harrisburg authority 2014 budget presentation

8/14/2019 Harrisburg Authority 2014 budget presentation

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The Harrisburg Authority

2014 Budget Presentation

November 14, 2013

Chris Feese, Finance Director


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Provider ofEssentialCommunityServices

Steward forSustainable UtilityManagement

Water

Solid WasteWastewater

Administrative

THA


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Projected Operating Expenses

The Authoritys operating expenses consist of the expense to produce, treat, and distribute water to

residents of the City of Harrisburg and adjacent service areas. In preparing the budget for 2014, several

adjustments were made from historical costs to account for the following items, among others:

1. Increase in salaries, wages, and benefits to account for the hiring of additional Water Divisionpersonnel to fill positions left vacant in recent years.

2. Accrued Leave Payouts due to past City personnel based upon their employment contracts with theCity.

3. Increase in Operating Expenses and Major Maintenance to account for prior years maintenancedeferments (i.e. water meters, meter batteries, pipeline repairs, minor equipment replacements.)

4. Elimination of the City Administrative Fee relative to the termination of the Management Agreement5. Proforma adjustments to estimated annual expenses, such as sewage, where significant increases or

decreases in cost are predicted for 2014 and beyond.

6. Full funding of expenses, necessary for effective operations, which were historically cut by the City aspart of their budget approval process.

Based upon industry standards and discussions with BOW staff, remaining expenses were then increased

between three (3%) to five (5%) percent to account for anticipated inflation over the six-year period of our

analysis.


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Projected Revenues

Historically, the Management Agreement authorized the City to perform customer billing and collection

services for the Authority. Revenue collected by the City for water service, referenced as City Deposits, was

transferred to the Authoritys Water Revenue Fund. City Deposits represented cash received. The

projected opening balance for January 1, 2014 is $3,102,590. These funds are unrestricted and available for

debt service coverage.

It is assumed that the City will continue billing service into 2014 until the time in which THA is appropriately

staffed and their billing software ready to commence direct customer billing and collection. This transition in

billing is anticipated to take place the middle to end of 2014. Estimated receipts from water revenues for

2014 are derived based upon the review of 2010, 2011 and 2012 actual revenues, along with projected

revenues for 2013. The cash basis rather than the accrual basis is used for projecting revenue.

In addition to reviewing historic revenue totals, City billing information was evaluated including historicannual water consumption totals, total annual collectable amounts and total amount collected for the period

of 2007 through 2013. Revenue projections for water service for the study period 2014 through 2019 were

based on the existing rates that became effective during 2006. The revenue projection does not include

growth in the water system customer base.


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Water System Rate Analysis

TABLE A - Comparison of Expanded Volumetric Rate Options

Per 1,000 gallons

EXISTING $ 5.75 26.83$

$ 6.18 28.45$

$ 7.27 32.54$

$ 7.63 33.88$

$ 7.99 35.26$

$ 6.18 28.45$

$ 6.64 30.15$

$ 7.11 31.94$

$ 7.81 34.57$

$ 6.18 28.44$

$ 6.63 30.13$

$ 7.38 32.96$

$ 7.94 35.07$$ 6.99 31.49$

$ 7.09 31.86$

$ 7.39 32.98$

$ 7.69 34.13$

$ 8.06 35.51$

RATE Average Residential

Bill

Current Consumption Rate

Per.

ExistingRateCovenant

OPTION 1A

(Rates Per Existing Rate

Covenant)

Proposed 2016 Rate (w/ 5.0% inc.)




OPTION 1B


Covenant)





OPTION 1C


Covenant)





Financial

I

stit

t

i

's OPTION 2

(Rates Per Financi al

Institutions's Proposed Rate

Covenant, No Addl. Bonds Test)







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Triple Bottom LineCriteria:

Environmental

Social

FinancialAffordability

Environmental

Financial

AffordabilitySocial

THA

harrisburg authority 2014 budget presentation

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