2021 Capital Improvements Plan Topics 1. Annual expenditures for - PowerPoint PPT Presentation

2021 Capital Improvements Plan

Topics 1. Annual expenditures for planning period 2. Cash reserves projections 3. Connection charge projections 4. Financing alternatives

Annual Expenditures Actual Expenditures Budgeted or Proposed Expenditures $50 $ 44 $41 $40 $36 $30 $29 $30 $27 Millions $23 $25 $20 $19 $19 $20 $15 $9 $10 $8 $0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

District Funds Connection Direct charges transfer (7%) (2%) Clean Operating Capital Water Fund Fund Fund loan (91%) Debt Service Interest Service Fund (<1%) charges

Transfer from Operating Fund to Capital Fund 2020 Capital B Budget Pr Prop opos osed 2 2021 (Actuals t throug ugh h Capi pital Year Ye 2019 2019) Impr provem emen ents P s Plan n Differ eren ence e 2016 $0 2017 172,000 2018 0 2019 1,200,000 2020 915,000 2021 961,000 $1,486,000 $525,000 2022 1,009,000 2,001,000 992,000 2023 1,059,000 2,506,000 1,447,000 2024 1,112,000 3,021,000 1,909,000 2025 1,168,000 3,542,000 2,374,000 2026 1,226,000 4,040,000 2,814,000 2021 2021-2026 T 2026 Total $6, $6,535, 535,00 000 $16, $16,596, 596,000 00 $10, $10,061, 061,000 00

Cash Reserve Projections $16 Millions Increased Cash Transfers No Increase in Cash Transfers $14 Minimum Balance $12 End of Year Cash Balance $10 $8 $6 $4 $2 $0 2020 2021 2022 2023 2024 2025 2026

Connection Charge Projection $6 Millions Historical Connection Charges 2020 Budget Projection $5 2021 CIP Projection $4 $3 $2 $1 $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026

Connection Charges – 2020 3.0 $2.8 2020 2.5 2019 5-Year Average 2.0 2020 Budget Target $1.7 Millions 2020 Revised Budget Target 1.5 1.0 0.5 0.0 Jan Feb Mar Apr May June July Aug Sep Oct Nov Dec

Outstanding Connection Charges SewerPlanNum DateApproved DateExpired CalcBalanceDue DeedRestriction Project/Comments 2020-007 1/30/2020 7/30/2020 0 Yes 2020-008 1/30/2020 7/30/2020 0 Yes Covered Bridge Resdences of Bear 2020-021 3/12/2020 9/12/2020 148,730.19 Tree Farms 2020-027 3/26/2020 9/26/2020 26,194.06 Village at Autumn Lake Phase 10 Rockstream Drive Assessment 2020-034 4/16/2020 10/16/2020 58,853.31 District - 2020 2020-035 4/16/2020 10/16/2020 49,851.41 Stoner Prairie Phase 3 2020-042 4/30/2020 10/30/2020 0 Yes 2020-045 4/30/2020 10/30/2020 14,561.01 Vang Homesites 2020-055 5/28/2020 11/28/2020 52,424.81 The Meadowlands Phase 11 The Woods at Cathedral Point 2020-063 6/11/2020 12/11/2020 78,007.20 Yes Phase 1 2020-064 6/11/2020 12/11/2020 274,206.48 Yes Whispering Coves Phase 1 2020-071 6/25/2020 12/25/2020 644,386.17 Yes Fox Hill Estates Phase 3 TOTAL 1,347,214.64

Financing Alternatives Transfer from Operating Transfer from Operating Projected increase in Fund to Capital Fund Fund to Debt Service Fund annual service charges Capital Reserve Six Year Debt Minimum Scenario Description Alt. No. 2021 2021-2026 2021 2021-2026 2021 2021-2026 Incurred Met? CIP (base) 0 $1.486 M $16.596 M $16.552 M $111.2 M 3.1% 3.0% $126.5 M Yes Reduce transfer to 1 $1.486 M $16.596 M $16.027 M $107.7 M 1.8% 2.8% $126.5 M Yes Debt Service Fund No Increases in transfer to Capital 2 $0.961 M $6.535 M $16.552 M $111.2 M 1.8% 2.0% $136.5 M No Fund

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% Interest Rates for Clean Water Fund loans 1993 1995 1997 1998 2000 1999 2002 2002 2006 2006 2009 2007 2010 2011 2011 2013 2015 2014 2016 2015 2015 2018 2017 2018 2018 2019

Debt Financing Advantages Disadvantages • Large capital costs can be • Interest payments, even at spread out over time subsidized rates. • Future users participate in • Debt burden on future cost of improvements users, limits flexibility • Subsidized interest rates • Future of Clean Water Fund through Clean Water Fund is not guaranteed • Steady revenue source for • High debt to expense ratio repayment of loans via hurts bond rating service charges

Next Steps • Accept draft 2021 CIP for planning purposes • Formal approval of Capital Budget in October • Project details available on District website http://www.madsewer.org/Planning/Budget- Finance

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Cash spending in 2021 Project 2021 Spending Metrogro Applicators & $0.9 M Equipment CMMS Replacement $1.3 M Pump Station 17 Relief $2.8 M Force Main – Phase 1 Total $5.0 M

Service Charge Impacts Operating ng F Fund nd Support f for the Impl plied ed P Percentage e Capital P Pro rogram m Increa ease i se in n Servi vice e (Fro rom S m Service Increa ease O se Over er P Prior Charge Reve venue nue O Ove ver Charges) es) Year Ye Prior Pr or Y Year Year Ye 2016 $12,909,000 $1,066,000 4% 2017 13,856,000 947,000 3% 2018 14,505,000 649,000 2% 2019 16,358,000 1,853,000 5% 2020 16,755,000 397,000 1% 2021 18,038,000 1,283,000 3% 2022 19,298,000 1,260,000 3% 2023 20,582,000 1,283,000 3% 2024 21,910,000 1,328,000 3% 2025 24,667,000 1,371,000 3% 2026 $24,667,371 $1,386,000 3%