Ariz. Admin. Code § tit. 18, ch. 4, art. 6, app C
Current through Register Vol. 30, No. 50, December 13, 2024
Arizona Financial Capacity For New CWSs and NTNCWSs
Definitions for Worksheet 1
| 5-Year Financial Projection | Year 1 Projection | Year 2 Projection | Year 3 Projection | Year 4 Projection | Year 5 Projection |
| 1. Beginning Cash on Hand | For the current year budget, use the actual cash balance. For all other years, cash on hand should equal item #12 from the previous period. | ||||
| a) Unmetered Water Revenue | All cash received or estimated for water supplied to residential, commercial, industrial and public customers where the customer charge is not based on quantity, but is based on other criteria such as diameter of service pipe, room, or foot of frontage. | ||||
| b) Metered Water Revenue | All cash received or estimated for water supplied to residential, commercial, industrial, and public customers where the charge is based on quantity of water delivered. | ||||
| c) Other water revenues | Other cash received or estimated from sales of water, sales for irrigation, sales for resale, inter-municipal sales, or ad valorem taxes. | ||||
| d) Total Water Revenues | Total 1(a) thru 1(c) | ||||
| e) Connection Fee | All cash received or estimated for connection of customer service during the year. | ||||
| f) Interest and Dividend Income | All cash received or estimated on interest income from securities, loans, notes, and similar instruments, whether the securities are carried as investments or included in sinking or reserve accounts. | ||||
| g) Other income | Other revenues collected or estimated during the period (such as disconnection or change in service fees, profit on materials billed to customers, servicing of customer lines, late payment fees, rents, sales of assets, or ad valorem taxes (infrastructure portion). | ||||
| h) Total Cash Revenues | Add 1(d) thru 1(g) | ||||
| i) Additional Revenues Needed | Additional cash needed to cover cash needs. | ||||
| j) Loans, Grants or other Cash Injections | Includes loans or grants from financial institutions, inter-municipal loans, state or federal sources. | ||||
| 2. Total Cash Balance | Add items 1(h) thru 1(j) | ||||
| 3. Total Cash Available | Add items 1 and 2 | ||||
| 4. Operating Expenses | Use actual amounts paid when completing the prior year. Estimate the amounts for projected years based on prior year amounts, trends, and other known variables. | ||||
| a) Salaries and wages | Cash expenditures made or estimated for salaries, bonuses, and other considerations for work related to the operation and maintenance of the facility, including administration and compensation for officers and directors. | ||||
| b) Employee Pensions and Benefits | Paid vacations, paid sick leave, health insurance, unemployment insurance, pension plan, and other similar liabilities. | ||||
| c) Utilities | Amounts paid or estimated for all fuel or electrical power. | ||||
| d) Chemicals | Amounts paid or estimated for chemicals used in treatment and distribution. | ||||
| e) Materials and Supplies | Amounts paid or estimated for materials and supplies used for operation and maintenance of the new public water system other than those under contractual services. | ||||
| f) Laboratory | Amounts paid or estimated for laboratory and associated services. | ||||
| g) Contractual Services | Amounts paid or estimated for outside engineering, accounting, legal, managerial, and other services. | ||||
| h) Insurance | Amounts paid or estimated for vehicle, liability, worker's compensation, and other insurance associated with the public water system. | ||||
| i) Miscellaneous | Amounts paid or estimated for all expenses not included elsewhere (such as permit fees, training, and certification fees). | ||||
| j) Total operation and maintenance expenditures | Add amounts in lines 4(a) thru 4(i). | ||||
| k) Replacement expenditures | Amounts paid or estimated for replacement of equipment to maintain system integrity (capital improvement plan). | ||||
| l) Total Operations and Maintenance expenditures plus Replacement expenditures | Add amounts in 4(j) and 4(k) | ||||
| m) Loan Principal, Capital Lease or Loan payment | Include cash payments made or estimated for principal and interest on all loans, including vehicle loans and equipment on time payments, and capital lease payments. | ||||
| n) Loan Interest payments | Include cash payments made or estimated for interest on all loans, including vehicle loans, and equipment on time payments, and capital lease payments. | ||||
| o) Capital Purchases | Amount of cash outlays or estimates for items such as equipment, building, or vehicle purchases and leasehold improvements that were not a part of the initial design of the water system. | ||||
| 5) Total Cash Paid Out | Add amounts in 4(m) thru 4(o) | ||||
| 6) Total Cash Available Minus Expenditures Calculation | Take Amount in 1 and subtract Amount in 5. If this amount is positive, there is operating cash left over after all calculated expenditure obligations have been met. If the number is negative, there are more expenses than there are funds available to pay for the expenses to operate the water system. | ||||
| 7) Number of Customer Accounts | Use most recent system data or expected increases. | ||||
| 8) Average User Charge per Customer | Take amount listed in 1(d) and divide it by amount listed in 7. | ||||
| 9) Coverage Ratio | Take amount in 1(h) and subtract the amount in 4(l). Then divide that amount with the sum of 4(m) + 4(n). The equation looks like this: [1(h) - 4(l)]) [4(m) + 4(n)] and measures the sufficiency of net operating profit to cover the debt service requirements of the system. A bond covenant might require the debt service to meet or exceed certain limits. | ||||
| 10) Operating Ratio | Take amount in 1(d) and divide it by the amount in 4(l). The equation looks like this: 1(d)) 4(l). This figure measures whether operating revenues are sufficient to cover operation, maintenance, replacement expenses. An operating ratio of 1:0 is the minimum for a self-supporting facility. If there are debt service requirements, the operating ratio would have to be higher. | ||||
| 11) End of Year Operating Cash | All non-reserved cash. Add amounts from 6 thru 12. | ||||
| 12) End of Year Reserves | Do not include depreciation as a reserve unless there is actually a designated depreciation reserve containing cash set aside for future expansion. | ||||
| a) Operating Cash Reserve | Funds set aside to meet cash flow, operating, and seasonal fluctuations. | ||||
| b) Debt Service Reserve | Funds specifically set aside to retire debt as it is scheduled. | ||||
| c) Capital Improvement Reserve | Funds specifically set aside to meet long-term objectives for a major facility expansion, improvement, or the construction of a new facility. | ||||
| d) Replacement Reserves | Funds specifically set aside for the future replacement of equipment needed to maintain the integrity of the facility over the useful life of the equipment. | ||||
| e) Total End of Year Reserves | Add amounts 12 (a) thru 12 (d). | ||||
Ariz. Admin. Code tit. 18, ch. 4, art. 6, app C