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Finance Department

Utility Capital Financing Plan. Christopher M. Quinn, MACC, CPA, CFE, CGFO, CGMA Finance Director. Finance Department. Government Accounting 101. Why the City u ses Fund Accounting. Must Comply with Legal and External Requirements Some Examples: Infrastructure Surtax (Capital Projects)

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Finance Department

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  1. Utility Capital Financing Plan Christopher M. Quinn, MACC, CPA, CFE, CGFO, CGMA Finance Director Finance Department

  2. GovernmentAccounting101

  3. Why the City uses Fund Accounting • Must Comply with Legal and External Requirements • Some Examples: • Infrastructure Surtax (Capital Projects) • Utility Revenues (Operation and Expansion of Utility System) • Impact Fees (Infrastructure Capacity Improvements related to Growth) • Grants (Specific Programs/Projects) DO NOT TOUCH Restricted Fund

  4. What is an Enterprise Fund? • Type of Proprietary Fund • Operates like a business • Primarily funded through charges for services • Services to external customers • Separate accounting and financial reporting • Fund has its own set of “books”

  5. Examples of Enterprise Funds • Utility Fund • Stormwater Fund • Solid Waste Fund • Golf Course Fund • Tennis Center Fund • Building Permits & Inspections Fund • IT&C Fund

  6. FundRestrictions • Each enterprise fund has a separate rate structure • Rates are reviewed to insure that adequate funding is available to meet the needs of that enterprise’s budgetary requirements • Reserves are planned to meet operating expenses and future capital needs

  7. UtilityFund • Bond covenants restrict use of revenues • Legally binding • Protect the bond holder • Treated like a separate business for accounting purposes • Financial statements are included in the annual audit report • Excess revenues (profits) are restricted from use in other areas of the City • Re-invested back in the Utility

  8. Total City Revenues Fiscal Year 2013

  9. City Ad Valorem Tax History Declining Ad Valorem Receipts

  10. Services Provided through Property Taxes Fiscal Year 2013

  11. Annual Financial Audit Report Comprehensive Annual Financial Report (CAFR) • Prepared Annually • Audited by independent, external audit firm hired by City Council • Audit is Required by State Statute • Provides insight into how the City is managing finances and the financial health of the City • Provides financial transparency • Promotes accountability

  12. Annual Financial Audit Report Where can it be found? • On the City’s website under “Popular Links” then “Financial Reports” www.palmcoastgov.com • Fiscal Year 2000 – 2012 is available • Filed with Florida Auditor General • Available for viewing on the Florida Auditor General’s website: www.myflorida.com/audgen

  13. Utility Financial Performance Summary of 2010-2012 • Total Operating Expenses • Change in Net Assets (net profit) • Net Cash Flow • Unrestricted Net Assets (reserves)

  14. Utility Financial Analysis

  15. Utility Financial Analysis

  16. Utility Financial Analysis

  17. Utility Financial Analysis

  18. History of Rate Adjustments • 2003 (Purchase of Utility) through November 2008 • No rate change • November 2008 • 12.5% increase to address capital needs including Water Treatment Plant 3 • 2009-2012 • Consumer Pricing Index (CPI) adjustments only • Average 1.67% • Included a decrease of 1.4% in 2009

  19. Capital Financial Program Addressing 3 issues: Refinancing 2003 Bonds – Cost Savings due to reduced interest rates Provide capital funding needed for EPA required ZLD Project Anticipated need for Waste Water Treatment Plant 2 which is in current 5 year capital improvement program.

  20. Questions?

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