1a - RAC 010609 Overview DTC January 2009. 8 January 2009 Page 1 ... – Establish budget guidelines...

Our water. Our future.

SAWS Overview

Financial Services

Dan CrowleyDirector - Financial Planning

Rate Advisory Committee8 January 2009

8 January 2009 Page 1

SAWS Overview San Antonio Water System

We proudly serve our customersand help communities flourish

with plentiful, quality, affordable water services

SAWS is a nationally recognized leader in providing reliable and affordable water

service



Mission & VisionMission: Proudly serving our customers

and helping communities flourish with plentiful, quality, affordable water services.

Vision: Our VISION of success is achieved through people, best in class performance, and strong partnerships.



Water Source Well/Pump Storage

RiverSewageCollection System

Wastewater Treatment Plant

Commitment to Essential ServicesProviding Value Around the Clock

Distribution



Employees: 1,601

YTD Revenues: $319.7 Million

Assets: $3.42 Billion

Liabilities: $1.71 Billion

Equity: $1.71 Billion

Nearly 10,000 miles of mains

Serving over 1.3 million people

Located within 620 square miles

SAWSBy the Numbers at 10/31/2008



Acting for the FutureA Brief History

1980

1994 – Residential Conservation funding established by Ordinance

2000

1984 – Council approves first Drought Management Plan

2000 – Water Supply Fee established by Ordinance

2010

2005 – Council endorses Water Supply Plan Update

2004 – Aquifer Storage & Recovery grand opening

1998 – Council endorses Water Supply Plan

1998 – Commercial Conservation funding established by Ordinance

1990s – Federal lawsuit and establishment of EAA, pumping limits, and drought restrictions

1992 – SAWS created

1980s – Conservation initiatives begin

1990

2001 – Recycled Water System comes online



SAWS Organization

InternalAudit

BoardSupport

Accounting

Finance

FinancialPlanning

Purchasing

RiskManagement

Supply

Treasury

FinancialServices

ApplicationServices

DatabaseAdministration

ERSS

Print ShopServices

ProgramManagement

TechnicalServices

InformationServices

Senior Vice President /Chief Financial Officer

Doug Evanson

Constructionand

Maintenance

EasternServiceCenters

WesternServiceCenters

SupportServices

Distribution& Collection

Val RuizVice President

CorporateReal

Estate

EnvironmentalLaboratoryServices

FacilitiesMaintenance

FacilitiesManagement

Fleet

ResourceProtection &Compliance

Security

OperationsServices

Mike BrinkmannVice President

Production

TreatmentOperations

TreatmentMaintenance

Heatingand

Cooling

EnvironmentalServices

Production &Treatment

Senior Vice President /Chief Operations Officer

Steve Clouse

Distribution& CollectionEngineering

GovernmentalEngineering

InfrastructurePlanning

PipelineInspection

Production/Recycle/

Treatment Eng.

Engineeringand

Construction

Conservation

WaterResources

WaterResources

Senior Vice PresidentStrategic Resources

Kelley Neumann

Customer Svc.Stacey IsenbergVice President

Communications

PublicAffairs

Greg FloresVice President

Claims

CorporateTraining

HumanResources

Safety andEnvironmental

Health

HumanResourcesJerry Bailey

Vice President

Contracting

Legal

RecordsManagement

Small, Minority,Women

Business

LegalFrank

Stenger-CastroVice President

President / CEORobert R. Puente

BOARDof

TRUSTEES



Structure

Plan and report from a Core Business perspective

– Water Delivery – Wastewater– Water Supply (Recycle, Water Resources,

Conservation, Stormwater)– Chilled Water & Steam

Allocation of revenues and costs by core businesses



PlanningPlan using 20 year model– Revenues– Operations & Maintenance Costs– Capital Improvement Program– Capital Outlay– Debt Service Portfolio– Financial Ratios (exp. Debt Coverage Ratios)– Ordinance Requirements (75686, 92752 est.)

• Operating Reserve• Debt Coverage and Reserves• City Payment and Matching City Payment



Budget Process• Review Strategic Plan• Update revenue forecast• Update 20 year Financial Plan• Develop budget goals & strategy

– Establish budget guidelines based on Executive Management directives

• Departments prepare budgets• Executive review and decision• Presentations to Board Subcommittees, Board• Board Approval



RatesCost of Service Based Structures

Rates are based on Cost of Service– By customers class– Matches rates to cost to serve each group– Each group “pays its own way”; no subsidies

The current general water and wholesale service rate structure are comprised of:– A monthly meter charge - based on meter size– An increasing volume charge - which includes five

blocks

SAWS rates are regulated by City Council– City Public Utilities office monitors SAWS activity



Revenue Requirements(Cash-Needs Approach)• SAWS uses the Cash-Needs Approach to determine revenue

requirements

• User charges are structured to recover specific cash requirements for O&M and capital

• Provides greater flexibility for SAWS to establish rates to recover the cash requirements

• Easier to understand - matches revenue with cash needs

• Our bond covenants are predicated on cash needs

• Is consistent with governmental budget practices

• Is generally accepted by governmental utility industry



50,00075,000

100,000125,000150,000175,000200,000225,000250,000275,000300,000325,000350,000375,000400,000425,000450,000

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

2043

2045

2047

2049

2051

2053

2055

2057

2059

Acr

e-Fe

et

Edwards Supplies (Avg) Non-Edwards Supplies ASR Project

Demand*

Current water supplies in average conditions would meet demand through the 2040s

Without Edwards Restrictions

*Assumes aggressive conservation and customer growth



50,00075,000

100,000125,000150,000175,000200,000225,000250,000275,000300,000325,000350,000375,000400,000425,000450,000

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

2035

2037

2039

2041

2043

2045

2047

2049

2051

2053

2055

2057

2059

Acr

e-Fe

et

Edwards Supplies Non-Edwards Supplies ASR Project

Edwards Supplies Cut 40%Under Stage IV Drought Restrictions


Demand*

50-yr Water Supply Plan

Edwards Aquifer LevelStage I <660’

Stage II <650’ vs Today 668.1’Stage III <640’Stage IV <630’



50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

250,000

275,000

300,000

2009 2010 2011 2012 2013 2014 2015 2016 2017

Acr

e-Fe

et

Edwards Supplies Non-Edwards Supplies ASR Project

Demand*

Drought of Record ScenarioShortage as early as 2013




1987 20071987

2007

Conservation50% More Customers, 0% More Water

SAWS Edwards Aquifer Production(1987 vs. 2007)



0

20

40

60

80

100

120

140

160

180

200

220

240

1979 1989 1999 2009 2019

Gal

lons

per

Cap

ita p

er D

ay (G

PCD)

Actual GPCDPredicted GPCD

Gallons Per Capita Per Day(1979-2007)

220 GPCD (1980)

157 GPCD (1996) SAWS115 GPCD (2007)

45% reduction in per capita consumption

ConservationThe National

Leader

Dallas 217Austin 187El Paso 151Houston 134TX Water Dev Bd, 2006



Deferred alternative supplies would have cost up to $2.7 billion

Additional Edwards$0.7 billion

Groundwater Desalination$1.3 billion

Surface Water $2.7 billion

1980s 2008121,000 ac-ft saved

ConservationFiscal & Environmental Stewardship



Additional treatment capacity would have cost up to $1.1 billion

$3.90 Per Gallon$348 million saved

$7 Per Gallon$625 million saved

$12 Per Gallon $1,071 million saved

1980s 200889.3 MGD Treatment Capacity Savings

Wastewater Treatment SavingsConservation Related Savings



Optimize use of the EdwardsConservationRecycled Water SystemAquifer Storage and Recovery

Reduce Stress on the EdwardsCanyon Lake - DesalinationTrinity Aquifer - Regional Carrizo Local Carrizo - Lower Colorado River Authority

- Recharge- Other Potential Supplies

Accommodating a growing community

Water Supply



Improving the SystemInfrastructure

Expensive Repairs

Pipes crumble and fail over time

Public Health and Safety



Capital Improvements Program 5 Year (Forecast)

$0

$100

$200

$300

$400

Water Supply $86.8 $132.7 $127.9 $98.7 $67.8 Water Delivery $58.1 $78.2 $69.0 $68.2 $53.1 Wastewater $123.3 $177.0 $138.4 $126.7 $172.2 Heating & Cooling $0.1 $0.1 $0.1 $0.1 $0.1

2009 2010 2011 2012 2013

$ in

Mill

ions

$268.3

$388.0

$335.4$293.7 $293.2



Operating Cost Increases

Wastewater Line CleaningPreventative Maintenance Program

Chemical Cost IncreasesFerrous Sulfate, Sulfuric Acid, Dewatering Polymer

Electricity Customer Growth, Rate Increase, Fuel Adjustment Clause

Employee-RelatedRetirement, Post-Retirement Medical

Maintenance Materials/ExpenseAsphalt Price Increases, General Inflation, System Expansion

Other Significant IncreasesCredit Card Payments, Security, Postage, Fuel

Water Related LeasesIncreased Edwards Leases to Support Customer Growth, Regional Carrizo Leases

Plus, Increased Conservation EffortsPrograms, Education and Awareness

Line maintenance and unavoidable rising costs



473464464441

403

0

100

200

300

400

500

2004 2005 2006 2007 2008*

Empl

oyee

Operations17% More Efficient Since 2004

Customers / Employee

*End of year projection



$220

$230

$240

$250

$260

$270

$280

$290

2005 2006 2007 2008

O&M Cost Per Average Customer 2005 O&M Per Customer - Projected with CPI

Operational EfficienciesOperating and Maintenance Cost Per Customer*

*Adjusted to reflect consistent accounting treatment across all periods.



Residential Bill & Rate Projection

Actual Projected

Monthly Residential Bill 2009 2010 2011 2012 2013 Water Supply 11.91 12.92 13.98 15.02 16.34 Water Delivery 13.94 14.52 15.31 16.01 16.49 Wastewater 17.39 19.08 20.64 21.46 23.04 Total 43.24$ 46.52$ 49.93$ 52.49$ 55.87$ Increase 1.63$ 3.28$ 3.41$ 2.56$ 3.38$ Increase % 3.9% 7.6% 7.3% 5.1% 6.4%

EAA Fee 0.95 0.95 0.95 0.95 0.95 Total With EAA 44.19$ 47.47$ 50.88$ 53.44$ 56.82$ Increase % with EAA 2.8% 7.4% 7.2% 5.0% 6.3%

Residential Bill (7,788 gallons water / 6,178 wastewater, ICL, Standard)

Average based on 7,788 gallons water and 6,178 gallons sewer usage. As of November 2008. Excludes COSA Stormwater.



Infrastructure1.7%

Operations & Maintenance

Water Supply1.0%

How the 2009 rate increase will be used

3.9%

Average Residential Bill Increase of $1.63 / monthAverage based on 7,788 gallons water and 6,178 gallons sewer usage. As of November 2008. Excludes COSA Stormwater.

(Other)0.3%

(Line Cleaning)0.9%



National Bill ComparisonNational Residential Water and WastewaterTop 10 U.S. Cities by Population

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$90.00

Monthly Bill $27.23 $32.28 $44.19 $49.88 $54.45 $55.21 $56.52 $57.94 $67.93 $78.48

Chicago Phoenix San Antonio Dallas New York Houston San Jose Los Angeles Phila- delphia

San Diego

Average based on 7,788 gallons water and 6,178 gallons sewer usage. Rates as of November 2008. Excludes COSA Stormwater.



Texas Bill ComparisonAverage Residential Water and Wastewater

$0.00

$10.00

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

Monthly Bill $34.59 $44.19 $49.88 $52.75 $55.21 $67.94 $68.08

El Paso San Antonio Dallas Ft. Worth Houston Austin Corpus Christi

Average based on 7,788 gallons water and 6,178 gallons sewer usage. As of November 2008. Excludes COSA Stormwater.



Residential Rate IncreasesMajor Texas CitiesSince Last SAWS Rate Increase in 2006

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Monthly Bill 2.0% 3.9% 6.7% 8.1% 19.3% 21.1% 25.9%

El Paso San Antonio Ft. Worth Houston Corpus

Christi Dallas Austin

Average based on 7,788 gallons water and 6,178 gallons sewer usage. Excludes EAA Fee. As of November 2008.



Affordability ProgramsIncome Based Programs

- Affordability Discount- Project Agua Payment Assistance

• Includes- Senior & Disability Billing- Medical Consideration- Foster Care Transition Support- Payment Arrangements

• Participants- Project Agua 1,015- Wastewater only 3,528- Senior Citizens 6,234- Avg Monthly Enrollment 20,829



Domestic Bottled Water: $1.00 per 0.5 literSAWS Tap Water: $0.0003 per 0.5 liter

For the price of a single 0.5 liter bottle of water, you can fill up the same container with SAWS water once a day for more than 8.1 years.

Final Comment

Our water. Our future.

SAWS Overview

Financial Services

Dan CrowleyDirector - Financial Planning

Rate Advisory Committee8 January 2009

1a - RAC 010609 Overview DTC January 2009. 8 January 2009 Page 1 ... – Establish budget guidelines...

Documents

Transcript of 1a - RAC 010609 Overview DTC January 2009. 8 January 2009 Page 1 ... – Establish budget guidelines...