COG Comprehensive Annual Financial Report

Table B-1 Change in Net Position– Business-Type Activities (in thousands of dollars )

Change in Net Position

Change in Net Position

Before

After

Depreciation/Amortization*

Depreciation/Amortization*

Enterprise Activities Water Resources

2018

2017

2018

2017

$

46,156 $ 50,115

$

19,772 $ 24,268

Stormwater Management

2,315 1,600

3,346

406

1,518 8,930 1,013

Coliseum

12,147

(1,632)

Solid Waste Management

687 906

1,523

252 336

Parking Facilities

320

(192)

Total

$

51,664 $ 67,451

$

19,134 $ 35,537

*Excludes the effect of Internal Service Fund chargebacks. Major activities and/or changes in the Enterprise Fund operations are presented in the following comments. 2) Water Resources Fund Charges for current services totaled $114,964,118 compared to $110,489,306 for the preceding year, an increase of 4.1%. Operating expenses (excluding depreciation) increased by 1.9% and totaled $66,207,811 as compared to $60,827,548 for the preceding year. On July 1, 2017, water and sewer rates for average residential customers increased by 3.25% for customers inside the City and 5.5% for those residing outside the City limits, largely causing the improved revenue results. On July 1, 2018, water and sewer rates were increased again, up 3.25% for customers inside and outside the City limits, expected to generate approximately $3.9 million in additional revenues in FY 2019, in keeping with debt service coverage covenant targets of 2.0x coverage. Actual debt service coverage has exceeded 2.0x coverage in each of the past ten years, with a current coverage of 2.25x as of June 30, 2018. The City continues to make a significant investment in water resource needs to replace and expand existing infrastructure and to meet new environmental regulations. The Water and Sewer utility comprises approximately one-third of the City’s overall capital improvement plan, with estimated $598 million in planned capital expenditures over the next ten year period. Ongoing system improvements are expected and are included in our long-range planning, however, management projects that within the next five years, certain of the major improvements will be completed ($95 million nitrogen removal project, $63 million for the Osborne Wastewater Treatment Plant capacity upgrade, $97.6 million for a system wide Sanitary Sewer and Water Line Rehabilitation and a $33 million Granular Activated Carbon (GAC) system to address PFOA and PFOS treatment) and pay-go funding, which is expected to be a little less than 50%, should cover a large part of anticipated future costs. The City has also established a capital reserve account to provide for future needs of the water and sewer system, with an account balance of approximately $9.8 million available in the restricted assets total of the Water Resources Fund as of June 30, 2018.

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