BUDGET METHODOLOGY 1 CLICK TO EDIT MASTER TITLE STYLE BUDGET - PowerPoint PPT Presentation

BUDGET METHODOLOGY 1

CLICK TO EDIT MASTER TITLE STYLE BUDGET METHODOLOGY Member Consumption (Billion Gallons) • Traditional Method - Budget for full FY Minimum Actual Difference variable rate to be covered directly by 08 91.8 77.5 84% rate 09 92.8 79.2 85% • Proposed Method - Only 90% of 10 92.8 74.6 80% variable is directly covered by rate 11 92.8 85.9 93% • Remaining 10% (if needed) is available in RWS Contingency or 12 93.6 81.0 86% Cap Imp Fund 13 93.6 78.4 84% • Only Exceeded 90% once in previous 14 93.9 69.0 74% 11 years 15 93.9 66.6 71% • Rebates and Excess Rates still 16 93.9 80.7 86% calculated using traditional method 17 95.0 78.7 83% • Does not affect contract or Rebate Policy 18 95.0 84.8 89% Average 83% 2

CLICK TO EDIT MASTER TITLE STYLE BUDGET METHODOLOGY Member Annual Minimums and Actual Consumption 100000000 Decade of Abnormal Weather 90000000 104% 93% 89% 80000000 87% 110% 86% 83% 85% 84% 84% 116% 91% 80% 94% 90% 70000000 74% 88% 75% 71% 60000000 1,000 Gallons 50000000 40000000 Model Conservation plan limits 30000000 lawn irrigation to twice per week NTMWD began meetings with Member Cities Lawn Irrigation limited to to develop the Model Conservation Plan twice per week during drought 20000000 10000000 0 Water Year Minimum Actual Drought with Restrictions Above Avg Rain 3

CLICK TO EDIT MASTER TITLE STYLE BUDGET METHODOLOGY Member Annual Minimums, Actual Consumption and Rate History 100,000,000 $4.00 Decade of Abnormal Weather Major Capital Projects 2005-2018 2005 Tawakoni plant/pipeline $180M $3.60 90,000,000 104% 2006 Wetlands project $243M 2010 Ozone (Wylie plants) $127M 93% 89% 80,000,000 $3.20 2012 Texoma pipeline $312M 87% 110% 86% 83% 85% 84% 2015 Main Stem project $120M 84% $2.78 116% 94% 90% 91% 80% $2.80 70,000,000 2016 Wylie plants imp/expan $191M Cost per 1,000 Gallons 74% 2017 Reservoir $1.6B 88% 75% 71% 60,000,000 $2.40 1,000 Gallons $2.00 50,000,000 $1.70 $1.60 40,000,000 30,000,000 $1.20 $1.02 $0.719 $0.80 20,000,000 $0.619 Lawn Irrigation limited to twice per week during drought Model Conservation plan limits NTMWD began meetings with Member Cities 10,000,000 $0.40 to develop the Model Conservation Plan lawn irrigation to twice per week $- 0 Water Year Drought with Restrictions Above Avg Rain Minimum Actual Member Rate 4

CLICK TO EDIT MASTER TITLE STYLE BUDGET METHODOLOGY Member Rate History Rate Annual FY @ 100% Increase 08 1.08 - 09 1.18 9.26% 10 1.25 5.93% 11 1.37 9.60% 12 1.49 8.76% 13 1.7 14.09% 14 1.87 10.00% 15 2.06 10.16% 16 2.29 11.17% 17 2.53 10.48% 18 2.78 9.88% 5

CLICK TO EDIT MASTER TITLE STYLE BUDGET METHODOLOGY Variable Rate – Propose FY19 Budget Traditional Proposed Difference $31.0 M $27.9 M $3.1 M Chemical Production Power $19.3 M $17.4 M $1.9 M Water Purchases $ 5.1 M $ 4.6 M $0.5 M $55.4 M $49.9 M $5.5 M Impact to Rate: $.05 Reduction 6

CLICK TO EDIT MASTER TITLE STYLE BUDGET METHODOLOGY - CONTINUED RWS Due to uncertainty planned to issue for rest of NTML $632 M Now that uncertainty has reduced the current plan is to issue the next SWIFT Bond Issue in November 2020 in the amount of $531 M. SWIFT  Resulted in reducing Nov 18 Bond Issue from $632 M to $531 M  Resulted in reducing rate by $.04 in FY19  Saved $3.7 M in FY19 NON SWIFT  Reduced from $57 M to $25 M  Reduced rate by $.01 in FY19  Saved $1.1 M in FY19 7

RWS Change From 7/12/18 to 8/9/18 7/12/18 BOD Budgeted Expenses $ 368,181,755 Rate Incr/(Decr) Variable Cost Savings: 10% Reduction Chemicals (3,095,870) $ (0.03) Power (1,935,870) (0.02) Water Purchases (508,515) - Total Variable Cost Savings: 10% Reduction (5,540,255) (0.05) Fixed Cost Savings: (3,728,470) (0.04) (Capital, Supplemental, and Personnel Request Reductions) Capital Cost Savings: Capital Improvement 2,400,000 0.02 Debt Service Payment (4,835,000) (0.07) Capital Cost Savings: (2,435,000) (0.05) 8/9/18 BOD Budgeted Expenses $ 356,478,030 -3.2% $ (0.14) Customer Premium (983,073) Other RWS Revenue (14,801,833) Fund Balance 88,505 Total Revenue Requirement $ 340,781,629 RWS Projected Flow for WY19 (1,000 Gal) 116,706,037 % Incr in Rate Proposed FY19 Member City Water Rate $ 2.92 5.04% FY19 Cost of Service Member City Water Rate $ 3.06 10.07% Difference $ (0.14) 8

FY19 FY19 PRELIMINARY ANNUAL TRADITIONAL PROPOSED INCREASE/ MINIMUM METHOD METHOD (DECREASE) MEMBER CITY 3.06 2.92 (0.14) Allen 6,011,208 18,394,296 17,552,727 (841,569) Farmersville 280,467 858,229 818,964 (39,265) Forney 1,849,256 5,658,723 5,399,828 (258,896) Frisco 10,352,662 31,679,146 30,229,773 (1,449,373) Garland 13,721,955 41,989,182 40,068,109 (1,921,074) McKinney 11,731,544 35,898,525 34,256,108 (1,642,416) Mesquite 8,297,666 25,390,858 24,229,185 (1,161,673) Plano 26,719,809 81,762,616 78,021,842 (3,740,773) Princeton 521,799 1,596,705 1,523,653 (73,052) Richardson 11,019,311 33,719,092 32,176,388 (1,542,704) Rockwall 3,529,281 10,799,600 10,305,501 (494,099) Royse City 492,064 1,505,716 1,436,827 (68,889) Wylie 1,877,558 5,745,327 5,482,469 (262,858) -5% Total 96,404,580 294,998,015 281,501,374 (13,496,641) 9

CLICK TO EDIT MASTER TITLE STYLE BUDGET METHODOLOGY – FY 17 COMPARISON 100% Traditional (Mil $) Proposed (Mil $) Flow City Net Annual Payment Net Annual Payment Actuals (%) Over All Benefit After Rebate After Rebate Allen 92.6% $15.026 $14.804 $0.222 Farmersville 63.4% $ 0.667 $ 0.660 $0.007 Forney 94.8% $ 4.639 $ 4.569 $0.070 Frisco 94.8% $25.652 $25.265 $0.387 Garland 73.9% $33.248 $32.846 $0.402 McKinney 97.9% $27.137 $26.716 $0.421 Mesquite 67.8% $19.897 $19.674 $0.223 Plano 82.3% $65.664 $64.789 $0.875 Princeton 95.7% $ 1.221 $ 1.202 $0.019 Richardson 73.5% $26.680 $26.359 $0.321 Rockwall 75.2% $ 8.088 $ 7.989 $0.099 Royse City 98.1% $ 1.131 $ 1.113 $0.018 Wylie 92.3% $ 4.690 $ 4.622 $0.068 Total $233.740 $230.608 3.132 10

CLICK TO EDIT MASTER TITLE STYLE BUDGET METHODOLOGY - CONTINUED FY 17 Estimated Additional Funding Required to Ongoing Funding Using Rebate Using 100% vs. 90% Rebate 100% vs. 90% (Normal Year) $.544 $1-1.5 M Source of Funding: Excess Rate Charges and Other Identified Budget Savings Recommendation: Staff Recommends Continuing to Use 100% of Rebates 11

CLICK TO EDIT MASTER TITLE STYLE BUDGET METHODOLOGY - CONTINUED BONDS RWWS Previously: • Issue for 1 yr 2/2019 – 1/2020 • Est FY19 Cost $0.746 M Current Plan: • Only issue for FY19 2/2019 – 9/2019 • Est FY19 Cost $0.70 M UEFIS Previously: • Issue for 1 yr 2/2019 – 1/2020 • Est FY19 Cost $0.9 M Current Plan: • Only issue for FY19 2/2019 – 9/2019 • Est FY19 Cost $0.69 M 12

BUDGET SUMMARY 13

CLICK TO EDIT MASTER TITLE STYLE ALL SYSTEMS - PRELIMINARY By Category June Personnel Operating Capital $77 0% $146 0% $276 <2%> FY18 Amend $84 9% $171 17% $305 9% FY19 July Personnel Operating Capital $77 0% $144 <1%> $278 <1%> FY18 Amend $84 9% $168 15% $306 9% FY19 Personnel Operating Capital August $77 0% $142 <3%> $278 <1%> FY18 Amend FY19 $84 9% $158 8% $302 8% 14

CLICK TO EDIT MASTER TITLE STYLE ALL SYSTEMS - PRELIMINARY By System June Water Wastewater Solid Waste Interceptor Sewer $327 <2%> $64 0% $35 <3%> $34 0% $38 <2%> FY18 Amend $368 11% $73 14% $37 3% $39 15% $43 12% FY19 July Water Wastewater Solid Waste Interceptor Sewer FY18 Amend $327 <2%> $64 0% $35 <3%> $34 0% $38 <2%> FY19 $368 11% $72 13% $37 3% $37 9% $43 12% August Water Wastewater Solid Waste Interceptor Sewer FY18 Amend $325 <2%> $64 0% $35 <3%> $34 0% $38 0% FY19 $356 7% $71 11% $37 3% $37 9% $43 13% 15

ALL SYSTEMS - PRELIMINARY Expenditures by System $400 7% Incr 2% Decr $350 $556 M Bonds $300 Sewer Bond Issues $26 M Buffalo Crk Inter $23 M Mustang Crk Inter $250 Millions $ 9 M Muddy Crk WWTP $200 $44 M $150 Bonds $53 M 11% Bonds $100 Incr 13% 3% 3% 9% Incr Decr Incr Incr $50 $0 Water Wastewater Solid Waste Interceptor Sewer FY18 Bdgt $332 $64 $36 $34 $38 FY18 Amnd $325 $64 $35 $34 $38 FY19 Bdgt $356 $71 $37 $37 $43 16

ALL SYSTEMS - PRELIMINARY FY19 Budget Expenditures $544 15% Personnel (Millions) $84 56% Capital Program/Debt Issuance $302 29% Operating Debt $254 M $158 Cap Imp $48 M Supplies $56 M Services $90 M Other $12 M (Other includes: Escrow, Capital Outlay, & Special Projects) 17

PERSONNEL 18

CLICK TO EDIT MASTER TITLE STYLE FY19 BUDGET – PRELIMINARY Personnel Requests FY18 Authorized – 793 10 Requested Mid-Year – 12 9 Requested FY19 – 21 8 FY19 Budget – 826 7 6 9 5 4 3 5 5 4 4 2 3 3 1 0 Note: 64 Original Requests Received From Managers *Reestablish 1 Position 19