GRP Division Proposed Fiscal Year 2020 Operating Budget: Budgeting - - PowerPoint PPT Presentation

GRP Division Proposed Fiscal Year 2020 Operating Budget: Budgeting During Uncertainty

GRP Review Committee May 20, 2019 SJRA Board Meeting May 23, 2019

Joint GRP Participants

• 80 GRP Contracts
• 149 Large Volume

Groundwater User (LVGU) Systems

Current GRP FY 2019 Rates

• Groundwater Pumpage Fee

$2.64/1000 gal

• Treated Surface Water Fee

$2.83/1000 gal

Budgeted Total Demand = 52.72 MGD or 19.24 billion gallons Treated Surface Water Production = 12 MGD Annual Average

Budgeting During Uncertainty FY 2020 Budget and Rate Development Goals

• Develop the FY 2020 Operating Budget following a

concept of responsible management of $500 MM GRP assets.

• Produce 12 mgd of surface water and deliver to 7

Participants.

• Develop a GRP Pumpage Fee and Surface Water Fee

assessed to meet revenue requirements.

Maybe Not

TWDB Rejects Lone Star Groundwater Conservation District’s Draft Management Plan

Uncertainty?

Compliance Overview

10.0 10.5 11.0 11.5 12.0 12.5 13.0 13.5 14.0 14.5 2016 2017 2018 Projected 2019 Projected 2020 5-Year Average Billion Gallons Groundwater Demand ICO Adjusted TQD

Impactful Changes to FY 2020 Operating Budget

Reduction in Expenses

• Quantity of GAC Changes
• Three vacant FTEs
• Professional Services

Increase in Expenses

• Chemicals
• Maintenance Contracts
• Cost of GAC Change Outs
• City of Houston Water

Reservation Fee Revenue Impacts

• Reduction in Projected Demands
• Anticipated Uncollected Revenue

FY 2019 Budget/Projections

(As of April 2019)

Category FY19 Budget FY19 Projected Operating Revenues 53,193,280 $ 49,237,025 $ Other Revenue 14,808 $ 14,808 $ O&M Expenses 19,116,988 $ 16,905,000 $ Debt Service 34,525,702 $ 34,525,702 $ Capital Items/Prepaid COH Credit (399,867) $ (399,867) $ Change to Fund Balance (34,735) $ (1,779,002) $

* Change to Fund Balance does not include uncollected revenue.

GRP Water Demands

• 5.00

10.00 15.00 20.00 25.00 FY 2017 Actual FY 2018 Actual FY 2019 Budgeted FY 2019 Projected FY 2020 Budgeted Billions of Gallons Groundwater Surface Water

3.45% Decrease in Budgeted Demands

GRP Operating Revenue

$0 $10 $20 $30 $40 $50 $60 $70 FY 17 FY 18 Projected FY 19 Budgeted FY 20 Millions Budgeted Actual Collected

* Total uncollected revenue (FY 17 through April 2019) = $3,074,387 ** Projected uncollected revenue for FY 2020 = $1,726,605

GRP O&M Expenses

Category FY18 Actual FY19 Projected FY20 Budget Payroll & Employee Benefits 4,764,748 $ 4,400,000 $ 4,544,712 $ Professional Fees 733,911 $ 1,000,000 $ 901,500 $ Purchased & Contracted Services 1,657,632 $ 1,772,000 $ 1,765,719 $ Supplies, Materials, & Utilities 9,115,771 $ 8,604,000 $ 9,109,820 $ Maintenance Repairs, Parts & Rentals 1,013,369 $ 702,000 $ 1,061,750 $ General & Administrative 405,005 $ 427,000 $ 476,390 $

Total GRP O&M Expenses

17,690,436 $ 16,905,000 $ 17,859,891 $

* FY19 & FY20 are based on a surface water production rate of 12 MGD.

GRP O&M Expenses

$- $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 Payroll & Employee Benefits Professional Fees Purchased & Contracted Services Supplies, Materials, & Utilities Maintenance, Repairs, Parts, & Rentals General & Administrative Millions FY 18 Actual FY 19 Projected FY 20 Budgeted

GRP Rate Composition

Payroll & Employee Benefits 8.4% Professional Fees 1.7% Purchased Services 3.3% Supplies, Materials & Utilities 16.8% Maintenance, Repairs, Parts & Rentals 2.0% General & Administrative 0.9% Capital Improvements 0.1% Bond Interest & Principal 63.7% Uncollected Revenue 3.2%

TWDB Open Market Total Principal 11,771,667 $ 2,590,000 $ 14,361,667 $ Interest 16,743,734 $ 3,431,350 $ 20,175,084 $ Total 28,515,401 $ 6,021,350 $ 34,536,751 $

FY 2020 Debt Service

Operating Fund Balance

(As of August 31st)

$0 $2 $4 $6 $8 $10 $12 FY 2017 FY 2018 FY 2019 FY 2020 Millions Target Actual W/Uncollected Revenue Projected Emergency = $0 R&R = $0 * Proposed changes to reserve structure and targets are included, starting in FY 2020.

Rates

$0.00 $1.00 $2.00 $3.00 $4.00 $5.00 4.30 3.85 NHCRWA Groundwater NHCRWA Surface Water 2.83 2.64 2.73 GRP Groundwater GRP Surface Water

• Equiv. Blend Rate

35%SW/65%GW 3.15 2.88

0.19 0.42

Per 1,000 Gallons Current Current Proposed Proposed Proposed Equivalent

0.45

Proposed FY 2020 Rates

• Groundwater Pumpage Fee

$2.73/1000 gal

• Treated Surface Water Fee

$3.15/1000 gal

2019 Regional Rate Comparison

$2.73 $2.95 $3.85 $3.65 $3.15 $3.35 $4.30 $4.00

$- $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 Proposed SJRA Rate Current WHCWA Rate Current NHCRWA Rate Current NFBWA Rate Per 1000 Gallons Groundwater Surface Water

Questions?

Amended Rate Order for Participants

• Rates

– Groundwater Pumpage Fee $2.73/1000 Gallons – Treated Surface Water Fee $3.15/1000 Gallons

* Rates effective September 1, 2019

• Definitions
• Conservation District Permitting