Economic Factors and Next Year’s Budget and Rates The Prince William County Service Authority is dedicated to excellence in providing safe, reliable water service to our customers and returning clean water to the environment. The Authority’s strategic plan supports the mission and is developed with contributions from the Board of Directors, management and staff. Key areas of the strategic plan include customer satisfaction, workforce excellence, financial viability, respected community partnerships, advanced and accessible technology, and agile, optimized and sustainable operations. The Authority’s operating and capital budgets are prepared in alignment with the initiatives identified in the strategic plan. The Authority considered the following general economic and operational factors in the preparation of its fiscal year 2021 budget: • The Authority estimated certification of 1,350 new ERUs for fiscal year 2021. This represents a combination of projected growth and pending certification plans. • Revenues are projected to decrease in total by $4.2 million, or 2.8%, with an anticipated drop in certifications revenue of $4.0 million, and relatively flat user charges, despite 0.5% projected account growth, adopted rate changes and anticipated customer credits that bring consumption revenues up to $121.5 million, an increase of 0.6%. In November 2019, the Authority’s Board of Directors adopted a three-year rate schedule and included increases in the base charge for water and sewer customers and no change to availability fees. The adopted increases are intended to replenish and sustain the replacement fund and enable investment in future infrastructure improvements needed for maintenance and replacement of the water and sewer systems. Adopted rates will fulfill the Authority’s bond covenants and meet the Authority’s operating and maintenance needs. Actual revenue realized as a result of the adopted rates depends on growth in new customers and water demand per customer. • Budgeted expenses are projected to remain relatively flat, with a slight decrease of $392,000, or 0.4%, in fiscal year 2021 as compared to fiscal year 2020, with an ongoing effort toward minimizing costs while maintaining the level of service expected by our customers. Personnel costs are expected to decrease approximately $2.8 million, or 6.5%, in fiscal year 2021. The budget reflects deferred hiring and a decrease in the retirement plan contribution rate, offset by an increase in health insurance costs and other non-personnel expenses, and an increase of $2.4 million, or 8.6% in purchased resources due to anticipated increases in wholesale water rates. • The Authority’s current multi-year CIP program budget includes a maximum estimated cost of $392.6 million in identified capital projects for fiscal year 2021 and beyond. The Authority prioritizes its CIP projects by weighing five criteria: (1) physical condition, (2) regulatory/environmental impacts, (3) service level/reliability, (4) capacity/ technical obsolescence issues, and (5) operations and maintenance impacts. For fiscal year 2021, capital spending is budgeted at a maximum estimated cost of $60.1 million. Major CIP projects scheduled for fiscal year 2021 include improvements and replacements to elevated water storage tanks, sewer mains, pumping stations and water lines, information technology systems and SCADA system improvements. Contacting the Authority’s Financial Management The CAFR is designed to provide the reader with a general overview of the Authority’s financial position and demonstrate the Authority’s accountability for revenues received and expenditures made. Questions concerning information provided in this report or requests for additional financial information should be directed to: Astrid B. Nelson, CPA Chief Financial and Business Operations Officer Prince William County Service Authority P.O. Box 2266 Woodbridge, VA 22195-2266 Telephone 703-335-7901 E-mail requests may be sent to: [email protected] MANAGEMENT’S DISCUSSION AND ANALY SIS FINANCIAL SECTION 29
Prince William County Service Authority | 4 County Complex Court Woodbridge, VA 22192
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