Rate models BACK

 

Our rate models are tailored to the needs of each client. Typical features of these models:

 

Project models are normally provided to clients for subsequent in-house use.

EXAMPLES OF RATE MODEL OUTPUTS:

KEY FINANCIAL INDICATORS            
FINANCIAL SUSTAINABILITY INDICATORS 2012 2013 2014 2015 2016 2017
Operating ratio (target<1.0) 0.92 0.89 0.88 0.86 0.85 0.84
Annual accounting surplus / accumulated surplus (>0) -0.007 -0.002 0.000 0.002 0.006 0.006
Operating Margin (>0) -0.03 -0.01 0.00 0.01 0.02 0.02
TCA investments / ammortization expense (> 1.0) 1.63 2.16 2.19 1.59 1.57 3.19
Current Ratio (>1.0) 14.97 7.57 6.07 5.03 4.00 4.27
Quick Ratio (>1.0) 13.63 6.92 5.59 4.67 3.75 4.03
Debt to net assets (>0 & <0.3) 0.02 0.05 0.08 0.10 0.12 0.18
Total debt service ÷ revenue (target<0.25) 0.03 0.04 0.06 0.06 0.07 0.09
Debt Service Coverage (>>1.0) 3.42 0.68 0.64 0.78 0.92 0.48
CUSTOMER IMPACT (average bill, $/mo)
FLAT - No meter 82 86 89 91 94 97
R4 - 40 mm (1.5”) 237 247 252 257 263 268
B3 - 150 mm (6”) 17,149 18,019 18,559 19,116 19,689 20,280
OPERATING STATEMENT (1000 $'s/year)            
Revenues 2012 2013 2014 2015 2016 2017
 Rate revenues          3,456         3,650         3,777         3,911         4,045         4,175
 Less provision for bad debt                   -                  -                  -                  -                  -                  -
 Interest earned on cash and cash equivalents                  9               12               13               15               18               22
 Earned DC revenue                   -                  -                  -                  -                  -                  -
 Other revenues             100            102            104            106            108            110
 Total revenues          3,565         3,764         3,894         4,032         4,172         4,308
Operating expenses
 Utilities          1,500         1,531         1,562         1,595         1,626         1,658
 Chemicals             500            510            521            532            542            553
 Administration             400            408            416            425            433            442
 Vehicle maintenance                  5                 5                 5                 5                 5                 6
 Mains Maintenance             200            204            208            212            216            221
 Fire Hydrants             100            102            104            106            108            110
 Meters             150            153            156            160            163            166
 Services             120            123            125            128            130            133
 Leak detection and repair             150            153            156            159            162            166
 Billing and Collection             140            143            146            149            152            155
 Locates                10               10               10               11               11               11
Total Operating Expenses         3,275         3,343         3,410         3,481         3,550         3,619
Net operating revenue            290            421            483            551            622            689
Less amortisation of tangible assets           (359)           (393)           (396)           (416)           (421)           (443)
Earnings before interest             (69)               29               88            135            200            246
Less Interest on short term operating loans                  -                  -                  -                  -                  -                  -
Less Interest on long term debt for new projects             (18)             (39)             (62)             (80)             (95)           (137)
Less Interest on existing long term debt              (24)             (21)             (18)             (15)             (12)               (8)
SURPLUS (DEFICIT) - Operating Stmt           (111)             (31)                 8               40               94            101
Accumulated Surplus/(Deficit), beginning of year       16,200       16,089       16,058       16,066       16,105       16,199
Accumulated Surplus/(Deficit), end of year       16,089       16,058       16,066       16,105       16,199       16,301
Check digits (should be zero) 0 0 0 0 0 0
CASH FLOW STATEMENT (1000 $'s/year)            
CASH FROM OPERATIONS 2012 2013 2014 2015 2016 2017
Earnings before interest expenses             (69)               29               88            135            200            246
Plus amortisation of tangible capital assets            359            393            396            416            421            443
Plus DC contributions                  -            126            126            126            126            126
Less earned DC revenue                  -                  -                  -                  -                  -                  -
Total            290            547            609            677            748            815
CASH FROM THE MOVEMENT OF BALANCE SHEET ACCOUNTS
Accounts payable - increase/(decrease)                  -                  -                  -                  -                  -                  -
Pensions and other employee benefits - increase/(decrease)                  -                  -                  -                  -                  -                  -
Accounts receivable - (increase)/decrease            136             (49)             (32)             (33)             (34)             (33)
Inventory - (increase)/decrease                  -               (4)               (4)               (4)               (4)               (4)
Prepaid expenses - (increase)/decrease                  -                  -                  -                  -                  -                  -
Total            136             (53)             (36)             (38)             (38)             (37)
PROCEEDS OF NEW DEBT            
Short term capital loans               41            570            655            582            572         1,167
Short term operating loans                  -                  -                  -                  -                  -                  -
DC debt                  -                  -                  -                  -                  -                  -
Long term loans            500            559            686            560            483         1,254
Total            541         1,129         1,341         1,142         1,055         2,420
CAPITAL FINANCE
Interest costs             (42)             (60)             (80)             (95)           (106)           (144)
Repayment of short-term capital loans                  -           (559)           (686)           (560)           (483)       (1,254)
Repayment of short-term operating loans                  -                  -                  -                  -                  -                  -
Repayment of DC debt                  -                  -                  -                  -                  -                  -
Repayment of long-term debt             (82)           (108)           (136)           (160)           (182)           (233)
Total           (125)           (727)           (902)           (815)           (771)       (1,631)
ACQUISITION OF TANGIBLE CAPITAL ASSETS
New project investments           (575)           (806)           (796)           (600)           (590)       (1,209)
Major repairs and replacements                  -                  -                  -                  -                  -                  -
Total           (575)           (806)           (796)           (600)           (590)       (1,209)
SURPLUS (DEFICIT) - Funds flow            267               91            217            366            403            359
Cash and cash equivalents, beginning of the year            900         1,167         1,258         1,475         1,841         2,245
Cash and cash equivalents, end of the year         1,167         1,258         1,475         1,841         2,245         2,604
             
FINANCIAL POSITION (1000 $'s)            
Financial assets 2012 2013 2014 2015 2016 2017
Cash and cash equivalents         1,167         1,258         1,475         1,841         2,245         2,604
Accounts receivable - rate revenues            864            913            944            978         1,011         1,044
Accounts receivable - other revenue sources                  -                  -                  -                  -                  -                  -
Investments                  -                  -                  -                  -                  -                  -
          2,031         2,171         2,419         2,819         3,256         3,647
Liabilities
Accounts payable - wages                  -                  -                  -                  -                  -                  -
Accounts payable - other payables                  -                  -                  -                  -                  -                  -
DC reserve (Deferred revenue)                  -            126            252            378            504            630
Short term debt            149            188            181            225            365            275
Long term debt            309            732         1,258         1,636         1,886         2,910
Pensions and other employee benefits                  -                  -                  -                  -                  -                  -
             458         1,046         1,691         2,239         2,755         3,815
Net Financial Assets/(Debt)         1,573         1,125            728            580            501           (167)
Non-financial assets
Tangible capital assets       14,316       14,729       15,129       15,313       15,481       16,247
Inventories of supplies            200            204            208            213            217            221
Prepaid expenses                  -                  -                  -                  -                  -                  -
        14,516       14,933       15,338       15,525       15,698       16,468
Accumulated surplus       16,089       16,058       16,066       16,105       16,199       16,301
Of which:            
Capital Account       15,235       15,480       15,631       15,657       15,684       15,745
Capital Reserve Fund            965            720            569            543            516            455
Retained Earnings           (111)           (142)           (134)             (95)               (1)            101
        16,089       16,058       16,066       16,105       16,199       16,301