90,500 5n 533.000
S833.000
51.081.000
5577.000 5796.1100 54.910.5110
GRAND TOTAL
Exhibit C
Town of Oro Valley Page 1 of 9
Canada Hills Water Utility Fund
Estimated Income Statement
(3% Rate Increase)
Estimated
Estimated
OPERATING REVENUES:
FY 1996197
FY 1997198
State Grant:
$0
$0
ADOT Grant
Water Sales:
Residential
1,740.409
1,817,573
Commerial
156,381
161,077
Irrigation
209,261
216,653
Turf
598,782
616,725
Construction
39,667
38,145
Total Water Sales
2,744,500
2,850,173
Other Revenue:
Miscellaneous Service
43,000
34,800
Meter Income
28,500
31,000
Hook -Up Fees
(68,655)
2,845
0
65,800
Total Other Revenue
Total Operating Revenues
2,747,345
2,915,973
OPERATING EXPENSES:
259,514
361,503
Personnel
Operations & Maintenance
693,865
962,500
Depreciation
603,596
25,950
648,596
25,950
Amortization
Operating Contingencv (5 %)
0
99,927
Total Operating Expenses
1,582,925
2,098,476
Operating Income
$1,164,420
$817,497
NONOPERATING REVENUES
(EXPENSES):
120,000
70,000
Interest Revenue
(847,000)
(843,100)
Interest Expense
Total Nonoperating revenues (expenses)
(727,000)
(773,100)
Net Income (Lass)
437,420
44,397
Retained Earnings, beginning of year
167,149
604,569
Retained Earnings, end of year
$604,569
$648,966
Exhibit C
Town of Oro Valley Page 2 of 9
Canada Hills Water Utility Fund
Estimated Statement of Cash Flows
(3% Rate Increase)
INCREASE (DECREASE) IN CASH.
Estimated
FY 1996197
Estimated
FY 1997198
Cash flows from operating activities:
Cash received from water revenues
2,744,500
2,850,173
Cash received from other revenues
2,845
65,800
Cash payments for operating expenses
(953,379)
(1,324,002)
Operating Contingency (5%)
0
(99,927)
Net cash provided (used) by operating activities
1,793,966
1,492,044
Cash flows from capital and financing activities:
Improvements
(390,000)
(262,000)
Machinery & Equipment
(35,500)
(10,000)
Vehicles
0
(62,000)
Interest expense
(847,000)
(843,100)
Principal payments
(100.000)
(325,000)
Net cash used/provided from capital and
financing activities
(1,372,500)
(1,502,100)
Cash flows from investing activities:
Interest
120,000
70,000
Net cash provided by investing activities
120,000
70,000
Net increase in cash
541,466
59,944
Unrestricted cash/bond funds at beginning of year
1,476,561
2,018,027
Debt Service Reserve (1.1X)
0
(116,810)
Unrestricted cash/bond funds at end of year
$2,018,027
$1,961,161
Exhibit C
Town of Oro Valley Page 3 of 9
Rancho Vistoso Water Utility Fund
Estimated Income Statement
(3% Rate Increase)
Estimated
Estimated
OPERATING REVENUES:
FY 1996197
FY 1997198
Water Sales:
unmetered/Wholesale/Construction
91,942
94,699
Residential
789,308
60,620
807,932
62,438
Commerial
112,887
116,273
Irrigation
219,654
226,245
Turf
Total Water Sales
1,274,411
1,307.587
Other Revenue:
Miscellaneous Service
59,100
18,100
Meter Income
26,000
85,100
27.500
45,600
Total Other Revenue
Total Operating Revenues
1,359,511
1,353,187
OPERATING EXPENSES:
168,366
232,108
Personnel
Aerations & Maintenance
406,250
70 518,9
403,700
70
533,9 70
Depreciation
18,70
8,
Amortization
0
59,420
Operating Contingency (5 %)
Total Operating Expenses
1,112,211
1.247,823
Operating Income
$247,300
$105,364
NONOPERATING REVENUES
(EXPENSES):
54,000
20,000
Interest Revenue
(651,000)
(651,000)
Interest Expense
Total Nonoperating revenues (expenses)
(597,000)
(631,000)
Net Income (Loss)
(349,700)
(525,636)
Retained Earnings, beginning of year
(16,669)
(366,369)
Retained Earnings, end of year
($366,369)
($892,005)
Exhibit C
Town of Oro Valley Page 4 of 9
Rancho Vistoso Water Utility Fund
Estimated Statement of Cash Flows
(3% Rate Increase)
Estimated
Estimated
INCREASE (DECREASE) IN CASH:
FY 1996197
FY 1997198
Cash flows from operating activities:
Cash received from water revenues
1,274,411
1,3 7,587
Cash received from other revenues
85,100
45,600
Cash payments for operating expenses
Operating Contingency (5%)
(574,616)
0
(35,808)
(59,420)
Net cash provided (used) by operating activities
784,895
657,959
Cash flows from capital and financing activities:
Improvements
Machinery & Equipment
Vehicles
(16,723)
(10,500)
0
(167,0 00)
0
(47,000)
Interest expense
Principal payments
(651,000)
0
(51,0 )
0
Net cash used/provided from capital and
financing activities
(678,223)
(865,000)
Cash flows from investing activities:
Interest
54,000
0 0
Net cash provided by investing activities
54,000
20,000
Net increase in cash
Unrestricted cash at beginning of year
160,672
462,564
(187,041)
623,236
Debt Service Reserve (LIX)
0
(65,100)
Unrestricted cash at end of year
$623,236
$371,095
Revenue Requirements
Personnel
O & M Expenses
CIP
Depreciation
Debt Service
Contingency
Total Requirements
Drojected Revenues
..ssume 3% Increase
Revenue Over/(Short)
of Requirements
Other Revenues:
Interest Income
Other
Total Over/(Short)
Canada
Hills
1996197
Town of Oro Valley Water Utilities Exhibit C
Comparison Of Funding Page 5 of 9
Requirements with
Projected Revenues
Canada
Hills
1997198
Rancho
Vistoso
1996197
Rancho
Vistoso
1997198
$260,000
$362,000
$168,000
$232,000
694,000
963,000
406,000
404,000
0
0
11,000 *
214,000
630,000
675,000
0 *
0
947,000
1,168,000
651,000
651,000
0
100,000
0
59,000
$2,531,000
$3,268,000
$1,236,000
$1,560,000
$2,744,000
$2,850,000
$1,274.000
$1,308,000
$213,000
($418,000)
$38,000
($252,000)
120,000
70,000
54,000
20,000
3,000
66,000
85,000
46,000
$336,000
($282,000)
$177,000
($186,000)
* Assumes depreciation expense will be unfunded but CIP items will be funded via water rates.
Exhibit C
Town of Oro Valley Page 6 of 9
Canada Hills Water Connection Fees
Estimated Income Statement
REVENUES:
Estimated
FY 1996197
Estimated
FY 1997198
Connection Fees
$173,000
$90,000
Total Revenues
173,000
90,000
EXPENSES:
Capital Improvements
542,000
215,000
Machinery & Equipment
0
0
Total Expenses
542,000
215,000
Surplus/(Deficit)
($369,000)
($125,000)
NONOPERATING REVENUES (EXPENSES):
Interest Revenue
$0
$0
Total Nonoperating revenues
0
0
Net Income (Loss)
(369,000)
(125,000)
Retained Earnings, beginning of year
0
(369,000)
Retained Earnings, end of year
($369,000)
($494,000)
Town of Oro Valley Exhibit C
Canada Hills Water Utility Page 7 of 9
FY 1997/98 Revenue Estimates
1996/97 1997/98
Miscellaneous Service Revenues $3,500 $3,700
New Service Establishment Fees 22,400 23,500
Reconnect Fees 4,700 4,900
Insurance Recoveries 9,800 0
Miscellaneous 2,600 2,700
Totals $43,000 $34,800
Meter Income
($100 X 310 Customers) $28.500 $31.000
Interest Income $120.000 $70.000
Water Connection Fees $173,000 $90,000
($68,655 + (52,190 X 2)
($575 X 310 customers factored for existing line extension agreements)
Exhibit C
Town of Oro Valley Page 8 of 9
Rancho Vistoso Water Connection Fees
Estimated Income Statement
Estimated
Estimated
REVENUES:
FY 1996197
FY 1997198
Connection Fees
$24,200
$151.250
Total Revenues
24,200
151,250
EXPENSES:
Improvements
80.000
1,319,000
Machinery & Equipment
0
0
Total Expenses
80,000
1,319,000
Surplus/(Deficit)
($55,800)
($1,167,750)
NONOPERATING REVENUES (EXPENSES):
Interest Revenue
$0
$0
Total Nonoperating revenues
0
0
Net income (Loss)
(55.800)
(1,167,750)
Retained Earnings, beginning of year
0
(55,800)
Retained Earnings, end of year
($55,800)
($1,223,550)
Town of Oro Valley
Rancho Vistoso Water Utility
FY 1997/98 Revenue Estimates
1996/97
Miscellaneous Service Revenues $15,000
New Service Establishment Fees 0
Reconnect Fees 1,500
Insurance Recoveries 8,200
Miscellaneous (L-T Storage Credits) 34,400
Totals $59.100
Meter Income
($100 X 275 Customers) $26.000
Interest Income $54.000
Water Connection Fees $24.200
($550 X 275 Customers)
($12,100 X 2)
1997/98
$16,000
500
1,600
0
0
$18.100
527.500
$20.000
$151.250
Exhibit C
Page 9 of 9
Exhibit D
Town of Oro Valley Page 1 of 2
Alternative Water Resources Development Impact Fees
Estimated Income Statement
Estimated
Estimated
REVENUES:
FY 1996197
FY 1997198
Development Impact Fees
$144,000
$175,500
Total Revenues
144.000
175,500
EXPENSES:
Contingency
$0
$327,200
Total Expenses
0
327,200
Surplus/(Deficit)
$144.000
($151,700)
NONOPERATING REVENUES (EXPENSES):
Interest Revenue
$1,200
$6,500
Total Nonoperating revenues
1,200
6,500
Net Income (Loss)
145,200
(145,200)
Retained Earnings, beginning of year
0
145,200
Retained Earnings, end of year
$145.200
$0
Town of Oro Valley
AWRDF
FY 1997/98 Revenue Estimates
1996/97
1997/98
Development Impact Fees $144.000 $175,500
($48,000/4 X 12)
($300 X 595 Customers)
Interest Income $1,200 $6,500
Exhibit D
Page 2 of 2