fgua board of directors strategic planning session · •received $322,000 in damage reimbursements...

FGUA Board of Directors Strategic

Planning Session

March 20, 2014

Central Florida Development

Council Office, Auburndale, FL

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

2

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


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

4


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

5


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


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


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.

8

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

9

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

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

los

ure

s f

ile

d p

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nth

Golden Gate Foreclosure Rate *Real Estate Owned (REO) Filings*

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

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Au

g-1

1

Se

p-1

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Oct-

11

Nov-1

1

Dec-1

1

Jan

-12

Fe

b-1

2

Ma

r-12

Ap

r-12

May-…

Jun

-12

Jul-1

2

Au

g-1

2

Se

p-1

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Oct-

12

Nov-1

2

Dec-1

2

Jan

-13

Fe

b-1

3

Ma

r-13

Ap

r-13

May-…

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

4

Fo

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Lehigh Acres Foreclosure Rate *Real Estate Owned (REO) Filings*

12

Economic Conditions

13

0

40

80

120

160

Jan

-11

Fe

b-1

1

Ma

r-11

Ap

r-11

Ma

y-1

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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-

13

Nov-1

3

Dec-1

3

Jan

-14

Fe

b-1

4

Fo

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Pasco Foreclosure Rate *Real Estate Owned (REO) Filings*

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

3

Oct-

13

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*

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%

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

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%

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

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


– No indexed rate increase


19

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


• Consolidated Systems – Increase in Debt Service cost ($300K)


– Pre-approved indexed (75% of CPI) rate increase


20

Major Assumptions

• Lindrick Utility System

– Level Debt Service Cost

– Pre-approved index (75% of CPI) Rate Increase


• North Fort Myers Utility System

– Increase in Debt Service Cost ($350K)

– Pre-approved index (75% of CPI) + 1.50% = 3.0% Rate

Increase


21

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


22

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)

23


• 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


• 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

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

Next Steps • August – Budget hearing advertisements (if

needed)

• September – Rate Hearings (if needed) and

Final Public Hearing and budget adoption by

Board

27

2014 CUSTOMER SERVICE SURVEY REPORT FROM

DR. HONEY RAND

AND

FURTHER PLANNING DISCUSSION WITH

DR. MEL JURADO

28

fgua board of directors strategic planning session · •received $322,000 in damage reimbursements...

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