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Home My WebLink About36-86 RESOLUTIONRESOLUTION NO. 16-R6 A RESOLUTION AUTHORIZING THE MAYOR AND CITY CTFRK TO EXECUTE A CONTRACT WITH BLACK & VEATCH FOR THE PREPARATION OF AN OPERATIONS REPORT ON THE CITY'S WATER AND SEWER SYSTEMS. BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYEITEVILLE, ARKANSAS: Section 1. That the Mayor and City Clerk are hereby authorized and directed to execute a contract with Black & Veatch for the performance of an operations report on the City's water and sewer systems. A copy of the contract authorized for execution hereby is attached hereto marked Exhibit "A" and made a part hereof. Section 2. To appropriate funds for the aforesaid contract the following adjustments in the 1986 Water and Sewer Fund Budget are hereby approved: Account No. 40-43702-051 40-43701-001 40-43702-001 40-43703-001 40-45700-054 Change Increase Decrease Decrease Decrease Decrease $16,500.00 4,687.00 1,563.00 1,000.00 9,250.00 PASSED AND APPROVED this 18th day of March , 1986. CONTRACT FOR ENGINEERING SERVICES THIS CONTRACT is madeby and between the City of Fayetteville, Arkansas, hereinafter called the City, and Black & Veatch Engineers -Architects of Kansas City, Missouri, hereinafter called the Engineers. WITNESSETH: That in consideration of the mutual covenants herein contained, the City hereby agrees to employ the Engineers to perform the services here- inafter outlined in connection with development of revenue and revenue requirements, allocation of costs of service, and rate design for the water utility. SECTION I. The services the -Engineers agree to perform are as set forth in Attachment A. SECTION II. For the services set forth in Section I, the City agrees to pay the Engineers on the following basis Project Manager, Project Engineer, and all other engineers, technical and clerical personnel. All direct expense, including in part, travel and subsistence away from the Engineers' Office, computer time, long distance telephone, and reproduction. 2.6 times Direct Salary Cost Out-of-pocket cost. Engineers will render itemized monthly statements t� the City for work per- formed and costs incurred during the preceding month. EXHIBIT'A The total amount of this contract is $16,500 and the City shall not be liable for total fees under this contract in excess of that amount unless additional sums are authorized by the City. SECTION III. It is mutually understood and agreed that the City shall pro- vide the following data and perform the following services at its own expense: 1. Copies of all maps, plans, records, statistical and finan- cial data, annual audits, annual budgets, reports by others, explanations, sales records, or other data as may be avail- able. Schedules of major improvements of the water and sewer systems anticipated during the next five year period. The major improvements schedule will include estimated construc- tion costs. 3. Ordinances, statements of policy, and statements of adminis- trative procedures which together formulate the present basis of providing, operating, and financingthe utilities. 4. Policy direction on such matters as the City considers appropriate, and expeditious review of preliminary findings and draft reports. SECTION IV. It is also mutually understood and agreed: 1. Any additional work requested by the City which is not spe- cifically covered in the scope of services as defined under Section I, such as more indepth study of operations, finan- cial and management practices, and capital project require ments, will be performed by the Engineers at a reasonable fee or compensation to be agreed upon between the City and the Engineers at the time any such services may be required. 2. The Engineers shall not be liable for delays resulting from causes beyond the reasonable control of the Engineers; that the Engineers have made no warranties, expressed or implied, which are not expressly set forth in this contract; and that under no circumstances will the Engineer be liable for in- direct or consequential damages. 3. If the City's responsibilities are kept in a timely and expeditious manner, the preliminary reports can be furnished by the Engineers within 3 months following receipt from the City of notice to proceed. 4. Final reports will be delivered to the City within 15 work- ing days following the Engineers' receipt of the City's comments pertaining to their review of the preliminary reports, assuming no major revisions to the study are required as a result of the City's review. 5. The Engineer will indemnify, defend, and save harmless the City from any and all losses or claims frominjuries or death to persons or damage to property and from any suit or judgment or other thing whatsoever that may occur in the performance of this contract resulting from any negligent act, error, or omission of the Engineer. IN WITNESS WHEREOQOF, the parties hereto have executedu/this contract in duplicate this ///day of add,- , 198�p CITY OF FAYETTEVILLE ir7) By V`.,' Title 277 4)04,"/ BLACK & VEATCH, ENGINEERS -ARCHITECTS By J. R. Brown Title Project Manager ft -t-,• Y. x ATTACHMENT A REPORT ON OPERATIONS FOR THE WATER AND SEWER SYSTEMS CITY OF FAYETTEVILLE, ARKANSAS The following scope of work is designed to provide information to meet the needs of various report users. The report would include an engineering evaluation section indicating how well each system is operated and main- tained, followed by a financial section showing five years of historical data and a five year projection of revenues and costs which would indicate the future financial position of each system. A combined water and sewer section would include comments on compliance with the bond ordinance requirements. ENGINEERING EVALUATION 1. Conduct an on-site survey of existing water and sewer treat- ment facilities and a representative sample. -of other above ground system facilities. Conduct interviews with appro- priate personnel on operation and maintenance problem areas. 2. Based on a review of existing records, analyze operating and maintenance techniques and the effect on facility perfor- mance, maintenance and reliability. 3. Review the proposed major capital improvement programs to evaluate the extent to which proposed improvements will eliminate identified problem areas. FINANCIAL ANALYSIS 1. Analyze service area growth and water use, taking into account climatic and other local conditions. Project future customers served, water sales volumes, treated wastewater volumes, and revenues which may be reasonably expected for a 5 year study period based on past records of numbers and types of customers served, historical water use by customer class, and revenues received under existing rates. Deter- mine the degree to which historical revenues have been abnormally high or low so that future projections may reflect normal conditions. 2. Project future operating costs recognizing increases in the number of customers served, operational changes, and the effects of continuing. inflation on cost levels. Fa 3. Project debt service requirements for principal and interest payments on existing and any proposed bond issues, and pro- ject the cost of routine annual capital expenditures, and any other requirements for revenue. 4. Prepare a projected cash flow for the study period utilizing projected revenue requirements and projected revenue under existing rates. Identify any revenue deficiencies, show the timing and magnitude of required revenue increases, and de- termine the optimum combination of cash and debt financing required to meet total revenue requirements. COMPLIANCE WITH BOND ORDINANCE 1. Evaluate the adequacy of projected revenues to satisfy the annual coverage test, and if required, the coverage test for issuance of additional bonds. 2. Verify that all funds required by the ordinance have been established and that fund balances are-,tin_.compliance with requirements. Review insurance coverage on system facilities. 4. Review the system of charges and the services provided to verify that no services are being provided without charge. D. Review records and books of accounts for compliance with bond ordinance. I�1 1 REPORT ON REVENUE REQUIREMENTS, COSTS OF SERVICE, AND RATES FOR WATER SERVICE FOR FAYETTEVILLE, ARKANSAS 1 B L A C K• & VEATCH ENGINEERS -ARCHITECTS - - TEL. (9131 339-2000 1500 MEADOW LAKE PARKWAY MAILING ADDRESS P.O. BOX NO. 8405 KANSAS CITY. MISSOURI 64114 June 24, 1986 Mr. Scott Linebaugh Administrative Services Director' City of Fayetteville 113 W. Mountain Fayetteville, Arkansas 72701 Dear Mr. Linebaugh: In accordance with our agreement, we are submitting our "Report on Revenue Requirements, Costs of, Service, and Rates for Water Service" for the City of Fayetteville, Arkansas. The study includes a brief analysis of the financial condition of the sewer utility for purposes of conducting the coverage test required by Ordinance No. 3134 which authorized issuance of the Water and Sewer Refunding Bonds, Series 1985. We appreciate the opportunity to be of service to the City of Fayetteville, and will be available at your convenience to discuss this report. lkm Very truly yours, BLIN & VAyTC \/ • ' d J. R. Brown 1 1 1 1� 1 1 1 1 1 1 1 INTRODUCTION The City of Fayetteville, Arkansas engaged Black & Veatch to perform a cost of service study and design rates for water service. The study includes projection of revenues and revenue requirements, development of a financing plan, allocation of costs to customer classes, and design of a schedule of rates to equitably recover total costs of service from the various classes of customers. This report presents the results of the comprehensive water rate study. Revenue requirements are projected for the study period 1986 through,1990, recognizing anticipated growth in number of customers and water use throughout the service area. Revenue requirements include pro- jected operation and maintenance expenses, capital improvement expenditure, and debt service requirements. An analysis of. projected revenues under existing rates and total revenue requirements provides the basis for deriving the level of revenue adjustments needed to meet future annual obligations. Tables referred to in the report text are included at the end of the report, following page 14. 1 1 1 1 1 1 1 1 �I 1 1 1 1 1 1 1 1 1 1 1 REVENUE The principal source of revenue for the water utility to meet annual costs of water service isfrom charges for service to water customers. Additional revenue is derived from fire protection charges, rental income, interest income, and other miscellaneous sources. WATER SALES REVENUE UNDER EXISTING RATES Historical and projected water `sales revenues under the existing schedule of water rates is shown in Table 1. Projected water sales revenue is based on the estimated number of accounts and the estimated water sales volumes, which are also presented in Table 1. Customer numbers are pro- jected to increase by approximately 3 percent per year through the study period. It is assumed Chat water sales per customer will remain constant at the level experienced in recent years. The projected increase in water sales revenue is therefore due to the estimated increase in customer numbers and the associated increase in water usage. OTHER REVENUE Revenues from fire protection charges are estimated at $50,500 per year, while miscellaneous operating revenues are estimated to total $53,900 per year. Interest income., calculated at 8 percent of the balances avail- able for investment, is estimated to average approximately $44,400 per year during the study period. Other nonoperating income is estimated at $32,700 per year throughout the study period. 2 1 1 '1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 REVENUE REQUIREMENTS Revenue requirements, consisting of operation and maintenance expenses and capital costs, are the cash obligations of the water utility. Opera— tion and maintenance expenses include the cost of purchased water, person— nel andmaterials required to operate and maintain the water utility system, plus the costs of metering, billing, collecting, and administrative services. In estimating future costs, historical costs by utility function are projected for the study period recognizing requirements for service and estimated inflationary increases. Capital costs consist of debt service requirements, cash financing of capital improvements, and operating reserves. OPERATION AND MAINTENANCE EXPENSES Historical and projected operation and maintenance expenses are shown in Table 2. Projected operation and maintenance expenses are based on an analysis of historical expense trends and anticipated future conditions. Estimated increases in operating costs are due to anticipated inflationary increases in the costs of purchased water, labor, power and materials and supplies, plus the estimated growth in customer numbers. It is estimated for this study that labor and power costs will increase at 8 percent per year, and all other costs at 6 percent per year. Customer accounting and collection expenses reflect 60 percent of the total (40.percent is allo— cated to the sewer utility) and administrative costs reflect 35 percent of the total (65 percent is allocated to the sewer utility). - 3 MAJOR CAPITAL IMPROVEMENTS The proposed mayorcapital improvement program, as furnished by the City, is shown in Table 3: The proposed expenditures are primarily asso- ciated with extension of the transmission and distribution system. ROUTINE CAPITAL IMPROVEMENTS Routine capital improvements include equipment, system replacements, and system extensions which occur on a recurring basis each year. Pro- jected expenditures for routine capital improvements represent an allowance based on historical expenditures. DEBT SERVICE REQUIREMENTS Existing debt service requirements consist of principal and -interest on the Water and Sewer Revenue Refunding Bonds, Series 1985, as shown in Table 4. Based on the facilities constructed with the original bond funds, 48.5 percent of the annual principal and interest on the refunding issue is allocated to the water utility. The balance of the debt service is allo- cated to the sewer utility. No additional debt is proposed during the study period. RECOMMENDED REVENUE ADJUSTMENTS The adequacy of revenues under existing rates to meet projected reve- nue requirements is summarized in the flow of funds analysis shown in Table 5. The indicated revenue increases are assumed to become effective September 1 of the year specified. It is further assumed that there will be a one month lag between the effective date of the increase and receipt of the additional revenue. The transfer to the debt service reserve fund (Line 20) represents 48.5 percent of the total required annual deposit, and is based on the 1 1 1 1 1 1 1 1 1 1 1� allocation of existing debt service between the water and sewer utilities. An amount equal to the proposed major capital improvements (Line 31) is transferred from the operating fund (Line 21) to the capital fund (Line 27). It is assumed the proposed capital improvements will be financed from annual revenues since the level of expenditure does not warrant issuance of additional bonds. The indicated revenue increases are designed to provide an ending balance in the operating fund (Line 25) equal to approximately 45 days operation and maintenance expenses. capital balance (Line 26) in 1986 or higher revenue increases in those years. is built up to the recommended level by smaller, equal revenue increases. of Meeting the recommended working 1987 would require significantly Therefore, the cumulative balance the year 1988 through a series of 1 1 1 1 1 1 1 1 1 1 COST ALLOCATIONS The primary function of the water utility is to supply water. when and where customers want it and in sufficient amounts to meet the needs of the customers. In providing 'this service, the utility experiences costs in relation to the operating and capital investments needed to meet the service expectations of all customer classes. Allocation of these require- ments to customer classes should take into account the volume of water used, peak rates of demand, number of accounts, and other relevant factors. The cost of service to be allocated to the various customer classes consists of the 1988 test year revenue requirements, which total $3,340,900. Under the utility basis of cost allocation used in this report, costs are classified as operation and maintenance expense, depreci- ation, and return. In test year 1988, estimated operation and maintenance expenses are $2,356,200, depreciation is $482,300, and return is $502,400. Operation and maintenance expenses include the cost of purchased water, personnel and materials required to operate and maintain the water system, plus the costs of metering, billing, collecting, and administrative services. Depreciation is a loss in value of the original plant investment, not restored by current maintenance, due to wear, decay, inadequacy, and obso- lescence. Annual depreciation is determined as .a percentage of original investment based on expected service lives of the various facilities. Unless funds are provided for normal annual replacement of original plant items, operating reliability of the system, as well as the value, will decrease. Depreciation funds are used to finance principal payments on bond issues and provide normal annual capital expenditures. 6 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Total return on thesystem investment provides funds for bond interest payments and any other costs that may be incurred. In developing the level of return on net plant serving the requirements of outside City customers, provisions for a reasonable margin should be made to meet interest on bor- rowed funds, and to recognize the business risk assumed by the City in pro- viding reliable facilities to serve nonresident customers. COST ALLOCATION TO FUNCTIONAL COST COMPONENTS The cost elements of water service are first allocated to functional cost components to facilitate the allocation of costs to customers accord- ing to their requirements for average or base water use, extra capacity demand, and the number and size of services. Allocation of Net Plant Investment The estimated 1988 test year net plant investment in water facilities consists of net plant in service as of December 31, 1985, and the estimated cost of proposed capital improvements through the test year. Allocation of this investment to functional cost components is shown in Table 6 for test year 1988. Plant investment is .allocated to cost components on a design basis recognizing the principalfunction governing the design of the facility. The allocation of net plant investment provides the basis for allocation of depreciation expense. Allocation of Depreciation Depreciation is a real part of the cost of operating a utility. In utility accounting, it is generally accepted practice to use depreciation funds to finance system replacements, improvements, and extensions. While such action does not restore the value lost in each property unit every 7 1 1 1 1 1 1 i 1 1 1 1 1 1 1 1 1 1 1 year, the total value lost through depreciation is restored to the system as a whole. Depreciation funds can be reinvested in the system either by direct payment of routine capital additions and replacements or by princi- pal payments on bonded debt. The allocation of depreciation, shown in Table 7 is based on the allocation of net plant investment. Allocation of Operating Expenses Projected operating expenses for the test year are allocated to cost components as shown in Table 8. Operating expenses are allocated to func- tional cost components in generally the same manner as plant investment. Distribution of Costs to Customer Classes The total cost responsibility of each class of customer may be esti- mated by the distribution of the cost of service for each cost component among the classes based on the respective service requirements of each class. Customer classes consist of residential, commercial, industrial, Campbell Soup, University of Arkansas, Growth Area, Farmington, Greenland, wholesale, wholesale peaking, and public and private fire protection. The commercial class includes combination/commercial, multi unit, nonprofit, yard irrigation and construction meters. Wholesale includes the RDA's, Elkins, and Mt. Olive; while the wholesale peaking customer is West Fork. These classes group together customers with similar service requirement characteristics and provide a means for allocating costs to customers. Estimated units of service for the customer classifications are summa- rized in Table 9. Service requirements for each class are based on the average daily water use projections and estimates of each class maximum day and maximum hour demands and metering and billing requirements. 8 1 1 i 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1� The unit costs of service, shown costs divided by the applicable units in Table 10, are based on the total of service. Application of the total unit cost of service to the respective service requirements for each cus- tomer class results in the total allocated cost of service for each cus- tomer class. The costs of service allocated to customer classes are summarized in Table 11. It is noted that the ordinance for the 1985 Water and Sewer Refunding Bonds requires that no services be provided without charge. This require- ment may be interpreted to include public fire protection. The City' has not paidfor public fire protection service in the past, and it is assumed in this analysis that any such charges to the City would be offset by an equal charge to the water utility in the form of a payment in Lieu of taxes or a charge for administrative services. Therefore, the allocated cost of providing public fire protection has been reallocated to the customer classes benefitting from such service in relation to their respective allo- cated costs of service. 1 1 1 � 1 1 1 1 1 1 1 1 1 1 1 1 WATER RATE ADJUSTMENT The principal consideration in establishing water rate schedules is to obtain rates to customers reasonably commensurate with the cost of provid- ing water service. Theoretically, the only method of assessing entirely equitable rates for water service would be the determination of each cus- tomer's bill based upon his particular service requirements. Since this is impractical, schedules of rates are normally designed to meet average con- ditions for groups of customers having similar service requirements. Practicality also dictates the use of a rate schedule which is subject to as few misinterpretations as possible. The revenue requirements and cost of service allocations described in this report provide the basis for adjusting water rates. The revenue requirements section shows the need for adjustment and the level of revenue required. The allocations section provides the unit costs of service used in the rate design process and gives a basis for determining whether resultant rates will develop revenues which recover costs of service from customer classes in proportion to service required and provide the total level of revenue required. EXISTING RATES The existing schedule of water rates is shown in Table 12. All cus- tomers are billed a service charge which varies by meter size, plus a volume charge. The volume charge for wholesale customers is a flat charge regardless of water usage, while the volume charge to all other customers declines as usage increases. 10 1 1 1 1 1 1 1 1 1 PROPOSED RATES Table 13 shows the proposed water rates designed to meet adjusted costs of service. The proposed rate structure is similar to the existing structure. .The analysis indicates that service charges for meter sizes of 2 inches and larger should be lower than .existing charges. It is recom- mended that service charges for meters 2 inches and larger be maintained at the existing level, and the service charge revenuegenerated from these meters in excess of the actual cost of service be utilized to reduce the indicated service charges for meters less than 2 inches in size. Simi- larly,it is recommended that no volume charges be reduced from their cur- rent levels. Adoption of these recommendations will benefit smaller customers and reduce the impact of the proposed rates on all customers while moving toward cost of service rates. A comparison of allocated costs of service for the test year with water sales revenue under the proposed rates is shown in Table 14. As indicated, revenues under the proposed rates will adequately recover the total cost of service. To better reflect the total effect the proposed increases in the total level of water sales revenue have on customer bills, a comparison of typical bills under existing rates and the rates proposed to become effec- tive October 1, 1986, is shown in Table 15. 11 SEWER UTILITY In conjunction with the Operations Report, and because the bond cover- age test is based on the combined revenues of the water and sewer systems, we have prepared a projected cash flow statement for .the sewer utility. Based on the most recent comprehensive sewer rate study, a schedule of increases was adopted which included a 10 percent increase effective August 1, 1987. The timing of that increase was to coincide with the completion of the new wastewater treatment plant. The magnitude of the increase was based on estimated operating costs furnished by CH2M Hill. Since adoption of that rate schedule, the completion date of the treatment plant has been moved ahead to January 1, 1987, and the initial year's operating expense for the new plant has been revised upward by approximately $495,000 by CH2M Hill. In addition, when the current schedule of sewer rates was approved in 1984, it was anticipated that the outstanding water and sewer revenue bonds would be refunded through the issuance of sales tax revenue bonds. There- fore, sewer rates were developed assuming no debt service would be paid from water and sewer system revenues. However, a decision by the State Supreme Court held that sales tax revenues could not be used to refund the outstanding revenue bonds. Partially offsetting these factors, the growth in sewer revenues has exceeded previous estimates, and lower than anticipated inflation rates have resulted in operating expenses which are lower than estimated in the 1984 sewer rate study. However, it is currently estimated that the sewer utility would operate at a deficit of approximately $488,000 in 1987, which would more than offset the projected beginning 1987 balance of approxi- mately $410,000. 12 A financing plan which would meet the projected sewer utility revenue requirements and provide an adequate working capital balance is shown in Table 16. The proposed plan requires a revenue increase of 10 percent effective September 1, 1986. Subsequent revenue increases include the 10 percent adjustment previously adopted for August 1, 1987, plus 5 percent August 1, 1988 and 5 percent August 1, 1989. A proposed schedule of sewer rates is presented in Table 17. The rates shown for September 1, 1986 are identical to those previously adopted for August 1, 1987. Subsequent rates reflect across-the-board increases corresponding to the recommended percentage increases in revenues. 13 COMBINED UTILITIES The ordinance for the Water and Sewer Revenue Refunding Bonds, Series 1985, requires that annual gross revenues of the water and sewer systems be at least 110 percent of the amount required to pay operating expenses, principal and interest on outstanding revenue bonds, Registrar and paying agent fees, deposits to the Debt Service Reserve Fund, and deposits to the Renewal and Replacement Fund. To test for compliance with this require- ment, the projected water and sewer cash flows previously presented in Table S and Table 16, respectively, have been combined. The combined cash flow is shown in Table 18, which illustrates that the coverage requirement will be satisfied in each year of the study period, assuming the proposed revenue increases are realized. 14 I 1 TABLE t WATER UTILITY HISTORICAL AND PROJECTED NUMBER OF CUSTOMERS, WATER SALES VOLUME, AND WATER SALES REVENUE 1 Fiscal _ Year Year End Ending Number of Water Sales Water Sales Dec 31 Customers Volume Revenue 1,000 gal f Historical N-- 1981 N/A 2,327,791 2,272,250 1982 NIA 2,407,336 2,364,099 1983 13,704 2,371,085 2,510,945 1984 14,219 2,519,107 2,501,116 1985 14,622 2,681,691 2,719,970 Projected ----- t 1986 15,208 2,787,900 2,836,900 • 1987 15,657 2,947,700 2,903,700 1988 16,119 2,909,700 2,973,000 1989 16,594 2,973,300 3,044,200 1990 17,084 3,038,700 3,117,400 1 1 1 1. 1 fi W2 W W V r Qom_ a T 6 N J C r r� a — 0- H O H 6a W C 6 9 C I O O OI O I t a $ m i 1 P, M- N IA H M! 1 '0 N - 1- 1 h M 1 I I 1 - N 1 1 1- O O O 1 O • OOO1 pO 1 M m O O 1 II `H 1 V9 M H -.I Ui r N 1 1 O O 0I .O j p N a-- 11 m H. , 0-s• M1 m mm Cl IA •I^ 1 ♦ N - 1 •♦ 1 N ~ a, C,',: l O O O CI O O 1 119 - H I� 1 `0 c1?-, 1- , 1 _ W ~ _ _ 1 P 1 -0 - d 0' N Y - -0 CI 0 Iul1 1 O p.. n 1 O .�pp IV i m l• O d O ♦ 1 N 0-p CM I - ^ I N ♦ N 1 O / I N 1 - 1 1 H ♦ O OI N 1 .p 119 n ♦ 1 1_ m i s 1rl m 1 119 H 0 1-. 1 O M('41 _ 1 _ 1 — I H •1 P - N h 1 I N In H 1 '0 • 1 O 1• ♦ m 0I 1• m — 1 O N N 1 w I r I. N 0• H N 1 n — ti a — 1 -o a s — u9 a o• 0- I o ~ ck p O uC P 1 . O ♦ N 1 yO M 1C 1 H -.H I IC C^ N - 1 1 N — pp♦ OI d j J m - O 1 r a a 6. H 1 1 111 '0 0$ 0' N d> 1— 1 ^ N ^ 1 T _ I 1 a 1 ^ 7 1 I. w y9 0I 0' w w 1 R p.. A m 1 O W 99 I Y9 — H d I W 1 m 1 M m N O -0 / 01 1 0I I-. N N N 1 ♦ _ 1 I C O M Y C d o •2+ O C U N w • y w N N C Al M CD w a H C C w s N C V - m a - C Y C. 6 N a. In L a - U, Ca YI • a I- O q = — U 6 7 V I I 1 r I I I I I I TABLE 3 WATER UTILITY PROPOSED MAJOR CAPITAL INPROVEIWNTS Transmission and Distribution Fayetteville Farmington Greenland Growth Area General Plant Total - Uninflated Total - Inflated 1986 1987 1989 1989 1990 ----N r Mr - w w 0 115,200 173,700 180,600 76,900 0 25,300 6,200 12,700 25,600 0 23,000 2,800 11,700 12,800 0 41,500 22,300 0 89,700 70,000 0 0 0 0 --------- --------- --------- --------- --------- 70,000 205,000 205,000 205,000 205,000 70,000 211,000 230,000 244,000 259,000 TABLE 4 DEBT SERVICE ON EIISTINB AND PROPOSED BONDS 1986 1987 1986 1989 1990 ---- ---- ---- ---- ---- 4 $ $ $ Existing 1985 Water and Sever Revenue Bonds 247,400 248,100 248,100 247,400 246,100 Proposed 1986 Issue 1987 Issue 1986 Issue 1989 Issue 1990 Issue Total Debt Service 0 0 0 0 0 0 0 0 0 • 0 0 0 0- 0 0 an Y -- NN--M- -N--N--- 0 0 0 0 0 247,400 249,100 248,100 247,400 246,100 I. TABLE 5 ' WATER UTILITY COMPARISON OF PROJECTED REVENUE UNDER PROPOSED REVENUE INCREASES WITH PROJECTED REVENUE REQUIREMENTS line No. 1986 1987 1988 1989 1990 .. N . . . NN I OPERATING ACCOUNT 4 f I f f Revenue 1 Water Sales 2,836,900 2,903,700 2,973,000 3,044,200 3,117,400 2 Fire Protection Charge 50,500 50,500 50,500 50,500 50,500 --------- --------- ---------- -- '• 3 Revenue Under Existing Charges 2,887,400 2,954,200 3,023,506 3,094,700 3,167,900 Indicated Revenue Increase 4. 5I Effective Sep 1, 1986 36,100 147,700 151,200 154,700 158,400 5 5Z Effective Sep 1,;1987 38,800 158,700 162,500 166,300 ' 6 5I Effective Sep 1, 1988 41,700 170,600 174,600 7 CL Effective Sep 1, 1989 0 0 B 5I Effective Sep 1, 1990 45, BOO ' 9 Subtotal. 36,100 186,500 351,600 407,800 545,100 -- - .N----- N. • 10 Total Water Sales Revenue 2,923,500 3,140,700 3,375,100 3,582,500 .3,713,000 11 Miscellaneous Operating Revenue 53,900 53,900 53,900 53,900 53,900 12 Interest Income 27,400 36,800 45,700 53,100 59,200 , - - 13 Other 32,700 32,700 32,700 32,700 32,700 N M . -.. .NN N 14 Total Revenue 3,004,800 3,231,400 3,474,700 3,689,500 3,826,100 Revenue Requirements • 15 Operating Expense 2,022,000 2,181,600 2,356,200 2,543,400 2,746,600 • Debt Service 16 Existing Bonds 247,400 248,100 246,100 247,400 246,100 17 Proposed Bonds 0 -_----- 0 ---- 0 _..... 0 0 -_-..... 18 . Total Debt Service 247,400 248,100 248,100 247,400 246,100 19 Routine Capital Improvements 513,000 521,300 526,400 532,200• 538,500 20 Transfer to Debt Sen. Res. Fund 49,500 49,500 49,500 49,500 49,500 21 Transfer to Capital Projects 70,000 211,000 230,000 244,000 259,000 Y N ' 22 Total Revenue Requirements 2,901,900 3,217,500 3,410,200 3,616,500 3,839,700 23 Net Annual Balance 102,900 13,900 64,500 73,000 (13,600) I. 24 Beginning Balance 110,700 213,600 227,500 292,000 365,000 25 Cumulative Balance 213,600 227,500 292,000 365,000 351,400 26 Recommended Working Capital 252,800 272,700 294,500 317,900 343,300 I. MAJOR CAPITAL PROJECTS FUNDING Source of Funds 27 Transfer from Operating Account 70,000 217,000 230,000 244,000 259,000 28 Bond Proceeds 0 0 0 0 0 29 Interest Income 0 .O 0 0 0 --e-,C-0 ......--- -,--- ------- -------- 30 Total Source of Funds 70,000 217,000 N 230,000 244,000 259,000 I. Capital Fund Requirements 31 Major Capital Improvements 70,000 217,000 230,000 244,000 259,000. 32 Bond Issuance Costs 0 0 0 0 0 33 Reserve Account 0 0 0 0 0 34 Total Capital Funds Requirements 70,000 217,000 230,000 244,000 259,000 35 BeginninqBalance 0 0 0 0 0 36 Net Annual Balance 0 0 0 0 0 37 Cumulative Balance 0 0 0 0 0 O O 1 1 .filr v i I b- u I I ! - • F 1' I I I Ir 0 0 1 in C Y ffiII 1 O. $I 8 8 pO 1 I Y 1 ^ fJ 0 1 • i r m N I I m •T' r u I I , i I- - I • '• - I C 1 1 1 1 e 1 + I _ O N I 1 0 S i• I I t u I I N 1 Y 1 V 1 � .I —I_ I• i i G m I '-I I I C I I I I 9 I 0 ' I 8 i Y 0_I - 1 ffi I C 8 I 1 Y I 1 CI C d fl I • 1 1 1 br.l r 1 1 1 1` I Y C 1 I 1 I I O I I. d i— ., I r 1 h 1 • 1 1 -I I S O S CO Cp 1 8 . P O 0 iV A i 0 C Yf I I p g 1 111 a M I P r I• C 1 c I 1 •0 I I• I 0 HS w I I . a I! d ! • m 1-I 1 fl O I ..I. 0 •01 P I i tttl-. Is e i i I -- I 0. W aCpg i. ' ' 9 1 1 O P $ a p O O O 1 1 O a 'Np� I... a C Y I M i T O M ! 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O I M n I Ci > r V 4 - u 4 4 C. a r p Y p rp V 4 a > • p V _ L C 1 p > - Y M Y M Y a r p p S a S ~ W r a O> L p> as r _C a - a - Vry p r 13— r p Y r r r r Y r U r a • a a s • M 11 r U 4 r C p r p a 0 m O 4 - C a V a C SU \_ -U a -U a -U a 9 U U O a a as a r J a Y a Y_ a r O . a r — a .� YI O .Cr . as • e p C H a O H a C r r r O I2 J L J L r O s a s e I- I- •o - e. n ! VI a r -0 C r ri II • y r r TABLE COMPARISON OF ADJUSTED COST OF SERVICE WITH REVENUE UNDER EXISTING RATES 1988 Test Year Allocation Revenue Allocated of Adjusted Under Indicated Line Cost of Fire Cost of Existing Revenue No. Customer Classification Service Protection Service Rates Increase --- - - Y Y - - a Y YaN-- ----Y I $ $ f 2 INSIDE CITY 1 Residential 1,264,200 145,900 1,410,100 1,090,100 29.31 2 Commercial 611,500 70,600 682,100 648,200 5.21 3 Industrial 100,700 11,600 112,300 128,200 -12.42 4 Campbell Soup 287,000 33,100 320,100 313,400 2.11 5 Univ. of Ark. 210,800 24,300 235,100 250,200 -9.91 a Y Y- - - - - - - - - nYY 6 Total 2,474,200 285,500 2,759,700 2,438,700 13.21 7 Fire Protection Public 285,500 (285,500) 0 0 Private 59,500 0 59,500 29,600 101.01 B Total Inside City 2,819,200 0 2,9192200 2,468,300 14.21 OUTSIDE CITY 9 Residential 5,700 0 5,700 5,500 3.61 10 Commercial 2,000 0 2,800 3,100 -9.71 11. Growth Area 121,500 0 121,500 121,300 0.22 12 Farmington 11,600 0 71,600 58,700 22.01 13 Greenland 33,400 0 33,400 27,200 22.82 14 Wholesale Customers 240,600 0 240,600 172,200 39.72 15 Nholnale Peaking 16,200 0 16,200 8,000 84.12 ---------- ---------C ---------- ------- 16 Total 491,800 0 491,800 396,800 23.92 17 Fire Protection Public 29,900 0 29,900 20,900 43.12 Private 0 0 0 0 --- N -Y - --- - N - 18 Total Outside City 521,700 0 521,700 417,700 24.91 - Y--- 19 Total System 3,340,900 0 3,340,900 2,886,000 15.81 4 TABLE 12 • EXISTING MONTHLY WATER RATES •1 1 1 I. I. MeterSize Inside City Outside City Farmington Greenland Growth Area Elkins - inches - $ f $ $ f $ 5/8 1,50 1,90 1.90 2,90 1.90 1.90 3/4 1,70 2,00 2,00 3.00 1,90 2,00 1 2,00 2,50 2,50 3,50 2,50 2,50 1 1/4 3,00 4,00 4,00 5.00 2.50 4,00 11/2 4.00 5.00 5.00 . 6.00 5,00 5.00 • 2 7.00 9.00 9.00 10.00 9.00 9.00 3 16.00 20.00 20.00 21.00 20.00 .20.00 4 24.00 30.00 30.00 31.00 30,00 30.00 6 50.00 60.00 60.00 61.00 60,00 60.00 8 75.00 90.00 90.00 91.00 90,00 90.00 Usage Rate First 10,000 1.01 1.21 1.21 1.01 1.21 1.01 Next 290,000 0.86 1.01 1.01 0.86 1.01 - 0.86 Next 4,700,000 0.74 0.86 0.86 0.74 0,86 0.74 Over 5,000,000 0.65 0.74 0.74. 0.65 0.74 0.65 PRIVATE FIRE PROTECTION Inside city limits Line Size Monthly Charge --------- ----------- 7.00 4' 11,00 6 22.50 • 8' 35.00 MONTHLY WHOLESALE TREATED WATER RATES $0.765 per 1,000 gal $34.00 meter.charge Outside city limits Monthly Charge ------------ f 7.00 11.00 22.50 35.00 TABLE 13 PROPOSED MONTHLY WATER RATES (Effective September 1, 1988) Meter Size Inside City Outside City Farmington Greenland Growth Area Elkins N N N M- YN NN N YNN inches- $ $ $ $ $ $ 5/6 2.24 2.62 2.62 4.11 2.62 23.35 3/4 '2.53 2.76 2.76 4.35 2.76 23.35 1. 2.98 3.45 3.45 5.08 3.45 23.35 1 1/4 4.47 5.52 5.52 7.25 5.52 23.35 11/2 5.96 6.90 6.90. 6.70 6.90 23.35 2 7.00 9.00 9.00 9.00 9.00 23.35 3 16.00 20.00 20.00 20.00 20.00 23.35 4 24.00 30.00 30.00 30.00 30.00 23.35 6. 50.00 60.00 60.00 60.00 60.00 23.35 8 75.00 90.00 90.00 90.00 .90.00 23.35 Usage Rate First 10,000 1.18 1.21 1.43 1.16 1.21 1.08 Next 290,000 0.95 1.01 1.21 0.95 1.01 1.08 Next 4,700,000 0.74 0.86 1.01 0.74 0.86 1.08 Over 5,000,000 0.66 0.74 0.86 0.66 0.74 1.00 PRIVATE FIRE PROTECTION Inside city limits Outside city liaits Line Size Monthly Charge Monthly Charge --------- ----N----- --- ---- - • $ •$ 3' 721 7.21 4 14.42 14.42 6' 40.05 40,05 8' 84.11 84.11 MONTHLY WHOLESALE TREATED WATER RATES $1.08 per 1,000 gal - $23.35 otter charge WHOLESALE PEAKINS TREATED WATER RATES $1.46 per 1,000 gal $25.00 otter charge TABLE 13 (Continued) PROPOSED MONTHLY WATER RATES (Effective September 1, 1987) Meter Size Inside City Outside City Farmington. Greenland Growth Area Elkins - -- - - - -\\ \\\\\\ \\ \ \\M Y \\ Y N \ aM M M inches 1 1 1 f f. 1 518 2.00 2.30 2.38 3.17 2.38 23.35 3/4 2.25 2.50 2.50 3.90 2.50 23.35 1 2.65 3.13 3.13 4.55 3.13 23.35 1 1/4 4.00 5.00 5.00 6.50 5.00 23.35 1 1/2 5.30 6.27 ' _ 6.27 7.00 6.27 23.35 2 7.00 9.00 9.00 9.00 9.00 23.35 3 16.00 20.00 20.00 20.00 20,00 23.35 4 24.00 30.00 30.00 30.00 30.00 23.35 6 50.00 60.00 60.00 60.00 60.00 23.35 8 75.00 90.00 90.00 90.00 90.00 23.35 Usage Rate First 10,000 1.12 1.21 1.36 1.12 1.21 0.98 Next 290,000 0.92 1.01 1.14 0.92 1.01 0.98 Next 4,700,000 0.74 0.86 0.96 0.74 0.86 0.98 Over 5,000,000 0.66 0.74 0.82 0.66 0.74 0.98 PRIVATE FIRE PROTECTION Inside city limits Line Size Monthly Charge 1 • 3' 7.00 4' 13.65 6' 37.90 8' 79.60 MONTHLY, WHOLESALE TREATED WATER RATES 10.98 per 1,000 gal $23.35 meter charge H 1• Outside city limits Monthly Charge Y C\ \N - - 1 • 7,00• 13.65 37.90 79,60 WHOLESALE PEAKING TREATED WATER RATES 11.23 per 1,000 gal 125.00 meter charge TABLE 13 (Continued) PROPOSED MONTHLY WATER RATES (Effective September 1, 1986) Meter Size Inside City Outside City Farmington Greenland Growth Area Elkins -- - N --N -- -- W H -- ------ inches f• 4 f 4 f f 5/8 1.75 2.14 2.14 3.34 2.14 23.35 314 2.00 2.25 2.25 3.45 2.25 23.35 1 2.30 2.82 2.82 4.03 2.82 23.35 1 114 3.50 4.51 4.51 5.75 4.51 23.35 1 1/2 4.70 6.90 . 6.90 6.90 6.90 23.35 2 7.00 9.00 9.00 9.00 9.00 23.35 3 16.00 20.00 20.00 20.00 20.00 23.35 4 24.00 30.00 30.00 30.00 30.00 23.35 6 50.00 60.00 60.00 60.00 60.00 23.35 8 75.00 90.00 90.00 90.00 90.00 23.35 Usage Rate First 10,000 1006 1.21 1.28 1.07 1.21 0.07 Next 290,000 0.89 1.01 1.08 0.09 1.01 0.87 Next 4,100,000 0.74 0.86 0.91 0.74 0.06 0.87 Over 5,000,000 0.65 0.74 0,78 0.65 0.74 0.87 PRIVATE FIRE PROTECTION Inside city limits Line Size. Monthly Charge Y - N 4 3' 7.00 4' 12.89 6' 35.80 8' 75.17 MONTHLY WHOLESALE TREATED WATER RATES $0.87 per 1,000 gal $23.35 meter charge Outside.city limits Monthly Charge ---------- 4 7.00 12.89 35.80 75.17 WHOLESALE PEAKING TREATED WATER RATES 11.00 per 1,000 gal $25.00 meter charge TABLE 14 COMPARISON OF ALLOCATED COSTS AND REVENUES BY CUSTOMER CLASSIFICATION 1988 Test Year Adjusted Lint Cost of No. Customer Classification Service Y YM. .-.. .. -. 4 Revenue Under Proposed Percentage Rates Recovered $ 1 INSIDE CITY t Residential 1,409,700 1,343,450 95.301 2 Commercial 682,000 722,463 105.931 3 Industrial 112,300 133,516 118.891 4 Campbell Soup 320,200 318,555 99.491 5 Univ. of Ark. 235,100 268,184 114.331 6 Total 2,759,300 2,786,768 101.001 7 Fire Protection Public 0 0 Private 59,500 61,700 103.701 .-Mease B Total Inside City 2,818,800 2,840,468 101.051 OUTSIDE CITY 9 Residential 5,700 5,998 105.231 10 Commercial 2,800 3,151 112.541 11 Growth Area 121,500 130,776 101.631 12 Farmington 71,500. 71,952 100.631 13 Greenland 34,000 34,042 100.121 14 Wholesale Customers 240,500 242,664 100.901 15 Wholesale Peaking 16,200 16,259 100.361 ........ ......... -----5--- 16 Total 492,200 504,842 102.571 17 Fire Protection Public. 29,900 27,394 91.622 Private 0 0 18 Total Outside City 522,100 532,236 101.941 19 Total System 3,340,900 3,380,704 101.191 TABLE 15 TYPICAL MONTHLY BILLS Inside City Existing Proposed Percentage Meter Size dater Use Rates Rates (a) Change ---------- ---------- ---------- ----------- ---------- 5/8 0 1,50 1.75 16.67% 5/8 5 6.55 7,05 7,63% 5/8 10 11,60 12.35 6.47% 5/8 20 20.20 21.25 5,20% 5/9 SO 46,00 47,95 4,24% 1 0 2,00 2.30 15,00% 1 10 12.10 12,90 6.611 1 20 20,70 21.80 5.311 1 50 46.50 48.50 4.301 1 100 89,50 93.00 3.91% 2 0 7.00 7.00 0.00% 2 50 51.50 53.20 3.30% 2 100 94.50 97,70 3,39% 2 250 223,50 231.20 3.45% 2 500 414,50 423,70 2.22% 4 0 24,00 24,00 0.00% 4 100 111.50 114.70 2,87% 4 500 431.50 440.70 2,13'% 4 1,000 801.50 810.70 1,15%. 4 . 2,000 1541.50 1550.70 0.60% 6 0 50.00 50.00 0.00% 6 500 457,50 466.70. 2.01% 6 1,000 827.50 836.70 1,11% 6 2,000 1567,50 1576.70 0.59% 6 5,000 3787,50 3796.70 0,24% 8 0 . 75.00 75.00 0.00% B 1,000 852,50 861.70 1.08% 8 2,000 1592.50 1601.70 0.581 B 5,000 3812.50 3821.70 0,241 8 10,000 7062.50 7071.70 0.13% la) Rates proposed to become effective September 1, 1986. TABLE 16 SEVER UTILITY COMPARISON OF PROJECTED REVENUE UNDER PROPOSED REVENUE INCREASES WITH PROJECTED REVENUE REQUIREMENTS Line No. 1986 1987 1988 1989 1990 OPERATING ACCOUNT $ f f 4 f Revenue l Sever Service Charge 3,201,800 3,297,900 3,396,800 3,498,700 3,603,700 2 Revenue Under Existing Charges 3,201,800 3,297,900 3,396,800 3,498,700 3,603,700 Indicated Revenue Increase 3 101 Effective Sep 1, 1986 80,000 329,800 339,700 349,900 360,400 4 101 Effective Aug 1, 1997 120,900 373,600 384,900 396,400 5 51 Effective Aug 1, 1988 68,500 211,700 218,000 6 51 Effective Aug 1, 1989 74,100 228,900 7 01 Effective Aug I, 1990 0 8 Subtotal 80,000 450,700 781,800 1,020,600 1,203,700 9 Total Sever Service Charges 3,281,800 3,748,600 4,178,600 4,519,300 4,807,400 10 Miscellaneous Operating Revenue 18,000 18,000 18,000 18,000 18,000 11 Interest Income 36,300 51,000 52,800 59,100 68,300 12 Other 10,900 10,900 10,900 10,900 10,900 13 Total Revenue 3,347,000 3,828,500 4,260,300 4,607,300 4,904,600 Revenue Requirements 14 Operating Expense 2,132,100 3,008,800 3,220,800 3,449,200 3,691,400 Debt Service 15 Existing Bonds 262,900 263,600 263,600 262,600 261,500 16 Proposed Bonds 0 0 0 0 0 I7 Total Debt Service 262,900 263,600 263,600 262,800 261,500 18 Routine Capital Improvements 473,000 437,500 483,000 540,000 608,600 19 Transfer to Debt Serv. Res. Fund 52,500 52,500 52,500 52,500 52,500 20 Transfer to Capital Projects 60,000 200,000 212,000 224,700 230,200 - __ -NM c _. 21 Total Revenue Requirements 2,980,500 3,962,400 4,231,900 4,529,200 4,852,200 22 Net Annual Balance 366,500 (133,900) 28,400 18,100 52,400 23 Beginning Balance 126,500 493,000 359,100 387,500 465,600 24 Cumulative Balance 493,000 359,100 387,500 465,600 518,000 25 Recommended Working Capital 266,500 376,100 402,600 431,200 461,400 MAJOR CAPITAL PROJECTS FUNDING Source of Funds 26 Transfer from Operating Account 60,000 200,000 212,000 224,700 238,200 27 Bond Proceeds 0 0 0 0 0 28 Interest Income 0 0 0 0 0 29 Total Source of Funds 60,000 200,000 212,000 224,700 . 238,200 Capital Fund Requirements 30 . Major Capital Improvements 60,000 200,000 212,000 224,700 238,200 31 Bond Issuance Costs 0 0 0 0 0 32 Reserve Account 0 0 0 0 0 33 Total Capital Funds Requirements 60,000 200,000 212,000 224,700 238,200 34 Sueginning.Balance 0 0 0 0 0 35 Net Annual Balance 0 0 0 0 0 36 Cumulative Balance 0 0 0 0 0 - TABLE 17 PROPOSED MDWTMLY SEWER WATER RATES Monthly Quantity Charge i • Effective Effective Effective Effective September 1, 1996 August 1, 1987 August 1, 1988 August 1, 1989 - --- N 4/1,000 gal - ----NM 4/1,000 gal ____e_ - 4/1,000 gal ----wN-M-- 4/1,000 gal Residential 1.60 1.76 1.85 1.94 Commercial/Industrial 1.08 1.19 1.25 1.31 Farmington/Greenland 2.02 2.22 2.33 2.45 Elkins 1.55 1.71 1.79 2.88 Monthly Service Charge i Effective Effective Effective Effective Meter Size September 1, 1986 August 1, 1987 August 1, 1988 August 1, 1989 inches 4 4 $ $ • 5/8- 4.40 4.84 5.08 5.34 3/4 5.00 5.50 - 5.78 6.06 1 6.20 6.82 7.16 7.52 • 1 1/2 9.00- 9.90 10.40 10.91 2 12.00 13.20 13.86 14.55 • 3 25.00 27.50 28.88 30.32 4 44.00 48.40 50.82 53.36 6 84.00 92.40 91.02 101.87 Extra Strength Surcharge i 5 • Y x 8.34 x (BOO Unit Charge (BUD - 300) + 59 Unit Charge (SS - 300)) Where 9 • Surcharge in dollars V • Sewerage volume in million gallons 8.34 = Pounds per gallon of water BOB Unit Charge • Unit charge for BOB in dollars per pound. BOO • B00 strength index in parts per million 300 • Allowed BOBD strength in parts per million 95 Unit Charge • Unit charge for suspended solids in dollars per pound S9 • Suspended solids strength index in parts per million by weight 300 =Allowed SS Strength in parts per million by weight . Effective Effective Effective Effective September I, 1986 August 1, 1987 August 1, 1980 August 1, 1989 -- -- -- NNNMY --- M--- N $ -1 4 .4 t BUD Unit Charge 0.1072 0.1179 0.1238 0.1300 SS Unit Charge 0.0563 0.0619 0.0650 0.0683 TABLE 10 COMBINED WATER AND SEWER UTILITY COMPARISON OF PROJECTED REVENUE UNDER PROPOSED REVENUE INCREASES WITH PROJECTED REVENUE RERUIREMENTS Line No. 1986 1987 1988 1989 1990 OPERATING ACCOUNT 4 4 f f f Revenue 1 Water Sales 2,836,900 2,903,700 2,973,000 3,044,200 3,117,400 2 Fire Protection Charge 50,500 50,500 50,500 50,500 50,500 3 Sewer Service Charge 3,201,800 3,297,900 3,396,800 3,498,700 3,603,700 Revenue Under Existing Charges 6,089,200 6,252,100 6,420,300 6,593,400 6,771,600 • Additional Water Revenue from 4 Proposed Increases (a) 36,100 186,500 331,600 487,800 545,100 Additional Sewer Revenue from • 5 Proposed Increases (b) 80,000 450,100 781,800 1,020,600 1,203,700 M -- -- N N - 6 Revenue with Proposed Increases 6,205,300 6,889,300 7,553,700 8,101,800 0,520,400 7 Miscellaneous Operating Revenue 71,900 71,900 71,900 71,900 71,900 B Interest Income 63,700 87,800 98,500 112,200 127,500 9 Other 43,600 43,600 43,600 43,600 43,600 10 Total Revenue 6,384,500 7,092,600 7,761,700 8,329,500 8,763,400 Revenue Requirements 11 Operating Expense 4,154,100 5,190,400 5,577,000 5,992,600 6,438,000 Debt Service 12 Existing Bonds 510,300 511,700 511,700 510,200 507,600 13. Proposed Bonds H 0 0 0 0 0 - - -- n -- --- - - 14 . Total Debt Service 510,300 511,700 511,700 510,200 507,600 15 Routine Capital Improvements 986,000 956,800 1,009,400 1,072,200 1,147,100 16 Transfer to Debt Serv. Res. Fund 102,000 102,000 102,000 102,000 102,000 11 Transfer to Capital Projects 130,000 417,000 442,000 468,700 497,200 - - - - - - - - - - --------- --------- - - - - - - - - - - ------a-- 18 Total Revenue Requirements 5,082,400 7,179,900 7,642,100 8,145,700 -8,691,900 19 Net Annual Balance 469,400 (120,000) 92,900 151,100 38,800 20 Beginning Balance 237,200 706,600 586,600 679,500 830,600 21 Cumulative Balance 706,600 586,600 679,500 830,600 869,400 22 Recommended Working Capital 519,300 648,800 697,100 749,100 804,700 MAJOR CAPITAL PROJECTS FUNDING Source of Funds 23 Transfer from Operating Account 130,000 417,000 442,000 468,700 497,200 24 Bond Proceeds 0 0 0 0 0 25 Interest Income 0 0 0 0 0 ---- - ---- - - -- ----- ------- 26 Total Source of Funds . 130,000 417,000 442,000 468,700 497,200 Capital Fund Requirements 27 Major Capital Improvements 130,000 - 417,000 442,000. 460,700 497,200 28 Bond Issuance Colts 0 0 0 0 0 29 Reserve Account 0 0 0 0 0 30 Total Capital Funds Requirements 130,000 417,000 442,000 468,100 497,200 31 Beginning Balance 0 0 0 0 0 32 Net Annual Balance 0 0 0 0 0 33 Cumulative Balance 0 0 0 0 0 34 Gross Revenues 6,567,000 7,119,500 7,755,200 8,322,800 9,744,900 35 Operating Expense 4,154,100 5,190,400 5,577,000 5,992,600 6,438,000 36 Annual Debt Service 510,300 511,700 511,700 510,200 507,600 37 Debt Service Reserve Fund 102,000 102,000 102,000 102,000 102,000 38 Renewal and Replacement Fund 0 0 0 0 0 39 - Percent Coverage 137.782 122.662 125.272 126.012 124.082 (a) Assumes revenue increases of 52 effective September 1, 1986, 52 September 1, 1987, 5% September 1, 1988, and 5I September 1, 1990. (b) Assumes revenue increases of 102 effective September 1, 1986, 102 August 1, 1987, 52 August 1, 1968, and 52 August 1, 1989.