Annual Meeting – Financial Report March 19, 2019
F inanc ial Statements Financial Statements – As of and For the Year Ending December 31, 2018 Include: Balance Sheets – snapshot of Utility’s financial health Statements of Revenues and Expenses – results of the Utility’s operations Statements of Changes in Members’ Equity – reports the changes in members’ equity accounts Statements of Cash Flow s – reports cash inflow s and cash outflow s from ongoing operations and investment (capital) and finance (debt) sources
F inanc ial Statement F ac ts Audited annually by a firm of Certified Public Accountants Provides an independent opinion on the accuracy of the Utility’s financial statements Users can rely on that information in making financial decisions Utility has received an unmodified opinion from the independent auditors on its 2018 financial statements, stating that the financial statements are fairly stated in all material respects Highest level of assurance auditors can provide Financial Statements duplicated in the Annual Report, completed audited Financial Statements include: Notes to the Financial Statements Supplemental Information
F inanc ial Highlights Utility had another successful year and is in strong financial shape Capital Credit retirement program commenced during 2018 – retirements totaled $2.9 million Credits w ere allocated to members for qualifying years from 1988 – 2005 Utility’s underlying credit rating unchanged 2012A and 2013 series revenue bonds paid in full Credit rating on the Utility’s 2010 series revenue bonds upgraded by Moody’s to Aa2 Total liabilities decreased $8.2 million
Balance Sheets - Assets– December 31, 2018 and 2017 – Highlights Assets – resources that provide future economic benefit to the Company Total assets year over year – increase of approximately $2,485,000 Plant, Property and Equipment (PPE) – Expenditures totaling approximately $17,479,000 during 2018 $23.5 million of capital projects completed and placed into service Lime Water Treatment Plant Upgrades RO Plant Expansion Project Phase II Water Main R& R Priority Projects Wastew ater Plant Upgrades Sew er R& R Rehabilitation projects
Balance Sheets - Assets– December 31, 2018 and 2017 – Highlights (cont’d) Cash and cash equivalents: • Restricted cash – not available for use • Continued effort to invest Utility’s cash in accordance w ith investment policy for a better investment return • Includes customer deposits of $3m – not available for use • Overall cash reserve levels w ill be decreasing throughout 2019 due to the follow ing: Expansion of the Operations Service Center West Wastew ater Plant upgrades Ongoing service line renew al and replacement
Balance Sheets - Assets– December 31, 2018 and 2017 – Highlights (cont’d) Investments: • $40.6 million – governed by Utility’s Investment Policy • Diversification • Compliance w ith the Utility’s investment policy monitored on a monthly basis
Cash and Investments by Type
Balance Sheets – Liabilities - Highlights Liabilities – future sacrifices of economic benefits that the Utility is obligated to make as a result of past transactions Total liabilities decreased $8.2 million from 2017 to 2018 Series 2012A and 2013 revenue bonds w ere paid in full during 2018 Payments due in 2019: $1,295,361 interest due 5/1 $6,120,361 principal and interest due 11/1
Balance Sheets - Liabilities - Long-Term Debt Service The Utility has three outstanding long-term bond issues totaling $66,595,000 at December 31, 2018: $48,090,000 Series 2010 Bonds – Water & Wastewater (refinancing) Maturity 2033 Interest Rates 2.50 – 5.00% $8,895,000 Series 2012B Bond – Water & Wastewater Refunding (Series 2002A/B) Maturity 2023 Interest Rate – 1.9326% $9,610,000 Series 2014 Bond – Water Refunding (Series 2004A) Maturity 2024 Interest Rate – 1.97%
Balance Sheets – Total Liabilities
Statements of Revenues and Expenses Operating revenues increased 3.4% from 2017, consistent w ith expectations Water Sales - 40% Wastew ater Sales - 52% Other fees are meter connection fees, special service charge interest payments, backflow installation fees, among others
Statements of Revenues and Expenses (cont.) Operating expenses increased 8.1% to $37.8 million compared to $35.0 million in 2017 Increase due to higher chemical cost and usage, increased labor costs and higher depreciation expense Depreciation expense increased approximately $1.1 million, mainly due to the completion of several large capital projects: RO Plant Expansion Water Treatment Plant upgrades Phase II Water Main R& R) Operating margin: 2018: $2.6 million 2017: $4.1 million
Statements of Members’ Equity Increase totaling $10.7 million as a result of: $1.8 million net margin $11.9 million of capital contributions $2.9 million of capital credit retirements Increase of 4.7% from 2017 Capital contributions consist of: $7.7 million of ANC fee and SSC principal payments $4.2 million of contributed collection and distribution lines from developers Members’ equity as a % of total assets at year end: 2018: 76.4% 2017: 73.8%
Statements of Cash Flow s - Highlights Reports on the cash inflow s and outflow s during the year Net cash provided by operating activities: 2018: $17.7 million 2017: $18.2 million Investing – investments in securities and purchases of capital assets $20.9 million spent on capital projects $7.7 million received in ANC fees and special service charge principal
Statements of Cash Flow s (cont.) $6.1 million in principal payments on long-term debt Principal payment included payoff of 2012A and 2013 bonds Cash and cash equivalents decreased $1.5 million during 2018
Final Thoughts Strong w orking capital position In compliance w ith all of its debt covenants and has strong service coverage ratios Currently has AA and Aa2 bond ratings issued by Standard and Poor’s and Moody’s, respectively The Utility w ill continue its system improvement capital project efforts, its debt reduction plan and capital credit retirement plan The Utility is w ell positioned to continue the same level of service its members expect
Recommend
More recommend
