Arizona Administrative Code › Title 18 - ENVIRONMENTAL QUALITY › Chapter 4 - DEPARTMENT OF ENVIRONMENTAL QUALITY - SAFE DRINKING WATER › Article 6 - CAPACITY DEVELOPMENT REQUIREMENTS FOR A NEW PUBLIC DRINKING WATER SYSTEM › Appendix C - Financial Capacity for New CWSs and NTNCWSs, Worksheet 1

Current through Register Vol. 30, No. 28, July 12, 2024
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).