fgua board of directors strategic planning session · •received $322,000 in damage reimbursements...
TRANSCRIPT
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FGUA Board of Directors Strategic
Planning Session
March 20, 2014
Central Florida Development
Council Office, Auburndale, FL
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Workshop Objectives
• Present 2013 Results and Challenges
• Present FY 12-13 Year-End Financial Report and Preliminary FY 13-14 Forecast
• Review Strategic Goals/Objectives
• Receive 2014 Customer Service Survey Report
• Future Direction Discussion
• Update Goals/Vision
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Accomplishments Since Last Planning Session (February
2013)
3
Aqua
30,294
56,474
75,846
89,217
96,182
117,973
0
20,000
40,000
60,000
80,000
100,000
120,000
2008 2009 2010 2011 2012 2013
Cu
sto
me
r C
on
ne
cti
on
s
Fiscal Year
FGUA Customer Connections
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Accomplishments Since Last Planning Session (February
2013)
• Intergovernmental outreach and collaboration with 15 local governments for Aqua purchase consent
• Smoothly transitioned 24% increase in customer connections
• Lent support to Sarasota and DeSoto County’s Aqua asset acquisition
• Recognized by Florida AWWA with “Best in Class” award for Pasco customer outreach
• Mitchell WTP recognized as “Outstanding Project” by FICE
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Accomplishments Since Last Planning Session (February
2013)
• Invited to present Pasco intergovernmental
cooperation success story at AWWA/WEF national
utility management conference
• No material facility regulatory compliance issues
• Overall improvement of utility financial position
with minimal rate adjustments, including;
– Transfers into Rate Stabilization ― Consolidated $300k
― Golden Gate $575k
― Lehigh Acres $250k
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Accomplishments Since Last Planning Session (February
2013)
• Received “clean” FY13 audit with no material
findings
• Reconnaissance bond rating for Lindrick remained
affirmed at A-, Pasco Aqua bond rating affirmed at
BBB+
• Very positive feedback from local governments and
customers in former Aqua service areas
• Productivity increased and cost reductions realized
from full utilization of new video conferencing
system 6
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Accomplishments Since Last Planning Session (February
2013) • Received the Award of Excellence in Financial
Reporting for the FY 2012 CAFR by the Government Finance Officers Association for the twelfth consecutive year
• Received $322,000 in damage reimbursements from FEMA for TS Debbie; $318,000 pending
• Independent benchmarking review reveals competitively favorable price value from FGUA operations and management contracts
• Negotiated cost effective operations contract for Pasco systems with updated cost allocation
7
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Accomplishments Since Last Planning Session (February
2013)
• Completion of Odor Control improvements at the
Seven Springs (Pasco Utility System) WWTP
reducing complaints from surrounding residents
• Reduction of chlorides in the Lindrick wastewater
system addressing City of New Port Richey
concerns
• Expect approval from SWFWMD this month for a
249k per day increase in groundwater withdrawal
allocation in the Seven Springs system with
approximate net savings of $262,000 per year.
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Challenges Encountered
• Slow economic recovery
• US Government reduction of Build America Bond subsidy - $320,026 negative budget impact
• Some customer complaints about Aqua related meter reading/billing
• Continued tight cash flow in North Fort Myers
• Did not achieve working capital policy target for North Fort Myers
• Reuse effluent disposal issues with FDEP at NFM/Del Prado
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Challenges Encountered
• Demands of Aqua transition requirements
prevented more planned contact with local
government elected officials.
• Some unexpected R&R issues with Aqua (e.g.
hydrotanks) necessitating CIP re-prioritization
• Participation in UAC meetings declined
10
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Economic Conditions
11
0
10
20
30
Jan
-11
Fe
b-1
1
Ma
r-11
Ap
r-11
Ma
y-1
1
Jun
-11
Jul-1
1
Au
g-1
1
Se
p-1
1
Oct-
11
Nov-1
1
Dec-1
1
Jan
-12
Fe
b-1
2
Ma
r-12
Ap
r-12
Ma
y-1
2
Jun
-12
Jul-1
2
Au
g-1
2
Se
p-1
2
Oct-
12
Nov-1
2
Dec-1
2
Jan
-13
Fe
b-1
3
Ma
r-13
Ap
r-13
Ma
y-1
3
Jun
-13
Jul-1
3
Au
g-1
3
Se
p-1
3
Oct-
13
Nov-1
3
Dec-1
3
Jan
-14
Fe
b-1
4Fo
rec
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ure
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ile
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Golden Gate Foreclosure Rate *Real Estate Owned (REO) Filings*
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Economic Conditions
0
20
40
60
80
100
Jan
-11
Fe
b-1
1
Ma
r-11
Ap
r-11
May-…
Jun
-11
Jul-1
1
Au
g-1
1
Se
p-1
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Oct-
11
Nov-1
1
Dec-1
1
Jan
-12
Fe
b-1
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Ma
r-12
Ap
r-12
May-…
Jun
-12
Jul-1
2
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g-1
2
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p-1
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Oct-
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Nov-1
2
Dec-1
2
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-13
Fe
b-1
3
Ma
r-13
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r-13
May-…
Jun
-13
Jul-1
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g-1
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3
Jan
-14
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b-1
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Lehigh Acres Foreclosure Rate *Real Estate Owned (REO) Filings*
12
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Economic Conditions
13
0
40
80
120
160
Jan
-11
Fe
b-1
1
Ma
r-11
Ap
r-11
Ma
y-1
1
Jun
-11
Jul-1
1
Au
g-1
1
Se
p-1
1
Oct-
11
Nov-1
1
Dec-1
1
Jan
-12
Fe
b-1
2
Ma
r-12
Ap
r-12
Ma
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Jun
-12
Jul-1
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Au
g-1
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Se
p-1
2
Oct-
12
Nov-1
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Dec-1
2
Jan
-13
Fe
b-1
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Ma
r-13
Ap
r-13
Ma
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Jun
-13
Jul-1
3
Au
g-1
3
Se
p-1
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Oct-
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Nov-1
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Dec-1
3
Jan
-14
Fe
b-1
4
Fo
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ile
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Pasco Foreclosure Rate *Real Estate Owned (REO) Filings*
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Economic Conditions
14
0
10
20
30
40
Jan
-11
Fe
b-1
1
Ma
r-11
Ap
r-11
Ma
y-1
1
Jun
-11
Jul-1
1
Au
g-1
1
Se
p-1
1
Oct-
11
Nov-1
1
Dec-1
1
Jan
-12
Fe
b-1
2
Ma
r-12
Ap
r-12
Ma
y-1
2
Jun
-12
Jul-1
2
Au
g-1
2
Se
p-1
2
Oct-
12
Nov-1
2
Dec-1
2
Jan
-13
Fe
b-1
3
Ma
r-13
Ap
r-13
Ma
y-1
3
Jun
-13
Jul-1
3
Au
g-1
3
Se
p-1
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Oct-
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Nov-1
3
Dec-1
3
Jan
-14
Fe
b-1
4
Fo
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NFM Foreclosure Rate *Real Estate Owned (REO) Filings*
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Financial Status – FY 2013
15
FGUA Combined Systems
Operating Revenues/Expenses FY2013
FY 13 Budget FY 13 Actual Variance ($) Variance (%)
Operating Revenue 68,050,342$ 67,580,838$ (469,505)$ -0.7%
Operating Expenses 36,503,036 35,262,447 (1,240,589) -3.4%
Net Operating Income 31,547,306$ 32,318,390$ 771,084$ 2.4%
Non-Operating Revenue 653,969 822,005 168,035 25.7%
Net Income 32,201,275$ 33,140,395$ 939,120$ 2.92%
Debt Service 22,092,981 22,690,124 597,143 2.7%
Other Transfers 4,532,515 4,731,471 198,956 4.4%
Surplus 5,575,780$ 5,718,800$ 143,020$ 2.57%
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Financial Status
16
$68.05 $67.58
$36.50 $35.26
$22.09 $22.69
$5.58 $5.72
$-
$20.00
$40.00
$60.00
$80.00
FY 13 Budget FY 13 Actual
Millio
ns
For The Fiscal Year Ending September 30, 2013
FY2013 FGUA Combined Systems
Operating Revenue Operating Expenses Debt Service Surplus
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Financial Status – FY 2014
17
FGUA Combined Systems
Operating Revenues/Expenses FY2014
FY 14
Budget
MTD Budget Jan.
2014
Actual Jan.
2014
FY 14
Projection
Budget vs.
Projection Variance
($)
Budget vs.
Projection Variance
(%)
Operating Revenue 74,900,808$ 24,966,936$ 24,786,246$ 74,358,737$ (542,071)$ -0.7%
Operating Expenses 41,982,151 13,994,050 12,580,180 41,526,090 (456,061) -1.1%
Net Operating Income 32,918,657$ 10,972,886$ 12,206,066$ 32,832,647$ (86,010)$ -0.3%
Non-Operating Revenue 439,386 146,462 753,867 901,503 462,117 105.2%
Net Income 33,358,043$ 11,119,348$ 12,959,933$ 33,734,150$ 376,107$ 1.13%
Debt Service 25,448,946 8,482,982 8,498,628 25,448,946 (0) 0.0%
Other Transfers 4,869,138 1,623,046 1,623,046 4,869,138 (0) 0.0%
Surplus 3,039,959$ 1,013,320$ 2,838,259$ 3,416,066$ 376,107$ 12.37%
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Financial Status
18
$74.90
$24.97 $24.79
$74.36
$41.98
$13.99 $12.58
$41.53
$25.45
$8.48 $8.50
$25.45
$3.04 $1.01
$2.84 $3.42
$-
$20.00
$40.00
$60.00
$80.00
$100.00
FY 14 Budget MTD Budget Jan. 2014 Actual Jan. 2014 FY 14 Projection
Millio
ns
FY2014 FGUA Combined Systems
Operating Revenue Operating Expenses Debt Service Surplus
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Major FY 2015 Assumptions
• Golden Gate
– Level Debt Service Cost
– Additional R&R transfers
– No indexed rate increase
– 2.5% increase in operating expenses
• Lehigh Acres
– Level Debt Service cost
– Additional R&R transfers
– No indexed rate increase
– 2.5% increase in operating expenses
19
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Major Assumptions
• Pasco Systems (Seven Springs & Aloha Gardens) – Increase in Debt Service cost ($500,000)
• Level Debt Service cost after 2015
– Reduce operating cost: • Lower labor cost at plants
• Increase well withdrawals
• Lower county water purchases
– 4.5 % Approved rate increase – Last pre-approved rate increase over indexed amount
– 2.5% increase in operating expenses
• Consolidated Systems – Increase in Debt Service cost ($300K)
– Additional R&R transfers
– Pre-approved indexed (75% of CPI) rate increase
– 2.5% increase in operating expenses
20
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Major Assumptions
• Lindrick Utility System
– Level Debt Service Cost
– Pre-approved index (75% of CPI) Rate Increase
– 2.5% increase in operating expenses
• North Fort Myers Utility System
– Increase in Debt Service Cost ($350K)
– Pre-approved index (75% of CPI) + 1.50% = 3.0% Rate
Increase
– 2.5% increase in operating expenses
21
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Major Assumptions
• MacDill AFB System
– Activity level per basic contract requirements and
approved new government project requests
• Lake, Pasco and Unified Aqua Systems
– Level Debt Service cost
– Pre-approved index (75% of CPI) rate increase
– 2.5% increase in operating expenses
22
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Strategic Goals/Objectives
• Maximize efficiencies, including technology investments, such as:
- SCADA
- Video conferencing
- Automated Meter Reading
- Reverse call-ins/e-commerce/Web services
• Adjust customer service approach in response to feedback (e.g. web use)
• Carefully control costs (e.g. energy auditing, consumables)
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Strategic Goals/Objectives
• Operate systems within optimal service standards and best industry practices
• Provide excellent stewardship of the FGUA finances and credit standing
• Minimize/Avoid Rate Increases
• Expand customer base in existing systems when/where feasible
• Ensure equity in service charges; maximize contributed revenue (e.g. grants)
24
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Strategic Goals/Objectives
• Expand FGUA systems to improve economies
of scale but within Board guidance
• Ensure well-reasoned, comprehensive capital
improvement planning balancing priorities
with customer and credit tolerance
25
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Next Steps • March – June 2014: Rate Consultant reviews
forecasts and rate requirements with CFO; budget development
• May – Present re-evaluated comprehensive capital improvement strategy to Board
• June – System Manager submits FY 2015 Proposed Budget and 2015-2019 CIP to Board
• July – Follow-up Budget recommendations/workshop (if needed)
26
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Next Steps • August – Budget hearing advertisements (if
needed)
• September – Rate Hearings (if needed) and
Final Public Hearing and budget adoption by
Board
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2014 CUSTOMER SERVICE SURVEY REPORT FROM
DR. HONEY RAND
AND
FURTHER PLANNING DISCUSSION WITH
DR. MEL JURADO
28