Ariz. Admin. Code § tit. 18, ch. 4, art. 6, app C

Current through Register Vol. 30, No. 50, December 13, 2024

Appendix C - Financial Capacity for New CWSs and NTNCWSs, Worksheet 1

Financial Capacity for New CWSs and NTNCWSs

Worksheet 1

Owner:___________________________________________________________________________________

Completed by:_______________________________________________________Date:___________________

5-Year Financial Projection	Year 1 Projection	Year 2 Projection	Year 3 Projection	Year 4 Projection	Year 5 Projection
Enter Year:
1. Beginning Cash on Hand
a. Unmetered Water Revenue
b. Metered Water Revenue
c. Other Water Revenue
d. Total Water Revenues (1a thru 1c)
e. Connection Fees
f. Interest and Dividend Income
g. Other Income
h. Total Cash Revenues (1d thru 1g)
i. Additional Revenue Needed
j. Loans, Grants or other Cash Injection (please specify)
2. Total Cash Balance (1h to 1j)
3. Total Cash Available (1+2)
4. Operating Expenses
a. Salaries and wages
b. Employee Pensions and Benefits
c. Utilities
d. Chemicals
e. Materials and Supplies
f. Laboratory
g. Contractual Services
h. Insurance
i. Miscellaneous
j. Total Operations and Maintenance Expenses (4a thru 4i)
k. Replacement Expenditures
l. Total Operations and Maintenance expenditures plus Replacement expenditures (4j+4k)
m. Loan Principal/Capital Lease Payments
n. Loan Interest Payments
o. Capital Purchases (specify):
5. Total Cash Paid Out (4m thru 4o)
6. Ending Cash Position (3 - 5)
7. Number of Customer Accounts
8. Average Annual User Charge per account (1d/7)
9. Coverage Ratio (1h-4l)/(4m+4n)
10. Operating Ratio (1d/4l)
11. End of Year Operating Cash (6 - 12)
12. End of Year Reserves
a. Operating Reserves
b. Debt Service Reserve
c. Capital Improvement Reserve
d. Replacement Reserve
e. Other
Total Reserves (12a thru 12e)

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