ML13331B480
| ML13331B480 | |
| Person / Time | |
|---|---|
| Site: | San Onofre  |
| Issue date: | 06/30/1989 |
| From: | Hoyt G ANAHEIM, CA |
| To: | |
| Shared Package | |
| ML13331A448 | List: |
| References | |
| NUDOCS 9006200543 | |
| Download: ML13331B480 (57) | |
Text
CITY OF ANAHEIM I t PUBLIC UTILITIES DEPARTMENT ANNUAL REPORT Year Ended June 30, 1989 90062(C05-43 90061 PDR AOCK 05000206.
Own up toil I nvn not ma KnRaw TZ
HIGHLIGHTS Water System Electric System Year ended June 30 Year ended June 30 Operations 1989 1988 1989 1988 Sales 21,756 million 21,853 million 2,419 million 2,661 million gallons gallons kilowatt-hours kilowatt-hours System peak requirements 97.0 million 96.9 million 492,960 470,880 gallons gallons kilowatt-hours kilowatt-hours Average number of customers 54,127 53,769 98,228 96,669 Financial Billed revenues from sale of water and electricity*
$20,504,000
$19,580,000
$175,831,000
$178,869,000 Net income
$ 5,896,000
$ 4,438,000
$ 14,202,000
$ 14,486,000 Transferred to City of Anaheim General Fund 802,000 745,000 7,511,000
$ 7,333,000
- Amounts represent revenues derived solely from billings. Electric system revenues also do not reflect any provision for changes in the Power Cost Adjustment Balancing Account which were $15,462,000 and $3,416,000 in the years ended June 30, 1989 and 1988, respectively, and do not reflect any provision for changes in the Rate Stabilization Account which were $12,288,000 and $9,427,000 in the years ended June 30, 1989 and 1988, respectively. See Note I to Electric Utility Financial Statements.
Moody's Investors Standard and Poor's Credit Rating Service Corporation Electric Revenue Bonds Aa A+
Water Revenue Bonds Aa AA Water Revenue Anticipation Notes MIG I SP-1+
Electric Tax-Exempt Commercial Paper Prime-1 A-i
REPORT FROM THE GENERAL MANAGER An experienced management team is a key ingredient in any successful organi zation. The Anaheim Public Utilities Department's four assistant general man agers and 10 division managers have more than 300 years of utility experience.
These managers and the other talented individuals who work for the Department Gordon W Hoyt have forged an inter-departmental alliance dedicated to a common goal: to pro Public Utilities vide Anaheim consumers with a reliable supply of electricity and water at the General Manager lowest possible cost. The successful achievement of this goal is reflected in year end electric and water rates. Year-end residential electric rates averaged 25 per cent lower than those paid to the Southern California Edison Company by residents in neighboring communities, and water rates ranked in the lowest third among Orange County communities.
The experience of our managers has been enhanced over the past years by a cross training program. Assistant general managers have traded divisions in order to broaden their management experience and knowledge. In fiscal 1989, this program was expanded to include division managers. Managers of the Administrative Services, Financial Services and Systems Planning divisions exchanged responsibilities for six months. Assuming management of another division not only challenged each division manager's abilities, but also broadened their knowledge and brought fresh problem-solving strategies to the operation of those divisions.
The Department made significant progress in several key areas during the year.
Taking another step forward in its quest for energy independence, the Department contracted for the construction of a natural gas turbine capable of generating 48 megawatts (MW) of power. When completed it will represent the first generat ing resource to come on-line within the city limits in 60 years. The turbine will be operated only during peak-demand periods to reduce costly capacity purchases from outside resources.
On September 6, 1988, continued load growth and soaring 100 degree-plus temperatures led to an all-time record electric system peak demand of 493 MW. That mark was nearly eclipsed on an unseasonably warm April 6, 1989 the year's hottest day - when system peak demand climbed to 481 MW.
We reaffirmed our commitment to comply with environmental regulations by establishing an Environmental Services Section. In-house experts are working closely with other utility divisions and other city departments to establish the two
most cost-effective procedures for monitoring and complying with all local, state and federal environmental laws and regulations.
The PCB program is designed to eliminate all polychlorinated biphenyls from the electric system by the mid-1990s. Three new field crews have been added to inspect the city's more than 16,000 electrical transformers for PCB Senior managersofhe contamination. The Department is purchasing sophisticated laboratory Public Utilities Depart equipment and hiring a chemist to conduct in-house PCB testing. Located in the mentfrom left to right:
Water Quality Laboratory, the new equipment also will be used in the water sys-Charles T Slatten tem's ongoing tests for trace organic compounds.
Edward G. Alario Anaheim consumers reap the benefits of having a first-class water utility.
Dale L Poblman Darrell L. Ament New deep wells are tapping aquifers currently untapped by other water utilities.
Increased reliance on these wells will help insulate Anaheim from the impact of future droughts and groundwater contamination.
With major construction underway in Anaheim's hill and canyon area, water engineers are working on developer-funded facilities that ultimately will serve more than 5,600 new homes.
A common thread in all of these achievements is the innovation, expertise and ongoing commitment to excellence of the Department's managers and employees. They have made the Anaheim Public Utilities Department one of the nation's most successful municipal utilities.
As I anticipate my retirement at the end of calendar 1989, I am taking this opportunity to thank our management team, and the Department's entire work force, for their dedication and their contributions in fiscal 1989 and over my past 25 years in Anaheim.
On behalf of the Department, I extend special thanks to the City Manager, Mayor, City Council and members of the Public Utilities Board for the vital role they play in creating an environment which allows our talented staff to achieve the Department's goals.
Gordon W Hoyt Public Utilities General Manager three
POWER RESOURCEs GROUP role in stabilizing Anaheim electric rates.
In fiscal 1987, the Public Utilities Projects of this magnitude require an Department realized its goal of energy incredible amount of planning and team Date L. Pohlman diversification. We pledged that work within the Department, with other Assistant Anaheim would never again find all of city departments, with outside agencies General Manager its energy eggs in one resource basket.
and other utilities. Transforming IPP from Power Resources Group Never again would one utility control the an initial concept to an energy-producing Department's only source of power supply resource took more than 13 years.
for Anaheim's electric consumers.
The process begins with development Today, the goal is even more ambi-of the Department's load forecast, filed tious: to replace our short-term, outside with the California Energy Commission supplier energy contracts with an assort-(CEC) every two years. The filing ment of long-term resources in which we identifies the City's future power needs have direct ownership or a firm contrac-and discusses alternative methods of meet tual interest. Through planning and ing the projected demand. Our futurists, working together now to control our col-led by economist and System Planning lective energy destiny, Anaheim will be Manager Dr. David Kolk, compile exten firmly positioned to move into the next sive data on land use, population growth, century with an assured, plentiful and development plans, national economic reliable supply of economical power.
trends and even studies on appliance use The Department's ownership interest to build both econometric and end-use in San Onofre Nuclear Generating models on which they can accurately Station (SONGS) Units 2 and 3, and base their projections. Conforming with long-term purchase contract for output the CEC's methodology is a mammoth from the coal-fueled, 1,600 megawatt undertaking and few utilities pass without (MW) Intermountain Power Project modification by the commission. Our (IPP) in Utah, are the backbone of our Department's forecasts, however, have commitment to a self-reliant future.
been accepted with little or no change Supplying more than two-thirds of and have, in fact, made Anaheim a leader Anaheim's annual electric energy require-in electric load forecasting.
ments, SONGS and IPP play a critical Purchases made by Power Production Division Manager Dick Butryn's staff, under the terms of firm contracts with Pacific Gas & Electric and Deseret Generation and Transmission Co operative, provide additional power for the community and complement the economic benefit from SONGS and IPP.
In addition to scheduling deliveries from our firm resources, SONGS, IPP and our share of the Hoover Upraing Project, the Department's power production team four
bought lower cost economy energy on Water District of Southern California FISCAL 1989 the open market from 18 utilities located (MWD) makes surplus imported water throughout the western United States.
available at a price comparable to the We continued to displace more costly cost of pumped water. Implementation of purchases from Southern California the program requires daily coordination Edison Company to the point where the between the Systems Operations, Water Department sold more energy to Edison Engineering and Water Field Divisions.
from our resources during periods of low In addition to conserving ground water, demand than it purchased from Edison in
$22,000 was saved as a result of reductions 50% 4% 17% 2% 24~% 3%
fiscal 1989.
in peak demand. Combined with the
" Intermountain Power Project Anaheim moved closer to making the
$99,000 saved through Systems Operations' Units I and 2
" Non-firm Economy Energy first generating resource within the city other peak reduction programs, the a San Onofre Nuclear Generating Station Units 2 and 3 limits in 60 years a reality. A contract to Department saved a total of $121,000 on 0 Hoover Darn build a natural gas combustion turbine pumping operations costs in fiscal 1989.
U Sirm Powern Ciontats generator in the northeast industrial Water production in fiscal 1989 was a center adjacent to Dowling Substation record 24 billion gallons, up 1.5 billion was awarded during the year to Ebasco gallons from fiscal 1988. The system's Constructors Inc. Slated to be opera-31 active wells produced 15.6 billion tional in 1991, the turbine will generate gallons, or 65 percent of total production.
up to 48 MW during peak demand peri-Well water is Anaheim's lowest cost ods and will meet tough air quality stan-water supply. The Department purchased dards. This important new peaking 8.4 billion gallons of imported water from resource, in conjunction with Anaheim's MWD during the fiscal year, accounting power allocation from Hoover Dam, for the remaining 35 percent of total will help to reduce high-cost capacity water production.
purchases from Edison and ultimately help hold down the rates we charge our retail consumers.
Once power is transmitted home to Anaheim from distant resources, delivery to consumers is the responsibility of Steve Albright and his Systems Operations Division staff. Highly trained personnel, using the latest in computer technology, continually monitor the electric system to provide reliable service. Water produc tion and distribution also command the attention of Albright's systems operators.
The Department generally pumps about 70 percent of its annual water sup ply from its own wells. To help "bank" ground water for future use, Metropolitan seven
ENGINEERING GROUP upgraded during the year to eight and Anaheim Public Utilities Department 16 inch pipelines.
designers and engineers work closely with Design of pumping modifications at Charles T. Slatten Department economists, city planners as Linda Vista and Olive Hills reservoirs Assstant well as residential and commercial devel-was started in fiscal 1989. This project General Manager opers to identify where the city's future will double the pumping capacity of the Engineering Group growth is most likely to occur and to Linda Vista Reservoir and Pumping project the water and electric use that Station Complex to 22,000 gpm. In con growth will bring. Once forecasts have junction with new pumps at Olive Hills been made, we then must identify the Reservoir, this project will enable the facilities which will meet future con-Department to supply up to 1.4 billion sumer demand reliably and economically.
gallons of lower cost well water annually Under Water Engineering Division to our high elevation system. The area Manager Diem Vuong's direction, eight is now served exclusively with higher wells, with a combined capacity of 9,700 cost imported water. Using lower cost gallons per minute (gpm), were rehabil-well water will result in projected water itated in fiscal 1989. The program cost savings of $400,000 annually.
increased overall efficiency of the wells Water Engineering staff engineers, by approximately 12 percent with annual designers and inspectors currently are operating energy savings of roughly working with three major developers 500,000 kilowatt-hours (kWh). In 1990, on water production and distribution six more wells will be rehabilitated, bring-projects in the Santa Ana Canyon. Upon ing an additional 300,000 kWh of energy completion, 4.5 miles of new water mains, savings. Saving 800,000 kWh annually two new pump stations with 8,500 gpm translates into $48,000 of avoided elec-of pumping capacity and five reservoirs tric pumping costs each year.
with total storage capacity of 12 million Continuing a comprehensive mainte-gallons, will be in place serving more nance and replacement program, funded than 5,600 homes.
primarily by current revenues, approxi-The Department continued to meet its mately 3.1 miles of old, unlined four to commitment to deliver water that meets eight inch distribution pipelines were all state and federal standards for drink ing water in fiscal 1989. Rigorous testing programs help maintain the quality of the water delivered to Anaheim consumers.
The Department's own Water Quality Laboratory conducted more than 30,000 physical, biological and chemical tests on approximately 6,000 water supply and distribution samples during fiscal 1989.
In addition, tests were conducted by Metropolitan Water District of Southern California on imported water sold to the eight
Department and by the Orange County project will increase the capacity of Water District on the aquifers it manages Anaheim's connection to Southern along the Santa Ana River.
California Edison's 220 kV transmission During fiscal 1989, the Electrical grid from 840,000 to 1,120,000 kilovolt Engineering Division, managed by Jafar amperes to accommodate future consumer Taghavi, issued work orders for construc-demand and enhance system reliability.
tion and installation of facilities to serve Accurate long-term planning and a 1,328 new residential and 423 new com-coordinated effort between divisions has mercial/industrial customers. Approxi-been, and continues to be, a key element mately eight circuit miles of underground of the Department's success. Several and overhead 12 kilovolt (kV) distribu-important studies are underway ranging tion lines were designed, in addition to from communications to enhancing elec more than five circuit miles of secondary trical distribution system reliability. One distribution lines.
study initiated in fiscal 1989 is designed Construction of Southwest Substation, to identify the most economic, reliable a new 69/12 kV distribution substation, and environmentally acceptable plan for was near completion at year end. South-meeting transmission needs within the west will serve growing consumer demand city for the next two decades.
for power in the Disneyland, Anaheim Over the next 20 years, Anaheim is Convention Center, and hotel area.
expected to add 50,000 residents to its Working closely with officials from the current population of 244,300. More California Department of Transportation, than 9,000 new housing units are ex our engineers are planning for replace-pected by 1994. Through cooperative ment of electrical transmission and distri-planning based on sound engineering, bution lines and facilities, including the Public Utilities Department will have Katella Distribution Substation that will the facilities in place to meet the com have to be relocated as a result of the munity's water and power needs well into widening of Interstate-5. The Depart-the next century.
ment plans to supply customer loads now served from Katella Substation through a future expansion of Southwest Substation and a new distribution substation cur rently planned for construction near Anaheim Stadium. A third new distri bution substation will be constructed to serve new residential and commercial loads in the rapidly developing Santa Ana Canyon.
Design of a fourth "A" bank, or 220/69 kV transformer, planned for installation at Lewis Substation, was completed in fiscal 1989. This $5 million eleven
FIELD AND WAREHOUSE GROUP 69 kV transmission lines and 530 miles Trained in such diverse specialties as of primary overhead distribution power communications, construction and main-lines. By using an infra-red scanner to Edward G. Alario tenance, equipment test and repair, and detect "hot spots" or points on the system Assistant computer operations, the men and where heat is generated due to such General Manager women of the Field and Warehouse Group things as old or loose connections, crews Field and maintain the integrity of Anaheim's can make repairs or replacements on Warehouse water and electrical systems, 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> a a planned basis before a point fails.
Group day, 365 days a year. When nature's fury Scheduled maintenance can save the or other problems disrupt service, the Department thousands of dollars each Group's dedicated professionals move in year in avoided overtime costs, not to to repair any damage and quickly restore mention reducing the intangible costs service to our consumer-owners. From associated with outages and customer Lewis Substation's massive 220/69 kilo-inconvenience. Although the scanning volt (kV) transformers to individual procedure currently is contracted to an customer service installations, our field outside firm, we are studying the feasi crews transform the designs and con-bility of purchasing our own equipment cepts of the Department's other divisions and performing the inspections with our into real-time applications.
field personnel.
To maximize the utility system's relia-The maintenance program performed bility, the Field Group implemented a by Interim Water Field Manager Jerry formalized, aggressive preventive mainte-Baldwin's crews include a critical valve nance program for the electric and water turning program. The exercising of all systems. Interim Electric Field Manager system valves on at least a yearly basis Gayle Herbel's technicians make regular-will help assure their performance during ly scheduled inspections of substations, routine maintenance programs and emer transformers, switches and protective gency operating conditions. A scheduled relays to make sure the equipment is in routine meter test program not only top operating condition.
improves system-wide meter accuracy, it Crews also conduct yearly examina-helps decrease unscheduled maintenance tions of Anaheim's 59 circuit miles of and replacement of old, worn meters.
Water field production crews are devot ing significant hours and working closely with water engineers to rehabilitate the system's older wells which will result in improved pump operating efficiency plus enhanced water quality and reliability.
Three new field crews were hired to help the Department attain its goal of becoming a PCB-free utility by the mid 1990s. PCBs, once a widely used element in electrical equipment insulating and twelve
cooling oils, now have been identified as over the years, the Insurance Services a toxic substance and suspected carcino-Office has rated Anaheim's water utility gen. All PCB contaminated capacitors a Class I, their highest underwriting rat have been removed from the electrical ing. The bottom line results for Anaheim system. Testing of the majority of the residents and businesses are the benefits Department's approximately 16,000 of reasonable water rates and relatively transformers is now underway. Those lower insurance premiums.
transformers found to be PCB contami-A job is not worth doing unless it is nated will be retrofilled or removed from done safely. The Department is especially service and destroyed.
proud of its safely record. Support for the In addition to the PCB program, program stems from top management, we are working closely with Environ-with overall coordination provided by mental Services personnel from the the Administrative Services Division of Finance and Administration Group on the Finance and Administration Group.
several projects, including the develop-But the root of our success is the strong ment of formal procedures for cleaning commitment to working safely on the up spills, and the implementation of pro-part of our field personnel. We see posi tocols for surplus department equipment tive efforts from individuals in recogniz subject to disposal regulations. Environ-ing, reporting and resolving safety issues mental Services also is providing oversight before they can become a personal injury of contractual agreements related to the or accident statistic. In fiscal 1989, management of hazardous waste gener-compared to our five-year average, dis ated by the Department.
abling injuries and days away from work The Field Group contracts with dropped 48 and 22 percent, respectively.
Anaheim's Parks and Recreation Depart-Our safety program has made great ment for its city-wide tree-trimming pro-strides over the last five years and is just gram as part of our ongoing effort to one example of what can be achieved enhance electric system reliability. By through hard work, innovation and team aggressively maintaining safe clearances work between employees and managers between power lines and tree limbs, the across divisional lines.
frequency and severity of outages created by branches fouling lines during wind storms are being reduced significantly.
Responding to requests from Ana heim's Fire Department, field crews are replacing the city's existing dry-barrel style fire hydrants with new wet-barrel hydrants. Firefighters feel confident that wet-barrel hydrants provide a more reliable flow of water in firefighting emergencies.
Based on the reliability and flexibility designed into Anaheim's water system fifteen
FINANCE AND ADMINISTRATION GROUP new program represents a Departmental The cornerstone of Finance and move to be proactive and cost-effective Administration is service, to our water in complying with all local, state and Darrell L. Ament and electric customers, and internally, federal environmental regulations.
Assistant to the other utility groups and divisions.
Environmental Services has developed General Manager In fiscal 1989, we continued our commit-and implemented new procedures that Finance and ment to provide all of our constituents have already saved the Department more Administration with the highest quality service possible.
than $500,000.
Group As the Department's front-line Strong financial planning has strate contact with Anaheim consumers, the gically positioned the Department to Customer Service Division, managed by finance capital projects needed for Bonnie Woodson, specializes in courtesy efficient operation of the Department's and efficiency. Representatives responded complex systems at favorable interest to more than 100,000 telephone, 4,200 rates. The bottom line is to maintain written and 13,500 in-person inquiries in lower water and electric rates for our the past fiscal year. Our meter readers customers.
achieved an enviable 99.96 percent accu-The Department's low rates - residen racy level. To further improve our service, tial electric rates at year end averaged we're designing a new computerized cus-25 percent less than those of Southern tomer information and billing system. Due California Edison in other Southern to go on-line in fiscal 1991, the system California communities while water will expedite billing and our response to rates were among the lowest in Orange service and information requests from our County - are a direct result of a coopera consumer-owners.
tive effort with the Engineering, Field One of our Department's most signifi-and Warehouse and Power Resources cant achievements in fiscal 1989 was the Groups. Financial Services Manager creation of an Environmental Services Mike Bell and his staff use computerized Section. Environmental Services is models to analyze alternative methods of headed by John Hills, who was formerly financing projected capital projects and in charge of Orange County's Hazardous to project operating results in order to Materials Management Programs. This determine probable rate consequences.
They then prepare the most cost effective five-year financial strategic plan. Their insightful financial planning is integral to the Department's financial strength and financial success.
Financial Services' active participa tion in financing activities of joint action agencies such as the Inermountain Power Agency and Southern California Public Power Authority, has further solidified the Department's financial sixteen
base. The division's important role in ance indicators. We also moved forward negotiations regarding distribution of with the installation of a computer IPP's surplus construction funds will ulti-automated records storage and mately result in $36 million in savings for retrieval system.
Anaheim's consumer-owners.
This year's decline in water sales, Over the next five years, approxi-especially in light of warmer temperatures, mately $18.6 million is targeted for more customers and less rain, can be replacement of water production and attributed in part to Administrative distribution facilities, $18.4 million for Services' water conservation communica construction of new water facilities, $45 tions program. Although water supplies million for power supply and $55.6 mil-remain plentiful, the Department contin lion for electric subtransmission and ues to encourage customers to conserve distribution facilities in Anaheim. Plans this most precious resource by eliminat are in place to fund the Department's ing wasteful practices.
investment in these facilities.
To promote safety as an integral part From personnel services to external of every task, Administrative Services communications, the role of the implemented a Safety Recognition Pro Administrative Services Division, man-gram honoring employees with exem aged by Diana Leach, is as diversified as it plary safety records. Providing employees is important to the organization's overall with the skills, training and recognition effectiveness.
needed to assure a safe working environ Interacting with the Field and ment will continue as one of the Depart Engineering Groups, Administrative ment's top priorities.
Services Division staff is updating our construction standards. Setting guide lines for each construction project, this program details how it will be built, the material, equipment and number of hours including drive, set-up, tear-down and clean-up time needed to do the job. With these improved guidelines, we can plan, schedule and use our work crews even more efficiently.
After a successful evaluation period, the Executive Information System is being expanded. This valuable business management tool enables top manage ment to closely monitor the financial and operational aspects of the electric and water systems and make the appropriate operational adjustment by providing rapid access to running data on perform nineteen
FISCAL YEAR STATISTICAL AND OPERATIONAL ANALYSIS program and bought 1.3 billion gallons WATER SALES Public Utilities Department managers from MWD that normally would have (BILLION GALLONS)
(BLLONGALOS)strive to operate the Department with been pumped from the Department's 31 88-89 8889218 the same conscientious attitude and ded-active wells. Adjusting production figures
-88.
87-88 ication as managers of the best run busi-for the impact of the joint water banking 21.9 nesses - long-range planning, attention program yields pumped local water to 86-87 8-722.0 to detail, an insistence on excellence, purchased imported water percentages of 85-86 teamwork and a commitment to provid-70 and 30 percent, respectively.
21.4 ing reliable, caring service.
In fiscal 1989, consumers used 21,256 84-85 848 21.1 W~Qhile not the entire story, statistics are million gallons of water. Down 97 million indicators of the results of the Department's gallons from the prior year, water use in operations and financial performance.
fiscal 1989 was still the third highest The operating and financial results of level in the history of the Department.
FISCAL YEAR the Public Utilities Department in fiscal Fiscal 1987 record sales were 21,958 ANNUAL RAINFALL 1989 continued to reflect the Department's million gallons. The difference between (INCHES) achievements across a broad spectrum of water produced and water sold varies 88-89 services provided for Anaheim consumers.
depending on the amount of water in 8.1 Water system production was 24.0 bil-storage, evaporation and other losses.
87-88 8-89.7 lion gallons, up 1.5 billion gallons from It is notable that water use was down 86-87 fiscal 1988, primarily as a direct result of in spite of decreased rainfall during fiscal 8.4 increased water storage levels.
1989. Rainfall was 8.0 inches, down 1.7 85-86 8-616.5 Wells, the Department's lowest cost inches from the prior year and well below 84-85 source of water, produced 15.6 billion the annual average of 13 inches for the 12.1 gallons in fiscal 1989, or 65 percent of coastal plain. Dry conditions in the West total production. Fiscal 1989 well pro-generally and in Southern California duction was up 1.3 billion gallons from particularly have not adversely affected the prior year. The purchase of 8.4 billion Anaheim's supplies of water. However, gallons of imported water from the consumer awareness has been heightened FISCAL YEAR FSAYERMetropolitan Water District of by the Department's communications pro PEAK DAY DEMAND PEAKIO DAYLDEMND)
Southern California (MWD) during gram and regional advertising by MWD.
(MILLION GALLONS) 8-9the fiscal year, made up the remaining The message is that even though sup 88-89 97.0 35 percent of total water production.
plies are adequate, there is a need to 87-8 The Department's water production eliminate wasteful uses of this precious 8-7goal is to pump 70 percent of total produc-resource.
86-87 85-86 Pb icn Utitiw es amnt manaers nte ndcto fimrvdcn 85-86
~thriematoioperateren Depatmen witchesu rawensprcitwtrue 84-85~
the. s mred onscentirous atitde and oded-o cniudatre erdwwr rn 94.0 help "bank" ground water for future use to 239 gallons a day in fiscal 1989, the during dry years, MWD once again made lowest mark in six years. Average water surplus imported water available from use was down in each major customer March through May of 1989 at a price class except for residential, which was up comparable to the cost of pumped water.
only 100 cubic feet, or 748 gallons.
The Department strongly supports the Electric system generation and pur twenry
chases totaled 2,843.5 million kWh, ment in April, 1989. However, the aver-FISCAL YEAR compared to the record 2,846.3 million age billing price per kWh continued to ELECTRIC SALES kWh set in the prior fiscal year.
show a decline and residential consumers The Department's firm, long-term were paying 25 percent less on the 242 resources - San Onofre Nuclear Gener-average than consumers in surrounding 87-88 ating Station, Units 2 and 3; the two communities.
266 coal-fueled units of the Intermountain Electricity sales overall fell to 2.4 bil Power Project and allocation of low cost lion kWh in fiscal 1989, down 242 million 85-86 hydroelectric power from the ongoing kWh, or 9 percent, compared to the prior uprating at Hoover Dam - continued fiscal year.
84-85 1.99 to provide a reliable and economical Sales of surplus energy to other electric source of power for Anaheim consumers.
utilities were 225 million kWh, down Together, these resources accounted for 285 million kWh, or 56 percent, and were 69 percent of the Department's total pro-the cause of the overall decrease in sales.
FISCAL YEAR duction of electrical energy.
Retail sales, excluding sales to other TEMPERATURE Firm system purchases from Pacific electric utilities, were 2.2 billion kWh (DEGREEDAYSABOVE72 )
Gas and Electric, Deseret Generation up 42.7 million kWh, or 2 percent. All 88-89 and Transmission Co-operative and the retail customer classes recorded sales gains.
426 87-88 addition of seasonal purchases from the Electric system energy use and demand 285 California Department of Water Resources are temperature sensitive and are driven 86-87 made up 24 percent of the Department's significantly by the impact of hot weather needs. Only 3 percent of the Depart-on consumer use of air conditioning.
in3 ment's power supply was purchased from While relatively mild weather was expe-84-85 Edison compared to 100 percent in 1975.
rienced for a fourth consecutive year, The Department's participation in the fiscal 1989 was warmer than the three Western Systems Power Pool and the pur-preceding years.
chase of non-firm supplemental economy By analyzing the number of degree energy from other utilities stretched across days above 72 degrees E, Department the western United States contributed to engineers can evaluate the effect of tem-FISCAL YEAR ELECTRIC PEAK DEMAND increased diversity and relatively lower perature on retail consumer electric ener-(THOUSAND KILOWATTS) power supply costs. Non-firm purchases gy use. Degree days are the number of were 4 percent of the system total.
degrees above 72 degrees F, times the 4930 Electric base rates were stable for number of hours above 72 degrees F, 87-88 another year due to the Department's divided by 24 hours2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br />.
4709 successful power supply program and the In fiscal 1989 there were 426 degree 4714 City Council's rate stabilization policy.
days above 72 degrees F compared to 85-86 The Department has not increased base 285, 204 and 383 degree days in the 4656 84-85 rates since September 1984.
prior three years. It was an early 4834 After two decreases in fiscal 1987 September heat wave, with temperatures and another decrease in fiscal 1988, the in the 100 degree F plus range, that Department moved to increase revenues helped push system demand to a new collected through the Power Cost Adjust-all time peak of 493 MW.
twenty one
WATER SYSTEM OPERATING STATISTICS WATER SUPPLY 1988-89 1987-88 1986-87 1985-86 1984-85 Water Production:
From Metropolitan Water District, million gallons 8,406.9 8,212.8 6,623.8 7,616.7 10,843.1 Percent of Total Production 35%
37%
28%
33%
48%
From Water System Wells, million gallons 15,565.6 14,284.1 16,887.6 15,337.1 11,714.7 Percent of Total Production 65%
63%
72%
67%
52%
Total Production, million gallons 23,972.5 22,496.9 23,511.4 22,953.8 22,557.8 Capacity-gallons per minute:
From Metropolitan Water District Connections 58,435 58,435 58,435 58,435 58,435 From Water System Wells, average 47,209 48,130 41,340 43,022 43,545 Filtration Plant Capacity 10,417 10,417 10,417 10,417 10,417 Total Supply Capacity 116,061 116,982 110,192 111,874 112,397 Peak Day Distribution, million gallons 97.0 96.9 98.7 102.0 94.0 Average Daily Distribution, million gallons 64.1 63.2 63.7 62.9 61.4 WATER USE Average Number of Customers:
Residential 47,162 47,007 46,677 46,111 45,429 Commercial/Industrial 5,381 5,328 5,290 5,249 5,170 Municipal 361 349 346 320 316 Other 1,223 1,085 1,105 1,038 981 Total-all classes 54,127 53,769 53,418 52,718 51,896 Millions of Gallons Sold:
Residential 12,684 12,631 12,625 12,381 12,145 Commercial/Industrial 8,145 8,393 8,394 8,108 7,883 Municipal 633 612 629 633 702 Other 294 217 310 270 398 Total-all classes 21,756 21,853 21,958 21,392 21,128 Anaheim Population Served 244,300 243,021 242,161 237,506 234,700 Population Seived Outside City, estimated 5,100 5,100 5,100" 5,900..
6,500 Total Population Served 249,400 248,121 247,261 243,406 241,200 Average Daily Sales Per Capita, gallons 239 241 243 241 240 GROWTH OF SYSTEM Active Wells 31 32 32 32 32 Reservoirs 10 10 10 10 10 Water Storage, million gallons:
Treated 77 77 77 77 77 Untreated 920 920 920 920 920 Water Mains, miles 701 698 688 680 662 Fire Hydrants 6,513 6,448 6,358 6,196 5,999
...Reduction in average number of people per dwelling unit for estimating purposes.
twenty two
WATER SYSTEM SALES COMPARISON Commercial All and Classes Residential Industrial Irrigation Municipal Other Combined Revenue from sale of water:
Year ended June 30 1989
$13,416,000
$5,862,000
$113,000
$513,000
$600,000
$20,504,000 1988 12,859,000 5,641,000 133,000 482,000 465,000 19,580,000 Increase (decrease) 557,000
$ 221,000
($ 20,000)
($ 31,000)
$135,000 924,000 Percent increase (decrease) 4.3%
3.9%
(15.0%)
(6.4%)
29.0%
4.7%
Units of 100 cubic feet sold:
Year ended June 30 1989 16,957,194 10,889,296 186,305 846,489 215,680 29,094,964 1988 16,886,937 11,220,542 213,797 818,442 75,510 29,215,228 Increase (decrease) 70,257 (331,246)
(27,492)
(28,047) 140,170 (120,264)
Percent increase (decrease) 0.4%
(3.0%)
(12.9%)
(3.4%)
185.6%
(0.4%)
Average billing price per 100 cubic feet:
Year ended June 30 1989
.7912
.5383
.6065
.6060
$ 2.7819
.7047 1988
.7615
.5027
.6221
.5889 6.1581
.6702 Increase (decrease)
.0297
.0356
($
.0156)
$.0171
($ 3.3762)
.0345 Percent increase (decrease) 3.9%
7.1%
(2.5%)
2.9%
(54.8%)
5.2%
Average number of customers:
Year ended June 30 1989 47,162 5,381 51 361 1,172 54,127 1988 47,007 5,328 54 349 1,031 53,769 Increase (decrease) 155 53 (3) 12 141 358 Percent increase (decrease) 0.3%
1.0%
(5.6%)
3.4%
13.7%
0.7%
Average annual use per customer in units of 100 cubic feet:
Year ended June 30 1989 360 2,024 3,653 2,345 1988 359 2,106 3,959 2,345 Increase (decrease) 1 (82)
(306)
(0)
Percent increase (decrease) 0.3%
(3.9%)
(7.7%)
(0.0%)
Amounts represent revenue derived solely from billings.
twenty three
WATER UTILITY FUND
SUMMARY
OF RESULTS FOR OPERATIONS AND NET REVENUES AVAILABLE FOR LONG-TERM REVENUE BOND DEBT SERVICE 1988-89 1987-88 1986-87 1985-86 1984-85 (in thousands)
Revenues:
Sale of water:
Residential
$13,416
$12,859
$11,969
$11,120
$10,845 Commercial/Industrial 5,862 5,641 5,578 5,185 5,042 Municipal 513 482 483 453 492 Other 713 598 557 479 549 Billed revenue from sale of water 20,504 19,580 18,587 17,237 16,928 Change in unbilled water revenue"'
509 (293) 1,802 Total revenue from sale of water 21,013 19,287 20,389 17,237 16,928 Other (including interest income) 1,565 1,155 1,127 1,172 979 Total gross revenues 22,578 20,442 21,516 18,409 17,907 Operating expenses (excluding depreciation and amortization):
Cost of water 8,184 7,933 7,856 8,164 8,272 Operations 2,526 2,353 2,124 2,384 2,004 Maintenance 3,057 2,955 3,035 2,549 2,402 Total operating expenses 13,767 13,241 13,015 13,097 12,678 Net revenues
$ 8,811
$ 7,201
$ 8,501
$ 5,312
$ 5,229 Revenue bond debt service requirements(,
$ 1,817
$ 1,817
$ 1,381
$ 1,625
$ 1,205 Times revenue bond debt service covered by net revenues 4.8 4.0 6.2 3.3 4.3
"'To provide a better matching of costs and revenues, effective with fiscal year ended June 30, 1987, the Water Utility changed its accounting policy for recording revenue. The new method provides for the accrual of estimated unbilled revenue for water consumed but not billed at the end of a fiscal period. Previously, revenues were recorded when billed to customers.
1988-89 1987-88 1986-87 Estimate of unbilled water revenue for:
Fiscal year
$ 2,018
$ 1,509
$ 1,802 Prior fiscal year 1,509 1,802 0
Change in unbilled water revenue 509
($
293)
$ 1,802 E
2'Fxcludes debt service on a portion of the 1984 $6,650,000 Water Revenue Bond Issue which has been advance refunded.
See Note 4 to Water Utility Financial Statements.
twenty four
ELECTRIC SYSTEM OPERATING STATISTICS POWER SUPPLY 1988-89 1987-88 1986-87 1985-86 1984-85 Own Generation:
San Onofre Nuclear Generating Station, kWh 492,562,602 427,297,605 476,785,844 304,229,709 286,779,260 Firm Purchases:
Intermountain Power Project, kWh 1,434,285,100 1,585,321,000 942,740,589 82,560,196 Hoover, kWh 45,733,000 53,407,000 4,307,000 Power Contracts, kWh 689,994,000 634,001,745 56,267,180 Southern California Edison Company, kWh 73,036,778 59,394,969 265,134,768 1,391,023,534 1,521,205,882 Non-Firm Purchases, kWh 107,842,787 86,924,376 618,624,268 421,189,000 304,017,000 System Total, kWh 2,843,454,267 2,846,346,695 2,363,859,649 2,199,002,439 2,112,002,142 System Peak Demand, kW 492,960 470,880 471,360 465,600 483,360 ELECTRIC USE Average Number of Customers:
Residential 83,131 82,030 81,043 79,967 79,827 Commercial 14,337 13,942 13,353 12,901 11,826 Industrial 589 559 546 533 527 Other 169 167 165 166 166 Other Utilities 2
1 1
1 1
Total-all classes 98,228 96,699 95,108 93,568 92,347 Kilowatt-Hour Sales:
Residential 498,768,985 483,700,118 470,309,712 475,055,915 494,519,080 Commercial 518,876,801 510,345,288 490,775,601 480,552,216 471,732,433 Industrial 1,139,252,784 1,121,912,987 1,066,954,519 1,048,774,980 991,719,855 Other 37,356,996 35,638,126 41,220,770 37,037,292 31,698,296 Other Utilities 224,818,564 509,874,878 129,519,302 53,766,000 Total-all classes 2,419,074,130 2,661,471,397 2,198,779,904 2,095,186,403 1,989,669,664 Average Annual kWh per Residential Customer 6,000 5,897 5,803 5,941 6,195 GROWTH OF SYSTEM Transmission, 69kV, circuit miles 59 59 59 59 59 Distribution, 12 kV and lower, circuit miles:
Overhead 888 888 890 890 888 Underground 404 398 395 379 351 Total 1,351 1,345 1,344 1,328 1,298 Transformer Capacity, kVa:
220kV to 69kV 840,000 840,000 840,000 840,000 840,000 69kV to l2kV 592,000 592,000 552,000 552,000 552,000 12 kV to Customer 1,021,000 974,000 930,000 905,000 868,000 twenty five
ELECTRIC SYSTEM SALES COMPARISON Public street and Irrigation Other All highway and electric classes Residential Commercial Industrial lighting pumping utilities combined Revenue from sale of electricity:
Year ended June 30 1989
$ 37,970,000 $ 44,767,000 $ 86,746,000 $ 1,007,000 $ 1,686,000 $ 3,655,000
$ 175,831,000 1988 37,211,000 44,874,000 86,172,000 1,007,000 1,622,000 7,983,000 178,869,000 Increase (decrease) 759,000 ($
107,000) $
574,000 $
0 $
64,000 ($ 4,328,000) ($
3,038,000)
Percent increase (decrease) 2.0%
(0.2%)
0.7%
0.0%
3.9%
(54.2%)
(1.7%)
Kilowatt-hours sold:
Year ended June 30 1989 498,768,985 518,876,801 1,139,252,784 12,430,597 24,926,399 224,818,564 2,419,074,130 1988 483,700,118 510,345,288 1,121,912,987 12,219,540 23,418,586 509,874,878 2,661,471,397 Increase (decrease) 15,068,867 8,531,513 17,339,797 211,057 1,507,813 (285,056,314)
(242,397,267)
Percent increase (decrease) 3.1%
1.7%
1.5%
1.7%
6.4%
(55.9%)
(9.1%)
Average billing price per kilowatt-hour:
Year ended June 30 1989
.0761 $
.0863 $
.0761 $
.0810 $
.0676 $
.0163
.0727 1988
.0769
.0879
.0768
.0824
.0693
.0157
.0672 Increase (decrease)
($
.0008)($
.00160
.0007)($
.0014)($
.0017) $
.0006 $
.0055 Percent increase (decrease)
(1.0%)
(1.8%)
(0.9%)
(1.7%)
(2.5%)
3.8%
8.2%
Average number of customers:
Year ended June 30 1989 83,131 14,337 589 107 62 2
98,228 1988 82,030 13,942 559 105 62 1
96,699 Increase 1,101 395 30 2
0 1
1,529 Percent increase 1.3%
2.8%
5.4%
1.9%
0.0%
100.0%
1.6%
Average annual use per customer in kilowatt-hours:
Year ended June 30 1989 6,000 36,191 1,934,215 1988 5,897 36,605 2,007,000 Increase (decrease) 103 (414)
(72,785)
Percent increase (decrease) 1.7P%
(1.1%)
(3.6%)
Amounts represent revenue derived solely from billings.
twenty six
ELECTRIC UTILITY FUND
SUMMARY
OF RESULTS FOR OPERATIONS AND NET REVENUES AVAILABLE FOR LONG-TERM REVENUE BOND DEBT SERVICE 1988-89 1987-88 1986-87 1985-86 1984-85 (in thousands)
Revenues:
Sale of electricity:
Residential
$ 37,970
$ 37,211
$ 37,145
$ 39,999
$ 39,440 Commercial 44,767 44,874 44,179 46,357 43,045 Industrial 86,746 86,172 84,978 90,272 81,772 Other 2,693 2,730 3,057 2,996 2,525 Other utilities 3,655 7,882 5,089 3,759 Billed revenue from sale of electricity 175,831 178,869 174,448 183,383 166,782 Change in unbilled electric revenue"'
(369)
(667) 8,502 Total revenue from sale of electricity 175,462 178,202 182,950 183,383 166,782 Provision for power cost adjustment 15,936 3,416 826 (10,855) 8,312 Provision for rate stabilization 12,288 9,427 7,291 7,196 Other (including interest income) 8,009 6,499 5,690 6,638 8,080 Total gross revenues 211,695 197,544 196,757 186,362 183,174 Operating expenses (excluding depreciation and amortization):
Cost of purchased power 136,570 124,936 108,300 119,744 122,495 Fuel used for generation 4,023 4,399 5,227 2,913 2,706 Operations 18,956 17,174 17,127 15,724 16,794 Maintenance 10,719 8,937 7,806 7,586 8,208 Total operating expenses 170,268 155,446 138,460 145,967 150,203 Net revenues
$ 41,427
$ 42,098
$ 58,297
$ 40,395
$ 32,971 Revenue bond debt service requirementsm
$ 21,387
$ 21,394
$ 19,852
$ 21,932
$ 14,229 Times revenue bond debt service covered by net revenues 1.9 2.0 2.9 1.8 2.3
")To provide a better matching of costs and revenues, effective with fiscal year ended June 30, 1987, the Electric Utility changed its accounting policy for recording revenue. The new method provides for the accrual of estimated unbilled revenue for electricity consumed but not billed at the end of a fiscal period. Previously, revenues were recorded when billed to customers.
1988-89 1987-88 1986-87 Estimate of unbilled electric revenue for the:
Fiscal year
$ 7,466
$ 7,835
$ 8,502 Prior fiscal year 7,835 8,502 0
Change in unbilled electric revenue
($
369)
($
667)
$ 8,502
"'Excludes interest paid from bond proceeds on 1980 $84 million; 1982 $70 million, Issue A and B; and 1983 $130.4 million, Issue A, B and C, Electric Revenue Bond issues prior to December 1, 1984. The 1980, 1982 and 1983 issues were for the City's share of San Onofre Nuclear Generating Station, Units 2 and 3, construction costs. The 1982 and a portion of the 1980 and 1983 bond issues have been advance refunded. See Note 6 to Electric Utility Financial Statements.
twenty seven
MANAGEMENT DISCUSSION OF represents an increase of $509,000 over FINANCIAL ACTIVITY fiscal 1988.
The Public Utilities Department Water Utility operating expenses in continued its long record of outstanding fiscal 1989 were $14,942,000, an increase financial performance in fiscal 1989.
of $549,000 over the prior fiscal year.
Significant financial events in fiscal The $8,184,000 expended for cost of 1989 included the following:
water in 1989 reflects an increase of just Electric operating revenues passed the
$251,000 over the prior year and was pri
$200 million mark.
manly due to increased production from Anaheim's share of debt service savings wells. The unit cost of water actually resulting from fiscal 1989 advance decreased by 3.0 percent as a result of refundings by the Intermountain increased use of relatively lower cost Power Agency (IPA) and Southern water pumped from the Department's own California Public Power Authority wells. Water pumped from water system (SCPPA) was $6.4 million, bringing wells accounted for 65 percent of the Anaheim's total share to $312 mil-total water production in fiscal 1989 com lion for the life of the project.
pared to 63 percent in the prior year.
Refunds totaling $3.5 million were Purchases of treated water from the received from Southern California Metropolitan Water District of Souther Edison for previous wholesale electric California (MWD) included water made rate overcharges.
available at a reduced rate under MWD's Water and Electric utilities' credit rat-
"water banking" conservation program.
ings were maintained at the same high Other operations and maintenance levels by Moody's Investors Service expenses of $5,583,000 for the year were and Standard and Poor's Corporation.
$275,000 higher than fiscal 1988, an
$3.7 million in one year Water increase of 5 percent.
Revenue Anticipation Notes was sold Water Utility net income of with an interest rate of 6.2 percent.
$5,896,000 in fiscal 1989 was up WATER$1,458,000 over the prior fiscal year.
The Water Utility's operating revenues totaled $21,255,000 in fiscal 1989, an increase of $1,856,000 over the prior Durinrthe ar,$.
fiscal year.
Thisinceas waspriariy th reultinvested in water system capital construc This increase was primarily the result of the increase in water rates effective September 27, 1988. In fiscal 1989, billed rend ees and or revenue from the sale of water was coned noer
- 2.
onhnri
$20,504,000, which represents an increase contrutio.
of $924,000 over the prior fiscal year. In fiscal 1989, unbilled revenue of $2,018,000 twenty eight
ELECTRIC UTILITY in fiscal 1989. Approximately $41.1 mi Electric Utility operating revenues lion in refunds and interest have been totaled $204,467,000 in fiscal 1989, an placed in the RSA since the account was increase of $12,622,000 compared to established in 1986. Department manage the prior year.
ment is forecasting that significant Billed revenue from the sale of elec-additional refunds are forthcoming.
tricity was $175,831,000 for the fiscal The forecast is based on decisions of the year. Revenue from sales to other utilities administrative law judges hearing these was $3.7 million in fiscal 1989, represent-wholesale rate cases. Those decisions ing a decrease of $4.3 million from the are now before the Federal Energy prior year. The major reason for the Regulatory Commission for review and decrease in sales to other utilities was a action. The RSA balance at June 30, dispute with Edison over the price of 1989 was $4.9 million.
power that it has purchased from the Electric Utility operating expenses were City. Retail sales to Anaheim consumers
$179,633,000 in fiscal 1989, an increase of $172.1 million represented an increase of $15,130,000 over the prior fiscal year.
of $1.3 million over the prior year. The Purchased power cost of $136,570,000 was result was a net decrease of $3,038,000 in up $11,634,000 over the prior fiscal year.
billed revenue from the prior fiscal year.
The increase in purchased power cost Unbilled revenue from the sale of was the result of a combination of factors.
electricity in fiscal 1989 was $7,466,000, The expiration of an Interim Operating a decrease of $369,000 from the prior fiscal Procedures (lOP) Agreement with year. The decline in unbilled revenue was Southern California Edison in October the result of lower kilowatt-hour sales.
1988 resulted in the Department put Decreases in billed and unbilled rev-chasing additional capacity and contract enue were offset by increased transfers energy from Edison and maintaining a from the Power Cost Adjustment Account higher reserve margin. The result was a (PCA) and the Rate Stabilization Account
$3.1 million increase in power costs.
(RSA). The PCA and RSA transfers The Department expects to resolve this increased $12.5 million and $2.9 million, issue with Edison in fiscal 1990.
respectively, in fiscal 1989.
Also, planned increases in debt The City's rate stabilization policy service for power from the Intermountain provides that refunds recovered from Generating Station and debt service costs Southern California Edison for whole-for the Northern and Southern Transmis sale electric rate overcharges should be sion Systems accounted for $6.3 million deposited in the Rate Stabilization and $2.2 million of the increase, Account. These refunds then are used to respectively.
stabilize base electric rates. Transfers from Other operation and maintenance the PCA and RSA accounts are made expenses were $29,675,000, up $3,564,000 monthly and are based upon the recorded compared to fiscal 1988. This increase kilowatt-hour sales.
was due to a combination of factors Refunds of $3.5 million were received including increased salaries and wages, twenty nine
increased emphasis on preventative Morgan Guaranty Trust Company backs maintenance and activities associated the remaining $8.0 million of the Electric with the testing and removal of polychlo-Utility line and the entire $4.3 million rinated biphenyls (PCB's) from electric Water Utility credit line.
distribution facilities.
Electric Utility net income was
$14,202,000 in fiscal 1989, a decrease ong ratn otecepartmen' of $284,000 from the prior fiscal year.
bonds are another indication of the over Investment in construction of new Invetmet i costrutio ofnewall financial strength of the Water and electric system facilities totaled $13.1 mil lion for fiscal 1989. Of this amount, $4.2 and sound planning continued to be rec million was invested in construction and nuclear fuel related to Anaheim's owner ship in SONGS. The remaining $8.9 mil lion was invested in electric subtransmis sion and distribution facilities in Anaheim.
SHoRT-TERM FINANCING revenue bonds. Standard and Poor's As of June 30, 1989, the Water maintained the revenue bond ratings of Utility had $3.7 million in short-term the Water Utility at AA and the Electric notes outstanding. The Water Utility Utility at A+.
short-term notes were rated MIG 1 and At June 30, 1989, revenue bonds out SP-1+ by Moody's and Standard and standing totaled $19,155,000 in the Poor's, respectively.
Water Utility and $231,910,000 in the At June 30, 1989, the Electric Utility Electric Utility. During fiscal 1989, short-term tax-exempt commercial paper maturing revenue bond principal outstanding totaled $20,450,000. The payments of $355,000 and $6,455,000 Department used this commercial paper were paid by the Water and Electric to finance the purchase and processing Utilities, respectively.
of nuclear fuel for SONGS. The Electric SELF SUPPORTING Utility notes were rated by Moody's The Pubic Utilities Department con and Standard and Poor's as Prime-1 and A-1, respectively.
A-1 resectiely.costs of operation and debt service and The department maintains a Revolving The eparmen maitain a evoling part of the cost of capital improvements Credit Agreement which may be used in Credt Areeentwhic ma beuse infrom current revenues. The remainder of the event that the Water or Electric the cost of water and electric system capi Utility notes cannot be refinanced as they tal improvements is met through the sale mature. The existing Agreement is with of revenue bonds or revenue anticipa Bank of America NT&SA and Morgan non notes and contributions by develop Guaranty Trust Company. Bank of Guarnty rus Comany Ban ofers and others in aid of construction.
America backs $13.0 million of the While providing reliable water and Electric Utility's $21.0 million credit line.tiicet i
lntervaer an ecmicl raethe bondsare nothr ndcatin ofthivry
Department meets all costs of operation THE 1988-1989 from current revenues, including pay-WATER DOLLAR ments to the City for services rendered OF REVENUE by the various municipal departments.
In addition, the Department annually transfers to the City a percentage of the prior year's gross revenues from retained earnings up to a maximum of 4 percent.
In fiscal 1989, the Department trans ferred $8,313,000 from retained earnings to the General Fund of the City in 60c 26r ic 9C 36C 25C 4C 8C 28C support of general municipal govern-N Residential Sales U Water Supply ment, the maximum allowable under the U Commercial and U Operation and Maintenance Industrial Sales N Transfer to City General Fund City Charter. The Water and Electric 0 Other Sales N Debt Service U Other Revenue 0 Available fot Additions Utilities transferred $802,000 and and Replacements
$ 7,5 11,000, respectively.
THE 1988-1989 ELECTRIC DOLLAR SOURCE OF REVENUE DISTRIBUTION OF REVENUE 1
60 21C 6c Fc 3C 64c 2r C 49c8C 8
" Residential Sales U Purchased Power Supply
" Commercial Sales Fuel Used for Generation 3 Industrial Sales E Operation and Maintenance
" Orher Revenue U Transfer to City General Fund
" Other Sales U Debt Service N Available for Additions and Replacements thirty one
WATER AND ELECTRIC SYSTEM SOURCE & SUPPLY WAS GO MONTANA IDAHO WYOMING DeSett Geoeranon InterEtiin and Tms s i o n li n e sr i
nihi c
AnThei m
hashas Transmssion line NEVADA UTAH COLORADO Cakfcania Aransmsston on Pactfe System Gas ard otherPwe Utliis o
Anaheimm rPurcurces Adeianto aAdelanto Mea-Pbmrix Converer N
f Lnhtwe energy resource ARIZONA orrid.
NEW MEXICO PHOENIX mExisting ransmis sion lines in which Anaheim has an interest mTransmission lines under studyi which Anahi has an interest mTransmissio by othe Utilities for Anaheim SFirm generating resources SNon-firm economy energy resources
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CITY OF ANAHEIM WATER UTILITY FUND BALANCE SHEETS
-June 3 0 1989 1988 (in thousands)
Assets Land -
1,554 1,S54 Source of water supply 10,612 10,030 Pumping 4,990 -
4,872 Transmission and distribution 107,097 104,466 General 2,701 2,460 126,954 123,382 Less -~ accumlated depreciaton-and amortization
- 34)
(21,797 103,620 101,585 Construction work-m progress 1,722 5,014 111,342 106,599 Restricted cash and itvestments 12,544 11,536 Currfent assets:
Cash and investments 1,250-2,432 Customer and other accounts receivable, net 4,168 2,921 Accrued interest receivable 203 172 Materialsand gpplies, at-average cost 168 i
136 RPurchased water in storage 569 220 6,358 5,881 Other assets:
Unmorized bond refundmng costs 1,004 1,08 Unamortized debt issuance costs 370 396 Totatassets
-$131,618
-$125.493
_7/
T K
2 thryfu
June 30' 1989 1988 (in thousands Equity, iabilities and other credits Equity Beginnig fund balance contributed by the City 19,280 19,280 Retained earnings 23,185 1,9 Tota equity
-1
- Tod eqity42,465 37,37[
-Long-term debt, less current portion 18,165 18,70T Capitalized lease oblgation, less current potion 2,624 2,681 Total apitahization 63,254
_58753 Current liabilities (payable from restricted assets):
Current portion oflagtr debt 294,520 Accied interest 522 529 Customer deposits 1,321 752 2, f4l 5,801 Carrent liabiines (payable from current assets).
Crrent portion of long-term debt 320,/
277 Cunrent portiorr'f capitalized lease obhiganion 58 53
,ounts payable and accrued expenses 2,433 1,954
-Short-teprp debt 3,700 Customer deposits 289 163 6,800 247 Total current liabilities 8,941 8,248 Other liabilities and deferred credits:
Contributions in aid of construction 59;423 58,492 Comantmenedhand contngencies Total egal
, liabilities and other credits
$131,'618,
$125,493 rSee accompyaning Notes to Financial Strments 2
7~r~p riao~
n tr et/~8' N
52
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i p ~ &NN l
~
YF EM TER UTIITY FUND STATEENTS
-OF INO 1989 Opeitig reavenues:
Sale of waer
$21,013
$1,87 Other operating revenues 2212 Total operatn revenues 21,45 Cost ofwater-8,184 7933 Other operation 2,5 2,353 Maintenance 27955 Depreciaticnkend amortior 1,15 otal operae expes Operatn 1o Q13 Other income (expense)2 Interest and other inceo n21 e1,3 Interest expense
(
Net income 3,05?
$ 2,558 See accompi No ao a S
iae ten thuand)
Balance at eg ing of ear 18,091 1,398 Net incme fo the y
5,806 4,43 Tran~er to the Genera Funidof te City (802)
(45)
Balance at end of year
$28,185 See Acompanying Ntes t nandz&Sta s as nts.
/
N NZ/
N f
N'
<r 4--
CITY OF ANAHEIM WATER UTILITY FUJNDSTAT-EMENTS OF CASH FLOWS June 30 1989 18 T'
(in thousands)
Operating activities:
Net income
$ 5,896
$ 4,438
.Adjustments to r,econedle net earnings to net cash provided from operations:
Depreciatiohi and Amortization 1,175 1,152 Amortuzation of debt issuance costs and bond discount 185 181 Changes in current, assets and hiabilities:
Customer and other accounts receivable, net-(1,247) 2 Accrued inter est receivable (3)(2)
Materials -4nd sup plies (32) 94 Purchased water mn storage (4)350 Accounts payable and accrued expenses 479 (7791)
Custome& deposits 696 (167)
Acenued interest (7) 80 TFocal adjustments 869 1,190
,Net cash provided from operations 6,765 5,628, Capital'ipd related financing activities.
Proceeds froma borrowings
.3,700 5,000 Principal reductio in debts a d capitahrzed lease' (4,849)
(485)
Issuance cost on new financmng (260)
TrAnsfer toGeneral Fund of the City (802)
(745)
Contributions in aid of construction 983 880 Net cash provided from (used for) financing activities (968) 4,390 Investing activities:
C it' I
ependiture Capil (5,971)
(5,287)
Net cash used forinvesting activities (5,971)
(5,287)
IncreAksldeicrease) in cash and investments (174) 43 Cash ;nd inessments, at beginning of the year, 13,968 9,237 Cash andcinvestmnts, at end of the year
$13,794
$13,968 Schedule of nonicashlfinancing and investing activities:
Contributibns in aid of construction
,58-9 See accrpanymg Notes to Fmnancial Statements4
- 4.
4>
C(31ve(n
A2 CITY OF ANAHEIM WATER UTILITY FUND NOTES TO FINA IAL STATEMENTS A
NOTE 1-Sm anf Sijicwta Cash kind vesnents Transfers to the General Fund of the Acounting Polcie The City pals idle cash flomal funds City for the purpose of increasing income Article XI of the City Charter provides Fhrough investent activities. Invest-that transfers to the Gera Fund ofthe TheatrUtility un te ae iments,ar carnied at cost, whidh'approxi-Cfi shall not exceed 4% of the gross Utility) tdeCity fAnaheim (tCi matesmarket value. Interest income on revenuetof the pribr year. Such transfers was established June 30, 1971 at which ihvesqruenrts is allocated to the various are not inlieu-of taxes and are recorded time the portion of theCity'General fuids of the City on the basis ofaverage-as distributions of retained earnings.
Fund equity relating to water system daily cash and investment balances.
Ieclassification
.operations was transferred to Water Utility euity, The financial statements of the vuCe stins haveibeen Water Utility are presened iconformity To provide a better miatchingof costs madeto the 1988 financial statements with generally accepted accounting princi-and revenues, effective with fiscal year to conform tothe 1989 presentation ples and accounting principles and methods ended June 30, 1987, the Water Utility Stateeat of Ch Flows prescribed by the California Public Utilities changed its accounting policy for recogniz Commission (CIUC) The Water Utility ing revenue to a method which provides e
reorting otanh Flo ss is not subject to the regulations of the for the acirual of estimated unbiled reqire the reporting of Cash R towsin CPIJC.
revenTUes for wvater sold but not-billed at, place of Changes in Financial Position.
CP1D.
fvenes oi atersokbutnotill~st The Water Utilitybhas electedto adopt Utility plnt and depreciation the enaof a fiscal period, previously,
-TeWtrUityhslcedoaop uevenues.wereidepreciaei when billedatoosuch standarscusing theindirectmethod S
cost ofadditions to retility plast c
erReen h
d t
or the current year. The fiscal year 1988 and replacement ofretired units is capita-mers accounal ildim on a Statement of Changes ini Financial Position iiiiis i ~mercial aconts are billed, bimonthly and_
bed. Utility plant isrecordd at cost, Ori all others are biltisrt has been restated to reflect this change.
the case eeontributed plant, satir mar-TheWater Utility Rates, Rules and NOTE 2-Operatig Expenses ket value at the date of the contribution, Regulations include a water commodity Operiting expenses shared with the except that assets acquired prior to July 1, adjustment formila by which billings to tElectc Uility amounted to $15,203,000 1977are recorded at appraised historical customes are subject to adjustment, up or and $13,545,000 fof the years ended June cost. Cost includes laboriateals; alloa downto reflect variatiar in the cost a 30,969 and1988, respetively, ofwhich cated indirect charges such asengineering, w
prodution to the Water Utilityo 3,04 0 and $209,000e ao ed wtilitr N
30100 n $2,709,000-were allocated supervision, construction and transporta-Detisac osohe ieriit tion equipment, retirement plan contribu-Debt issunce shto the eter tility.
tions and other fringe beneis; certain Debt issuance costi are deferred and The shared expense are allocated to adnieeatifve and general expenses The ainoitizd over-the lives of the related ba U iliy i
aero the benefits each Utility derves from those cst of relatively niior replacements is bond tues on a basis which approximates c
includedia maintenance expense. The net the effectiveniriterest method mmonepenes, book value of assets retired or disposed of, psin p l NOTR3-Short-Term Debt net ofdroceeds, is recorded in accumulated All fulltime City employees are On September 12, 1988 the Ciy issued depreciation.
tlt ln nlbr fteSaeoaioi~ilc
-$3,700,000 ofWate Revenuie Anticipa d
ofutil gantis i
metribrs of the State of Californi aWueRevnir Depreciation of tion Notesat an-interest raP S
of 62 per i
-t taiti Employees Retiremen System PERS).n the
-time, the City paido following estimated serviceciives of the T
a p
ic for al pa Water Revenue prtties~
2costs accrued; su~ch costs to be funded are deterined annually as of e Ciby he N
chaiged diectly Water tility bdainuaineda
$4i3mialion ofrconstion W
U arevslving-credie
- acreemen, ii ocanebe
--distributio~n plant 20 to 75 years Vacatipn and sick nused in thevent that thedebt canst ebe Othe plant and Vacation ansick pay forallCity refinanced asiatures.
equipment 5t~lo yea" --employees is paid by the,General Benefits K
-and Insance Fundof the City._The>
,K Deprecitionon contributed aisets is General Benefits and Insurance Fund is Charged directly to Contributions in aid rekibursed through payroll charges to the Of construct ion.
-Water Utility based on estimates of bene~-
$is to beandduring teyear-Vested vacation and sick pay benefts are-accrued N
in the General Benefits atsdinsurance Fund and amounted to $245,000 and
$203,000 forthe Water1Utilityiti~une 30, 1989 and 1988 respectively.
7I
-~ydV
/7
NOTE 4
Long-Tem Debt The Water Utilhty is mndebted as follows:
June 30
- 1989,
-1988 (in thousands)
Wate-r Revenue Bonds 1980
- Series, TIC 8.6401%,
dated January 1,
- 1980, sold-February 26,N1980 mn-the amount of $7,350,000, of which (1) $3,270),000 at ratesrangmng from 7,6% to 8.0%
'margre serially'to July 1, 1909 mn annual puincipal mnstallments rangmngfrom $1 85,000 to $400,000, and (2) $3,165,000 at rates of 8% are term bonds maturing July 1, 2005, subject to mandatory call and redemption from July l, 2000 to July_ 1, 2005 mn annual prmncipal mnstaillmerits rangmng from
$435,0(00 to $640,000; total debt service of $11,417,000 to-matunity
$6,280,000
$6,500 Water Revenue Bonds, 1984 Series, TIC 10.317%, dated October 1, 1984, sold October 9, 1984 in
-the amount of $6,650,000 at rates raring from 7.4% to 10.4%, of whuch $5,370,000 maturing v
April 1,1J996 through 2009 were advance refunded on March 31, 1986;,the remamning bonds matulre smrally to Apnil 1, 1995 in annual puincial installments ranging froma $120,000 to
$180,000; total debt servicedo $1,193,000 to matunity, 885,000 9500 Water Revenue Bonds, 1986 Series, TIC 7.048%, dated March 1, 1986 sold March 4, 1986 mn the amwunt ~f-$7,160,000, of which (1) $2,735,000 at rates rangmng from 5.5% to 6.9% mrature serially to April 1, 2001i mannual puincipal installments ranging from $75,000 -to $415,000, (2) $1,4Q5,0Q00 at rattes of 5.75% are ter borids matuning April 1, 2004, subject to mandatory call and redepto froim April 1, 2002 to April 1, 2004 in annual principal installments raiiging from $445,000 to
$+95N, amd
- 3)
$2,920,000 at rates-of 5.75% are terrabonds maturing Apnil 1, 20, subject to niandatory call and redemption from April 1, 2005 to April 1, 2009 in annual principal installments ranging fronm$520,000 to $650,000; total debt service of $12,686,000 to maturity 6,990,000 3,600 Water Revenue Bonds, 1988 Senies, TIC 7.3765%, dated January 1, 1988, sold January 12, 1988 in the amount of $5,000,000 at rates ranging from 6.3% to 7.6%, maturing serially to October 1,
.2012 in annual'gprincipal installIments-rangmng from $85,000 to $425,000; total debt service of
$-10,583,000 to maturity
-5,000,000 500,0 Total revenue bond debt 19,155,000 1950".
Revene Anticipatien Notes, 5.0%, issued September 12, 1986 mn the amount of $4,300,000 in the form of tax-exempt notes which matured and were paid off on September 12, 1988.4,000
-Note Payable to General Fund of the City, 7%, issued July 1, 1980 in the amount of $1,021,000, monthly principal and interest payments of $ 12,000 to June 1, 1990; total debt servrece of
$144,000 to matuty 139,000 Note Payable to Internal Service Fund of the City, 8.95%, issued October 13, 1984 in the amount of
$335,000, semi-annual pnncipal and mnterest payments rangmgk from $14,000 to $29,000 through October 31, 2003; total debt service of($515,000 to maturity' 306,00031,0 Total other long-term debt 445,000 4A,0 Total long-term debt r9,600,000 L ess:
urrentportion 618,0 4
bond discounts 817,000 18165000
$8995,000 7
,7,060,00 ad-(2 $3,$5,00~s atesof 8 aretermbo~4,887,000,
$43,Oso
~'~N
~$18,165,000
$18,701,000
NOTE 4--
Long-Term Debi (continued)
Annual debt seryice requnrements at June 30, 1989 toimatunity are as follows:
Total2 All Revenue Bond'Debt OheryLng-Term Debt Long-Termn Fiscal-Year
'Pripcipal Intere t Total' Principal Ineet Total Debt 190 45,00
,4,00
, 1600$
153,000
$ 24,000
$177,000
$ 1,993,000 1991 500,000 1,316,000 1,816,000 14,000 23,000 3 7,000 1,853,000 1992 540,000 1,277,000 1,817,000 16,000 22,000 38,000-1,855,000 193580,000 1,235,000, 1,815,000 18,000 2 1, 000 39,000 1,854,000, 1994 625,000 1,189,000 1,814,000 22,0=
1 0
41,000 1,855,000 Thereafter 16,445,000 10,356,000 26,801,000 22 2,000 99,000 321,000 27,122,000
$19,155,;000
$16,724,000
$35,879,000
$ 445,000
$208,000
$653,000
$36,532,000 k
Currenst mnterest costs of $387,000 and $299,000 hve been mevluded in Construction work ip progress for fiscal years
!nleIJne3, 1989 and 1988, respectively.
In accordance with the bond resolutions, a reserve for maximum annual debt service has been estabhished and a teserve for renewal,
_and replacement is being accumulated equal to a maximium of 1% of the depreciated book value of the unility plant mn service.
The bond issues outstandmng at June 30, 1989 requnre the establishment of a Bond Service Account accumulatmng monthly one-sixth of the interest which will become due and payable on the outstandmng bonds within the next six months and:lane-twelfth of the p rnapabunount which will mature and be payable on -the outstandmng bonds within the next twelve months.
On March 31, 1986, the Water Utility defeased a portion of the Water Revenue Bonds, 1984 Senies, in the aggregate puincia
]
amount of $5,370,000 at rates rangmng from 9.7% to-10.4%, with a portion of the proceeds from the sale of $7,160,000 of Water Revenue Bonds, 1986 Senies at rates rangmng from 5.0% to 6.9%. The excess of the amount required to advance refund the 1984 Bonds over the carrymng value of those bonds at the refunding date amounted to $1,25 0,000. This amount is bemngdeferred and amortized over the life, of the 1980-Bonds using the effective interest method. At June 30, 1989, outstanding principal of the refunded 1984 Bonds totaled $5,370,000. Over the life of the 1986 Bonds the Water Utilhty expets to save approximately $1,b49,000 indebt service, as compared to the iefunded 1984 Bonds.
Restricted cash and investments mecludes reserved amounts as well as undisbursed bond proceds, as follows:
June 30 1989 198 Held by Fiscal Agent:
Bond Resepre Fund 1,910,000
$ 1,905,000 Bond Service Fund 443,000
'437,000 Held by City Treasurer Bond Service Account 328,000 264,000 Rtenewal and Replacement Account 1,036,000 1,016,000 Restrited bond proceeds 8,827,000 7,91-4,000,
$12,544,000
$11,536,000 TheWaer tity as exenitures frmestxpneor the years ended June 30, 1989 and 1988 were $1,899,000 and
$1,648,000, respectively.
V J
NOTE 5 -Capialize N
Obligatio n
f I
~
1/
Th iyhsac The City has a long-tenn non-cancel-
-lnfrisfl-ieepoesudrte othWarUiiy'saeofheCys able lease w t the Municipal Water, Stt fClfri ulc mlye' polddpst a 22600fti Dirict of Orange,County to inance the acquisition of a 7.2% share in the cap~acity avialseaaeyfrteW tr tlt izdwtheciishldbteCtyo of the Alleciloch Pipeline.
The as lease provides for semiannualpayments of ac taiel ci homtresetoy vale of
- i. $1,~e05,0 is~h colateralzewt mout
,$147,000 commencing August 1, 1981 and danno-etda'-I pa tishlbyhyegn facalnttu continuingt February 1, 2008. Future be rlte m
d th o te Wartmt se the Cys ainitium lease paynents under this lease tef andfth aurial cmpu ped depost wa o
O t's are as follows:
aalae vestebnfor the r
aled ithetmntrre bysure i
or,
Fisc Year-,
penso fue aosetst itentn the cin a
m n 1990
$ 294,000 NOTE vt and no i e an iesed by n1991 m
294,000 2
te ste relt i pat of tie tt lt tipaion in t
-19 Citsy'se fvstdbn~t ve h rae pooled vestmnts isualoed re S294,000
$efis e.. orescmes o an bnvsed heovscall g ent ag f9 93r X 294,000 s ~ s r d o k r'~
f994
-294,000 g
h porm oea percentag f S1994 7
-294,000 suc clis-stasere oteCtn participation as follows:
Thereafter
'4,116,000 cosdrtoofslinua Iep mus Threafre pai by160 thef5 at er o$-Utility Pfet uy1 U 'Sigvernment securities $ 3,012,000 Bakr 5,58tace,00000 Less interet 88%
2,904,000 he nsureCosRts,00 resent value f oture rtheitigatio aims are C
paper
$2~$2 charged to expense as incurred.
minimun lease payments
$2,682,000 Lclaec netet Current portion 58,000 Contlled by
-Long-term portion 2,624,000 C
Treasurer 9,215,00
$2,682,000 Am invedby
-. fiscal agents'235,0
- Thiasset relatd to this lease is Total cash and i recordei Utility plant, Transmission an i*iftion, and at June 30, 1989 an dim' na~n3, 99 7N-Fiscal agents on behalfof the City hld~
aoed to3,9,000.
The related accu-from longterm b
mutedmortizati at Je 30, 1989 and aces Fiscal, agens ae mandate 1988 ya4$305,000 and
$265,0, tively. Amoizationexpense whichrocee can be eed fNOTE 6-o Pn t Investments by fiscal agents redom The~~~~~~~~~nnl Contis has a cotiuorGesooAvue0,18,terrymgemnt at Wsecurities held inbooik entry foeit.
('NNN vetdadno-etNcumlt dpan te edbytepegn 6nnilisiu pe'N nsinfn>ses>-
atrdk h ecpo fmut NOI7 epnuenc rga in/tdb aet.Asmayo 7
N
'h h
e 7rn ed
'N N
/
suchy closnernfnd oteCt aacpto sflos conidraso ofNefepeih Contolle b Amont inesed y N> -sa get oNeal>f h it o
andinvst und frm7lng-eadl Isune Fsa get r-mnaeb
\\<bond identure-s to7th\\types o invest ments j
7 1
A inwihpoed cnb nvitd faclya
-rutdt r
nvetet yEclNgnspeof nantly
~'
conas oU.Gvenn secuntie hedmbo
,nr om 7
7
-V AI fNN-'
N( TE9-Cbin met and NOTE 10 -7Sub sente Events Indeedn uias ir ContinencidsOn September 12, 198%, the City T -the Honoirable City Council Ligigtipnpai&D of the 6ne year, $3,700,Q0Wate City 4 Anaheim, Califoritk Apuber of clainds and suits are pe dheeu niiainNtsise ave, audited the atcompanyink 2,
1918 rttesm ing gainst theCity-for allegd damages-to St 12198
-t th-i-eimh balance heets of th ater Utille Fund peron anpipery ndforoteialeed City s be issof $3,700,000 m on of the City of Anaheini, California as of liabilitiqansing 6is of adatters usually year Water Revenue Anticioatio Notes Junge0, 1989 ad 1988,'in the related) icidental to the, operationwof a utility tartif
.prei statements ofiricome, changes in retained Suich as the water system~o thetssJn earig adis flows for the yeadsther the opiriogn of management, the exposure ened TeefncilStatements are the Underriese claims and sts woul Anot respnsibilityifthe Water U3tility's madn m-aterially alkct*h64inancial position, ageindnt. Our responsibilit is to express
'Of the Water Utilit# as of June 3 1989.
are inan these Incastareinents Capital expenditures based o
our audits.
TheWatr Uiliy b t f th f calWe onducted our audit rin accordance ate reven eebon eebds& adh icat-algneaoitwehrtefaca bTtions aidofstmens statd reqoimea state p tust aproir~t 69,9 coc hateno na d5 I1 in ponn ecto t erewih.
ad deror tes iuite ob ta emn re s.l anuditc alsou inluete the innc estiatr made-bnd byan mangeen, siel a b~~~tiotevluain thi fctiiritofe,o ve ra iak i stateea pestaion evi e ee tha ou ainuits proaid an reasecable aisf outopio ou aino, hiiants deiet aterial nres eisth financial pstioemnts Af adi asr Uinlt ud ofap~s the iyb accoung principle e s discusse in e ovl fitnte ianial sae s-tmet Wheae otiit Fuda ipred eentain Accouevthtn Sts-ar equrino hhepinociah Fsitnt placerofial repcs infinancial position.
KPd Pea8 Mathyrslt vick 6Mtin Occoto n r 13,1989e OrIaeCnty, C afe na nd
-,amn0 s n etdpted theeent Aio tandard-'
On Sepember 2, 198 the Cty Ti rpoe Cit "oCxulcil
~~~A~~~~umberac~o~ane ofitAica Posiantutsaeionn.Rvne niipto Ntslsie Otkr19 an 9
-ndterae such at te water sstem~f th Citv~nangsa a lwfor tii a isie the pin~ ofmanaemet, te eposue eded.Thee fiancal sateents rte te
CITY OF ANAHEIM PUBLIC UTILITIES DEPARTMENT Years Ended June 30, 1989 and 1988 ELECTRIC UTILITY FUND AUDITED FINANCIAL STATEMENTS
CITY OF ANAHEIM ELECTRIC UTILITY FUND BALANCE SHEETS June 30 1989 1988 (in thousands)
Assets Utility plant:
Production
$172,914
$171,198 Transmission 12,315 12,313 Distribution 94,691 89,323 General 11,288 10,380 291,208 283,214 Less -
accumulated depreciation (65,838)
(58,433) 225,370 224,781 Construction work in progress 8,419 7,013 Nuclear fuel, at amortized cost 9,213 10,199 243,002 241,993 Restricted assets:
Cash and investments 52,778 48,950 Other 414 377 53,192 49,327 Current assets:
Cash and investments 53,371 46,895 Customer and other accounts receivable, net 19,757 23,770 Prepaid purchased power 1,468 742 Accrued interest receivable 2,047 1,926 Materials and supplies, at average cost 2,817 2,226 79,460 75,559 Other assets:
Unamortized bond refunding costs 25,274 27,578 Unamortized project costs 5,938 4,792 Unamortized debt issuance costs 1,563 1,775 32,775 34,145 Total assets
$408,429
$401,024 fony fou
June 30 1989 1988 (in thousands)
Equity, liabilities and other credits Equity:
Beginning fund balance contributed by the City
$ 14,629
$ 14,629 Retained earnings 86,692 80,001 Total equity 101,321 94,630 Long-term debt, less current portion 216,740 223,147 Total capitalization 318,061 317,777 Current liabilities (payable from restricted assets):
Current portion of long-term debt 5,225 4,900 Accrued interest 3,756 3,952 Accounts payable 202 144 Tax-exempt commercial paper 20,450 20,450 29,633 29,446 Current liabilities (payable from current assets):
Current portiop of long-term debt 2,054 1,909 Accounts payable and accrued expenses 7,878 7,947 Customer deposits 1,140 920 Power cost adjustment balancing account (8,869) 6,960 Rate stabilization account 4,869 12,861 Test energy billings 3,315 3,064 Surplus energy billing reserve 2,159 Intermountain Power Agency refund account 24,918 37,464 33,661 Total current liabilities 67,097 63,107 Other liabilities and deferred credits:
Contributions in aidof construction 19,474 17,521 Decommissioning reserve 3,797 2,619 Commitments and contingencies Total equity, liabilities and other credits
$408,429
$401,024 See accompanying Notes to Financial Statements.
forty five
CITY OF ANAHEIM ELECTRIC UTILITY FUND STATEMENTS OF INCOME June 30 1989 1988 (in thousands)
Operating revenues:
Sale of electricity
$175,462
$178,202 Provision for power cost adjustment 15,936 3,416 Provision for rate stabilization 12,288 9,427 Other operating revenues 781 800 Total operating revenues 204,467 191,845 Operating expenses:
Cost of purchased power 136,570 124,936 Fuel used for generation 4,023 4,399 Other operations 18,956 17,174 Maintenance 10,719 8,937 Depreciation 8,786 9,057 Amortization of cancelled project costs 579 Total operating expenses 179,633 Operating income 24,834 27,342 Other income (expense):
Interest income 7,228 5,699 Interest expense (17,860)
(18,555)
(10,632)
(12,856)
Net income
$ 14,202
$ 14,486 See accompanying Notes to Financial Statements.
STATEMENTS OF CHANGES IN RETAINED EARNINGS June 30 1989 1988 (in thousands)
Balance at beginning of year
$ 80,001
$ 72,848 Net income for the year 14,202 14,486 Transfer to the General Fund of the City (7,511)
(7,333)
Balance at end of year
$ 86,692
$ 80,001 See accompanying Notes to Financial Statements.
forty six
CITY OF ANAHEIM ELECTRIC UTILITY FUND STATEMENTS OF CASH FLOWS June 30 1989 1988 (in thousands)
Operating activities:
Net income
$ 14,202
$ 14,486 Adjustments to reconcile net income to net cash provided from operations:
Depreciation 8,786 9,057 Amortization of nuclear fuel 3,531 3,971 Amortization of cancelled project costs 579 Amortization of debt costs 3,400 3,522 Increase in decommissioning reserve 1,178 680 Changes in current assets and liabilities:
Customer and other accounts receivable, net 4,013 (1,288)
Prepaid purchased power (726) 7,274 Accrued interest receivable (158)
(149)
Materials and supplies (591)
(161)
Accounts payable and accrued expenses (11) 1,003 Customer deposits 220 135 Power cost adjustment balancing account (15,829)
(5,631)
Rate stabilization account (7,992)
(7,269)
Intermountain Power Agency refund account 24,918 Test energy billings 251 3,064 Accrued interest (195)
(45)
Surplus energy billing reserve 2,159 Total adjustments 23,533 14,163 Net cash provided from operations 37,735 28,649 Capital and related financing activities:
Reduction of long-term debt (6,810)
(6,308)
Payments to the General Fund of the City (7,511)
(7,333)
Contributions in aid of construction 1,715 935 Debt issuance costs (11)
Net cash used for financing (12,617)
(12,706)
Investing activities:
Capital expenditures (10,544)
(9,837)
Nuclear fuel expenditures (2,545)
(1,254)
Project costs (1,725)
(1,650)
Net cash used for investing (14,814)
(12,741)
Increase in cash and investments 10,304 3,202 Cash and investments at beginning of the year 95,845 92,643 Cash and investments at end of the year
$106,149
$ 95,845 Schedule of noncash financing and investing activities:
Contributions in aid of construction 629
$ 1,421 See accompanying Notes to Financial Statements.
forty seven
CITY OF ANAHEIM ELECTRIC UTILITY FUND NOTES TO FINANCIAL STATEMENTS NOTE I -
Summary of Significant Cash and investments Nuclear fuel Accounting Policies The City pools idle cash from all funds The Electric Utility amortizes the cost Basis of accounting for the purpose of increasing income of nuclear fuel to expense using the "as Thethrough investment activities. Invest-burned" method. In accordance with the Utility) of the City of Anaheim (the City) ments are carried at cost, which approxi-Nuclear Waste Disposal Act of 1982, the was established June 30 1971, at w ih investmet islue. Interest income on Electric Utility is charged a fee for the wasestblihe Jue 3, 17, a whch nvstmntsisallocated to the various disposal of nuclear fuel at the rate of one time the portion of the City's General funds of the City on the basis of average mill per kwh on the Electric Utility's share Fund equity relating to electric system daily cash and investment balances.
of electricity generated by the San Onofre operations was transferred to Electric Nuclear Generating Station, Units 2 and Utility equity. The financial statements of Revenue recognition 3 (SONGS). The Electric Utility pays the the Electric Utility are presented in con-To provide a better matching of costs fee quarterly to the Southern California formity with generally accepted account-and revenues, effective with the fiscal year ing principles and accounting principles ended June 30, 1987, the Electric Utility as n or son pricias.
and methods prescribed by the Federal changed its accounting policy of recogniz-a regulton SO require t
e Energy Regulatory Commission (FERC).
ing revenue to a method which provides Util tod for the ecti The Electric Utility is not subject to the for the accrual of estimated unbilled regulations of the FERC.
revenues for energy sold but not billed decommissioning SONGS. Decommis sioning costs are charged to other operat Utility plant and depreciation at the end of a fiscal period; previously, ing expenses and are provided for over the The cost of additions to utility plant revenues were recognized when billed to remaining life of the plant.
and of replacement of retired units is capi-mer ial ad bmoly ao d talized. Utility plant is recorded at cost, or aer s are billed onthly.
in the case of contributed plant, at fair mar-alohr r ildmnhy in ala the as e of th contributedpattfiomar The Electric Utility's Rates, Rules and ket value at the date of the contribution, RgltospoiefraPwrCs except that assets acquired prior to July 1, Adjustment pCAvili for which 1977 are recorded at appraised historical cost. Cost includes labor; materials; allo-iin in csto bilig to re cated indirect charges such as engineering, Electric Utility. The Electric Utility adjusts supervision, construction and transporta-revenues from t tion equipment, retirement plan contribu-overcollections he sale olecticit f
tions and other fringe benefits; and certain revenues resulting from differences administrative and general expenses. The cost of relatively minor replacements is wern the amoUtilled to cs included in maintenance expense. The net of p book value of assets retired or disposed of, tom he billing formula. These net of proceeds, is recorded in accumu-recorded in lated depreciation.
the PCA balancing account until they are atDepreciation tlt ln spoie refunded to, or recovered from, utility Depreciation of utility plant is provided csoes by the straight-line method based on the OnsJanryw following estimated service lives of the rn policy (Policy) whhsincluded properties:reudplc(Plc)wihnldd propeties:establishing a Rate Stabilization Account Production(RSA) was adopted as par of the Electric Prodctio 30 ears Utility's Rates, Rules and Regulations.
Transmission and The Policy provides for establishment of a distribution plant 20 to 75 years rate, in cents per kilowatt-hour of sales, by Other plant and which funds are transferred from the RSA equipment 5 to 50 years to the Electric Utility Revenue Fund. This transfer is made on a monthly basis.
Depreciation on contributed assets is charged directly to Contributions in aid of construction.
fony eight
NOTE 1 -
Summary of Significant NOTE 2-Operating Expenses NOTE 4-Short-Term Debt Accounting Policies (continued)
Operating expenses shared with the The Electric Utility has outstanding Debt issuance costs Wate Utility amounted to $15,203,000 Revenue Anticipation Notes in the form Debtand
$13,545,000 for the years ended June of short-term tax-exempt commercial Dmre issane ots arve dferredlaned 30, 1989 and 1988, respectively, of which paper for the purpose of financing nuclear amortized over the lives of the related bond issues on a basis which approximates
$12,162,000 and $10,836,000 were allo-fuel purchases related to the ownership the effective interest method.
cate tic Utility interest in SONGS. The balance out The shared expenses are allocated to standing at June 30, 1989 and 1988 totaled Pension plan each Utility based upon estimates of the
$20,450,000. The interest rates on this All full-time City employees are mem-benefits each Utility derives from those debt at June 30, 1989 ranged between bers of the State of California Public common expenses.
6.00% and 7.05% with maturities ranging Employees' Retirement System (PERS).
NOTE 3 -
Unamortized Project Costs from 5 to 92 days. The Electric Utility has The City's policy is to fund all pension The City plans to participate in various obtained a $21 million revolving credit costs accrued; such costs to be funded are agreement, which can be used in the event determined annually as of July 1 by the pgene rti project wit oer that the commercial paper cannot be PERS's actuary.
g a
n p
refinanced as it matures.
Vacation and sick pay agencies for preliminary engineering and TE 5 -
JointlyOumed Utility Vacation and sick pay for all City environmental impact studies for the Project employees is paid by the General Benefits related projects.
The Electric Utility owns a 3.16%
and Insurance Fund of the City. The In addition, the City is participating in interest as a tenant in common in SONGS.
General Benefits and Insurance Fund is other projects which are being financed The other participants in Units 2 and 3 reimbursed through payroll charges to the by outside third parties. If the projects are are Edison, 75.05%; San Diego Gas &
Electric Utility based on estimates of bene-ultimately abandoned, the Electric Utility Electric Company, 20%; and the City of fits to be earned during the year. Vested will be required to reimburse the third Riverside, 1.79%. Units 2 and 3 became vacation and sick pay benefits are accrued parties for the Electric Utility's share of operational on October 9,1983 and April in the General Benefits and Insurance Fund project costs, which at June 30, 1989 1,1984, respectively. The Electric Utility's and amounted to $741,000 and $646,000 amounted to approximately $200,000.
cumulative share of construction costs, for the Electric Utility at June 30, 1989 which amounted to $172,914,000 at June and 1988, respectively.
30, 1989, was included in Utility plant Transfers to the General Fund of at June 30, 1989. The Electric Utility the City recorded depreciation related to SONGS Article XII of the City Charter provides yf ended Jn 30,99 and 198 that transfers to the General Fund of the rseie The Eer Utlt ad e City shall not exceed 4% of the gross rosins drn fler 1989 for revenue of the prior year. Such transfers posaos ofs clear fean for are not in lieu of taxes and are recorded d o m
n costs see nteo1 as distributions of retained earnings.fuuedcmisongots(eNte1 as dstrbutons f rtaied ernigs.of
$493,000 and $1,178,000, respectively.
Reclassifications These costs along with the Electric Utility's Certain reclassifications have been share of SONGS operating and mainte made to the 1988 financial statements nance costs have been included in Oper to conform to the 1989 presentation.
ating expenses for fiscal year 1989.
Statement of Cash Flows Recent Accounting Standards issued require the reporting of Cash Flows in place of Changes in Financial Position.
The Electric Utility has elected to adopt such standards using the indirect method for the current year. The fiscal year 1988 Statement of Changes in Financial Position has been restated to reflect this change.
forty nine
NOTE 6 -
Long-Term Debt The Electric Utility is indebted as follows:
June 30 1989 1988 Electric Revenue Bonds, Issue of 1972, TIC 4.9263%, dated April 1, 1972, sold March 28, 1972 in the amount of $8,000,000 at rates ranging from 2.0% to 7.0%, maturing serially to July 1, 1992 in annual principal installments ranging from $550,000 to $675,000; total debt service of
$2,639,000 to maturity
$ 2,450,000 2,975,000 Electric Revenue Bonds, Issue of 1976, TIC 6.07%, dated May 1, 1976, sold April 27, 1976 in the amount of $6,000,000 at rates ranging from 5.0% to 8.0%, maturing serially to May 1, 2006 in annual principal installments ranging from $125,000 to $400,000; total debt service of
$7,645,000 to maturity 4,625,000 4,750,000 Electric Revenue Bonds, Issue of 1980, TIC 9.173%, dated October 1, 1980, sold October 10, 1980 in the amount of $84,000,000 at rates of 8.0%, of which (1) $19,250,000 maturing serially from October 1, 1991 through October 1, 1997, (2) $16,650,000 of term bonds maturing October 1, 2001, and (3) $36,875,000 of term bonds maturing October 1, 2007, were advance refunded on November 25, 1986; the remaining bonds mature serially through October 1, 1990 in annual principal installments ranging from $1,850,000 to $2,000,000; total debt service of
$4,164,000 to maturity 3,850,000 5,550,000 Electric Revenue Bonds, Issue A of 1983, TIC 9.3051%, dated April 1, 1983, sold April 27, 1983 in the amount of $10,000,000 at rates ranging from 8.0% to 9.0%, of which $900,000 maturing serially October 1, 1995 through 1998 and $8,460,000 of term bonds maturing October 1, 2007 were advance refunded on March 31, 1986; the remaining bonds mature on October 1, 1993 and October 1, 1994 in annual principal installments of $300,000 and
$340,000, respectively; total debt service of $900,000 to maturity 640,000 640,000 Electric Revenue Bonds, Issue B of 1983, TIC 9.3051%, dated April 1, 1983, sold April 27, 1983 in the amount of $40,000,000 at rates ranging from 8.0% to 9.0%, of which $3,600,000 maturing serially October 1, 1995 through 1998 and $33,840,000 of term bonds maturing October 1, 2007 were advance refunded on March 31, 1986; the remaining bonds mature on October 1, 1993 and October 1, 1994 in annual principal installments of $1,200,000 and
$1,360,000, respectively; total debt service of $3,602,000 to maturity 2,560,000 2,560,000 Electric Revenue Bonds, Issue C of 1983, TIC 9.1023%, dated April 1, 1983, sold April 27, 1983 in the amount of $80,400,000 at rates ranging from 5.25% to 9.0%, of which $5,650,000 maturing serially October 1, 1995 through 1998 and $52,500,000 of term bonds maturing October 1, 2007 were advance refunded on March 31, 1986; the remaining bonds mature serially through October 1, 1994 in annual principal installments ranging from $2,250,000 to
$2,850,000; total debt service of $18,096,000 to maturity 14,650,000 16,750,000 Electric Revenue Bonds, Issue of 1986, TIC 7.006%, dated March 1, 1986, sold March 4, 1986 in the amount of $129,275,000, of which (1) $59,740,000 at rates of 5.25% to 6.9% mature serially through October 1, 2001 in annual principal installments ranging from $1,085,000 to
$8,955,000, (2) $30,665,000 at rates of 5.75% are term bonds maturing October 1, 2004, subject to mandatory redemption from October 1, 2002 to October 1, 2004 in annual principal installments ranging from $9,590,000 to $10,875,000, and (3) $37,885,000 at rates of 5.75% are term bonds maturing October 1, 2007, subject to mandatory redemption from October 1, 2005 to October 1, 2007 in annual principal installments ranging from
$11,550,000 to $13,600,000; total debt service of $226,279,000 to maturity 127,260,000 128,290,000 Electric Revenue Bonds, Second Issue of 1986, TIC 6.7737% dated October 15, 1986, sold November 25, 1986 in the amount of $77,780,000, of which (1) $46,700,000 at rates of 4.3%
to 6.5% mature serially through October 1, 2002 in annual principal installments ranging from
$1,015,000 to $4,960,000, and (2) $30,150,000 at rates of 6.75% are term bonds maturing October 1, 2007, subject to mandatory redemption from October 1, 2003 to October 1, 2007 in annual principal installments ranging from $5,275,000 to $6,815,000; total debt service of
$133,779,000 to maturity 75,875,000 76,850,000 Total revenue bond debt
$231,910,000
$238,365,000 fifty
NOTE6 -
Long-Tenn Debt (continued)
June 30 1989 1988 Note Payable to the General Fund of the City, 7%, issued July 1, 1980 in the amount of
$2,382,000, monthly principal and interest payments of $28,000 to June 1, 1990; total debt service of $336,000 to maturity 324,000 626,000 Note Payable to Internal Service Fund of the City, 8.95%, issued October 13, 1984, in the amount of $1,342,000, semi-annual principal and interest payments ranging from $55,000 to
$106,000 through October 31, 2003; total debt service of $2,062,000 to maturity 1,224,000 1,276,000 Total other long-term debt 1,548,000 1,902,000 Total long-term debt 233,458,000 240,267,000 Less: current portion 7,279,000 6,809,000 bond discounts 9,439,000 10,311,000
$216,740,000
$223,147,000 Annual debt service requirements at June 30, 1989 to maturity are as follows:
Total All Revenue Bond Debt Other Long-Term Debt Long-Term Fiscal Year Principal Interest Total Principal Interest Total Debt 1990
$ 6,900,000 $ 14,487,000 $ 21,387,000
$ 379,000
$110,000
$ 489,000 $ 21,876,000 1991 7,365,000 14,016,000 21,381,000 59,000 93,000 152,000 21,533,000 1992 7,195,000 13,548,000 20,743,000 63,000 88,000 151,000 20,894,000 1993 7,705,000 13,092,000 20,797,000 70,000 83,000 153,000 20,950,000 1994 8,145,000 12,583,000 20,728,000 89,000 76,000 165,000 20,893,000 Thereafter 194,600,000 97,468,000 292,068,000 888,000 400,000 1,288,000 293,356,000
$231,910,000 $165,194,000 $397,104,000
$1,548,000
$850,000
$2,398,000 $399,502,000 fifty one
NOTE 6 -
Long-Term Debt (continued)
Current interest costs of $578,000 and $1,188,000 have been included in Construction work in progress for fiscal years ended June 30, 1989 and 1988, respectively.
In accordance with the bond resolutions, a reserve for maximum annual debt service has been established and a reserve for renewal and replacement is being accumulated equal to a maximum of 2% of the depreciated book value of the utility plant in service.
The bond issues outstanding at June 30, 1989 require the establishment of a Bond Service Account by accumulating monthly one sixth of the interest which will become due and payable on the outstanding bonds within the next six months and one-twelfth of the principal amount which will mature and be payable on the outstanding bonds within the next twelve months.
On June 1, 1983, the Electric Utility defeased Electric Revenue Bonds, Issue A of 1982, in the aggregate principal amount of
$18,000,000 at rates of 8.0%, and Issue B of 1982, in the principal amount of $52,000,000 at rates ranging from 7.5% to 11.5%, with a portion of the proceeds from the sale of $80,400,000 Electric Revenue Bonds, Issue C of 1983 at rates ranging from 5.25% to 9.0%.
The excess of the amount required to advance refund the 1982 Bonds over the carrying value of those bonds at the refunding date amounted to $7,567,000. In accordance with industry practices, this amount is being deferred and amortized over the life of the Issue C of 1983 Bonds using the effective interest method. At June 30, 1989, outstanding principal of the refunded 1982 Bonds totaled
$58,300,000. Over the life of the Issue C of 1983 Bonds, the Electric Utility expects to save approximately $12,297,000 in debt service as compared to the refunded 1982 Bonds.
On March 31, 1986, the Electric Utility defeased a portion of the Electric Revenue Bonds, Issues A, B and C of 1983, in the principal amounts of $9,360,000, $37,440,000 and $58,150,000, respectively, at rates ranging from 8.3% to 9.0%, with a portion of the proceeds from the sale of $129,275,000 of Electric Revenue Bonds, Issue of 1986 at rates ranging from 5.0% to 6.9%. The excess of the amount required to advance refund the 1983 Bonds over the carrying value of those bonds at the refunding date amounted to
$21,476,000. This amount is being deferred and amortized over the life of the 1986 Bonds using the effective interest method. At June 30, 1989, outstanding principal of the refunded 1983 bonds totaled $104,950,000. Over the life of the 1986 Bonds, the Electric Utility expects to save approximately $10,849,000 in debt service as compared to the refunded 1983 Bonds.
On November 25, 1986, the Electric Utility defeased a portion of the Electric Revenue Bonds, Issue of 1980, in the principal amount of $72,775,000, at rates of 8.0%, with a portion of the proceeds from the sale of $77,780,000 of Electric Revenue Bonds, Second Issue of 1986 at rates ranging from 3.8% to 6.75%. The excess of the amount required to advance refund the 1980 Bonds over the carrying value of those bonds at the refunding date amounted to $9,693,000. This amount is being deferred and amortized over the life of the Second Issue of 1986 Bonds using the effective interest method. At June 30, 1989, outstanding principal of the refunded 1980 bonds totaled $72,775,000. Over the life of the Second Issue of 1986 Bonds, the Electric Utility expects to save approximately
$10,818,000 in debt service as compared to the refunded 1980 Bonds.
Included in Restricted assets are Restricted cash and investments which include reserved amounts, as well as undisbursed bond proceeds, as follows:
June 30 1989 1988 Held by Fiscal Agent:
Bond Reserve Fund
$22,487,000
$22,356,000 Bond Service Fund 618,000 602,000 Held by City Treasurer:
Bond Service Account 8,302,000 8,096,000 Renewal and Replacement Account 8,304,000 6,792,000 Decommissioning and fuel reserves 12,344,000 9,241,000 Restricted bond proceeds 723,000 1,863,000 Other restricted assets 414,000 377,000
$53,192,000
$49,327,000 The Electric Utility cash expenditures for interest expense for the years ended June 30, 1989 and 1988 were $16,371,000 and
$16,377,000, respectively.
fifty two
NOTE 7 -
Pension Plan NOTE 10 -Cash and Investments NOTE 1I-Commitments and The City has a contributory pension At June 30, 1989, the carrying amount Contingencies plan for full-time employees under the of the Electric Utility's share of the City's Take or pay contracts State of California Public Employees' pooled deposits was $16,160,000. Of this Retirement System. Information is not amount, $8,484,000 is insured or collater-the I nter edtino Agents available separately for the Electric Utility alized with securities held by the City or Ith t itcmoudin o e g e
as to the cost of benefits funded, the its agent in the City's name. The remain actuarially computed present value of ing $7,676,000 is collateralized with of Utah, Utah Power & Light (UP&L) vested and non-vested accumulated plan securities held by the pledging financial and the Southern California Public Power benefits, the related assumed rates of institution's trust department in the City's Authority (SCPPA), a public entity return used and the actuarially computed name.
organized under the laws of the State of valued of vested benefits over the related At June 30, 1989, all of the City's California. The City has agreed with IPA pension fund assets.
pooled investments were insured or regis-and UP&L, pursuant to power sales NOTE 8 -
Self-Insurance Program rered with the exception of amounts invested by fiscal agents. A summary Of generation output of IPA's 1,600 megawatt The Electric Utility is part of the City's the Electric Utility's participation in the two unit coal-fueled generating station self-insured workers' compensation and City's pooled investments is allocated (the Station) in central Utah. Unit 1 of general liability program. The liability for based on the overall percentage pt a
the Station became available for com such claims is transferred to the City in tion as follows:
mercial operation June 10, 1986. Unit 2 consideration of self-insurance premiums was commercially available May 1, 1987.
paid by the Electric Utility. Effective July U.S. government securities
$21,865,000 Cost of construction of the Station and 1, 1986, the City became self-insured.
related transmission lines, including the Costs relating to the litigation of claims Bankers acceptances 6,212,000 Southern Transmission System (STS) are charged to expense as incurred.
Repurchase agreements 8,029,000 from Utah to Southern California,was NOTE 9 -
Refunds Commercial paper 27,567,000 financed principally through sales of IPA's Sincefiscalpower supply revenue bonds and payments Utility has received refunds from Edison fund (state pool) 3,211,000 it agrd wt SCPPA T he totaling $35,705,000. These refunds have Controlled by rights to 17.6% of the transmission been placed in the RSA. At June 30, 1989 City Treasurer 66,884,000 capacity in the STS.
and 1988, total principal and interest The contracts constitute an obligation amounted to $4,869,000 and $12,861,000, A
us invs by respectively. The City intends to refund these amounts to Electric Utility cus-Total
$89,989,000 the revenues of the Electric Utility. These tomers in the form of reductions to futureCity's rate increases through the Rate Stabiliza-share of IPs debt service requirements tion cease to te tbi Fiscal agents on behalf of the City hold and production costs and SCPPs debt These e
Note b
- r.
and invest funds from long-term debt service requirements, began in July 1986, Thes reund hae ben eflcte in issuances. Fiscal agents are mandated by the month in which Unit 1 of the Station the Electric Utility's Financial Statements bond indenture as to the types of invest-and the STS began commercial operation.
as part of the RSA.
ments in which proceeds can be invested.
These payments will be considered a Cost Investments by fiscal agents predominantly of purchased power. As of June 30, 1989, consist of U.S. Government securities IPA has issued $5.3 billion in revenue held in book entry form, bonds and revenue bond anticipation notes to finance construction of the Station and SCPPA has issued $11 i billion in revenue bonds and revenue bond anti cipation notes to finance payments in aid of construction.
The Electric Utility's projected mini mum payments for purchased power due under these take or pay contracts for the next five years are as follows:
Fiscal Year 1990
$63,218,000 1991 63,412,000 1992 64,897,000 1993 64,545,000 1994 64,674,000 fifty three
NOTE 11 -
Commitments and rendered at this time as to the probable Independent Auditors' Report Contingencies (continued) outcome of these actions.
The City does not expect these payments Edison and the City also have a dispute to have an adverse impact on the Electric over capacity and energy charges under Utility's rate structure in that such pay-the Integrated Operations Agreement. As We have audited the accompanying ments are in lieu of payments which would of June 30,1989, the City has received balance sheets of the Electric Utility Fund have been made to purchase power from
$3,356,000. Of this amount, $2,113,000 of the City of Anaheim, California as of Edison. The City projects that there will has been placed in a restricted account June 30, 1989 and 1988, and the related be substantial long-term power supply cost pending the resolution of the dispute. The statements Of income, changes in retained savings from the take or pay contracts City has paid Edison $8,691,000, of which earnings and cash flows for the years then compared to purchase from Edison.
the City is disputing $3,048,000. Both this ended. These financial statements are the On July 1, 1988, the Certificate of dispute and the test energy billing dispute responsibility of the Electric Uility's Completion of the initial facilities of the are the subject of negotiations between management. Our responsibility is to Intermountain Power Project was exe-Edison and the City.
express an opinion on these financial cuted and as a result the surplus in IPA's Capital expenditures statements based on our audits.
We conducted our audits in accordance Construction Fund was transferred to IPA's The Electric Utility's budget for the with generally accepted auditing standards.
General Reserve Fund and will be allocated fiscal year 1989-90 provides for capital Those standards require that we plan and to the various participants based upon the expenditures of approximately $30,540,000, perform the audit to obtain resonable Plan for the Disposition of Surplus Funds.
of which $14,518,000 is expected to be assurance about whether the financial The Electric Utility's share of these surplus funded from electric revenue bond and statements are free of material misstate funds was approximately $35.8 million certificate of participation proceeds.
ment. An audit includes examining, on a which the Electric Utility will use to NOTE 12 reduce future IPP purchased power costs.
At June 30, 1989, the Electric Utility's On September 15, 1989, the City issued and disclosures in the financial statements.
remaining share of these surplus funds was Electric System Certificates of Participa-An audit also includes assessing the approximately $24.9 million, which the non (Combustion Turbine Peaking Plant) accounting principles used and significant Electric Utility will use to reduce future in the aggregate principal amount of estimates made by management, as well as IPP purchased power costs over the next
$44,336,000. The Certificates evidence evaluating the overall financial statement 3 to 4 years.
direct and proportionate interests in the presentation. We believe that our audits Test energy billings right to receive purchase payments to be provide a reasonable basis for our opinion.
made by the City pursuant to an install-In our opinion, the financial statements On August 5, 1988, as a precondition to ment Purchase Agreement, dated Sep-referred to above present fairly, in all entering into an arbitration agreement on tember 15, 1989, between the Anaheim material respects, the financial position of disputed billings, Edison paid the City Public Improvement Corporation, a the Electric Utility Fund of the City of
$3,064,000 for contested Intermountain California non-profit public benefit cord Anaheim, California as of June 30, 1989 Power Project test energy which is poration, and the City relating to the put-and 1988, and the results of its operations included in cash and offset by a current chase by the City of a 48 MW combustion and its cash flows for the years then ended liability. This money will not be expended turbine peaking plant for the City's in conformity with generally accepted for any purpose until such time as the electric system. The interest rate on the accounting principles.
arbitration has been completed.
Certificates ranges from 6.20% to 7.00%.
As discussed in Note 1 to the financial Litigation The certificates will be repaid in semi-statements, the Electric Utility Fund has A number of claims and suits areannual installments of principal and adopted the recent Accounting Standard pendngme ag cai the C uitso aee interest commencing April 1, 1990 and requiring the reporting of Cash Flows in pending against the City for alleged continuing through the year 2012.
place of Changes in Financial Position.
damages to persons and property and for other alleged liabilities arising out of matters usually incidental to the operation of a utility such as the electric system of the City. In the opinion of management, k7 2 WV4 41 the exposure under these claims and suits would not materially affect the financial KPMG Peat Marwick position of the Electric Utility as of June October 13, 1989 30,1989.
Orange County, California Rate challenges and other actions The City has filed several complaints against Edison challenging various rate increases and a suit alleging that Edison has violated certain anti-trust laws. These actions could potentially result in refunds or payment of damages to the Electric Utility; however, no opinion can be fifty four
Date k-§ 2
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