FY 15 Budget Review

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City of Raleigh Department of Public Utilities Financial Planning Model Revenue Sufficiency & Rate Projections

FY 2012

FY 2013 Estimated

FY 2014

FY 2015 Projected

FY 2016 Projected

FY 2017 Projected

Line No.

Total System Revenue

Actual

Budget

Raleigh/Garner User Charge Revenue

Water User Charges (1) Sewer User Charges (1)

69,624,243 58,740,881 128,365,123

68,737,422 66,265,381 135,002,802

71,856,638 77,877,839 149,734,477

75,921,298 83,315,227 159,236,524

80,614,996 88,576,146 169,191,142

85,854,340 94,288,454 180,142,794

1. 2.

Subtotal: Raleigh/Garner User Charges

Miscellaneous Revenue

Merger Town Water User Charges Merger Town Sewer User Charges Merger Town Miscellaneous Revenue

9,307,890 10,138,835 4,133,740 18,558,347

10,156,325 11,179,767 5,735,118 21,255,320

8,934,325 10,117,520 4,022,000 19,490,316

9,068,340 10,269,283 4,022,000 19,524,886

9,204,365 10,423,322 4,022,000 19,560,666

9,342,430 10,579,672 4,022,000 19,597,698

4. 5. 6. 7. 8. 9.

Other Operating Income (2)

Acreage Fee Revenue

Interest Income

977,127

650,929

793,440

823,200

1,030,000 1,631,700

1,110,000 1,631,700

Fund 315 Revenue

1,883,956

1,631,700

10.

44,999,895

50,609,159

44,989,301

45,339,408

45,872,053

46,283,500

Subtotal: Miscellaneous Revenue

11.

173,365,019

185,611,961

194,723,778

204,575,933

215,063,194

226,426,294

Total: System Revenue

12.

General Water Rate Increase - Admin (3) General Water Rate Increase - Volume (3) General Sewer Rate Increase - Admin (3) General Sewer Rate Increase - Volume (3)

0% 0%

Approx. 10% Calculated

Calculated

13. 14. 15. 16.

20% 20%

15% 15%

Calculated

14%

17. Total Operating Expenses

(90,783,309)

(95,832,597)

(98,203,779)

(101,310,667) $

(104,531,494) $

(107,863,548) $

18. Net: Revenue Available for Debt Service Current and Future Debt Funding Needs 19. Revenue Bonds & Parity Debt (4,5) Projected Refunding Savings (6) Subordinate Debt (SRF & GO Bonds) Other Indebtedness (Installment Fin., COPs) Transfer to General Fund for ERP Debt (7) 20. 21. 22. 23.

82,581,710

89,779,364

96,519,999

103,265,266

110,531,701

118,562,746

(36,721,035)

(37,082,633)

(44,645,794) 2,457,114 (3,537,970) (4,157,787) (1,608,684)

(47,681,513) 1,282,736 (4,608,802) (3,052,296) (1,664,988)

(51,320,056)

(51,085,923)

262,961

1,748

(2,328,513) (8,719,635) (1,750,000)

(2,225,650) (3,551,163) (1,776,039)

(7,623,841) (3,427,049) (1,723,263)

(6,594,468) (2,864,767) (1,783,577)

(49,519,183)

(44,635,485)

(51,493,122)

(55,724,864)

(63,831,247)

(62,326,986)

Total: Debt All Sources

24.

25. Annual Surplus/(Deficit)

33,062,526

45,143,879

45,026,876

47,540,402

46,700,453

56,235,760

Total Annual PAYGO

(15,000,000) (1,276,999)

(32,500,000) (1,416,000)

(33,000,000) (1,416,000)

(36,000,000) (1,416,000)

(38,000,000) (1,416,000)

26.

27. PAYGO For Nutrient Reduction/Watershed Protection

28. Total Surplus/(Deficit) w/ PAYGO

16,785,527

11,227,879

10,610,876

13,124,402

9,284,453

16,819,760

Debt Service Coverage Parity Indebtedness (8)

2.25

2.42

2.29

2.23

2.16

2.32

29. 30. 31. 32. 33. 34.

Legal Covenant: 1.20

City Policy:

2.00

2.11

2.28

2.11

2.02

1.88

2.06

Parity, Subordinated, & G.O. Indebtedness

Legal Covenant: 1.00

City Policy:

1.25

1.67

2.01

1.87

1.85

1.73

1.90

All Sources

Legal Covenant: 1.00

City Policy:

1.00

Unrestricted Fund Balances

Beginning Balance (9)

62,952,906 16,785,527

79,738,433 11,227,879 (5,390,946) 85,575,367

85,575,367 10,610,876

96,186,243 13,124,402 (6,204,000) 103,106,645

103,106,645

112,391,099 16,819,760 (12,700,875) 116,509,983

35. 36. 37.

Total Surplus/(Deficit) (Line 28) Transfers to CAPI Funds (10)

9,284,453

Ending Balance (9)

79,738,433

96,186,243

112,391,099

38.

Ratio of Ending Balance to O&M (11)

87.8%

89.3%

97.9%

101.8%

107.5%

108.0%

39.

Minimum Target Balance (11)

45,391,655

47,916,298

49,101,890

50,655,333

52,265,747

53,931,774

40.

Ending Over/(Under) Target Balance

34,346,779

37,659,068

47,084,353

52,451,312

60,125,352

62,578,209

41.

Budgeted Non-Cash Reserve

3,128,672

3,238,175

3,351,511

3,468,814

42.

Typical Residential Customer Bill (12)

$ 44.92

$ 48.89

$ 52.63

$ 56.07

$ 59.38

$ 62.71

43. 44.

% Change

10.6%

8.8%

7.6%

6.5%

5.9%

5.6%

(1) Projected water and sewer user charge revenue is based on actual CY 2012 customer demand and assumes 1.5% annual growth in accounts beginning in FY 15. Consumption is projected to remain constant through FY 2016 and 0.50% annual growth is included beginning in FY 2017. (2) FY 12 Misc. Revenues include one-time revenue for: Garner Capacity Purchase ($3.04M); Equipment Fund 252 Transfer ($700,000); Knightdale capital funds return ($400,000). Excluding these one-time revenues, Parity Debt Coverage would be 2.14, and Parity, Subordinated, and GO Coverage would be 2.01. (3) Water and Sewer Admin charges are calculated to recover costs related to billing, meter reading, utility administration, and a percentage of annual debt service requirements. Water and Sewer Volumetric rates increase based on percentages shown. Projected water and sewer rates are shown on the following page. (4) Increases in revenue bond debt are based on future debt issues in the amounts of $75, $77, $158, and $163 million for Series 2013, 2015, 2017 and 2019, respectively. (5) Excludes liquidity/remarketing costs from 2008 A&B debt, which are included in operating expenses (line 17). (6) Includes annual debt service savings from the partial refunding of the Series 2005 and Series 2006A Revenue Bonds. (7) Represents a transfer to the General Fund that is used for payment of Utilities' portion of debt service relating to the City's ERP system. (8) City Policy includes a Council endorsed 2.00x Parity Coverage starting in FY 2012. (9) The balance shown in "Unrestricted Fund Balance" is for Operating and Debt Service Funds Only. See Appendix A for FY 12 reconciliation to financial statements. (10) In lieu of using bond proceeds, the City has elected to cash-finance the Capitalized Interest Funds. (11) City Policy includes a minimum target balance of 50% of annual O&M costs. (12) Monthly bill assuming a residential customer with a 5/8" meter and 6 ccf monthly usage and includes $0.45 per bill for Watershed Protection.

Raleigh Financial Planning Model v40 (Draft Final)

5/13/2013

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