BAYTOWN AREA WATER AUTHORITY (BAWA)

Transcription

1 BAYTOWN AREA WATER AUTHORITY (BAWA) ANNUAL PROGRAM OF SERVICES ADOPTED BUDGET

2 BAYTOWN AREA WATER AUTHORITY BOARD OF DIRECTORS BRENDA BRADLEY SMITH, President MIKE WILSON, Vice President WAYNE BALDWIN, Secretary LETICIA BRYSCH, Assistant Secretary BRANDON BENOIT, Director FRANK McKAY III, Director 2

3 BAYTOWN AREA WATER AUTHORITY (BAWA) ORGANIZATION CHART Board of Directors General Manager Plant Manager/ Director of Public Works/ Utilities Superintendent Water Treatment Baytown Area Water Authority 3

4 BAYTOWN AREA WATER AUTHORITY 7425 Thompson Road, Baytown, Texas (281) FAX (281) August 19, 2015 President and Directors Baytown Area Water Authority Baytown, Texas It is my pleasure to present the Adopted Budget for the Baytown Area Water Authority (BAWA). The Budget sets forth the revenues and appropriations for the fiscal year October 1, 2015 through September 30, The financial guidance provided by the Board has resulted in BAWA s ability to maintain a system that consistently provides a dependable and high quality water supply to the City of Baytown and surrounding communities. The assurance that we can meet the future water needs of our growing community is vital to our mission. To this end, this adopted budget continues to move forward the new BAWA East Water Treatment Plant, continues to address improvements to the current water treatment facility including replacement of the high service pump area of the plant. Additionally, toward this end we are adding personnel positions of one Chief Laboratory Technician and one Supervisory Control and Data Acquisition (SCADA) Technician. The development of the new BAWA plant continues to progress with the focus on design. The design costs were split over two fiscal years: FY14 - $2.5 million and FY15 - $1.4 million. Construction should begin in FY16 with completion expected in the summer of This budget anticipates issuing $15 million in bonds to fund the initial construction phase. Included in this budget is $5,500,000 for the replacement of the high service pump area, $650,000 for SCADA upgrades, $200,000 for rehabilitation of the flocculation and sedimentation basins and $186,000 for a new transfer pump. Also included is $709,594 for new initiatives bringing that total to $1,500,000 for FY16. The City of Houston notified BAWA of a 4.4% rate increase effective April 1, 2015, for untreated water purchased from the City of Houston. The rates increased from $ to $ per 1,000 gallons. The City of Houston s Code of Ordinances provides that water and sewer rates be adjusted automatically each year in April to reflect the previous year s percentage change to the Houston Regional Consumer Price Index plus Houston population growth. An updated rate study has calculated the effect of this increase, along with future capital and bond reserve needs, and recommends BAWA s treated water rates increase 5% for its customers. This budget includes this recommended 5% rate increase to provide for the increased cost of untreated water, debt associated with the capital program and to provide a reserve for future capital project and working capital needs. Rates will be adjusted in future budgets to reflect funding needs based on the rate study and actual operational needs including debt service requirements. 4

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6 MAJOR BUDGET ISSUES Fiscal Year BAYTOWN AREA WATER AUTHORITY This fund accounts for the operations of the Baytown Area Water Authority (BAWA). BAWA is a water authority created by the Texas Legislature to supply water for the City of Baytown (City) and surrounding communities. BAWA services a total of eight customers with the City as the largest customer, generating approximately 87% of BAWA s annual sales. BAWA is a separate legal entity; however, it is considered a component unit of the City. Since it began operating, BAWA has not experienced shortages of its raw water supply to the plant or interruptions of service to its customers. REVENUES The adopted budget estimates sales of $12,372,759 for an average of million gallons per day (MGD). Fluctuations in rainfall amounts can significantly impact actual sales. A 5% rate increase, recommended by the Utility Rate Study, effective October 1, 2015, is included in the budget. The existing rate structure of $2.61 per 1,000 gallons for the City of Baytown and $2.65 per 1,000 gallons for customers outside the city will increase to $2.74 and $2.78 respectively. This would cover the increased cost of operations, including debt service, the purchase of raw water, and provide a reserve for future capital projects. EXPENDITURES Total operating expenditures for the adopted budget are $6,276,375 which is an increase of $308,303 from the budget and includes additional personnel positions of one Chief Laboratory Technician and one Supervisory Control and Data Acquisition (SCADA) Technician. The budget also includes a transfer of $350,000 to the General Fund for an indirect cost allocation to reimburse the City for administrative services such as Human Resources, Fiscal Operations, Legal and Information Technology Services. Highlights of major operating changes are as follows: Increase in personnel services $ 119,018 Increase in supplies 192,121 Increase in maintenance 2,500 Decrease in services (5,336) Decrease in capital outlay (61,147) Increase in transfers out-capital improvements 919,960 Raw Water Supply Cost BAWA purchases raw water from the City of Houston. The raw water supply contract with the City of Houston is in effect through the year 2040, and sets the maximum amount of raw water to be delivered to the BAWA plant at 20 MGD without penalties. The surcharge for water purchased over the 20 MGD is nominal at this time. BAWA received notice of a rate increase (4.4%) from $ to $ effective April 1, The annual rate adjustment is intended to help cover the City of Houston s cost increases that impact the provision of safe, clean drinking water and the collection and treatment of wastewater. This includes operational costs as well as the costs involved in repairing portions of the City of Houston system s aging infrastructure. 6

7 MAJOR BUDGET ISSUES Fiscal Year Debt Service The transfer to cover the debt service requirement for the adopted budget is $3,187,063 which consists of $2,433,573 for existing debt and $753,490 for new debt related to the BAWA East Water Treatment Plant construction. CAPITAL IMPROVEMENT PROGRAM The Capital Improvement Program for BAWA is funded through the issuance of revenue bonds, grants, and revenue from operations. BAWA East Water Treatment Plant: Development of a six (6) million gallons per day (MGD) surface water treatment plant south of Interstate Highway (IH) 10 and west of SH 99 along the Coastal Water Authority (CWA) Barbers Hill Canal. The design will provide for the ability to expand the plant based on future water demands and allow the plant to convert to salt water treatment (desalinization) ensuring long term viability. BAWA Fritz Lanham Water Treatment Plant: Improvements to this facility include implementation of the upgraded SCADA system, replacement of the high service pump area of the plant, rehabilitation flocculation basins, rehabilitation of sedimentation basins and replacement of one transfer pump and motor. WORKING CAPITAL In order to maintain fiscal stability, governmental entities maintain a working capital balance to meet daily liquidity needs. Appropriate levels of working capital vary from entity to entity based on the relative impact of particular circumstances or financial conditions. Working capital is defined as current assets (e.g., cash, investments and accounts receivable) less current liabilities (e.g., accounts payable). In the adopted budget, BAWA s working capital level at year end is projected to represent 144 days of operating expenditures; a contingency line item of $75,000 is provided; plus we are able to transfer out $4,680,000 to BAWA s Capital Improvement Project Fund (CIPF). The $4,680,000 will be available for funding future capital projects, and to help downsize future borrowing requirements. 7

8 3070 BAYTOWN AREA WATER AUTHORITY PROGRAM SUMMARY Program Description BAWA operates and maintains a 26 Million Gallon per Day (MGD) surface water treatment facility. It has a projected raw water flow of MGD and projected finished water flow of MGD for fiscal year BAWA currently serves 8 surrounding area customers, including the City of Baytown, which uses 87% of BAWA s production. Operations personnel ensure the facility s compliance with the Texas Commission on Environmental Quality s (TCEQ) Rules and Regulations for Public Water Supplies. BAWA provides its customers with high quality, safe drinking water and consistent water pressure for fire protection. Major Goals Maintain water quality necessary to be classified as "Meeting Optimum Corrosion Control" by TCEQ. Maintain Superior Public Water System status. Maintain standards for the Texas Optimization Program - a voluntary program through TCEQ that promotes the optimization of surface water treatment plants, by identifying and addressing the various factors that limit performance in order to lower the risk of waterborne disease. Develop and maintain a staff of highly trained water professionals through continuing education classes and hands on training. Major Objectives Produce MGD of finished water. Maintain finished water turbidity (haze measurement) consistently < 0.1 NTU. Maintain compliance with all TCEQ and EPA regulations. Workload Measures Actual Budget Estimated Projected Primary Customers Average MGD of raw water treated Average MGD of finished water produced Performance Measures 1. Days without interruption of service Days finished water turbidity < 0.1 NTU Maintain Running Annual Average Distribution Chloramine Residual <4.0 mg/l

9 BAYTOWN AREA WATER AUTHORITY FUND 510 BUDGET SUMMARY BY FUND Actual Budget Estimated Adopted Revenues Sale of Water - Baytown $ 10,249,406 $ 10,714,529 $ 10,286,411 $ 10,800,732 Sale of Water - Other 1,451,275 1,497,169 1,497,169 1,572,027 Interest Revenue 3,833 2,000 2,000 2,040 Miscellaneous Transfer From W&S Fund & WWIS Fund 64,938 63,700 63,700 67,463 Total Revenues 11,770,366 12,277,398 11,849,280 12,442,262 Expenditures Personnel Services 890,567 1,139,112 1,008,543 1,258,130 Supplies 3,558,881 3,945,542 4,054,868 4,137,663 Maintenance 164, , , ,800 Services 636, , , ,782 Total Operating 5,249,789 5,968,072 5,982,819 6,276,375 Capital Outlay 70, , , ,600 Transfers Out - Debt Service 2,427,133 2,947,903 2,947,903 3,187,063 Transfers Out - Capital Improvement 3,195,000 4,000,000 4,000,000 4,680,000 Transfers Out - General Fund 250, , , ,000 Contingency - 75,000-75,000 Total Expenditures 11,192,430 13,538,722 13,410,722 14,705,038 Excess (Deficit) Revenues Over Expenditures 577,935 (1,261,324) (1,561,442) (2,262,776) Working Capital - Beginning 5,740,219 6,293,679 6,293,679 4,732,237 GAAP to budget basis adjustment (24,475) Working Capital - Ending $ 6,293,679 $ 5,032,355 $ 4,732,237 $ 2,469,461 Days of Operating Expenditures

10 3070 BAYTOWN AREA WATER AUTHORITY- SERVICE LEVEL BUDGET Actual Budget Estimated Adopted Acct# Acct Description Personnel Services Contract Personnel BAWA $ 890,567 $ 1,139,112 $ 1,008,543 $ 1,258,130 Total Personnel Services 890,567 1,139,112 1,008,543 1,258, Supplies Office Supplies 3,064 2,900 2,900 2, Postage Supplies Wearing Apparel 4,230 6,000 5,000 6, Motor Vehicle Supplies 13,340 16,000 12,000 5, Minor Tools 1,656 1,540 1,600 2, Fuel For Generators , Cleaning & Janitorial Sup 1,900 2,000 2,000 2, Chemical Supplies 678, , , , Medical Supplies Educational Supplies 1,962 2,000 2,000 2, Untreated Water Supplies 2,834,854 3,291,702 3,291,702 3,403, Laboratory Supplies 18,507 22,000 22,000 22,000 Total Supplies 3,558,881 3,945,542 4,054,868 4,137, Maintenance Buildings Maintenance 5,540 6,300 6,300 6, Heat & Cool Sys Maint 5,682 5,500 5,500 5, Electrical Maintenance 32,488 30,000 30,000 30, Furniture/Fixtures Maint 2,838 1,000 1,000 1, Machinery & Equip Maint 110, , , , Motor Vehicles Maint 7,239 4,500 6,000 7,000 Total Maintenance 164, , , , Services Communication 6,394 3,060 5, Electric Service 517, , , , Equipment Rental 5,124 10,250 15,000 15, Special Services 81, , ,000 80, Audits 11,483 13,150 13,150 13, Advertising Education & Training 7,951 8,000 8,000 8, Association Dues General Liability Ins Errors & Omissions Auto Liability Auto Collision Mobile Equipment Real & Personal Property 3,022 3,626 3,626 3, Flood Insurance Bonds Total Services 636, , , ,782 Total Operating 5,249,789 5,968,072 5,982,819 6,276,375 10

11 3070 BAYTOWN AREA WATER AUTHORITY- SERVICE LEVEL BUDGET Actual Budget Estimated Adopted Acct# Acct Description Capital Outlay Furniture & Equip <$ Building & Improvements , Machinery & Equipment - 100, ,000 71, Motor Vehicles - 26,000 26,000 53, Capital Lease Payment 70,443 71, Total Capital Outlay 70, , , , Other Financing Uses To BAWA Debt Service 2,427,133 2,947,903 2,947,903 3,187, To BAWA CIPF Fund 3,195,000 4,000,000 4,000,000 4,680, Expense - General Fund 250, , , ,000 Total Other Financing Uses 5,872,133 7,297,903 7,297,903 8,217, Contingencies Contingencies - 75,000-75,000 Total Contingencies - 75,000-75,000 TOTAL DEPARTMENT $ 11,192,430 $ 13,538,722 $ 13,410,722 $ 14,705,038 11

12 BAWA - CAPITAL IMPROVEMENT PROGRAM FUND 518 BUDGET SUMMARY BY FUND Actual Carriedforward Adopted Budget Estimated Carriedforward Allocation Budget Revenues Transfer In from Operating Fund $ 3,195,000 $ - $ 4,000,000 $ 4,000,000 $ 4,000,000 $ - $ 4,680,000 $ 4,680,000 Interest Revenue 8,781-3,000 3,000 6,500-6,500 6,500 Total Revenues 3,203,781-4,003,000 4,003,000 4,006,500-4,686,500 4,686,500 Expenditures Thompson Rd Utility Relocation - 46,382-46,382-46,382-46,382 BAWA Valve Project 49, , , , East Plant Feasibility Study - 9, BAWA East Plant Engineering 585,178 1,914,822 1,400,000 3,424,822 1,680,598 1,744,224-1,744,224 BAWA East Plant Land , , , ,686 SCADA System 38, , , , , ,000 1,201,678 Flocculator Equipment 98, ,000 77,221 77, Actuators 152, Waterline - Thompson & Cedar Bayou 244,776 55, Chlorine Room Improvements 132, ,981-33,010 33, Filter Rating - 50,000 50,000 50, Decant Pumps 88, Chain and Scraper , , Vertical Pump ,000 64, Thompson Rd Line Improvements (36") , , Chemical Feed System Improvements , ,000 80, , ,500 High Service Pumps ,000 38,000 10,000 5,500,000 5,510,000 Polymer Pumps ,000 55, Rehab Flocculation Basin , ,000 Rehab Sedimentation Basin , ,000 Transfer Pump and Motor , ,000 New Capital Project Initiatives - 1,267, , , , ,594 1,500,000 Total Expenditures 1,389,101 4,557,487 2,515,000 7,172,465 3,165,589 3,656,876 7,245,594 10,902,470 Excess (Deficit) Revenues Over Expenditures 1,814,680 (4,557,487) 1,488,000 (3,169,465) 840,911 (3,656,876) (2,559,094) (6,215,970) Working Capital - Beginning 4,961,019 6,775,699 2,218,212 6,775,699 6,775,699 7,616,610 3,959,734 $ 7,616,610 Working Capital - Ending $ 6,775,699 $ 2,218,212 $ 3,706,212 $ 3,606,234 $ 7,616,610 $ 3,959,734 $ 1,400,640 $ 1,400,640 12

13 BAYTOWN AREA WATER AUTHORITY REVENUE BONDS LONG TERM DEBT AMORTIZATION SCHEDULES Principal Requirements Principal Revenue Amount of Outstanding Fiscal Year Outstanding Bonds Issue Oct. 1, 2015 Principal Interest Total Sept. 30, 2016 Series, 2006 $ 9,975,000 $ 4,800,000 $ 640,000 $ 136,260 $ 776,260 $ 4,160,000 Series, ,505,000 3,405, , , ,613 2,600,000 Series, ,315,000 6,800, , , ,700 6,265,000 Total $ 15,005,000 $ 1,980,000 $ 453,573 $ 2,433,573 $ 13,025,000 Combined BAWA Debt, All Series Debt Requirements to Maturity Fiscal Principal Total Total Year 5/01 Interest Requirement ,980, ,573 2,433, ,030, ,393 2,423, ,090, ,181 2,421, ,165, ,518 2,429, ,290, ,060 1,485, ,025, ,870 1,187, , ,755 1,120, , , , , , , ,000 92, , ,000 82, , ,000 73, , ,000 62, , ,000 51, , ,000 39, , ,000 27, , ,000 13, ,825 Total $ 15,005,000 $ 2,589,192 $ 17,594,192 Combined BAWA Debt, All Series Debt Requirement to Maturity Interest Principal Amount in Thousands $3.000 $2.500 $2.000 $1.500 $1.000 $0.500 $ Fiscal Year 13

14 BAYTOWN AREA WATER AUTHORITY REVENUE BONDS DETAIL DEBT AMORTIZATION SCHEDULES Fiscal Interest Principal Interest Interest Annual Principal Total Year Rate Due 5/01 Due 11/01 Due 5/01 Requirement Outstanding Outstanding Revenue Bond, Series 2006 Date of Issue - June 14, 2006 Term - 20 Years $ 12,113, % $ 595,000 $ 2, $ 51,400 $ 648,515 $ 9,380,000 11,465, % 530,000 77, , ,152 8,850,000 10,751, % 540, , , ,587 8,310,000 10,000, % 550, , , ,159 7,760,000 9,234, % 565, , , ,368 7,195,000 8,458, % 580,000 98,545 98, ,090 6,615,000 7,681, % 590,000 91,585 91, ,170 6,025,000 6,908, % 605,000 84,210 84, ,420 5,420,000 6,135, % 620,000 76,345 76, ,690 4,800,000 5,362, % 640,000 68,130 68, ,260 4,160,000 4,586, % 655,000 59,490 59, ,980 3,505,000 3,812, % 675,000 50,484 50, ,968 2,830,000 3,036, % 695,000 41,034 41, ,068 2,135,000 2,259, % 710,000 31,130 31, ,260 1,425,000 1,487, % 735,000 20,835 20, , , , % 690,000 10,178 10, , $ 9,975,000 $ 1,024,000 $ 1,114,711 $ 12,113,711 Rev. Refunding Bond, Series 2007 Date of Issue - February 1, 2007 Term - 13 Years $ 8,842, $ - $ - $ 66,153 $ 66,153 $ 6,505,000 8,776, % 40, , , ,613 6,465,000 8,472, % 40, , , ,013 6,425,000 8,169, % 45, , , ,413 6,380,000 7,862, % 45, , , ,613 6,335,000 7,558, % 695, , , ,813 5,640,000 6,605, % 715, , , ,013 4,925,000 5,660, % 745, , , ,413 4,180,000 4,713, % 775,000 85,806 85, ,613 3,405,000 3,767, % 805,000 70,306 70, ,613 2,600,000 2,821, % 835,000 54,206 54, ,413 1,765,000 1,878, % 865,000 37,506 37, , , , % 900,000 19,125 19, , $ 6,505,000 $ 1,135,894 $ 1,202,047 $ 8,842,941 14

15 BAYTOWN AREA WATER AUTHORITY REVENUE BONDS DETAIL DEBT AMORTIZATION SCHEDULES Fiscal Interest Principal Interest Interest Annual Principal Total Year Rate Due 5/01 Due 11/01 Due 5/01 Requirement Outstanding Outstanding Revenue Bond & 2002 Series Refunding-Series 2012 Issue Date - March 29, 2012 Term-20 Yrs $ 10,590, % $ 485,000 $ 123,050 $ 103,500 $ 711,550 $ 7,830,000 9,878, % 510,000 98,650 98, ,300 7,320,000 9,171, % 520,000 93,550 93, ,100 6,800,000 8,464, % 535,000 88,350 88, ,700 6,265,000 7,752, % 540,000 83,000 83, ,000 5,725,000 7,046, % 550,000 77,600 77, ,200 5,175,000 6,341, % 570,000 72,100 72, ,200 4,605,000 5,627, % 580,000 66,400 66, ,800 4,025,000 4,914, % 290,000 60,600 60, ,200 3,735,000 4,503, % 295,000 57,700 57, ,400 3,440,000 4,092, % 300,000 54,197 54, ,394 3,140,000 3,684, % 310,000 50,447 50, ,894 2,830,000 3,273, % 315,000 46,184 46, ,369 2,515,000 2,866, % 325,000 41,459 41, ,919 2,190,000 2,458, % 335,000 36,584 36, ,169 1,855,000 2,050, % 345,000 31,350 31, ,700 1,510,000 1,642, % 360,000 25,744 25, ,488 1,150,000 1,230, % 370,000 19,894 19, , , , % 385,000 13,650 13, , , , % 395,000 6,913 6, , $ 8,315,000 $ 1,147,422 $ 1,127,872 $ 10,590,294 15

16 CITY OF HOUSTON UNTREATED WATER RATES Effective Month/Year 04/ / / / Rate 01/ FIRST 150 MGD/PER 1,000, NEXT 150 MGD 08/ FIRST 300 MGD/PER 1,000, NEXT 300 MGD 07/ FIRST 300 MGD/PER 1,000, NEXT 300 MGD 08/ FIRST 300 MGD/PER 1,000, NEXT 300 MGD 02/ FIRST 300 MGD/PER 1,000, NEXT 300 MGD 10/ FIRST 300 MGD/PER 1,000, NEXT 300 MGD 10/ (GRACE UP TO 13.1 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER 11.9) 06/ (GRACE UP TO 13.1 MGD. IF WE GO OVER, THEN 5% ADDED TO ANYTHING OVER 11.9) 04/ (GRACE UP TO MGD. IF WE GO OVER, THEN 5% ADDED TO 04/ (GRACE UP TO MGD. IF WE GO OVER, THEN 5% ADDED TO 04/ (GRACE UP TO MGD. IF WE GO OVER, THEN 5% ADDED TO 04/ (GRACE UP TO MGD. IF WE GO OVER, THEN 5% ADDED TO 04/ (GRACE UP TO MGD. IF WE GO OVER, THEN 5% ADDED TO 04/ (GRACE UP TO MGD. IF WE GO OVER, THEN 5% ADDED TO 06/ (GRACE UP TO MGD. IF WE GO OVER, THEN 5% ADDED TO 04/ (GRACE UP TO MGD. IF WE GO OVER, THEN 5% ADDED TO 04/ (GRACE UP TO MGD. IF WE GO OVER, THEN 5% ADDED TO 04/ (GRACE UP TO MGD. IF WE GO OVER, THEN 5% ADDED TO 04/ (GRACE UP TO MGD. IF WE GO OVER, THEN 5% ADDED TO 04/ (GRACE UP TO MGD. IF WE GO OVER, THEN 5% ADDED TO 16

17 City Rate/1,000 gallons Other Rate/1,000 Gallons TREATED WATER RATES Increase- City Increase- Other Year 1981 $0.97 $ $0.97 $1.00 $0.00 $0.03 Comments $1.07 $1.10 $0.10 $0.10 Result of rising operating cost. (Raw water rates up 25%) $1.18 $1.21 $0.11 $0.11 Result of increase in raw water rates $1.26 $1.29 $0.08 $0.08 Funding for plant expansion debt $1.39 $1.42 $0.13 $0.13 Funding for new water line debt and City of Houston rate increase $1.46 $1.49 $0.07 $0.07 Funding for new water line debt and City of Houston rate increase $1.55 $1.58 $0.09 $ $1.71 $1.74 $0.16 $ $1.96 $1.99 $0.25 $ $2.15 $2.18 $0.19 $ $2.35 $2.39 $0.20 $ $2.53 $2.57 $0.18 $ $2.61 $2.65 $0.08 $ $2.74 $2.78 $0.13 $0.13 Funding for new water line debt, other operating increases and City of Houston rate increase. Funding for new water line debt, other operating increases and City of Houston rate increase. Funding for new water line debt, other operating increases and City of Houston rate increase. Funding for new water line debt, other operating increases and City of Houston rate increase. Funding for new water line debt, other operating increases and City of Houston rate increase. Funding for new water line debt, other operating increases and City of Houston rate increase. Funding for new water line debt, other operating increases and City of Houston rate increase. Funding for new water line debt, other operating increases and City of Houston rate increase. 17

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