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Home My WebLink AboutPP-FY19 Financial SummaryMWMC Regional Wastewater Program Financial Summary FY 2018-19 Here for a summary of FY2018-19 financial results We will look at 2 ways: Actuals compared to budget – ensures compliance to oregon budget law and measures accuracy in budgeting. why are these things important? budget compliance is a legal requirement – the legal level is more granular than what you see in these slides and we keep a close eye on it throughout the year accuracy of budgeting is important because if we consistently underexpend and overcollect by large margins we risk setting rates too high and accumulating excess reserves What you will see as we go thru the slides is that the revenues and costs that go in to our user fees come in close to budget showing that we have significant expertise predicting the amounts for these activities in normal years. What if we have an abnormal year? We are financially resilient because we have well sized reserves, especially on the operating side. Actuals compared to mid-year estimates a. These mid year estimates were done as part of preparing the FY20 budget. We estimated where we will end the year, in order to better estimate what projects we should re-budget in the following year as well as what our ending/beginning cash might be. Regarding the comparison to mid year estimates, we covered this information in depth at the September meeting where the commission approved carryover funding for both operating and capital, as well as some new funding for fy20 cap projects and adjustments to budget facilitating the early payoff of CWSRF loan 64840 1 6/8/2018 Budget to Actual Similar story to previous years, we received revenue over budget and spent less than budgeted. We have been working to dial in these variances while still trying to err on the conservative side of variances. Operating revenue was higher by $1,106,907. 3.1% over budget for operating revenue budget as a whole User fee revenue made up 357K of this 1.07% over its budget Septage hauler fee revenue made up 216K of the operating revenue overage (45% over its budget) (other items internal engineering over by 234K, interest over by 150K, misc rev over by $100K SDC revenue was over by 448K or 26% of its budget. This is one of the more difficult items to estimate because we are never sure what permits will be pulled and how much building will happen. This slide illustrates why we look at dollar variances and % variances. While sdcs are over budget by 25%, it is less than half the actual dollars than operating revenues which are over by only 3% Another important point here is that even if we do consistently overcollect sdc’s, that does not have the same impact on ratepayers as ifwe consistently overcollected user fees Operating expenses – under budget by $1,059,312. 5.8% under operating expense budget a. Springfield total underspend was $463,986 which was 11% of the budget b. PS was under budget by $27.788 which is 1.5% of the PS budget B. M&S was under budget by 436,198 which was 20% of the MS budget c. M&S underspending was in contractual services, litigation & attorney fees, insurance premiums and the tiny house waiver fund. d. Eugene operations underspending was $595,326 PS $816,532 or 8.9% under budget while M&S 221,206 or 4.4% over budget 7. RESERVES a. the budgeted reserves of $56M is after the budget adjustment to allow for the fy19 SRF loan payoffs b. you can see on the chart that of the $25M in reserve surplus (over budget) $21M is from capital projects alone. c. Of the $25m in budget surplus reserves, $12M for cap projects was included in the base budget for FY20 and another $6M in cap projects was carried forward, $5M was budgeted to payoff CWSRF loan and almost $200K was carried forward on operating budget line items. 2 6/8/2018 Operating – Estimated vs. Actual For this slide and the next slide – they are repeats the information we discussed at the september meeting. The top portion shows the details of how the fund ended the year more than estimated. The bottom part of the slide shows the changes the commission approved to the operating budget in SB1 – including several carryover amounts and the items that comprise the loan payoff 3 6/8/2018 Capital – Estimated vs. Actual Capital projects not spent is the majority of the capital cash carryforward and those are carried forward into FY19. Eugene capital not spent was carried forward in the form of capital outlay, major rehab and equipment replacement for projects/items planned by the end of the year but timing off and will happen in FY19. Interest income was higher than budget and estimates in both operating and capital mainly because our interest rate doubled over previous year and we didn’t spend down as much on capital projects as budgeted. Supplemental budgets are listed as approved in September with most all being carryforwards of money previously budgeted except the $5M of SRF loan payoffs that we talked about last month. This will pay off the one of the two remaining CWSRF loans 4 6/8/2018 Reserve balances Here is a picture of where we ended last year and where we ended this year. The total reserves are down 3.9M from prior year, Capital spending increased by $3.2M between FY18 and FY19 Debt service spending increased by $4.9M between FY18 and FY19 due to the early retirement of two CWSRF loans in FY19 Adjustments we talked about last month is SB1 is going to have the effect shown on the right. We transferred 15M in FY19 compared to 14M in FY18 (up from $11.3M in FY17.) the 17-18 increase was based on debt service savings when the 2006 bond was retired. 5 6/8/2018 Debt – as of 6/30/19 CWSRF 64840 was paid off on October 1, 2019 6 6/8/2018 Questions and Comments Discussion This is a look at our BUDGET numbers and how they compare to our actual costs. The auditors are going to be here Monday for 2 weeks looking at the City of Springfield AND MWMC so we are in the middle of the audit process now and compiling financial statements that include all the reporting adjustments required by GAAP for full accrual accounting. We will be coming back in probably January with the auditors to talk about that. 7 6/8/2018 Meg This is the graph in their packets. Basically shows that all reserves are funded directly or indirectly from user and septage fees except SDC reserves which are funded by reimbursement and improvement SDCs 8 6/8/2018 Input, Questions and Comments Discussion The MWMC and the regional partners are committed to providing these services in a manner that will achieve, sustain, and promote balance between community, environmental, and economic needs while meeting customer service expectations Katherine 9 6/8/2018 Valerie Warner, Associate Program Manager Finance Department, City of Springfield vwarner@springfield-or.us 541 726-3740 10 6/8/2018