Operating Revenues Operating revenues consist of water and sewer user charges, development charges and other operating revenues, which primarily consist of refuse collection fees, lab testing fees, and grinder pump maintenance fees. Operating revenues are, in part, based on local environmental and economic factors. Demand for water is affected by temperature, precipitation amounts, and precipitation frequency. In addition, the volume of water sold increases in the summer months as customers increase their water usage for irrigation systems, swimming pools, and other applications. The Authority’s Board of Directors adopts rates and fees to cover the cost of service provided. Water and sewer user charges consist of fixed and variable charges. Variable charges are based on the amount of water used. The amount of water used during the peak season of May through October for outdoor watering and commercial cooling is influenced by the weather. Development charges are impacted by development in the County during the year. 2020-2019 Comparison Operating revenues increased $5.3 million, or 4.7% over the prior fiscal year to $119.2 million. The increase is primarily due to favorable weather, which contributed to higher water usage, adopted rate increases, and 1.2% growth in customer accounts. These factors offset decreases to revenue related to the coronavirus pandemic. In March 2020, the Service Authority suspended late fees and service disconnects, resulting in lower administrative fee revenue of $686,000 through the end of the fiscal year. In addition, to assist customers during the coronavirus pandemic, the Service Authority distributed $2.8 million to customers as bill credits. Although coronavirus pandemic restrictions resulted in lower commercial usage in the 4th quarter of 2020, increased usage by residential and multi-family customers more than offset the lower commercial usage. Account Receivables over 90 days increased to $500,000 as of June 30, 2020; however, the Service Authority expects to collect the majority of outstanding receivables through customer payment plans. Developer charges increased $172,000 predominantly due to an increase in inspections, plan reviews, and as-builts. 2019-2018 Comparison Operating revenues remained relatively flat from 2018 to 2019 as adopted rate increases and growth in customer accounts was offset by reduced water use, primarily due to unusually high rainfall in 2019. Operating revenues were up only $70,000, or 0.1% over the prior fiscal year to $113.8 million as a result of a $286,000 increase in developer charges predominantly due to an increase in inspections, plan reviews and as-builts, partially offset by a decrease in user rates and fees of $147,000 and decreases in other operating revenues of $69,000. User rates and fees decreased by $147,000 due to a decrease of $1.3 million in volumetric charges that were offset by an increase in fixed service charges of $1.2 million. Revenue from service charges increased 6.0% from the prior year after benefiting from a half year of adopted service charge increases that went into effect January 1, 2019 as well as a 0.9% increase in the number of customer accounts. However, revenue from volumetric charges decreased due to unusually high rainfall totals in fiscal year 2019 and thus less water being used during the peak season. Non-Operating Revenues Non-operating revenues consist of availability fees, investment income and other non-operating revenues, which consist of property rental income, proceeds from the sale of capital assets and other miscellaneous revenues. Availability fees cover the cost of a customer’s pro-rata share of capacity and infrastructure. Availability fees are charged in ERUs at the time of certification, which authorizes a customer to establish service and physically connect to the Authority’s system. 2020-2019 Comparison Non-operating revenues increased by $11.4 million, or 45.9% in fiscal year 2020 from the prior fiscal year. The primary factors impacting the change were an increase of $7.1 million in availability fees, a $3.2 million increase in the equity interest in UOSA, a $581,000 increase in investment income and a $556,000 increase in other operating revenues. Revenue from availability fees is directly related to economic development in the County and increased in fiscal year 2020 as the number of ERUs sold increased by 461 to 1,871. 2019-2018 Comparison Non-operating revenues increased by $675,000, or 2.8% in fiscal year 2019 from the prior fiscal year. The primary factors impacting the change were an increase of $7.1 million in investment income, partially offset by $5.9 million decrease in availability fees and a $520,000 decrease in other operating revenues. Revenue from availability fees is directly related to economic development in the County and decreased in fiscal year 2019 as the number of ERUs sold decreased by 358 to 1,410. 22 FINANCIAL SECTION MANAGEMENT’S DISCUSSION AND ANALY SIS
Prince William County Service Authority | 4 County Complex Court Woodbridge, VA 22192
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