E1. Staff Presentation — original pdf

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Water and Wastewater Commission Austin Water Proposed FY 2022 Budget Joseph Gonzales, Financial Services Assistant Director Briefing Agenda  Proposed FY 2022 Budget Overview  5-Year Capital Improvement Plan FY2022 – 2026  Debt Management Efforts  Financial Policy Updates 2 Budget Considerations  Increase operational and infrastructure resiliency  Maintain financial strength and stability  Ensure affordable rates 3 Proposed FY 2022 Budget Highlights  Resiliency Efforts  $12.0 million in O&M  $350.3 million in the 5-Year CIP (FY22-FY26)  Continued debt management strategies  $64.8 million debt defeasance proposed in FY 2022  Potential debt refunding opportunity in fall FY 2022  Texas Water Development Board Loans anticipated closing in fall FY 2022  Clean Water SRF loan $23.1 million  Drinking Water SRF loan $30.0 million  SWIFT loan $18.0 million  0% Rate Increase for FY 2022  Improvements in affordability 4 Proposed FY 2022 Budget Overview FTEs 62 New Full-time Positions Category EUM - Enterprise Resiliency EUM - Infrastructure Strategy & Performance Reducing Contracted Services My ATX Water Water Forward EUM - Customer Satisfaction EUM - Employee Development & Leadership Affordability Facility Improvements FTE 18 14 10 8 5 3 2 1 1 5 Proposed FY 2022 Budget Overview Sources of Funds Department Service Revenue: FY 2021 Amended: $568.0 million FY 2022 Proposed: $583.4 million $306.3 $296.8 $256.7 $264.9 Water Services Wastewater Services Miscellaneous Revenue $12.2 $9.7 $2.3 $2.5 Reclaimed Water Services FY 21 Amended FY 22 Proposed 6 $350 $300 $250 $200 $150 $100 $50 $0 Proposed FY 2022 Budget Overview Uses of Funds Department Expenditures: FY 2021 Amended: $621.3 million FY 2022 Proposed: $654.2 million $250.6 $236.6 $221.2 $189.8 $173.7 $161.6 $21.2 $20.7 Program Requirements Other Requirements Debt Service Transfers FY 2021 Amended FY 2022 Proposed 7 $300 $250 $200 $150 $100 $50 $0 Increasing Resilience and Enhancing Infrastructure Proposed FY 2022 Budget Overview Capital Improvement Spending Plan $1.087 Billion 5-year Capital Spending Plan 5‐Year Plan FY 2022‐2026 $ in millions 2022 2023 2024 2025 2026 Total Water Wastewater Reclaimed $                            105.1 110.1 6.9 $                             85.2 123.6 13.3 $                               74.2 129.1 9.6 $                               54.6 134.1 3.7 $                               52.4 185.0 1.0 $                          371.5 681.9 34.5 Combined $      222.1 $      222.1 $      212.9 $      192.4 $      238.4 $   1,087.9 9 Proposed FY 2022 Budget Overview 5-Year CIP Spending Plan CIP Category (Alphabetical Order) $ in Millions Buildings and Improvements Information Technology Lift Stations Other Pump Stations Reclaimed Water Network Reservoirs Vehicles and Equipment Wastewater Pipe Network Wastewater Treatment Plants Water Pipe Network Water Treatment Plants $28.9 $17.9 $18.5 $3.2 $30.5 $34.5 $51.6 $20.7 $204.7 $425.0 $178.8 $73.5 10 Ongoing Resiliency Projects for FY2022  Renewing Austin pipeline renewal & replacement projects  Advanced Metering Infrastructure for Potable & Reclaimed Water  South Austin Regional WWTP Electrical Substation No.1 Replacement  Various reservoir and storage projects  Various Supervisory Control & Data Acquisition (SCADA) Improvements  Ullrich WTP Low Service Pump Station Electrical Feed Renewal  Center Street Pump Station Replacement and Electrical Improvements ($80.6M) ($63.2M) ($28.9M) ($28.9M) ($23.4M) ($17.1M) ($11.9M) ($8.6M)  Davis Pump Station Area Improvements 11 New Resiliency Projects for FY2022  Center Street Pump Station Replacement and Electrical Improvements ($11.9M)  Southwest Parkway Transmission Main ($3.0M)  Systems Operations at South 1st Street Service Center  Southwest Parkway Southwest B Elevated Reservoir  Two Potable Water Tanker Trucks to distribute bulk water ($200,000) ($3.4M) ($325,000) 12 Maintain Financial Strength Debt Management Efforts Impacts Total Debt Service Requirements Comparison FY2017 to Current - Budget Basis $19.0 $45.9 $70.5 $76.8 $48.7 $29.7 $43.8 $69.6 $72.3 $78.3 Total Debt Service Savings $571.4M Since 2016 $280 $240 $200 $160 $120 $80 $40 $0 ) s n o i l l i m n i ( e c i v r e S t b e D 2016-17 Actual 2017-18 Actual 2018-19 Actual 2019-20 Actual 2020-21 Estimate 2021-22 Forecast 2022-23 Forecast 2023-24 Forecast 2024-25 Forecast 2025-26 Forecast Current Debt Service Requirements 2016 Debt Service Requirements 14 Fiscal Year Debt Svc Reduction Debt Management Efforts TWDB Loan Savings TWDB Debt Service Loan Savings Loan Amount PV Savings $4.5 s r a l l o D f o s n o i l l i M $60 $50 $40 $30 $20 $ $2.0 $45.2 $10 $20.4 $6.0 $32.0 $7.0 $19.8 2016 2017 2020 2021 $.8 $6.2 2019 $.3 $3.0 2018 Fiscal Year $126.6 Million in Loan Closings To-Date $20.6 Million in Present Value Savings To-Date 15 Proposed FY 2022 Budget Overview Financial Policy Updates Debt Service Coverage Days Cash on Hand Cash Financing of CIP Projects Current Minimum of 1.50x shall be targeted Minimum of 60 days shall be targeted Minimum of 20% is desirable Minimum of 1.75x shall be targeted Minimum of 180 days shall be targeted Proposed Minimum of 35% and maximum of 50% is desirable Drinking Water Protection Zone 5 Boards & Commissions and City Council Public Hearing Public Input at 3 Boards & Commissions Budget Public Input Process 16 Ensure Affordability Proposed FY 2022 Budget Overview Average Residential Customer Proposed Bill Impacts Water Service2 Wastewater Service Total Revenue Current  2021 Rates1 $          40.31             40.48 $          80.79 Proposed  2022 Rates1 $          40.31             40.48 $          80.79 $ Variance $               ‐                  ‐ $               ‐ % Variance 0.0% 0.0% 0.0% Notes:  1. Bills based on 5,800 gallons of water and 4,000 gallons of wastewater discharge 2. Water bills include the Reserve Fund Surcharge 18 Proposed FY 2022 Budget Overview Customer Assistance Program Customer Assistance Program Overview • Over 14,000 Residential CAP participants • Over 15,000 Multifamily CAP participants • Waived residential monthly water and wastewater fixed fees • Discounted residential volumetric water and wastewater rates • Multifamily CAP monthly credit $17 ($11 Water & $6 Wastewater) 2021 Average Monthly Residential Bill Comparison: Non‐CAP vs. CAP Non‐CAP CAP $ Discount % Discount Water $             40.31 $             17.58 $             22.73 Wastewater                 40.48                 22.01                 18.47 Combined $             80.79 $             39.59 $             41.20 56.4% 45.6% 51.0% Note:  Bills based on 5,800 Gals water and 4,000 Gals. wastewater 19 Proposed FY 2022 Budget Overview Affordability Benchmark Actual FY 2019: 1.29% Projected FY 2022: 1.19% AW Goal: 1.5% or less 20 Proposed FY 2022 Budget Fund Summary Amended 2021 Estimated 2021 Proposed 2022 (In Millions) Revenue Transfers In Beginning Balance $               206.4 $          231.1 $               224.3                  568.0             590.0                  583.4                    46.2               11.2                    74.8 Available Funds* $               614.2 $          601.2 $               658.2 Operating Requirements                  257.8             262.7                  271.4 Debt Service Transfers Out                  173.7             190.5                  161.6                  189.8             154.8                  221.2 Total Requirements* $               621.3 $          608.0 $               654.2 Excess (Deficiency)                     (7.1)                (6.8)                      4.0 Ending Balance $               199.3 $          224.3 $               228.3 Proposed complies with all Council approved financial policies. 21 Questions? 22