ML20095L080

Kissimmee Util Authority 1991 Annual Rept

ML20095L080
Person / Time
Site:	Crystal River
Issue date:	12/31/1991
From:	Hord R, Welsh J KISSIMMEE UTILITY AUTHORITY
To:
Shared Package
ML20095L057	List: 3F0592-01, Forwards Annual Financial Rept for 1991 & Annual Financial Repts for Participating Owners of Crystal River Unit 3. Sebring Utils Commission Rept Will Be Submitted Upon Receipt by FPC ML20095L059 ML20095L074 ML20095L080 ML20095L086
References
NUDOCS 9205060209
Download: ML20095L080 (34)

Text

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Mel.ter Fsurn Tlie Anitfibrity Ulseirappn arid Th@ssidsnt and jiencral $1ahaker .

FACING NEW DEMENSIONS Smiling... Service... Satisfaction. This

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ments to the transmission c,ad distribution system, motto has been hallmark in tne iormative years of including three new substations; and the design and the Kissimmec Utility Authority, in March,1985, constmetion of a new adniinistration facility cur- l the voters of Kissimmee approved establishing a rently in the hands of builders, architects and separate entity from the city to provide electric engineers.

servin to the residents of this area; alas, the A was With these new dimensions upon us and in adda > KUA. As a result, this challenged us to set the future, the total cost of these projects over a ten-new y:als and reach new horizons. Fiscal year year period will be approximately $128 million.

1991 was a fast-paced year of success for KUA, With five years under our belt, KUA as a separate marked by growth, commitment to the community entity, has been able to strengthen its financial and continued financial strength. position and has been able to fund all capita! proj-From its inception, KUA was off and run- ects intemally. By closely monitoring our ex-ning in many directions with new heights to reach. penses, we are making every effort to limit the l Without a doubt, the greatest challenge to the KUA amcant of borrowing that will be needed in the

. over the last decade has been the growth of our future. KUA is committed to financial soundness in crea; yet, thanks to sound planning by KUA staff order to best serve our ratepayers - - now and in the and Board of Directors, KUA has been able to meet future, that growth with no base rate As evidenced by this increase since the Authority's report,1991 found KUA origin in 1985. busy diving into new Looking ahead, we at things, not just testing the

- KUA have identified major waters, to build a utihty capital projects that will help b ', our customers can be meet the need of system de- , 4 ' 4 proud of. KUA wasn't mands caused by rapid customer %a f afraid to get a little wet in growth during the final years of M ", ..', 1991.

the 20th century. These projects ',;  ; Sound planning, include the construction of a _

.ey customer dedication and new gas turbine facility; instal- commitment, and employ-lation of a new supervisory y

" '4y ees willing to soar above control and data acquisition  :-  ?

the rest will allow KUA (SCADA) system to better to add to the quality of

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monitor and regulatt the flow of life throughout the area.

energy requittments; improve- 2 .- An area we call home.

?

h Richard L. Hord(left> andJames C. Welsh

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Richard L. Hord James C. Welsh Chairman President & General Manager

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. ) f E RjA T I N ff I H IL.G: 11 Ifi N H T S YEARS ENDED

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SEPTEMllER 30 VrINCREASE 1991 1990 (DECREASE)

.;. '..- gwl1 sales . (thousands) 645,578

! 678.602 5.1

.1

' . ' , +' ,.. .d m KW Peak Demand -(thousands) 157 200 (21.5)

'. . ." hh Customers - aserage number 34,632 32.209 7.5

1. ' %p

, -1 }g Operating res enues - (thousands) 561,581 $60.357 2.0

',4 ' . { g9 yM;M.

j.; Fuel and purchased power espenses -

4:{ ,Q.- (thousands) 524.882 $23.301 6.8

y. . % ..

SIEM me t'

. .. . ; 4d Total operating expenses - (thousands) 548.943 545,824 6.8 .

KWil sales per residential customer i1,321 11.580 (2.2)

Stilevajgransmisitm ' ,

liars help Af A prorme Average resenue per KWil residential relichic clectric 4crverr., sales - (excluding COPA) $.09277 5.09368 (1.0)

CONTENTS  ;. ; 'X W~ MH PdOWS I Organizational Ct. art.... .... .. .. .. 3 KUA Board of Directors. ... .... . 4 Wilere il Callie[1'0111 Wllere il WGS IISed I nt rod uctlon.. ... .. ... .... .... .......... 6 Power Suoply Department... . .. 8 1 }

Planning & Engineering Dept......10

-rFf"?]

Customer Relations Department.12

'1

Q ~

n $s Transmission & Distribu' ion ~

Depa rt me nt..... ..... . .-. , .I4 j

q, }

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Staterials $1anagement Dept.. ... 15 4 Personne! & Risk Management 2 /

Depa rt me nt..... .............I6 6 Finance Department...... ~ 3 17 3 Auditors' Report.... 19 4

Balance Sheet ... .. 20 sta:ement of Resenue, Espenses and 1. Residential Revenue 44.9% 1. Fuel & Purchased Power 35.5%

Changes in Retained Earnings .22 2. Commercial Resenue 35.9% 2. Operation & Maintenance 18.1%

, Statement of Cash Flows- .23 3. Industrial Res enue 7.1% 3. Capital Improvements 15.0%

Notes to Financial Statements . . 24 4. Interest Resenue!Other 12.19 4. Debt Service 12.3%

5. Cash for Future Improvements 6.8%

6. Intergovernmental Transfers /

Other 12.3%

. . . . .._ _ _ . _ _~ .. .. - _ _ . _ _ .. _.. .

N er Kissimmee Utility Authority

- Financial Review Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 ~

General Purpose Financial Statenwnts Balance S heet . '* . . . * . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 '

Statenwnt of Revenue, Expenses and Changes in Retained Earnings * * *

• 22 Statement of Cash Flows * * * * * * * * * * * * * * * * * * * * * * * * *

• c * *

• 23 Notes to Financial Statements * * * * * * * * * * . . * * * * * * * * * * * * * *

• 24 eighteen l

FINANCE l

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n fiscal 1991, KUA's operat- current tax exempt interest rates and l ing revenues mereased to 502 mil- issuing new money bonds in the lion, compared to S35 sc.illian only amount of $75,556,000 to provide five short, yet fast-paced, years ago. construction funds to complete these Even with double-digit growth over projects on KUA's horizon. In spite these years, KU A has kept electric of this large expansion plan required

, rates stable over the years. by growth in KUA's service area, With KUA's hiegawatt hour KUA plans to keep rates stable sales growth averaging i1.5 percent throughout the

a yea; since 1955, total KUA assets decade. In order to have grown to Sl74 million as of accomplish this we a September 30,1991 to facilitate the are planning to hold _ )

enormous growth occurring in our increases in operation '

service area. This is an increase of and maintenance " <

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I c $61 million since September 30. expenses down J J fg 7 l

1985. Of this amount, approxi- throughout the com- e 9 . ,y, l mately half has been used to acquire ing years m i additional plant and equipment, The financial I allowing KUA to provide affordable, condition of KUA has L reliable electric service at the flick of substantially im-a switch. The remaining half has proved since 1985, at k .;.

been designated toward future which time KUA capital outlays. The Finance Depart- became a separate

, ment at KUA is con:inually planning Authority. Since for tomorrow as ifit were today. 1985, the debt to One of the challenges of equity ratio has growth is the demand that needed decreased from 5:1 in <

expansion places on an organ- 1985 to 2:1 in 1991.

% m e- -

ization's cash resources. We have The debt service

. met that challenge by preparing a ten coverage ratio has increased 38% , continuing matter of pride for its em-year plan which has projected the from 2.37x in 1985 to 3.26x in 1991. playees and customers. KUA is work-timing and cost of future projects Besides financing, this mg hard to build on this tradition of and the effect that they will have on department has also delved into other excellence on which it prides itself. 1 our overall financial resources. The matters such as recently initiating a l Finance Department is committed to professional intemal audit division. ' i ensuring the future financial strength Internal Auditing is an independent  ?' m j of KUA and to provide affordable appraisal function with the objective  ;,

service to our customers. of examining and evaluating KUA's t

. f l In the next decade KUA will add three new substations, a combus.

activities to promote ef ficient opera- ,.  ; Am l tions and provide reasonable assm- 1 Tf  !

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tion turbine facility,17 h1W of generating power at Orlando Utilities ance of proper controls over our resources.

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Commission's Stanton Unit II, in addition, KUA's Infonna- -

expansion of our transmission and tion Systems Division has coordi-

, distribution system, and a new nated the installation of a new #

administration building at a pro- computer system to meet the de- i )

i jected cost of over S 160 million. mands of customer growth. In order _

A financing plan was devel- to provide customers with timely, A oped in 1991 to provide the most useful mformation concerning KUA optimal financing that could be and electric issues, we have installed x obtained for KUA and provide the an electronic envelope billing sys-least cost to the ratepayers. This tem. thn erw r/ccermth;,cnregfr bitting plan included refunding a paor bond As KUA faces new dimensions, machine greatly redavdelfer spint - '

issue to take advantage of lower its outstanding financial health is a gerging cornererpitis in ye wait;  ;

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Whv t'adt Wan $shstation, ^ ; I  ?

une oftwo substations W .. .

cently comtructed.fedtags a ., '

new law-preffikdesignfor ; . +

bener eninuilation inta the U eknnenesity. Thianbstatien : '

- " u helpedincorose M 4's '

\ distribution egencity by . . .

l 30 percent. It h located qq . .

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l _Beggp Caret Reed. behisdthe ,

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\ Rose 1918Cenietersandthe - - '

-Omola 4teasesyGe#ns. L . J -

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, , . - ,. . . , -)

.] g .8 l 1. . 2 .. .. c.u ,

i 60,000 square foot office complex -

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located on Carroll Street. This complex will also house a new

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state-of-the-art energy control center. Consolidation of these functions at one location will growth presents a trem:ndous reliable source of power at the t

maximize the operating efficiency challenge to KUA. Through the lowest possible cost. .While of the various departments which dedication of our Board of Direc- coping with today's growth, KU A

- must interact witn each other on a tors, management, and staff we is busy forecasting and planning daily basis. In order for these will continue to meet these chal- for tomorrow.

facilities to become reality in the lenges. Sound management and future, planmng was on our mmds our committed employees will in 1991, enable us to meet our organiza-l Managing the data associ-tional commitment of providing

! ated with continual changes to our customers with an adequate and

system became an enormous task

- in itself. Updating system draw-ings and facilities data cmated a - -

tremendous workload. Recently ..c .

we have installed an automated

~ g-mapping and facilities manage-

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ment system to ease this situation.

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f.- g- j- .g [.g.gjk ggg.f This system greatly enhances our efficiency in record keeping, .

production and revisions of drawings, maintenance schedul-l k ing, and engineering analysis.

I Through all the changes .

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we are experier.cmg, we strive to .k maintain our commitment to the 4 community we serve. This -

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department, as well as KUA as a en whole,is committed to programs f, such as the one in conjunction '

with City officials in concentrate

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efforts toward providing increased y r S'. ,

lighting in potential high crime areas. These areas are given our

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^-g top priority for the repair and '

- .; , V j" installation oflighting. V; ~~

g /. r y Meeting the demands .y y brought about by this level of ,

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l CUSTOMER RELATIONS 1 h

w o u - w,m e - --

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sen. ice rather than make a trip to the g

'yR j (, 3' KUA Administration Building.

Another convenient customer service function KUA made available

,y to its customers recently was 13ank j s ,

Drafting. This voluntary senice

! 44.+r '. allows a customer's checking or M vings account to be automatically s debited for the amount of his or her bill on a set day each month. Bank

',o Drafting has been a relief to many

.H customers, especially those who travel

_ ,_ j frequently or who live part of the year a y away from our service territory. This 2y s

tviv of " insurance policy" against i y forgetting to pay an electric bill has w also been extremely helpful for senior 4 ,A citizens and those businesses whose gwhhrh check writing process is complicated it u R g w M T E w u n i importantly, how to effectively and lengthy. With Bank Drafting,

-a ga y eg g

![O a e wm . yd fulfill those needs. Our represen.

tatives work individually with our KUA utilized advanced microcom-puter technology to provide its cus-

- m,mm A i commercial and residential cus- tomers with the most efficient and inWE l tomers, searching for better and convenient means of paying monthly

.. more cost-effective ways to serve utility bills.

.dC them. While continuously being ' Paying a utility bill has never faced with the influx of new been so easy, Recently, KU A also customers, KUA is faced with made available credit card payment

. 1 new needs and service require- which allows customers to pay ustomer satisfaction is ments daily. Fortunately, KUA is monthly utility payments, as well as one of our primary goals at KUA. continuously anticipa'ing and initial or additional deposits, by We believe our customers are striving to meet these needs charging the amount on a MasterCard entitled to receive the finest quickly by expanding the duties of or Visa. A small fee is billed to those service that KUA can provide. In our Customer Relations Depan- customers using the credit card pay-keeping with this philosophy, ment to meet our customer ment option so the burden of the cost l customer support and conGdence growth. It has been KUA's goal of this service does not fall to other has been essential this past year over the last year to provide the customers not using the credit card l

toward enabling KUA to bring on- highest-quality, lowest-cost option. Credit card payment has line numerous innovative techr.a- energy services to our customers. helped make our customers' house-l logical programs to improve In striving to accommodate hold budgeting easier, especially customer service. Ilowever, with the needs of all our customers, during those months when unexpected the onset of high-tech means of KUA has, over recent years. taken expenses arise.

service to take KUA and its a hard k>uk at the way we pness in a move to provide all customers into a new decade, back requests for service from our customers with additional infonnation to the basics and what's important customers. As a result of this regarding their utility bill, energy has never been stressed more. critical review, KUA worked to conservation, retes, and major utility One-on-one contact between our streamline the process of provid- projects, a new envelope style bill customers and personnel in KUA ing service to customers by imple- replaced the old postcard bill in 1990.

Customer Relations has enabled us menting the KUA phone bank The nev> fonnat allowed for more to determine first hand customer Customers may nosv call KUA to privacy o! billing information for the needs and desires and, most process many types of requests for customer and for a return envelope to twelve

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fourth consecutive year, KUA has been awarded the Distinguished Budget Presentation Award and the t.

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Certificate of Achievement for Excellence in Finan- '

, ,f -n- cial Repordng by the Government Finance Officers t- Association of the United States and Canada. Both

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signify the highest fonns of recognition for excel-lence :n state and local government financial report-

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%, I 11 har been a busy and productive year indeed;

>b - * ..

S but most im; ortantiv, K'UA continued to uphold its

" ^ 7 U '!, commitment of making its customers the most impor-

'y .

s. s ,.  ;. tant goal, in doing so, KUA has challenged its s '

~ - '

employees b,, measaring their perfonnance, setting 3

y' ' '

o goals, providing the necessary training and giviri; 3

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them an opportunity to work together to sob. 4r.at-

. .  :.- 9 ;

ever problem arose, in doing so increasing tL level o of customer satisfaction has been the outcome.

t,  ? ., 1991 is only the beginning of the new decade:

1991 is only the beeinnine of what KUA can accom-

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plish.

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. whannea S,e r - , _ ' -- ,

• Ills minating the night sky, the increasing number oflights seen on Vi .e %treet . . the world's gatem ay to Walt Dhney World . is

.' '

• es id nce of the vast growth in the area WA is busy serving.

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M MSFLjCTRK%IgVICIPARisA .

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energized 2 new substations last year, the Carl A.

Wall and the Lake Cecile substations, increasing

%e ' " -Wr! 9 l KUA's distribution capacity by 50 percent to further ~ "I .! 2" l

l- meet the escalating demand on the system load. In I f I ' ,

the works is a new combustion-turbine power plant at Cane Island, as well as a new administrative facility a-

"' r.

l- combined with a state-of-the-art energy control center ,x

," T " "TA on Carroll Street. KUA worked at a driven pace in  !".im N

-f C'ilP/d l l

1991 to install and upgrade infrastructures essential to --

serve the flood of new customers this past year.  %*y [ g..a w:g __j l

, Throughout this year of growth, KUA's serv ce contmued to be reliable and progressive with r,WW i'/ggjMg ;

,f q

v the development and continuation of many new customer service programs including cred'it card E- d %pk~-~ ' N (< g. k' ,

l payments, bank drafting and lockbox. In addition. \

aj :UL

• l several new, exciting programs were born this year ,,,  ;

i such as the SAVE Procram - - a load manacement %N '

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'~~

program -- and the Good Neighbor Prograrh which is  ; '3~j a voluntary customer contributory program to help '

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' J l those KUA customers u ho are less fortunate pay KUA utility bills during emereency situations. ..

- . . .___.2- 2. m . .~ .

In additi. .. KUA proudly contmues to mam- _. u m .~.m tain its excellent standing in the financial community. _7 _ C'.7"7 That confidence is reflected in the fact that for the ,

- l l

l...-... _ - . _ _ . _ _ . . _ . . . . . _ _ , . _ _ . _ _ _ _ _ , . . _ _ _ _ _ _ . _ _ _ _ _ _ _ _ _ _ _ _ _ _ . _ _ _ _

l POWER SUPPLY I gy;gqqg--- v_.rp 1 , w _ r- n e i

issimmee is proximately 11 MW) expected to continue t jg g . ownership in OUC's as one of the nation's ' tW Indian River Combus-fastest growing metro-politan areas through A yj tion Turbine Units A

& B. KUA also has an 2010. Osceola ownership entitlement County's population is through the Florida projected to increase Municipal Power

, 413%, to 145,000, by Agency (FMPA) for 2000. For KUA which the share of approxi.

has continuously mately 7 MW of l

experienced an aver- , capacity from Florida

, age 10.8% yearly & Power & Light's St.

! growth increase in Lucie Nuclear Power

! megawatt hours since Plant Unit 2. KUA i its inception five years e also has secured {

ago, such forecast firm purchase means the local de-raand for power and

@s  ;

agreements with various utilities for

~

facilities doubles every . short term and long seven years. Such growth man- cycle unit (30 MW gas  ; term capacity and dates that KUA's reaction be turbine plus two 10  ; energy. The forward-thinking in its efforts to MW each steam tur-  : current agreements achieve new heights in perfonn- bines), in addition, tius  ;

melude those with ance and service in every aspect of facility houses nine the Orlando Utili-its operations, smaller dual fuel  ;

ties Commission, innovations, imagmation (natural gas and No. 2  ; Florida Power and joint action are bringing new fuel oil) diesel units of  ; Corporation (FPC) dimensions of cost effectiveness approximate total  ;

and Tampa Electric and reliability to KUA's rapidly capacity of 20 MW, Company (TECO).

expanding electric system. The which brings the total These contracts are primary goal of KUA is to provide capacity of the plant to approxi- for varied amounts of capacity reliable electric service to its mately 70 MW. To maximize the during different years. In addition customers at the lowest possible operating efficiency of our gener- to the above-mentioned firm cost in the best environmentally ating units, we maintain an ongo- contracts, KU A also has economy j l acceptable method. In order to ing program to monitor important interchange agreements with accomplish this, KUA has diversi- operating elements - - f40m the severai other electric generating '

fled its power supply resources amount of fuel that they bum to utilities in the State of Florida, which are based on KUA's own the amount of air that they use for KUA's need for natural generation, off-site generation combustion. gas fuel is met through both finn through joint participation proj- Additionally, KUA has an and interruptible gas supply ects, and through long and short approximate 5.2 MW ownership contracts with Florida Gas Trans- '

term purchase power contracts. interest in Florida Power Corpora- mission Company (FGT). Tliese ,

KUA's on-site generation tion's 840 MW Crystal River 3 contracts con: 'tute pure sales, as at the Roy Hansel plant and the Nuclear Unit, a 4.819N (20MW) well as transportation service adjoining area consists of the interest in Orlando Utility Com- arrangements.

following generating units: An mission's (OUC) Stanton Energy In order to meet the future approximate 50 MW combined Center Unit I and a 12.29 (ap- demand caused by continued cicht

with the Board in 1985 and has held the position of Secretary since that time, the city's oldest retail establish-Initially, a reporter for the ments, Goold's Department Store, r l Milwaukee Sentinel and Milwaukee located in Downtown Kissimmee. John 11. Pollet l Journal, Bobroff ro ,e to positions of bwenstein has been a resident of

' Associate Editor and Editor of Osceola County for 19 years.

Kissimmee j severallarge newspaper publica- .

i tions throughout Florida. From . y. Mayor 1962 to 1982, he held various y g '! John B.

positions with the Orlando Sentinel, Pollet, an l meludmg serving on the Editoral Arnold W. Jones ) '2

"

• Ex-Board. Bobmff earned his very Businessman Arnold G. I . ,. 4 / Officio

- credible reputation in the field of W. Jones is currently serving his Director,

journalism stemming from his second term on the KUA Board of e ( became a

/f

college days at the University of Directors. Jones is no stranger to 2 . member

' Wisconsin, .

KUA, ofthe Although retired as a re- >

'% having KUA Boarti of Directors in Octo-porter, Bobroff currently is an p W

3 served as an ber 1990. Pollet's strong political agricultural writer. In addition, this #g' original background speaks for itselfin

! Osceola County resident of 31 years l is President / Owner of Bobroff's, g

~

f]i Board member in placing him as a person dedicated to leadership.

Inc., a national stamp approval

~

1985, Pollet served on the Kis-i business. responsible simmee City Commission from i

for trans. 1977 to 1979, and he was ap-forming the pointed to the same in 1989 to fill utility to an authority, an unexpired term of a resigning l Harry Lowenstein member ':. October 1989, he was Jones currently holds the position of President with Alden appointed Mayor to fill an unex-Harry Equipment Company, Orlando, pired term of a resigning incum-Lowenstein where he has been employed for 21 bent. Upon completion of that i f. T . is currently years. He has served in his current term, he was elected Mayor - - a 3,: /

serving his capacity as President for 10 years. position he holds to date.

,g' first term in In addition, Jones serves on the Pollet is a Life Insurance

'cz; office, Board of Directors of Alden's parent Agent with New York I.ife Insur-which began company, Management Tech. Serv- ance.

.A ices m Califorma.

1. $ qP October 1,

@9, - 'Q 1987. He Jones is a native Floridian, holds the having been born in Daytona Beach, position of Assistant Secretary, and has been a resident of Osceola Having been associated with County for 10 years.

, _ the clothing industry since 1952, l Lowenstein is the owner of one of i

4 l

A Year Marked By Growth And Change . . . -

? xperiencing City of Kissimmee. It's service To help contend with the l growth unparal- area covers the City of Kissimmee continuous doubic digit growth teled to any in its and some unincorporated areas, rate in Central Florida, KU A has history, the totaling 85 square miles. continued its ownership interests J Kissimmee Utility New customers enter its in other utilities' power plants to Authorny found itself continu- service territory at an overage of keep up with the growth and ally setting itigher goals and 233 new accounts a month, cata- acquire reliable, economical reuhing new heights in 1991. pulting KUA as one of the fastest nuclear and coal-f ueled power.

With both hands on the wheel, growing utilities in the state. This KU A's assets include partnerships KUA has been busy keeping area of Central Florida, and in Florida Power Corporation's ahead of the unprecedented ultimately that which KUA serves. Crystal River 3 Nuclear Unit, growth that has occurred in its is experiencing a phenominal Orlando Utilities Commission's service area. annual growth rate. Osceola Stanton Energy Center Unit I and KUA is a municipal County is projected to grow by Indian River Combustion Turbine, electric utility under the direc- 1279 by the year 2020, according and (through Florida Municipal tion of a 6-member board of to the University of Florida.1991 Power Agency) Florida Power &

directors. In addition, KUA acts found KUA supplying electricity Light's Saint Lucie Nuclear Power as a billing and customer service to 29.026 residential households Plant - - marking an increase in agent for the Water and Sewer and 5 A50 commercial establish- assets of $58 million since 1985.

and Refuse Departments of the ments. In addition to this, KUA six

KUA BOARD OF DIRECTORS

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d Richard L. Hord resident for 19 years. Prior to Osceola County Health Director. ,

moving to Florida, he received an Gant earned his MD from the MS in Mechanical Engineering University of Miami School of '

~. Richard from Tri-State University in Medicine in Coral Gables.

'. A Q - , L. Hord Indiana. Involved in the commu-l-

was nity, Gant has been an active 1 3 elected to member of the Kissimmee City j -

- his second Dr. George A. Gant Commission for 13 years, serymg

- ",.V -

term on as Mayor for seven years. He was born in Pahokee, Florida and has k.tN-(. "h 7 '. the Vice Chairman George A. been an Osceola County resident r c Chr J% . Author- Gant, an Ex-Officio Director for 31 years.

ity's during October 1985 to April Board of Directors in 1989 and 1988 has been busy sersing as Chair- '

-- while Bob Bobroff man since that time.

l .

serving as Hord, President / Owner of , Mayor of Custom Plastics in Kissimmee, ' , Kissim. Former newspaper journal-participated as a member of the ..

mee, is ist with 50 years of experience, l Ad-Hoc Committee which spear- -

1 currently Bob Bobroff was reappointed last l -heMed the formation of KUA as a serving year to I

se,,arate entity from the City of Kissimmee. Subsequently, Hord gw ~ - .

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1 his third term as .N

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T tus second served as a member of the Charter Director. term on i committee for the utility, as well With a diverse medical

.R$ 6.. . h( j the KUA as a member of KUA's founding

Board of

, aard of Directors, inaugurated background as a private practice physician, a physician for the state

.) Directors.

October 1,1985.

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prison system and an aviation Bobroff Formerly from Ohio, Hord medical director behind him, he began his has been an Osceola County currently holds the position of .

affilianon four

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Historical trend information presenting the Retirement Plan's progress in accumulating sufficient assets to pay benefits when due is presented in Table 9 of the Statistical Section of the KUA Comprehensive Annual Financial Report.

7. DEFERRED COMPENSATION PLAN

~ The KUA offers its employees a choice of two deferred compensation plans created in accordance with Intemal Revenue Code Section 457. The plans are administered by the international City Managers Association (ICMA) and the United States Conference of Mayors (USCM). The plans, i

available to all KUA employees permits them to defer a portion of their salary until future years, The deferred compensation is not available to employees until termination _or unforeseeable emergency (including death, retirement and disability).

l The Internal Revenue Code section 457 requires that all amounts of compensation deferred, all p property and rights purchased, and all income earned are (until paid or made available to L

' employees or their boaeficiaries) solely the property and rights of the KUA, subject only to the claims of the KUA's general creditors. Participants' rights under the plans are equal to those of l general creditors of the KUA in an amount equal to the fair market value of the deferred account for each participant. Deferred Compensation accounts are stated at market value.

L The ICMA and USCM are responsible forinvestment of funds, distribution of benefits and reporting to participants. The KUA believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future.

8. REVENUE BONDS OUTSTAND!NG The Revenue Bond resolutions provide for:

A. Establishment and maintenance of various funds:

(1) Revenue Fund records all operating revenues and expenses of the system; (2) Sinking Fund records principal and interest requirements; (3) Bond Amortization Fund records funds held for the retirement of term bonds; (4) Reserve Fund records funds held for the maximum annual debt service requirement;

-(5) Renewal, Replacement and improvement Fund is to be used only for making improvements, extensions and replacements to the system, and (6) Construction Fund records the cost of major additions to the system financed by  ;

i revenue bonds. '

i l

. .. .. -- . . ~ - .. , - . - - - -- - -. .

- c B. Restrictions on the use of cash from operations in order of priority:

(1) Deposits are made to the Revenue Fund to meet current operations according io the {

- Budget; (2) Deposits to the Sinking Fund Account are required on or before the 25th day of each month equal to oneisixth (1/6) of the interest coming due on the next semi annual interest payment date and one twelfth (1/12) of the principal coming due on the next principal payment date; (3)- Deposits to the Bond Amortization Fund are required on or before the 25th of each -

month equalto one sixth (1/6) of the amortizationinstallment coming due on the next semi-annual paymont date; (4) Deposits to the Reserve Fund are to be made when required to maintain the Fund ,

at the reserve _ requirements _ (maximum annual debt service); and (5) Deposits to the Renewal, Replacement and Improvement Fund are required each month in an amount equal to one twelfth (1/12) of the adopted budget for that fund. i The total annual deposit may not be less than 5% of the gross revenues for the 4 preceding fiscal year after deducting 100% of the fuel expense and the energy component of purchased power expenses incurred in such preceding fiscal year.

. However, no such monthly deposit shall be required when the amount in such fund >

shall at least equal $1,500,000.

} C. Early redemotlam The bond ordinance provides for early redemption of outstanding bonds,  ;

except originalissue discount bonds, at call rates varying from 100% to 102% of the instruments' face value, dependent upon the call date. Original issue discount bonds may be redeemed early at call rates of 80% to 100% of the face value, dependent upon the call date.

D. investment restrictions:

(1) _ Funds of the Sinking Fund, Bond Amortization Fund, Reserve Fund and Renewal, Replacement and improvement Fund are required to be continuously secured in the same

_ manner as mun;cipal deposits of funds are required to be secured by the Laws of the State of Florida; and -

(2): Monies on deposit in the Sinking Fund and the Bond Amortization Fund shall be invested --

only.in direct obligation of, or obligations the principal of and interest on which are

= guaranteed by the United States of America and which oo not permit redemption prior to maturity at the option of the Authority. Monies on deposit in the Revenue Fund, Reserve Fund and Renewal, Replacement and improvement Fund may be invested as described above as well as in obligations reting an "A" or better from Moody's investors Service, Inc.,

bank time . deposits represented by certificates of deposit and bankers acceptances,

. repurchase agreements, commercial paper which has the highest investment grade rating and shares of investment companies which invest principally in United States government securities.

L thirty-six

_ . _ _ _ . _ . _ _ _ _ _ _ ~ _ _ . _ _ _ ____ __ _ _ _ _

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%.@N W $N;Q% N; W Vr%*:ahr vne egymeare menin erethw hatesma#* comes* :

ang 2, espekssfagsirien&g nf er At a system. tere sp9EAidylff bringad e&jW nogits ararSt%IM system. thetow Ta maximke the operaltagwDiete.ncy,af .

'r;& k hW[& O Q fl Q

entgtercettisg1 units,l'owefiant Alectspoirs atalntak aanguing pangswsn to noenitor4nterpatH. epartans operating elementv

. ~ .. .

a . . a 3:m&&s ' v - ;x .-

+q.

~4 d (SCADA) system -

c o -

ee

~

~l which will be .. e installed at the new 4 Administrative and

'O Energy Control .

K '

facility currently .

under construction .

.i growth, KUA has emberked on and npected to be f

several projects that will add capacity to KUA's generating operational by October 1992. ~ 'W k 6 ,

7 ""a system. In FY 1991, planning for KUA set the 7

'1- Q> j, f , g

~

, a new gas turbine facility, known ball rolling in 1991 l as Cane Island, has been initiated. towud the fom1ation

. This new facility will provide ofits new load I l

l KUA with approximately 40 MW management pro-s  :

f_ ' .,

l of peaking capacity and is sched- gram. The SAVE(Shifting Adds Reliable service is a u!ed to be completed by October Yalue To Energy) Program is 1993, phrase that we take seriously at expected to go on-line mid 1992.

, KUA, Sound management and KUA has been offereo and This program is designed to ease dedicated employees have en-is planmng to avaii the opportu- the demand for electricity on those abled us to provide relidle mty to participate m OUC's few days when electricity use is at electric service during tnis year Stanton Energy Center Na. 2 coal its peak. Existmg KUA customers of enormous growth. As they unit for the share of approximately who sign up for the program will

- 17 MW of cepacity. Further, be entitled to have their household sa}' about the chicken and the egg, you can't have one without KUA has been continuing negotia- water hea:er ar.d air conditioner / the other. And so it goes with tions with FPC, FMPA, and heating unit controlled (turned off arowth and change. They go TECO for any possibih,ty of and on) via a radio signal during [iand in hand. Everythinj; must participatmg m those utih, ties, these periods of high use. Anyone change. As growth takes place, future planned generating units. who has pulled a building permit For better control of all the after December 31,1991 must change is bound to follow. As

. vou can see, KUA's Power available resources, meluding the participate in SAVE as a condition -

, , , Supply Department has been transmission and distribunon of service with KUA. Participatmg planning and laying the ground-system, and m, order to replace the customers will receive a monthly work for our trip through the last existing outdated equ:pment, incentive on their KUA utility bill. decade of this century - - one that i KUA is currently m the process of The amount of that incentive will s sure to be fueled by growth, acquiring a new Supervisory be based on what level of control Control and Data Acquisition the customer has chosen.

': P 3n%f

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l PLANNING & ENGINEERING I immmmm.+ .- _, , , .

erving the center of one throuch KUA's Enerev Control System expansions cer-of the fastest growing areas in the Cente'r. These two n5v facilities tainly do not stop there. Current country, KUA continues to grow increased KUA's substation plans call for the construction of at an accelerated rate. This enor- capacity 50 percent. Also we three additional distribution l mous growth has certainly had a have added an additional intercon. substations during the next five-major impact on the KU5 system. nection to a neighboring uti!ity in year period. Substantial additions ,

For the ten year period fru,1981 order to increase the reliability to our transnussmn system will to 1991, we have seen the ann..il and capacity of our import capa. also be constructed in order to averace number of residential bilities, bring our new gas turbine generat-l custoiners increase at a rate of 9.4 ing facility on line during the mid percent, while residential energy 1990s.

usage has increased at a rate of prommme - w r The growth of KUA does i i 10.5 percent. During the same 3 not cease with additions to the time frame, commercial energy j transmission, distribution, and usage has increased at a rate oi 12 generating systems. Additional percent. As evidence of growth, , . _

office, warehouse, and mainte-we set a record peak demand of .

Jimm7rm nuha nance facilities are also required.

200 megawatts in December of r Rommme Mid 1992, the majority of our administrative and engineering 1989. This compares to a peak - m.Mhemdi demand of 64 megawatts in 1980, personnel will relocate to a new Due to the thriving economy of the area, projections indicate a -

continued strong growth pattern.

l Even conservative estimates i project that we will see our net 9 "

energy for load increase at an annual average rate of 6 percent s from 1990 to 2000. Planning and construct;ng additional facilities to meet such a high system demand s is a continual process that kept us 7 busy in 1991.  ?'

During the past five years we have constructed two new distnbution substations, the Lake Cecile substation and the Carl A.

Wall substation. Funded inter-nally by revenues and bond proceeds, each substation features '

a lew low-profile design to better  ;

nt into the community. Both have state-of-the-art digital relays and are completely remote controlled

(

ten

be included for the customer's use. investicated 1,892 cases in 1991. business world - - helping them get a This envelope style also allows While only a small portion of the handle on the future. This year also KUA to include monthly bill approximately 150 to 200 cases of found KUA on the road with its I

stuffers allowing custoniers to be tampering investicated on a newly formed Speakers Bureau, informed about matters at KUA or monthly basis prdves to be a true developed to inform our customers within the industry that pertain to case of utility theft,left undetected about different aspects of KUA and them, conservation information, as the impact of diverted power the utility industry, from past and well as community events happen- affects every customer, present KUA projects to electromag-ing that month. KUh's commitment to the netic fields, that we feel customers As a result of initiatine the community and its customers is want and need to know.

4 new style bill, KUA is also now exactly that - - a continued com- And without a doubt, taking advantage of lockboxing KUA, in conjunction with the technolog'y. The return envelope * -

United Way, was proud to intro-provided to customers for bill R.

~~ ' ~~

duce the Good Neighbor Pro-pavinc purposes is bar coded for 2 r

gram to the community in No.

, delive'ry directly to a banking

~

vember,1991. This program facility which opens and electroni- ,

helps KUA customers experienc-cally scans bill payments and posts ~

mg financial difficulty pay utility l bills in emergency situations. It them to the customer's account via computer link to KUA's mainframe f;l>.. '

1 1

x., .

is designed so that customers computer. This system not only T ,; # g w ho can afford and want to help l speeds u) the bill paying process,it -

.; others can make 5 aluntary increases accuracy and helps KUA contributions to this special

\ 3 avoid the expense of hiring addi- 4 I. w fund, Whether the customer

' '4i

~

tional employees to process pay- '

makes a monthly ments. .

e >ntributmn, which And speaking of payments, a @fQ. Z shows up as a line

' c'.F Mr~m-

- new collection process was initiated .

item on ins or her by KUA's Credit and Collections c monthly KUA bill, Division that has allowed Customer -

g er makes a one-  ;

l Relations to increase recovery of ~

mitment. The utility's l

- g

~

old unpaid utility bills, saving KUA ll energy conservation l app,roximately 5 times the cost of program, seen most y

l T

the employee manpower involved in often as free home or '

b the collection effort. Left uncol- business energy audits, lected, unpaid bills directly impact continues to benefh all .' _

the entire customer base. types of customers, in , 7 KUA Customer Rem ions addition to helping ~

has also worked to bring the meter almost 500 KUA customers per reading process into the 20th Cen- year maintain control os er their c f -

tury by converting to an electronic energy use, this service helps i _

meter reading package. The KUA avoid higher than normal . t tyjg handheld electmnic devices now peaks. KUA's commitment is

• used by our readers increases their also seen in the Osceola County - vg',Q' accuracy and productivity, as well school system through work done 6- - - $E as speeds up the processing of meter reads. Because readings are pro-with the future leaders of tomor- ~ k ,

cessed electronically, KUA has row. Support Services personnel ..

can be seen going into classrooms 1 -- =

again avoided the cost of hiring new demonstrating how electricity emplo3 :es to manually key each works, the importance of safety time donation, all money collected individual read into the system. around electricity, and the neces- in this fund is tumed over to the During 1991. Customer sity of conservation. KUA Cus- Human Services Council, a United Relations also continued its newly tomer Relations is also partners in Way funded agency, which assumes -

initiated current diversion program education with the school system's the responsiblity of distributing the that seeks out and investigates Project COPE for school-age funds to those in ned.

suspected cases of meter tampering parents. Donating an hour or two Quality customer service l a week, Customer Relations l

and theft of utility services discov- means going that extra mile, taking l

ered through a variety of means, Representatives voluntarily show that extra step and putting yourself in '

most of which are reports from these young adults the importance the cmtomer's place. KU A believes utility meter readers, field service of a high school education and that a commitment to that philoso-personnel and neighbors. KUA allow thern to get a feel of the phy guarantees et.stomer satisfaction.

., .-~

1 I_ _

TRANSMISSION & DISTRIBUTION [

li F4MidehEIkadd@i4MMfMW4 ---- NPm W l

l- ince the early 1970s, the feeders, served from six substa- constrnet un electric maintenance KUA Transmission & Distribution tions, with three additional substa- shop at this site for electrict!

bepartment has been called on to tions planned in the near future. equipment repair, further expand-meet the system's heavy growth From 1975 to the present, '

rate required by the increase of our Distribution feeder loads -

customers moving to the area, due increased from approximately 45 , - 1 n 4 wma ^

to the heavy tourist industry that megawatts to a system peak in .

w abounded in the area. The growth 1989 of 200 megawatts.  !

l rate over this peri)d has been one With this growth, the  !

of the highest in the state and department itself has grown in presented growing pains for the site, as required to meet the department by imposing increased system installations de-l construction requirements. mands. In 1975 the Trans- .

L The Distribution System in mission & Distribution 1975 consisted of 10 distribution Department consisted of leed' rs from 'wo substations; approximately 15 employ- ft p g ~i s %@.h, .

J , 4K3 9X those i,:ing the Hansel Plant and ces and has crown to 51 in 4

]

l the Airport Substation. Today, 1991. As of October,1, iL NR L!fl[th@y $

the Distribution system has 30 the Distribution Depart- + WD , i f / ' Lypys (_.. O.

l ment received a 1 4Hv '?

.. , , m . ~ , new name - -

T MIT N> ' j*Mf

~ $ MM i IgW

~

24 ,

1. f[g fy Transmission &

Distnbunoa 1

__. 7 p M

_ , K'N q

$5p  !

( , ,

$$r 8i Department to yN: F V L} v 4;D ?D?

4 g[.

1 more clear;y  % p'fh l s Mb,

~

l' indentify the, ,

y y respons:bihties of 9 9%

/ its recent division ~

addition, Electri- -

cal Maintenance h k Division (previ-ously part of the 4_ $(  %

Transmission s l F j -

M Disision housed 7 i  %@p ,

4 in Power Supply). ing our Transmission & Distribu.

7" J

Due to the large Jw u*4 increase in vehicular tion accomplishments.

The Transmission &

. . d y4 construction equipment, inventory requirements and Distribution Department is con-tinually striving to maintain a high

'd personnel facilities re- level of service to its customers '

quired to keep in step with within KUA's 85 square mile

%^ - the system's growth, this service territory. This department settled into its department's employees, and KUA wSh qwrig_am! new home on Bermuda Avenue. itself, take pride in the high-g/NTaaEEIE -" At this site, the department also quality. top-notch workmanship I M

NT13d began a Transportation Division. our cr'ews provide, in addition to which is responsible for repair and routine line clearing programs, maintenance of all KUA vehicular line extensions, system mainte-

$ fleet. From bucket trucks to nance, routine checks of street V pickup trucks. this fleet has grown lighting and distribution systems.

,g. to approximately 85 units. and around-the-chick-emerycucy During 1992, plans are to response for system problems.

Ivanan

l

~

l MATERIALS MANAGEMENT T umamhmmmammumuus:rm:d '

i

' l i

989 found KUA passing million of inver'ory from the City cry information, ad inventory item I

out congratulations and exclaim- facilities. costs with a simple inquiry into the ing "It's a department!" Last The next major objective system through a terminal. Overall.

l year was the birth of a new for this "new kid on the block" this accomplishment aids KUA in

department for KUA. The Mate- was to convert from a totally ensuring timely and reliable service

! rials Management Department manual purchasing and inventory to its customers.

l began independent purchasing system to a totally automated in keeping up with the fast operations trom the City of system. This considerable task growth of KUA Maierials Manage.

Kissimmec's Purchasing Depart- was carried out in several phases, ment personnel have to be progres. I ment. This centralized purchas- one of which included establishing sive in their thinking, while encour-ing system, which uses competi- a logical stock number classifica- aging sound planning. One of the l tion sy stem for inventory and primary objectis es of the depart.

mw ,7 7 l 9 purchr. sing and tailoring it to the ment is to purchase materials, -

g 5 w. . hb$g l, requirements of an automated system. Many other steps fol-tipment and services at the lowest possible cost, consistent svith s

% 3 -

i i

l lowed, such as the purchase and prevailing economic cq. ations.

F F . &R installation of the proper data while establishing and maintaining p V&@N

[

y . w$g M ^M %M.4l: M - processing equipment; hardware and software modificaiions, as a reputation for fairness and ,

^$4 integrity.The department motta has h

N g$ MA @U x ,

dh)M Nks ey ,

well as enhancements that were necessary for a totally functional come to be "The better we plan, the less we pay for those needed goods system. In September 1990, KUA d/T/ jh;Q@k s .

. . . =~

@4$ gg was proud to announce that the T mhh,

%@Mhgkyn automated purchasing function p' ,. Vg g..

g' had become operational; in Octo- G M 11 92 kin T y

,MW o

+

s Y G A , g{ %g,:m 3

l ber, the inventory function fol-

S-. . . . 4@.. '? . . TA lowed. l .. <

CW6 h KUA quickiv realized Ine i

. .W8 Y

' dMkk , ~ "

M4W.@M. N F benefits of having a central- . .

/ V -

ized automated purchasine G 7e$m f MN'1 [s and inventory system wer'e M8 M%#**8 HOI ,

qp . m d h enonnouL rabking of ./ NNi 7

' ,3 "s)

, -WA WiwP .e commod,ity purchases 01 5 . .

7

>c stocked items, everythine w S .A tive bidding whenever possible, trom electrical equipmerit V w ~ , < ',' "@, .g?

,K " - .,

l was established for in Muse materials to office supplies, 4 .. p w s [ g operation to better accommodate and usage history occurs '- '

< 4

~

KUA's particular needs. Materi- automatically. With a larp "r - a c

l l

als Mariagement, which is a public purchasing organization that variety of management reports available from the

't**{G@

A;.

4, 4 54{ f .

g' i operates under Florida Statutes, system. management is  ? @. : ..

i. took to its new Warehouse / Office easily able to look at the .1 f'- ~ Q

%.

• 7" facilities becoming neighbors and ' big picture or specific ~ ~

sharing facilhies with KUA's details as necessary. p ' SQ ~ .

l Transmission & Distribution in addition, the n w# s l

$.6 Department at 2850 N Bermuda taster and more accurate ..

.s j Avenue. From here, Materials automated system greatly I Management assumed responsibil- aids other KUA departments as and services." Of course, in the l ity for all KUA inventory opera- well. User departments now have end, this highly conscientious j tions after overcoming the tedious the capability to access the status attitude saves our customers hard-tasks of transferring over 51 of their purchase requests.deliv- carned money.

l t

l PERSONNEI & RkSK MANAGEMEN'l

_ S eerked bx e ,eirit er I

beiioies earkiec iet ie e 8eckei each ef the different derartmeei teamwork, cooperation and com. truck! within the company. The EOC

. mitment, KU A employees were in addition, KUA employ- meets once a month and acts as a confident in 1991 in their abilities ces strive to be pillars in the springboard for ideas and sugges-to meet the challenges ahead. community by serving on boards. tions linking en ployees and Team KUA - - a force of 2:7 varions civic clubs and associa- management The EOC also employces strong - - demonstrated tions, working hand-in-hand with recognizes an Employee of the tnis continually through giving the Osceola County School Sys- Month, *md at the end of the year, 110% in theirjobs and by giving tem and panicipating in Leader- an Employee of the Year; plans freely of their time and talent to ship Osceola County, and prepares an annual employee respond to the needs of the com- KU A employees possess Christmas party and family spring m munity. This potential for team something special, With KU A picnic; and organizes KU A par-effort was continuously spurred Personnel frequenity processing ticipation in the annual kical during 1990-1991 by the KUA approximately 150 to 250 applica- Christmas parade through the Personnel & Risk Management tions each for many job openings creation and entry of a float.

Department and the Employees' at KUA, this is a well-known fact We are continuously proud ,

Organization Committee (EOC), in the commanity. On August 16, of the hardwerking, caring men identifying KUA as a " neighbor 1991, KUA Personnel opened a and women at KUA who under- ,

who cares", stand the importance of teamwork As neighbors, ourselves, m m providing the best possible this comrounity where our friends service to our customers. KUA and family play and reside, KUA believes each employee is a vital is much more than just a place to '3 link in the organizational chain. It work. To every employee, KUA is this spirit of service and dedica-offers a chance to retum leader- tion shared by KUA employees ship, care, and support to a place that enabled KUA in 1991 to +

we and our customers call home. '

achieve its [.vsition as one of the Employee participation leading energy service companies was high during the 1990 EOC- .\ _

and businesses in the area.

sponsored anr ual Bass-A-Thon a M 1 fishing tournament and picme, -

allowing KUA to reel in a $1340 _ ,.

donation to the United Way,

' ' J Without a doubt, KUA ,I employees are the lifeblood of this , ,

organization. With that idea in record i i mind, Personnel organized a bi- 102 annual Blood Drive which estab- resumes Ne lished an " account" to be drawn for the o upon by those in need. same job j g KUA turned hve last year. opemne a .  %

Looking back on our formative in just ' @,

years, we are satisfied. No re- one mail  %~

grets. To help say thank you for run. Employee benefits, such as sh[

five successful years as a separatt health and life insurance and a entity from the City of Kissir+ non-contributory Pension Plan, are -

__ 3 mee, KUA threw a birthday bash several of the many ways Person- m on October 1,1990. The day-long nel serves KUA employees, event was celebrated by customers showing them they make the and employees alike, with presen- positive difference, tations, refreshments and other Also in place to serve activities - - including a " scenic KU A employees is the EOC, trip" around the Administrative comprised of representatives from sixteen

10. RFFUNDED UONDS The KUA prasently has outstanding serial bonds, which were refunded through the full cash defeasance method on January 4,1973 and through the net cash defeasance method on February 25.1982, January 25,1983, December 31,1985 and April 1,1987 as follows:

AMOUNT OUTSTANDING ELECTRIC & WATER BONDISSUES __ 1991 1990 1963 $ 690,000 $ 905,000 1937 740,000 825,000 1971 850,000 850,000 1971-A 345,000 385,000 1073 2,975,000 3,030,000 1975 3,045,000 3,135,000 ELFCTRIC REVENUE BONDS 1977 Series A $ 17,020,000 $ 17,505,000 1979-A 2,330,000 2,380,000 1982 46,260,000 46.750,000 1982-A 68,510,000 69,375,000 1984 27.790.000 28.010.000

$170,555,000 $173,150,000 Since governmental obligations are held in escrow for the payment of principal and interest on these bonds, they are not liabilities to the KUA.

11. COMMITMENTS AND CONTINGENT LIABILITIES:

The KUA owns a portion of Florida Power Corporation's nuclear power plant at Crystal River, Florida. This plant is scheduled to be decommissioned beginning in the year 2015 and ending 2022. The KUA will be liabie for approximately $861,000 in decommissioning costs in 1989 dollars.

In June 1988, the Nuclear Regulatory Commission (NRC) required utilities to provide financial assurance that decommissioning funds would be sufficient and available when needed for NRC required decommissioning activities. On July 12,1990 the KUA and the Florida Municipal Power Agency (FMPA) entered into an agreement whereby the FMPA would act as agent for the KUA and certain other Crystal River Unit 3 (CR3) participants to coordinate the administration of a trust l fund. Contributions to this trust fund are not available to KUA for any other purpose except the j decommissioning of CR3. On October 17,1990 the KUA transferred $436,231 to this trust i account. KUA's balance in this Trust at September 20,1991 including interest earnings was i $506,192. Future contributions will be made to this trust account as needed based on updated

- cost estimates and trust fund earnings.

thirty-eight

The refunding and revenue bonds consist of the following serial and term bonds:

AMOUNT AMOUNT l FINA'. ORIGINAL OUTSTANDING OUTSTANDING ,

DESCRIPTION MATURITY AMOUNT 9/30/91 9/30/90 Refunding Revenue Bonds-Series 1982A 7.25% - 7.75 % 10/01/92 $71,500,000 $ 2,605,000 $ 3,470,000 4/1;10/1 Refunding Revenue Bonds-Series 1985 7.00 % - 8 50 %

4/1;10/1 10/01/17 36,875,000 35,770,000 36,165,000 Electric Revenue Bonds-Series 1987 4.40 % - 6.80 %

4/1;10/1 10/01/12 66,020,000 64,330,000 64,715,000

9. CHANGES IN LONG-TERM DEBT The fc!!owing'is a summary of bond transactions:

1991 1990 Bonds Payable Beginning of Year $ 104,350,000 $ 105,900,000 Bonds Retired (1.645.000) (1.550.000)_

Bonds Payable at End of Year $ 102,705,000 $ 104,350,000 The annuallong-term debt service requirements are as follows:

YEAR ENDING-SEPTEMBER 30 1991 -1990 1991 $ 0 $ 8,564,178 1992 8,856,167 8,856,167 1993 8,838,229 8,838,229 1994 8,871,371 8,871,371 1995- 8,847,977 8,847,977 1996 8,835,878 8,835,8'78 1997-2001 43,643,346 43,643,346 2002-2006 42,025,370 42,025,370 2007 2011 41,269,205 41,269,205 2012-2016 25,047,255 25,047,255 2017 5.689.600 5.689.600 TOTAL $201,924,398 $210,488,576 LESS:

Amt. represent-ing interest (99.219.398) (106.138.576)

TOTAL AT PRESENT VALUE $102.705,000 $104,350,000

l j

12. SUBSEQUENT EVENT On December 4,'1991 the KUA entered into an Bond Purchase Agreement to issue $75,550,000 Kiss'immee Utility Authority Electric System improvement and Refunding Revenue Bonds, Series 1991, in December 1991. The Bnnds are being issued to i) refund a portion of the KUA's outstanding Electric System Revenue Bonds, Series 1985, ii) finance a part of the cost of the acquisitionandconstructionof additions,extensionsanoimprovementstothe System,lii)fundthe Reserve account, and iv) pay the costs of issuance of the 1991 Bonds.

I' I

l As stated in note fi'.e (5), the KUA entered into a Power Supply Acquisition Agreement with the Florida Municipal Power Agency (FMPA)in 1981. KUA contracted to receive approximately 7 MW of power from the St. Lucie nuclear power plant for the life of the plant. The amount of KUA's participation costs for 1991 and 1990 were $3,649,054 and $3,167,264 respectively. The participation costs for 1992 will be $3,885,444. Future participation costs are not known at this time.

The KUA has purchase agreements with utilities whereby the KUA must pay capacity demand or reservation fees whether electricity or fuel is received from these utilities or not. The utilities involved and the charges paid are as follows:

Maximum Expiration Annual Date Commitment Orlando Utilities Commission (OUC) 2019 $ 1,545,435 Florida Power Corporation (FPC) 1995 4,532,124 Tampa Electric Company (TECO) 1992 2,235,945 Florida Gas Transmission (FGT) NONE 389.129

$ 8,702,633 The charges paid to OUC, FPC and TECO are recorded as purchased power while charges paid to FGT are recorded as power generation expenses.

As a result of their ownership interest in CR3 and St. Lucie purchase power agreement the Authority is subject to the Price Anderson Act which was enacted to provide financial protection for the publicin the event of a nuclear power plant accident. The first layer of financial protection was the purchase of $200 rnillion of public liability insurance from pools of commercialinsurers.

The second layer of financia! protection is provided under an industry retrospective payment plan.

Under that plan, owners are subject to an assessment of $252 million per incident with provision for payment of such assessmant to be made over time as necessary to limit the payment in any one year to no more than $40 million per incident.

The Authority's share of these assessments would be approximately $1,702,000 and $270,000 respectively for CR3 and $1,925,000 and $305,000 respectively for St. Lucie.

The authority has recently completed negotiations and executed a Participation Agreement with OUC to acquire a 3.8314% (17MW) undivided ownership interest in Stanton Energy Center Unit No. 2 (SEC 2), which is scheduled to be brought on line in 1997. The total cost of the Authority's interest in SEC 2 is estimated at $28,666,000 which includes the Authority's purchase of a portion of certain existmg common facilities at the Stanton Energy Center.

~ ~ ~ ~

Coo 3ers l &Ly3rahd REPORT OF INDEPENDENT ACCOUNTANIX Board of Directors Kissimmee Utility Authority

'Je have audited the accompanying balance sheets of the Kissimmee Utility Authority as of September . 30, 1991 and 1990, and the related statements of revenue, expenses and changes in retained earnings, -and cash flows for the years ended September 30, 1991 and 1990. These financial stat ments are the responsibility of the Authority's management. Our responsibility is to express an opinion on these financial statements based on our audits.

'Je conducted our audits in accordance with generally accepted auditing standards and Government Auditinn Standards issued by the Comptrollt: General of the United States. Those standards require that we plan and perform the audit to

-obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management , as well as evaluating the overall financial statement presentation, We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above pres 2nt fairly, in all material respects, the financial position of the Kissimmee Utility Authority as of September 30, 1991 and 1990, and the results of its operations and its cash flow for the years then ended in conformity with generally accepted accounting principles.

As discussed in Note 1 to the financial statements, in October 1990 the Company changed its method of accounting for contributed capital by reclassing the balance as a reduction of plant and began amortising the contributions over the life of the related plant.

Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The introductory and s.etistical sections, on which we express no opinion, are presented for purposes of '

additional analysis and are not a required part of the basic financial statements of Kissimmee Utility Authority, o

Tampa, Florida November 22, 1991

)

KISSIMMEE UTILITY AUTHORITY  !

BALANCE SHEETS FOR THE YEARS ENDED SEPTEMBER 30,1991 AND 1990 l ASSETS _ 1931 1990 UTILITY PLANT I Property, plant and equipment $129,322,332 $ 123,660,574 l less; accumulated depreciation (38,243,592) (32,551,317) 7

.- t 91,078,740 91,109,257 Construction in progress 6,244,445 1,001,399 )

inventory nuclear fuel 450,920 564,065  !

TOTAL UTILITY PLANT 97,774,105 93,274.721 RESTRICiED ASSETS l

Debt service Investments 4,695,064 0,211,484 Cash and cash %'aivalents 11,476,205 4.949,936 Construction Cash and cam: wivalents 1,500,000 1,500,000 Customer deposits Cash and cash equivalents 1,847,543 1,783,708 TOTAL RESTRICTED ASSETS 19,518,812 17,445,178 DESIGNATED ASSETS Cash and cash equkalents desi0nated for specific purposes 30,539,956 27,796,429 Deferred compensation plan assets 626,365 434,001 TOTAL DESIGNATED ASSETS 31.166,321 28,230,430 CURRENT ASSETS Carh and cash equivalents 11,213,934 9,tT4,713 Accoats receivable' 7,987,343 9/ 71,286 less: allowance for doubtful accounts (156,146) (G3,757)

Notor, receivable 18,002 23,626

~ Inventcty 5,055,932 4,708,096 l: Prepaid expenses 45,884 122,448 i Dee from other governments 101,998 265,197 Deferred cost of power adjustment 0 1,191,385 TOTAL CURRENT ASSETS 24,266,947 25.068,994 OTHR ASSETS Unamortized bond costs 1,066,910 1,125,803 TOTAL ASSETS $173,793,095 $165,145,126 i

See accorganying notes.

twenty

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KISSIMMEE UTILITY AUTHORITY STATEMENT OF REVENUE, EXPENSES AND CHANGES IN RETAINED EARNINGS l FOR THE YEARS ENDED SEPTEMBER 30,1991 AND 1990 1991 1990 OPERATING REVENUES Meterod sales $60,240,709 $59,368,189 Other operating revenues 1,334,193 989.151 TOTAL OPERATING REVENUES 61.580,902 60,357,340 OPERATING EXPENSES Power genoration 11,741,774 10,530,920 Purchased power 18,000,904 17.483,408' Transmission 1.092,957 876,468 Distribution 2,077,481 1,818.238 Customer Relations 2,341,973 1,704,500 Administrative and general 2,272,042 2,830,579 Payment to the City of Kissimmee 4,980,213 4,029,930 Duvie iation 6,435,691 6,550,030 TOTAL OPERATING EXPENSES 48.943,035 45,824,073 OPERATING INCOME 12,637,867 14,533,267 NONOPERATING HEVENUE (EXPENSES)

Interest revenuo 3,850,156 4,129,646 Interest expense (7,427,924) (7.427,416)

TOTAL NONOPERATING REVENUE (EXPENSES) h577,768) (3,297,770)

INCOME BEFORE CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING PRINCIPLE 9,000,099 11,235,497 CUMULATIVE EFFECT TO SEPIEMBER 30,1990 OF A CHANGE IN ACCOUNTING FOR CONTRIBUTED CAPTIAL 688,743 0 NET INCOME 9,748,842 11,235,497 RETAINED EARNINGS AT DEGINNING OF YEAR 53,334.239 ^2.098,742 RETAINED EARNINGS AT END OF YEAR $63,083,081 $53,334,239 l See accompanying notes.

twt'nty two

KISSIMMEE UllLITY AUTHORITY B ALANCE SHEETS FOR THE YEARS ENDED SEPTEMBER 30,1991 AND 1990 CAPITALIZATION AND LIABillTIES 1991 1990 CAPITAllZATION Retained earnings Reserved for debt service $ 10,503,230 $ 10,503,230 1 Unreserved 52,579,851 42,831,009 Total Retained Earnit'gs 63,083,081 53,334,239 LIABluTIES LONG TERM DEBT Revenue Bonds payable 100,625,000 102,705,000 less: unamortized bond discount (4,926.116) 3 255,716)

TOT AL LONG TEhM DEBT 95,698,884 97,449,284 CURRENT LIABILITIES (PAYABLE FROV RESTRICTED ASSETS)

Current portion of revenue twrt,s 2,080,000 1,045,000 Accrued interest payable revenue bonds 3,459.589 3,513,240 Contracturotainages payable from construction 0 237,400 Customer adsances for construction 678,756 518,986 Customer deposits 1,847,543 1.783,708 TOTAL CuMRENT LIABILITIES (PAYABLE FROM RESTRICTED ASSETS) 8,065,888 7,698.334 DESIGNATED LIABILITIES (PAYABLE FROM DESIGNATED ASSETS)

Due to employees under deferred compensation plan 626,365 434,001 TOTAL DESIGNATED LIABillTIES (PAYABLE FROM DESIGNATED ASSETS) 626,365 434,001

, CURRENT LIABILITIES (PAYALLE FROM -

CURRENT ASSETS)

Accounts payable 2,530,122 2,552,509

' Due to other governments 1,917,289 2,441,810 l Accrued taxes payable 544,170 460,244 Accrued salariet 190,406 166,376 i Pension plan liabihty 264,866 264,866  !

' Accumulated unuseci compensated absences 414.474 343,463 l Deferred cost of power adjustment 457,550 0 l

l TOTAL CURRENT LIABILITIES (PAYABLE I

FROM CURRENT A iSETS) G,318,677 6.229,268 TOTAL LIABILITIES 110,710,014 111,810,887 TOTAL CAPITAllZATION AND LIABILITIES $173,793,095 $165,145,126 1

See acco panying notes.  !

i

_ J

N KISSIMMEE UTILITY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1991 AND 1990

1.

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Kissimmee Utility Authority (KUA)are presented in conformity with generally accepted accounting principles. The statements are substantially in conformity with accounting principles and methods prescribed by the Federal Energy Regulatory Comm!ssion and other regulatory authorities.

Entity Definitigm The accompanying financialstatements present the financial position, results of operations and cash flows of the KUA in accordance with NCGA Statement No. 3," Defining the Governmental Reporting Entity", and subsequent interpretation No. 7 clarifying the application of Statement No. 3. The reporting entitv for the KUA includes all functions in which the Board of Directors exercise oversight responsiL.ilty. Oversight responsibility includes, but is not limited to, financialinterdependence, selection of governing authority, designation of management, ability to significantly influence operations and accountability for fiscal matters. As a result of applying the above reporting entity criteria, no other component units exist in which the KUA has any oversigfr!lesponsibility which would require inclusion in the KUA's financial statements.

The Kissiminee Utility Authority we created effective October 1,1985 by the City of Kissimmee Ordinance #1285 adopted on February 19,1985 and ratified by the voters on March 26,1985. The Authority Board has 6 members. The Mayor of the City of Kissimmee is a non voting Ex Off@o member. The 5 voting members are nominated by the Board and ratified by the City Commission.

The Authority has exclusive jurisdiction control and management of the electric utility and the following factors indicate that the KUA is properly excluded from th9 City's financial statements:

1. Subsequent to Board appointments being ratified by the City Commission, there is no continuing relationship.

2. KUA management is selected by the Board,

3. The City has no authority to interfere with KUA's operation.

4. KUA is responsible for its financial affairs including rate setting and the disposition of any surplus.

5, The City does not guarantee KUA's outstanding debt.

Begulation: According to existing laws of the State of Florida, tne six members of the KUA act as e the regulatory authority for the establishment of electric rates. The Florida Public Service l Commission (FPSC) has authority to regulate the electric " rate structure" of municipal utilities in Horida. It is believed that " rate structurns" are clearly distinguishable from the total amount of revenues which a particular utility may receive from rates, and that distinction has thus far been carefully made by the FPSC.

l l

twemy four.

l

l i

l KISSIMMEE UTILITY AUTHORITY STATEMENT OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30, 391 AND 1990 1991 19 %

CASH FLOWS FROM OPERATING AClivillES Operating income $12,637,867 $14,533,267 ADJUSTMENTS TO RECONCILE OPERATING INCOME TO NET CASH PROVIDED BY OPERATING AC11VITIES:

Depreciation and amortization 6,015.078 6,751,704 Cumulative effect of accounting change 688,743 0 Interest on customer deposits (107,934) (68,572)

CHANGESIN CURRENT ASSETS AND LIABILITIES:

Accounts receivable, net of reserves 1,232,332 (1,632,184)

Inventory (34 ,836) (1,742,189)

Due from other governments 1tn.199 128,013 Deferred cost of power adjustment 1,648,935 (1,160,207)

Accounts payable (23,460) 545,634 Due to other governments (524,521) 327,767 Other assets 82,188 (115.432)

Other liabilities 436,239 322,519 NET CASH PROVIDED BY OPERATING ACTIVITIES 21,900,830 17,884,060 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition of capital assets and nuclear fuel (11,977,136) (10,267,488)

Prinicpal paid on revenue bonds (1,645,000) (1 550,000)

Interest paid on revenue bonds (6,985,147) (7,087,182)

Caoital contributed by developers 1.451,002 1,406,407 NET CASH USED FOR CAPITAL AND RELATED FINANCING ACTIVITIES (19,156,281) (17,498,263) '

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of investment secunties 0 (4,402,600)

Increase in deterred compensation plan assets (192,364) (123,682)

Proceeds f rom matunties of investment securities 4,457,443 4,439,672 Interest and dividends on investments 3,843.174 4,325,358 NET CASH PROVIDED BY INVESTING ACTIVITIES 8,108,253 4.238,748 NET INCREASE IN CASH AND CASH EQUIVALENTS 10,852.802 4,624,545 CASH ANC OASH EOUlVALENTS AT BEGINNING OF YEAR 45,724,836 41.100.291 CASH AND CASH EOUlVALENTS AT END OF YEAR $56,577,638 $45,724,836

=

see accompanying notes 1

l

The General Manager is authorized to approve all budget transfers and those transfers are repo, led to the Board of Directors monthly. Budget amendments which increase the adopted budget are approved by the Board of Directors. Both budget transfers and budget amendments were mado during the fiscal year.

Operating expense budgets lapse at year end. Capital projects are budgeted for the project life rather than for the currer" fiscal year. The unexpended portion of project budgets do not lapse until the conclusion of the project.

Revenues: Kissimmee Utility Authority recognizes revenues when service is rendered to customers.

Utility Plant: Property, plant and equipment are stated at cost when purchased or constructed.

Depreciation is provided using the straight line met' / 'he e simated usefullives of the varicus classes of depreciable property, plant and equipn nt +- *%"

Structures & !mprovements at t u;. SO Generatica Plant & Equipment 13 lu to 50 General Machinery & Equipmer,t 6 2/ ) to 40 The cost of maintenance and repairs, including renewal of minoritems of property,is charged to operating expense as incurred. The cost of replacement of depreciable property units, as distinguished from minor items,is charged to utility plant. The cost of units replaced or retired, including cost of removal, not of any salvage value,is charged to accumulated depreciation.

((uclear Fuel: Amortization of nuclear fLet is based on cost, which is prorated by fuel assembly batch in accordance with the thermal energy that each assembly produces. The KU A is currently paying 1 mill per kWh for residual future disposal costs in addition to estimated labor and waste burial costs.

Inventori13: Inventories are stated at the lower c' cost or market, with cost determined using the weighted average cost basis.

Q1her Asselt Unamortized bond discounts and issuance costs on long-term debt are amortized overthe life of the issue on a straight line basis. The KUA considered the etfective interest meihod of amortizing bond discounts and determined that no material difference results from the continued use of the straight line method. <

twenty-six

_ _ ._ _ . _ . _. . _ __ _ _ _ . . _ _ . _ . . _ _ _ .._m As noted above,the FPSC hasjurisdiction to regulate electric" rate structures"of munic: pal utilities.

In addition, the Florida Enctgy Efficiency and Conservation Act has given the FPSC exclusive authority to approve the construction of new power plants under the Flohda Electrical Power Plant Siting Act. The FPSC also exercisesjurisdiction under the National Energy Act,includmg electric use conservation programs.

Operations of the KUA are subject to environmental regulations by Federal State and local authorities and to zoning regulations by local authorities. Federal and State standards and procedures that govern control of the environment can change. These changes can arise from continuing legislative, regulatory and judicial action respecting the standards and procudures.

Therefore, there is no assurance that the units in operation, under construction, or contemplated will always remain subject to the regulations currently in of fect or will always be in compliance with future regulations.

An inability to comply with environmental standards or deadlines cou'd result in reduced operating levels or complete shutdown of individual electric generating units not in compliance. Further-more, compliance with environmental standards or deadlines may substantially increase capital and operating costs.

Basis of Att9 Muting 1 The Financial Statements are presented on the accrual basis of accounting. Under this basis, revenues are recognized in the period camed and expenses are recognized in the period incurred. Retail electric service rates are designed to recover debt service and operating fund requirements and exclude depreciation expense and other noncash expense  ;

items. This method of rate setting results in costs being included in the determination of rates in different periods than when these costs are recognized for financial statement purposes. The effect of these differences are recognized in the determination of net income in the period that they occur in accordance with the KUA's accounting principles. ,

Budget: The Kissimmee Utility Authorityis required by charter to adopt an Annual Budget. The Budget is adopted on a basis consistent with generally accepted accounting principles.

l The Kissimmee Utility Authority follows these procedures in establishing the annual budget:

1 The General Manager submits to the Board of Directors a proposed operating budget for the ensuing fiscal year. The operating budget includes proposed expenditures and the sources of funds to finance them.

2. During several workshops, which are open to the public, the staff and Board of Directors discuss and revise the submitted budget. A public hearing is conducted to obtain ratepayer comments.

3. The budget is approved by the Board of Directors and becomes the basis for operations for the ensuing fiscal year.

Eaymentti_to the City of Kissimmet By charter the Kissimmee Utility Authority is required to pay to the City of Kissimmee a minimum of $6.24 per 1,000 kWh. This payment is treated as an operating and maintenance expense in the statement of revenue, expenses and cash flows.

Reclassification: For comparability purposes certain reclassifications have been made to the 1990 financial statements to conform with the 1991 financial statement presentation.

Cash and Cash Eaulvalenis Cash and cash equivalents include short term, highly liquid '

investments that are both readily convertible to known amounts of cash and whose original maturity is ti,ree months or less. These consist of repurchase agreements, the State Board of Administration Pool and the carrying amount of KUA's deposits with financial institutions.

2. DEPOSITS AND INVESTMENTS Florida Statutes, the KUA Charter and investment Policies authorize the investment of excess funds in time deposits or savings accounts of financial institutions approved by the State Treasurer, obligations of the United States Government and certain instruments guaranteed by the U.S. Government. Investments may include repurchase agreements. Revenue Bond Covenants also restrict the type and maturities ofinvestments in the required trust f unds (See Note 8).

Investments (excluding deferred compensation plan assets) are recorded at cost, which approxi-mates market. Deferred compensation plan assets are stated at market value (see Note 7).

Adjustments are made to cost for any premiums or discounts. Premiums and discounts are amortized over the life of the investments using the straight line method.

Investments must be in KUA's name and placed in a safety-deposit box in a bank or institution carrying adequate safety deposit insurance or represented by bank trust receipts which enumer-ate the various securities held, The Statutes also require depositories of public funds to provide collateral each month at least equal to 50 percent of the average daily balance of all public deposits in excess of deposit i insurance. Any loss not covered by the pledged securities and deposit insurance would be assessed by the State Treasurer and paid by other qualified public depositories.

i l

twenty-eight

- - - . . .-. . _ _ . . __ _ ~

l Hitsenesi Reserves representing the excess of amounts provided for certain restricted asset accounts over the liabilities payable there from are established by a reservation of retained earnings. The restricted assets and liabilities are used to indicate a segregation of a portion of retained earnings equal to the net current assets that are restricted for meeting various covenants l as may be specified and defined in the various revenue bond indentures. Usage of reserves has been limited to the following items:

Reserve for Bond Retirement restricted for future servicing of the revenue bonds.

Reserve for Bond Asset Replacement . restricted for meeting of various contingencies as may be so specified and defined in the indenture (frequently referred to as renewal, replacement and improvement).

Designations: Certain designations are made in the financial records during the fiscal year to identliy a portion of cash and investments intended to be used for specific purposes in a future period. Designated assets are as follows:

SEPTEMBER 30 1991 1990 Decommissioning (Note 11) $ 110,294 $ 483,500 Self Insurance 1,829,243 1,369,550 Capital improvements 28,600,419 24,462,449 Rate Stabilization 0 1,480,930 Deferred Compensation Plan Assets 626.365 434.001 TOTAL $ 31,166,321 $ 28,230,430 Contributed Capitall Prior to October 1,1990 the Authority recorded contributed capital directly as Total Capitalization. In October 1990 the Authority changed its method of accounting for contributed capital by reclassifying the balance as a reduction of Plant and began amortizing the contributions over the life of the related plant. This method was adopted to conform with industry practices. The effect of the change in 1991 was to decrease depreciation expense and increase income before the cumulative effect of the change in accounting principles by approximately i

$244,000. The amount of amortization related to years prior to October 1,1990 was recorded as a cumulative effect adjustment. The pro forma amounts below reflect Net income as if the current method had been in effect during the past two years.

1991 1990 _ _

As Pro As Pro Reported Forma Reponed Forma Cumulative Net income $ 9,748,842 $ 9,060,099 $11,235,497 $11,487,701 Deferred Cost of Power Adiustment: Deferred cost of power adjustment represents the KUA's cost of power adjustment revenues collected, but for which costs have not been incurred or costs that have been incurred, but for which cost of power adjustment revenues have not been collected.

At September 30,1991 and 1990 the carrying amount of KUA's deposits with financialinstitutions was $(518,508) and $495,647 respectively, and the bank balance was $248,334 and $661,166 respectively. All bank balances are fully insured in accordance with Florida Statute 280, which established the multiple fmancial institution collateral pool.

3. PROPERTY, PLANT AND EQUIPMENT ,

Property, plant and equipment is comprised of the following at:

SEPTEMBER 30 4 1991 1990 Nuclear production $ 4,418,212 $ 4,041,243 Steam production 17,429,970 16.349,742 Other production 43,097,858 42,244,145 Transmission plant 21,454,602 21,458,401 Distribution plant 33,338,980 31,424,479 General 9.582.702 8.142.564 SUBTOTAL $ 129,322 332 $1P3,660,574 Less: accumulated deprociation (38.243322) (32.551.317)

TOTAL $ 91,078,740, $ 91,109,257 ,

4. CONSTRUCTION PROJECT INTliREST COST in accordance with Statement of Financial Accounting Standards No. 62, " Capitalization of interest Cost in Situations involving Certain Tax Exempt Borrowings and Certain Gifts and Grants," the KUA has recorded interest cost on long term debt issued to finance specific capital projects as constnJction in progress. KUA capitalized interest of $68,287 in 1990. There was no interest cytalized in 1991.

5. PARTICIPATION AND POWER SUPPLY AGREEMENTS Kissimmee Utility Authority is party to the following participation and power supply a0reements at September 30,1991:

A. Slanton Energy C3nter Unit No.1 (SEC 1); In 1984, the KUA entered into a Participation Agreement with Orlando Utilities Commission (OUC) to acquire a 4.8193% (20MW) undivided i ownership interest in SEC 1 and to participate in the use of related common and external facilities.

The capacity and energy of the KUA's ownership interest in SEC 1 is transmitted throu0 h OUC's transmission facilities to the KUA's transmission facilities. SEC 1 is part of the Stanton Energy Center, which involved the development of an approximately 3.200 acre plant site located approximately 20 miles northeast of the City of Kissimmee. In addition to SEC 1, the Stanton Energy Center is capable of accommodating three more units with a total capacity at the Stanton thirty

At year end, the carrying amount and rnarket value of investments (in thousands of dollars) classified by category of credit risk were:

SEPTEMBER 30.1991 CATEGORY OF RISK CARRYING MARKET 1 2 3 AMOUNT VALUE Repurchase Agreements $- 6,087 6,087 6,087 U.S. Gov. Secunties -

436 -

436 466 U.S. Instrumental Sec. 4.128 -

A.128 4.229

$ 4,128 $ 436 $ 6,087 $10,651 $10,782 State Board of Administration Pool 50.437 SDd2Z Total investments $61,088 $61,219 SEPTEMBER 30.1990 CATEGORY OF RISK CARRYlNG MARKET l 1 2 3 AMOUNT VALUE Repurchase Agreements $ -

6,390 6,390 6,390 U.S. Gov, Securities 4,403 451 -

4,854 ~ 4,885 U.S. Instrumental Sec. 4,225 -

4,225 4.326

$ 8,628 $ 451 $ 6,390 $ 15,469 $ 15,601 State Board of Administration Pool 38.839 38.839 i Total Investments $54,308 $54,440 Level of credit risk assigned to the above investments include:

Category 1 - Insured or registered, or securities held by the Kissimmee Utility Authority or its agency in the Kissimmee Utility Authority's name.

Category 2 - Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the Kissimmee Utility Authority's name.

Category 3 - Uninsured and unregistered, with securities held by the counterparty's trust department or agent but not in the Kissimmee Utility Authority's name.

The investments in the State Board of Administration Pool (representing approximately 82 percent of totalinvestments)is collaterlized in accordance with Florida Statutes. Allinvestments are delivered to the SBA's custody bank and held for the SBA's account according to their instructions.

Repurchase agreements result entirely from a banking services agreement requiring overnight repurchase agreements of securities guaranteed by the United States Government At Septem-ber 30,1991 and 1990, the balance sheet also includes $130,567 and $132,544 respectively of accrued interest on investments.

1 J

l It has been determined tnat none of the participation agreements to which KUA is a party meet the criteria of a joint venture as specified by the National Council on Governmental Accounting 4 Statement No. 7. The KUA lacks operational control over the SEC1, CR3, Indian River and FMPA  !

projects. No separate governing authority exists for any of the projects.

According to the participation agreements, each participant must provide its own financing and each participant share of expenses for operations of the plants are included in the corresponding operating expenses of its own income statement. The amounts of utility plant in service do not include the cost of common and external facilities for which participants pay user charges to the operating entity. Accumulated depreciation on utility plant in service is determined by-each _

l participant based on their depreciation methods and rates relating to their share of each plant.

! Following is a summary of KUA's propodionate share of each jointly owned plant at:

SEPTEMBER 30.1991 INDIAN SEC 1 CR3 RIVER Utility Plant in Service $ 17,429,978 $ 4,418,212 $ 2,678,954 Less: Accum. depreciation (2.009.261) (1.775.467-) ( 241.630)

- Net Plant in Service $ 15,420,717 $ 2,642,745 $ 2,437,324 SEPTEMBER 30.1990 ,

INDIAN ,

SEC 1 CR3 RIVER Utility Plant in Service $ 16,349,742 $ 4,041,243 $ 2,678,954 Less: Accum. depreciation (1.497.927) (1.572.265) (161.261) !

Net Plant in Service $ 14,851,815 $ 2,468.978 $ 2,517,693

6. PENSIONS  :

The KUA employees participate in a multiple employer cost sharing Retirement Plan for both '

employees of_the City of Kissimmee and Kissimmeo Utility Authority (The Plan). The Plan was established in 1968 and amended and restated'in 1975 to cover substantially all full time employees, except City police officers and firefighters. Annual costs of the pension plan are actuarially computed and include amorlization of past service costs over a 30 to 40 year period

-beginning January 1,1974. An actuarial study was conducted at January 1,_1991 and 1990.

l l

.. _- .- - - - . - - - - . _ - - - ~..

I l

Energy Center of approximately 2000 MW. Each participant in the project financed their share of the cost independently and no liability exists for the debt service required by the other participants.

KUA's cost was fincnced by the proceeds of the 1984 Bonds and revenues of the system. KUA's benefit in the Agreement is the added availability of capacity and energy of the facilities through l its participation in future energy purchased and it does not otherwise maintain an ongoing financial '

interest or responsibility for the project.

l Stanton Energy Center began commercial operations on July 1,1987. The KUA does not exercise significant intluence or control over operating or financial policies of OUC.

B. Crystal River Unit No. 3 (CR3): In 1975, the KUA entered into a Participation Agreement with Florida Power Corporation (FPC) to purchase a .6754% undivided interest in their 806 net MW nuclear powered electric generating plant designated Crystal River Unit No. 3. The KUA is billed for its share of operating and capital costs. Capital costs are included in Property, Plant and Equipment and operating costs are included as power generation expenses. KUA's benefit in the Agreement is the added availability of capacity and energy of the facilities through its participation in future energy purchases and it does not otherwise maintain an ongoing financialiritorest or responsibility for the project.

The KUA does not exercise significant influence or control over the operating or financial policios of FPC.

C. In.dian River C.pn)bustion Turbine; in 1988, the KUA entered into a Participation Agreement with Orlando Utilities Commission (OUC) to acquire a 12.2% (11.7 MW) undivided ownership interest in the Indian River Combustion Turbine and participate in the use of related common and external facilities. Each participant in the project financed their share of the cost independe, My and no liability exists for the debt service required by the other participants.

The KUA does not exercise significant int'uence or control over the operating or financial policies of OUC.

D. Florida Mun!cloal Power Agency (FMPA)t in 1981, the KUA entered into a Power Supply Acquisition Agreement with the FMPA. KUA is to receive approximately 7 MW of power from the St. Lucie nuclear power plant. Costs associated with this agreement are included in purchased power expenses.

The KUA does not exercise significant influence or control over the operating or financial policies of FMPA.

. . . ~ . . . _ . , . - _ -

P The current year payroll for all KUA employees was $6,583,168. Membership in the Plan is comprised of the following:

Retirees receiving benefits 36 Beneficiaries receiving benefits 27 Vested terminated employees 10 Active employees:

Fully vested 97 Partially vested 119 Nonvested .129 418 Normal retirement eligibility is defined as attainment of age 65 and completion of 10 years of credited service. Eligibility for early retirement is attained at age 55 and completion of 15 years of credited service. The Plan also provides for disability retirement and a death benefit. The prior year employee contribution rate was 1% (2% if member of barDaining unit) of basic annual compensation. A plan amendment in 1986 provides that the employee contribution rate be reduced 1% each year. The shortfallis handled through an increase in normal cost and through the establishment of a plan amendment base to be amortized over 30 years. KUA's contribution is calculated by the actuary based on membership.The administrative cost of the Plan is allocated proportionately between the City and KUA and paid separately.

As of January 1,1991, the pension benefit obligation was calculated as follows:

Retirees and beneficiaries currently receiving benefits and terminat6d employees not yet receiving benefits: $ 2,816,971 Current employees:

Accurnulated emoloyee contributions includin0 allocated ;nvestment income 931,091 Employer financed - vested 3,701,094 Employer financed - nonvested 3.893.641 Total pension benefit obligation $ 11,342,797 Less actuarial value of assets 11148.5B6 Unfunded (assets in excess of) pension benefit ob5gation $ (1,805,789) i i

The actuarial assumptions used to compute contribution requirements were the same as those used to compute the pension benefit obligation. The pension benefit obligation is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step-rate benefits estimated to be payable in the future as a result of employee service to date. The measure, which is the actuarial present value of credited projected benefits,is intended to help users assess the System s funding status on a going-concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among Public Employees Retirement System (PERS) and employers.

. thirty-four

- - .- . - . _ =_ _ - _ - . . , . - - . - _- .

The table below shows televant data for the Plan as a whole and for KUA's portion where this was available:

1991 1990 Total Plan:

Unfunded accrued liability $ 2,046.680 $ 658,088 Value of assets 13,148,586 12,173.234 Vested benefits 7,449,156 6,359,395 Nonvested benefits 573,381 435,592 j Normal Cost 851,406 695,768 Amortization of Unfunded liability 171,582 60,939 '

Interest Adjustment 76,724 56,753 Actuarial funding requirement 1,099,712 813.460

% of  % of Total Total KUA'S Portion: .. Plan fjan Vested benefits 3,083,013 41.4 2,601,030 40 9 Nonvested benefits 296,541 51.7 222,571 51.1 Normal Cost 393,539 301,495 Amortization of Unfunded liability 76,654 27,020 Interest Adjustment 35,264 24,639 Actuarial funding requirement 505,457 45.9 353,154 43.4

% of  % of Covered Covered Payroll Pavroll Covered Payroll 4,162,167 3,235,960 Normal Cost 393,539 9.4 301,495 9.3

( Amortization of Unfunded liability 76,654 1.8 27,020 .8 Employer Contributions 505,457 12.1 353,154 10.9 The Entry-Age Normal-Level Percentage of Pay actuarial cost method was utilized in the January 1,1991 and 1990 valuations. The significant assumptions for this Plan are:

1. Life expectancy M calculated using the GA 1951 Male Mortality projected to 1965 Ly Scale C with a five year set back for females;

2. an interest return of 7.5% compounded annually;

3. a salary factuase of 6% per year.

As of January 1,1991, the plan included 418 employees at a total annual basic compensation of

$9,139,854. Of these numbers, KUA employees were 168 at a total annual basic compensation of $4,162,167.

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