To: Members of the Castle Rock Water Commission
From: Mark Marlowe, P.E., Director of Castle Rock Water
Anne Glassman, Business Solutions Manager
Title
2020 Rates & Fees Study Deliverables - April 2020
Body
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Executive Summary
As part of the annual rates and fees study, Castle Rock Water staff gathers several pieces of information to input into the four enterprise models for calculating rates, system development fees and cost of service. Throughout the study, staff will bring to Commission some of those inputs and deliverables used for this process.
2019 Year-End Financials (Attachment A)
The 2019 year-end financials along with the 2020 approved budget serves as the starting point for developing the 5 year 2021-2025 financial plan. Three years of actual data from 2017-2019 serve as a historical trend comparison. Attachment A shows the comparison in summary by enterprise fund of the 2019 preliminary year-end actuals to the 2019 adopted budget.
Overall, revenues were $11.1M higher than budget. Of this increase, $2.5M can be attributed to charges for services comprising of approximately $0.6M in metered water sales and fixed water charges, $0.5M in renewable water fund charges, $0.6M in wastewater charges, and $0.4M in bulk water sales. Investment earnings came in better than budget by $1.7M amongst all the funds. Other revenue includes $4.5M in loan proceeds in the stormwater fund from the approved bank loan. It also includes $0.9M from the sale of assets in the water fund and $0.5M in reimbursements. Overall system development fees came in very close to budget with an increase of $0.6M.
Expenses were $63M lower than budget. The majority of this variance relates to capital projects not completed in 2019 of approximately $56.1M. The largest capital items not spent in 2019 are $18.1M for the advanced oxidation facility, $9.9M for the Plum Creek diversion structure, $4.4M for new water supply wells, $5.5M in Newlin Gulch pipeline and pump station, and $4.1M for Chatfield Reallocation. Services and Other was under budget by $6.7M which was made up of $1.2M for repair and maintenance of wells, $3.4M in PCWRA Expansion costs, and $1.0M for CIP operations and maintenance.
2021 Business Cases Summary (Attachment B)
Also attached you will find the business case requests for the upcoming 2021 budget process. Three new full time equivalents (FTEs) are being considered for the 2021 budget depending on the impact to the rates and fees. The three new FTEs include a Distribution Supervisor, an Electrician and a Supervisory Control and Data Acquisition (SCADA) Support Network Engineer. Leadership Team is still evaluating and reviewing options to reduce or limit the number of requested FTEs submitted through the business case requests, specifically for 2021. Staff will also be evaluating the staffing plan for the full five year planning window from 2021-2025 by department and position.
CIP by Enterprise Fund (Attachment C)
A large piece of the annual rates and fees study is updating capital project costs and timing to ensure the most current and up-to-date information gets input into the models. The capital plan forecasts costs through 2060 taking into consideration the timing of projects as well as inflation factors. Each capital project then receives a priority rating as follows:
Priority 1: Capital projects urgent in nature, timing is critical or dependent on another project.
Priority 2: Capital projects not as urgent in nature, timing of construction is more flexible.
Priority 3: Capital projects eliminated with little or no consequences to the future of Castle Rock Water.
Attachment C shows the individual capital projects requested as part of the 2020 Rates and Fees Study as compared to those requested in the 2019 Rates and Fees Study for the 2021-2025 planning period. Staff will use these CIP projections along with their priority ratings defined above to develop proposed changes to the 2020 Study. Every few years we increase the planning period. This year we extended the forecasted years from 2055 in the 2019 Study to 2060 in the 2020 Study.
2019 Preliminary Fund Balances (Attachment D)
Throughout the year CRW staff reviews each enterprise fund to ensure that expenses do not exceed revenues. Attached you will find the historical fund balances, the 2019 preliminary fund balances, forecasted 2020 fund balances and the projected fund balances for 2021-2024.
Attachments
Attachment A 2019 Year End Financials
Attachment B: 2021 Business Cases
Attachment C: CIP Summary by Enterprise Fund
Attachment D: Fund Balances