ML20108C699

Comprehensive Annual Financial Rept FY95 Kissimmee Util Authority

ML20108C699
Person / Time
Site:	Crystal River
Issue date:	09/30/1995
From:	Hostetler J, Johnston A KISSIMMEE UTILITY AUTHORITY
To:
Shared Package
ML20108C682	List: 3F0496-13, Forwards Annual Financial Rept for 1995 & Annual Financial Repts for Ten Participating Owners of Crystal River 3 ML20108C685 ML20108C689 ML20108C699 ML20108C712 ML20108C734 ML20108C739 ML20108C751 ML20108C752
References
NUDOCS 9605070107
Download: ML20108C699 (56)

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( CEL EBR A TING OUR PAR TNERSHIP WITH THE ENVIRONMENT l! Comprehensive Annual

! Financial Report Fiscal Year Ended September 30,1995 AUTHORITY D AOKO O 302 '

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,i L. Kissimmee Utility Authority Kissimmee, Florida i

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f COMPREHKNSIVE AXNI~AL FINANCIAL REPORT FISCAL YEAR ENDED SEPTEMBER 30,1995 Joseph Hostetler Ann Johnston Director of Finance Manager of Accounting O

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Listing of Officials Table of Contents lt 4 ,

Letter of Transmittal .

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.:S'300:70RCLS AS 07 8F3BR30, 995 P

BOARD OFDIRECTORS George A. Gant, Chainnan .

Larry W. Walter, Vice-Chairman Harry Lowenstein, Secretary Kenneth B. Guthrie, Asst. Secretary Ron Dorsett, Acting Mayor (Ex-Officio)

Edward Brinson, Attorney

, PRESIDENT & GENERAL MANAGER James C. Welsh .

t A TTORNEY Brinson, Smith, Smith, Lewis & Starr P.A.

DEPARTMENT DIRECTORS Christine Beck, Director of Customer Service Kenneth L. Davis, Director of Engineering

Joseph Hostetler, Director of Finance Kenneth Lackey, Director of Transmission & Distribution A.K. Shanna, Director of Power Supply James Tillman, Director of Materials Management Neville Turner, Director of Personnel & Risk Management Dennis Wick, Director ofInfonnation Systems V

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TABLE OF CONTENTS

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a. Introductory Section:

Ti t l e Pa g e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i Prin cip al O fficials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v Ta bl e o f Co n t e n ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii Lette r o f Tra ns m i tt al . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1 Certificate of Achievement for Excellence in Financial Reporting . . . . . . . . . . . A-9 j O rga n iza tio n al Ch a rt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11 ,

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' 1 s Financial Section: i 4

it j! A u d i t o r's Re p o rt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-3 General Purpose Financial Statements:

B ala n c e S h ee ts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6 Statements of Revenue, Expenses & Changes in Accumulated Reinvested I E a rn i n gs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-8 i

' Sta tem en ts of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-9 i Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-10 1

i a Statistical Sectioni I

[ Table 1 - Operating Revenues by Source / Operating Expenses by Department . C-3 Table 2 - Ten Highest Meter Locations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-4

(' Ta ble 3 - In s u ra n ce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-5 Table 4 - General Employees Retirement Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . C-6 Table 5 - Revenue Bond Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-7 Table 6 - Residential Electric Meters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-8 Ta ble 7 - Po p ulatio n . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-9 Ta ble 8 - Cli m a t e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-10 Table 9 - Sch ool En rollm en t . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-11

- Ta ble 10 - Il o u s i n g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-12 vil

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! e o. son:m s .gs e um: s. n h KISSimmEE R UTILITY

$ AU1HORITY December 9,1995 I Board of Directors i

Kissimmee Utility Authority The Comprehensive Annual Financial Report (CAFR) of the Kissimmee Utility Authority (KUA),

for the Fiscal Year ended September 30,1995, is submitted herewith pursuant to Section 10 of the KUA Charter, Florida Statutes Chapter 166.241(1) and Chapter 10.550 of the Rules of the Auditor General of the State of Florida. Responsibility for both the accuracy of the data, and the

.,- completeness and fairness of the presentation, including all disclosures, rests with the KUA. This .

{ CAFR was prepared by the staff of the Finance Department of the KUA. We believe the data, as presented, is accurate in all material respects; that it is presented in a manner designed to fairly set ,

n forth the financial position and results of operations of the KUA; and that all disclosures necessary l j to enable the readers to gain the maximum understanding of the KUA's financial activity have been included.

I The CAFR is presented in three sections: introductory, financial and statistical.

Section I: Introdactory Section - Contains the Letter of Transmittal and other such i material as may be useful in understanding the reporting entity.

[! Section II: FinancialSection - This section of the report contains the auditors' report and financial statements of the KUA which present fairly the financial position, results of operations and cash flows for the fiscal year.

I Section III: Statistical Section -

This section presents selected financial and demographic information which will be beneficial to the reader in understanding the KUA's historic growth and its future growth prospects.

In 1983, the City Commission of the City of Kissimmee established a Utility Study Committee.

,_ The report of this committee recommended establishing a separate authority. In February 1985, the City Commission adopted Ordinance #1285 establishing the KUA, subject to approval by a majority of qualified voters. In March 1985, the voters of Kissimmee did approve establishing the l

. KUA effective October 1,1985. The KUA Chaner (Ordinance #1285) states that the KUA shall be responsible for the development, production, purchase and distribution of all electricity and such other utility services as may be designated by resolution by the City Commission. The KUA currently provides electric services in an 85 square mile service territory in the Kissimmee area.

All of the service territory is within Osceola County. This report includes all funds of the KUA.

Servmg the Kt:.surutsee Area Since 1901 A-1 j i

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This report does not include the financial activities of the City c#Kissimmee. Reference should be made to their report published separately.

ECONOMIC CONDITION AND OUTLOOK .

The KUA service territory is located approximately 18 miles south of Orlando and 7 miles east of Walt Disney World. This area is one of the fastest growing areas in the State of Florida. The  !

I area's rapid population growth has continued this past year, but at a somewhat lower level than in I

recent years. This trend is expected to continue through the end of the century. Customer

. growth is expected to increase from approximately 43,000 in 1996 to approximately 57,000 by the year 2005. Sales are expected to increase from approximately 858,400 MWh in 1996 to approximately 1,133,700 MWh by the year 2005.

MAJOR INITIATIVES f For the year. During Fiscal Year 1995, the KUA completed several major projects that ,

improved our system. These included a new gas turbine and combined cycle facility at Cane Island in joint-ownership with Florida Municipal Power Agency (FMPA); constmetion of a new v substation and related transmission lines; upgrade of our Feeder Distribution systems; and the continued expansion of a Load Management Program KUA also e'ntered into transfer agreements with two Cities for the transfer of entitlement shares in the Stanton Energy Center  ;

Coal Plant located 20 miles northeast of the City of Kissimmee. This action will result in a i cheaper fuel source in the future and will help keep KUA's rates competitive. j l

For the Future. During the next ten years, the KUA has identified major projects that will help l meet the need of projected customer growth. The key projects during the ten year planning  ;

period deal with construction and expansion of the KUA's transmission and distribution system and completion of modifications to the KUA Administration facility and the transfer of all ,

administrative departments to this location.

FINANCIAL INFORMATION l I

Management of the KUA is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the KUA are protected from loss, theft or misuse , ,

and to ensure that adequate accounting data are compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. In developing and modifying the KUA's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not i absolute, assurance regarding:

1. The safeguarding of assets against loss from unauthodzed use or disposition; and

2. The reliability of financial records for preparing financial statements and maintaining accountability for assets.

The concept of reasonable assurance recognizes that:

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1. The costs of a control should not exceed the benefits likely to be derived; and

2. The evaluation of costs and benefits requires estimates and judgments by management.

All internal control evaluations occur within the above framework. We believe that the KUA's internal accounting controls adequately safeguard assets and provide reasonable assurance of  ;

j proper recording of financial transactions. l i

l Annual Budeets i

The KUA follows these procedures in establishing the annual budget:

{, 1. The President & General Manager submits to the Board of Directors a proposed operating and capital 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 i

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.

The KUA is required by charter to adopt an annual budget.

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Budgetary control is provided by monthly revenue, expense and financial analysis reports. These interim reports are provided to the Board of Directors for review in advance of a formal verbal presentation of financial activity at each monthly Board meeting.

Cash Manneement The KUA has a banking service agreement with a local depository bank that provides that all funds in excess of a compensating balance will earn interest through overnight repurchase agreements. The KUA also participates in the State of Florida State Board of Administration's program for pooled investment of local government surplus funds. During 1995, the KUA purchased investments for certain designated funds in accordance with established policies and procedures. The cash management program involves a theory of keeping principal and earnings free from unreasonable risk, maintaining reasonable liquidity to meet maturing obligations and maximizing return through the use of competitive rate comparisons from various investment sources. ,

I Debt Manneement The KUA attempts to minimize external financing needs through internal generation of capital funds. The purpose of this financial policy is to establish and maintain a debt-to-equity ratio and a coverage ratio that would minimize the impact of future debt issues for generation and

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. . i transmission plants. In Fiscal Year 1992, an overall 15% rate decrease was implemented along with a new fiscal policy which includes the following:

1, Bond proceeds should be spent on all generation (capacity) and transmission projects; '

2. Current earnings (cash provided from operations) should be adequate to fund principal payments and year to year capital needs generally less than $100,000;

3. The Reserve for Future Capital Outlay funds (accumulated funds from prior years) should be used for all other projects;

4. Maintain a minimum of three months of Operating & Maintenance expenses (excluding Depreciation and Cost To Be Recovered From Future Revenue) in j unrestricted operating cash; ,  ;

5. , Maintain a minimum of $5,000,000 in the Reserve for Future Capital Outlay; and

6. Maintain a minimum of 1.5 debt service coverage.

The KUA projects the need to issue approximately $10,000,000 additional debt in Fiscal Year 1999 to fund the construction of a substation. In 1987 a major refunding bond issue was '

accomplished. In 1991 and 1993 major improvement and refunding bond issues were  !

accomplished which reduced our overall debt costs on existing debt and provided construction funds for major generation and transmission projects.

The principal, premium if any, and uiterest on all outstanding Bonds are payable solely from the Net Revenues derived by the KUA from the operation of the System. These obligations do not l constitute liens upon the System or on any other property of the KUA or the City of Kissimmee, i

but are a lien only on the Net Revenues and special funds created by the Bond Resolution and m the manner provided therein, t

Balst i In December 1974, the City Commission adopted an ordinance permitting the City (and now the KUA) to pass on directly to the customer incremental fuel cost increases on a monthly basis. This Cost of Power Adjustment ("COPA") has eliminated the regulatory delay that has been a problem i

for many other utilities. Additionally, in June 1983, the City Commission modified the COPA Ordinance to allow the System to project the billed COPA to a levelized rate for the Fiscal Year.

i The negative or positive COPA account balance was used in calculating the projected COPA rate for the next Fiscal Year. In July,1991 the Board of Directors approved a COPA Resolution that allows automatic monthly adjustments to the COPA rate based on a weighted average using the prior month, estimated current month and following monthly costs. In May 1994 the Board of i

Directors approved a resolution permitting the KUA to pass on directly to the customer conservation costs on a monthly basis similar to the "COPA" mechanism. This Energy ,

Conservation Cost Recovery (ECCR) Rate will be adjusted semi-annually to reflect changes in conservation costs. The ECCR and COPA rates have been combined and are presented on the customer's bill as COPCA (Cost of Power and Conservation Adjustment).

In addition to the COPA, the City has from time to time changed base rates as necessary to assure ,

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1 proper operation of the System. Base Rate increases of 7%,6.2% and 2% were approved in Fiscal Years 1983,1984, and 1985 tespectively. In 1985, the KUA implemented a program of rate stabilization in an effort to prevent uneven increases in total electric charges to the customers.

The Base Rate did not change in 1986. In Fiscal Year 1987 an effective decrease in the overall base rates of 1% was implemented, while in Fiscal Year 1988 a 4.1% decrease was approved by the KUA's Board of Directors affecting the commercial classes only. The Base Rate did not ,

change in Fiscal Year 1989. In Fiscal Year 1990 the Florida Gross Receipts Tax of 1.5% was l removed from the base rate and shown separately on customer bills as required by the State of Florida. This effectively reduced the base rate. The base rate did not change in Fiscal Year 1991.

An approximate 15% rate decrease was, implemented in Fiscal Year 1992 to become more competitive with neighboring utilities and promote growth within our service territory.

The KUA, additionally, maintains a computerized cost of service study which is updated bi-annually with:

a. past years' audited figures to survey the adequacy of each rate and rate stmeture; and

b. the current years' budgeted amounts to predict the need for a rate change.

Customer rates and rate structures are intended to follow guidelines of the Florida Public Service Commission and, as such, should be " fair, just and reasonable" It is also intended that they are '.

competitive with neighboring utilities and equitable between rate classes.

Financial Condition Comparative data for the last three fiscal years is presented in the following tables:

1221 1224 19_91 Utility Plant - Net $165,909,770 $151,164,291 $102,481,131 Current Assets - Cash & Cash 12,573,913 13,250,414 8,928,789

. Equivalents, Investments and Interest ,

Receivable Designated Assets-Cash & Cash 44,261,388 38,535,595 33,989,252

. Equivalents, Investments and Interest Receivable .

Current Ratio 3.86 to 1 4.32 to 1 2.88 to 1 Operating Income 11,634,804' 9,912,701 7,343,230 Reinvested Earnings 9,575,615 6,014,207 1,180,878 Income available for debt senice 28,350,807 24,218,492 20,823,098 Debt Senice Requirement 8,812,408 9,186,280 10,482,367 Debt Service Coverage 3.22x 2.64x 1.99x A-5

Continued expansion of the generation, transmission and distribution system has caused significant growth in the values of the utility plant from FY 1993 to FY 1995. Designated Cash and Cash Equivalents, Investments and Interest Receivable have increased since FY 1993 due to positive reinvested earnings during FY 1994 and 1995. Reinvested Earnings have increased due to an approximate 6% increase per year in MWh sales, higher interest revenue and lower interest expense due to the recapitalization of excess construction bond funds to capitalized interest expense that occurred during FY 1995. Income available for debt service increased 17% while the debt service requirements decreased 4% from FY 1994 to FY 1995 resulting in a 22%

increase in the debt service coverage. Our current customer growth rate and projected increase in metered sales should result in similar operating results in FY 1996 as we experienced in FY 1995.

Risk Manneement ,

During the current Fiscal Year the KUA has continued to accumulate resources in the Co-Insurance Fund. The amount in the Fund at September 30,1995 was $2,297,605.

Management is continuing to review the Insurance Program to determine the appropriate amount of risk in terms of higher deductibles that can be assumed by the KUA. In addition, various risk control techniques including employee accident prevention training have been continued during the year to minimize accident related losses.

Future Prosnects Demand for electric power from the sy' stem has significantly increased in recent years and is projected to continue to increase as the Kissimmee area grows. In response to this growth the KUA will continue its fisi:al policy developed in FY 1992 and complete the transmission improvements needed throughout the system. The KUA is carefuJly watching the growth of the '

surrounding community and is methodically building its system resources to a level adequate to serve the area for many years to come. The KUA also is carefully watching the developments of increased competition currently being discussed in the electric utility industry to take advantage of opportunities that might develop in the future.

OTIIER INFORMATION Independent Audit State Statutes require an annual audit by independent cehified public accountants. The accounting firm of Coopers & Lybrand L.L.P. was selected by the KUA's auditor selection committee. The auditor's report on the general purpose financial statements is included in the financial section of this report.

Awards The Government Finance Oflicers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the KUA for its CAFR for the fiscal year ended September A-6

30, 1994. The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports.

In order to be awarded this Certificate of Achievement, a government unit must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards. Such comprehensive annual financial report must satisfy both generally accepted accounting principles and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. The KUA has received a Certificate of Achievement for the last eight consecutive years. We believe our current report continues to conform to the' Certificate of Achievement program requirements, and we are 2

submitting it to GFOA.

In addition, the KUA also received the GFOA's Award for Distinguished Budget Presentation for its annual budget for the Fiscal Year beginning October 1,1994. To qualify for the Distinguished Budget Presentation Award, the KUA's budget document was judged to be proficient in several categories including policy documentation, financial planning and organization.

Ack'nowledements The preparation of the CAFR on a timely basis was made possible by the dedicated service of the

- entire staff of the Finance Department. Each member of the Department has our sincere appreciation for the contributions made in the preparation of this report.

In closing, without the leadership and support of the Board of Directors of the KUA, preparation of this report would not have been possible.

_ Respectfully submitted, w, f. J ,

1 d mes C. Welsh osep Hostetler President & General Manager Director of Finance j i

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1 Certi:!ica:e 0:: ,

Acnievement for Exce lence in Financia

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Presented to Kissimmee Utiity Authority,

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, For its Comprehensive Annual Financial Report i

for the Fiscal Year Ended September 30,1994 A Certificate of Achievement for Excellence in Financial Reporting is presented by the Govemment Finance Officers Association of the United States and Canada to

. govemment units and public employee retirement systems whose comprehensive annual financial reports (CAFRs) achieve the highest 4

standards in govemment accounting

and financial reporting. ,

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KISSIMMEE UTILITY AUTHORITY Organization Chart FY 1995 Board of Directors h

I Attorney President &

General Manager 1

i Assistant to the Internal  ;

Pr.esident & General

. Audit .

Manager .

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i Conununication i* Administrative i Specialist Secretary 1 i 1 i

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Information Power Supply "" "E Systems Distribution 84 21 7 c 58 ,

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Customer 'Penonnel & Risk' Materials .

Mnance Management

- Relations Management g4 54 6 .

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Section

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I y Aucitor's Report

!n General Purpose Financial Statements Notes to Financial Statements

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Report of Independent Accountants  !

l Board of Directors Kissimmee Utility Authority

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, We have audited the accompanying balance sheets of the Kissimmee Utility Authority as of Septem- l 1 '

ber 30,1995 and 1994, and the rela,ted statements of r'evenue, expenses and changes in accumulated reinvested earnings, and cash flows for the years then ended. These' financial statements are the re-spensibility of the Authority's management. Our responsibility is to express an opinion on these Snan-cial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards and Government Auditing Standards issued by the Comptroller General of the United States. Those standards require  ;

that we plan and perform the audit to obtain reasonable assurance about whether the financial state- i

,7 ments are free of material misstatement. An audit includes examining, on a test basis, evidence sup-

! porting 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 I i;

overall financial statement presentation. We believe that our audits provide a reasonable basis for our l! opinion.

In our opinion, the fin:ncial statements referred to above present fairly, in all material respects, the fi-l nancial position of the Kissimmee Utility Authority as of September 30,1995 and ~1994, and the re-

! sults of its operations and its cash flows for the years then ended in conformity with generally

accepted accounting principles.

!i In accordance with Government Auditing Standards, we have also issued a report dated November 22,1995 on our consideration of the Kissimmee Utility Authority's internal control struc-

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l ture and a report dated November 22,1995 on its compliance with laws and regula'tions. l Our audit was conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The introductory and statistical sections are presented for purposes of additional analysis and.are not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accord- l' l' ingly, we express no opinion onit.

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Tampa, Florida i November 22,1993 i

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e B-3 l Coopers & Lybrand LL.P. is a memtser of Coopers & Lybrand Intemational, a hmited habdity association incorporated in Switzerland 1

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KISSIMMEE UTILITY AUTHORITY -

• BALANCE SHEETS - . j SEPTEMBER 30,1995 AND 1994 * -  :

ASSETS 1995 1994 UTILITY PLANT  !

Property, plant and equipment $ 208,209,448 $ 142,438,287 less: accumulated deprecianon (65,068.681) (56,639,189) 143,140,767 85,799,098 Construchonin progress 22,485,468 64,912,140 Irwentory nuclearfuel 283,535 453.053 TOTAL UTILITY PLANT , 165,909',770 151,164291  !

RESTRICTED ASSETS Cash and cash equivalents 38,588,902 31,455,861 investments 40,354,666 64,164,164  ;

interest receivable 575,442 852,270 ,

TOTAL RESTRICTED ASSETS 79,519,010 96,472 295 DESIGNATED ASSETS  !

Cash and cash equivalents 10,163,598 4,969,941 jnvestments 33,749,635 33,247,448 Interest receivable 348,155 318,206 ,

Deferred compensanon plan assets 1,760257 1.325.350  ;

TOTAL DESIGNATED ASSETS 46,021,645 39,860,945 CURRENT ASSETS Cash and cash equivalents 7,753,018 12,744,314  ;

investments 4,750,000 500,000 Interest receivable 70,895 6,100 Accounts receivable 8,331,145 8,014,024 less: allowance for doubtful accounts (178285) (137,838) ,i inventory 5,095,742 4,595,779  !

Employee advances 114,077 82,596 ,

, Prepaid expenses 34 S72 19,422 Due from other govemments 54.01-4 48,161 ,

TOTAL CURRENT ASSETS 26.025.576 25,872,558 OTHER ASSETS Unamortized bond costs 2,655,070 2,787,368 Unamortized loss on reacquired debt 23,443,064 24,492,071 Costs to be recovered from future revenue 31,054,988 27,571,394 Other 138,627 139,624 TOTALOTHER ASSETS 57,291,749 54,990,457 TOTAL ASSETS $ 374,767.750 $ _368,360,546 ,

See accompanying notes.

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• I CAPITALtZATION AND WABluTIES 1995 1994 CAPITAUZATION Accurnuleted re6nvestod eamings Reserved for debt senace $ 20,271,150 $ 20,271,150 l

Unreserved 91,410.744 81,835,129

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l 111,681,894 102,106.279 l TOTAL ACCUMULATED REINVESTED EARNINGS 1

UABILITIES LONG TERM DEBT Revenue bonds payable 239,545,000 , 242,410,000 less: unamortized bond discount (4.932.880) (5.165.004) if TOTAL LONG-TERM DEBT , 234.612.120 237.244.996 f

127,848 128,338  ;

!, OTHER LONG TERM UABlWTIES CURRENT UABILITIES (PAYABLE FROM RESTRICTED ASSETS) 2,865,000 2,630,000 Current portion of revenue bonds 6,813,758 6,881,178 Accrued Interest payable . revenue bonds 997.446 580,012 Advances for construction 2,889,471 2,831,815 Customer deposits

• 180,842 4,077,213 Accounts payable ,

7- 1.500.000 1.500,000 3 Other 16.246.517 18,500,218 TOTAL CURRENT LIABluTIES (PAYABLE FROM RESTRICTED ASSETS)

DESIGNATED WABlUTIES (PAYABLE FROM DESIGNATED ASSETS) l 1,760,257 1,325,350 l Due to ewyees under deferred compensation plan

• 3.598,755 3.062,501

, Other 5.359.012 4.387.851 TOTAL DESIGNATED LIABluTIES (PAYABLE FROM DESIGNATED ASSETS)

CURRENT UABILITIES (PAYABLE FROM CURRENT ASSETS) lf 3,878,374 3,096,691 Accounts payable

• 1,078,941 1,073,309 Due to other governments 739,247 588,595 Accrued compensated absences Deferred cost of power adjustment 477,704 370,123

' 148,123 2,084 Energy conservation cost recovery 417,970 862,062 Other accrued liabilities 4

6,740,359 5.992,864 TOTAL CURRENT UABILITIES (PAYABLE FROM CURRENT ASSETS) 263,085.856 266.254,267 TOTAL UABILITIES COMMITMENTS AND CONTINGENT UABtWTES (NOTES 10 & 11) f TOTAL CAPITAUZATION AND WABluTIES S 374,767,750 $ 368,360,546 See accompanying notes.

B-7

KISSIMMEE UTILITY AUTHORITY ,' ~

STATEMENTS OF REVENUE, EXPENSES AND CHANGES IN - -

l ACCUMULATED REINVESTED EARNINGS * - i FOR THE YEARS ENDED SEPTEMBER 30,1995 AND 1994

• l 1995 1994 OPERATING REVENUES Metered sales $ 64,173.826 $ 64,331,724 Other operatng revenues 2.674,021 1,366,280 TOTAL OPERATING REVENUES 66,847.847 65,698,004 e

OPERATING EXPENSES Power generation 16.093.962 15,055,711 Purchased power 18,775,611 22,287,889 TransmissiorVDistnbution 2.905,367 3,061,714 Adrmnistratrve and 9eneral .

6,144,049 5,241,368 Intergovernrnental transfers 6,094,693 5.787,944 Depreciation and arnortization 8,682,955 7,508,905 Cost to be recovered frorn future revenue , (3,483,594) (3,158,228)

TOTAL OPERATING EXPENSES 55,213.043 55,785,303 OPERATING INCOME 11,634,804 9,912,701 NONOPERATING REVENUE (EXPENSES)

Interest revenue 5,421,949 4,167,170  ;

interest axpense (6,061,061) (6,643,140)

Other (1,420,077) (1,422,524)

TOTAL NONOPERATING REVENUE (EXPENSES) (2,059,189) (3,898.494)

REINVESTED EARNINGS 9,575,615 6,014,207 ACCUMULATED REINVESTED EARNINGS AT BEGINNING OF YEAR 102,106,279 96,092,072 l ACCUMULATED REINVESTED EARNINGS AT END OF YEAR $ 111,681,894 $ 102.106,279 [

O See accompanying notes.

. ~

B-8 I

P

. KISSIMMEE UTILITY AUTHORITY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED SEPTEMBER 30,1995 AND 1994 l l

1995 1994 l CASH FLOWS FROM OPERATING ACTIVmES:

Operating income $ 11,634,804 $ 9,912,701 ADJUSTMENTS TO RECONCILE REINVESTED EARNINGS TO NET CASH PROVIDED BY OPERATING ACTIVITIES:

Depreciation and amortization 8,682,955 7,508,905 interest on customer and City of Kissimmee deposits (113,652) (86,858)

Cost to be recovered from future revenue (3,483.594) (3,158228)

CHANGES IN CURRENT ASSETS AND LIABILmES:

Accounts receivable, not (276,674) 118,464 inventory (499,963) (96,601)

Employee advances (31,481) (26,058) 2' Other assets (15,043) 126,834 Due from other governments (5,851) (3,312)

Deferred cost of power adjustment 107,581 969,133 Energy conservation cost recovery 146,039 2,084 Accounts payable 844,337 400,169 Due to other govemments 5.632 (1,634,672)

Customer deposits 57,656 355,645 f Other accrued liabilities (1,192,309) 131,302 Other designated liabilities 536,254 97,523 NET CASH PROVIDED BY OPERATING ACTIVITIES 16,396,691 14,617,031 i

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: i Acquisition of capital assets and nuclear fuel ,

(28,232,521) (89,758,063)

Advances for construction & advances from co-owners 8,868,649 35,417,673

]

Princ$al paid on revenue bonds (2,630,000) (2,045.000) .

Interest paid on revenue bonds (13,694,938) (12.031,247)

Debt issuance costs - (64,532)

I Other debt costs (6.646) (9,093) l NET CASH USED FOR CAPITAL & RELATED FINANCING ACTIVITIES (35,695.456) (68,490,262) i

}

i io .

. CASH FLOWS FROM INVESTING ACTIVITIES: ,

j Purchase ofinvestment securttles (20,255,000) (41,500,000) l Proceeds from maturtties of investment securttles 38,482,400 $1,811,400 Interest on investments 8,406,767 8,012,164 i

NET CASH PROVIDED BY INVESTING ACTIVITIES 26,634,167 18,323,564 1:

6 .

NET INCREASE /(DECREASE)IN CASH AND CASH EQUIVALENTS 7.335,402 (35,549,667) p I CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 49,170,116 84,719,783 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 56,505,518 $ 49,170,116 See accompanying notes, l

! B-9

KISSIMMEE UTIUTYAUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994

1.

SUMMARY

OF SIGNIFICANT ACCOUNTING POLICIES Entity Definition: he accompanying fmancial statements present the fmancial position, results of operations and cash flows of the Kissimmee Utility Authority (KUA) in accordance with Govemmental Accounting Standards Board Statement (GASB) No.14, "The Financial Reporting Entity". He reporting entity for the KUA includes all functions in which the KUA exercises fmancial accountability. Financial accountability is defined as appointment of a voting majority of the component unit's board, and either a) the ability to impose will by the primary govemment, or b) the possibility that the component unit will provide a financial benefit to or impose a fmancial burden on the primary government. As a result of applying the above reporting entity criteria, no other component units exist in which the KUA has any fmancial accountability which would require inclusion in the KUA's financial statements.

The accounting and repo'rting policie of the KUA conform with the accounting rules prescriUd by the GASB. The KUA has elected under GASB No. 20, " Accounting and Financial Reporting for Proprietary Funds and Other Govemmental Entities That Use Proprietary Fund Accounting," to apply all applicable GASB pronouncements, as well as all applicable Financial Accounting Standards Board (FASB)

Statements and Interpretations issued on or before November 30,1989, except for those that conflict with .

or contradict GASB pronouncements.

ne KUA was created effective October 1,1985 by the City of Kis'simmee Ordinance # 1285 adopted on February 19,1985 and ratified by the voters on March 26,1985. De KUA Board (Board)has 6 members.

The Mayor of the City of Kissimmee is a non-voting Ex-Officio member. The 5 voting members are nominated by the Board and ratified by the City Commission. The KUA has exclusivejurisdicti,on, control and management of the electric utility. Under the definition of GASB No.14, the KUA is properly excluded from the City of Kissimmee's financial statements.

Regulation: According to existing laws of the State of Florida, the six members of the KUA act as the regulatory authority for the establishment of electric rates. He Florida Public Service Commission (FPSC) ,

has authority to regulate the electric " rate structures" of municipal utilities in Florida. It is believed that

" rate structures" 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.

As noted above, the FPSC has jurisdiction to regulate electric " rate structures" of municipal utilities. In addition, the Florida Energy Efliciency and Conservation Act has given the FPSC exclusive authority to approve the construction of new power plants under the Florida Electrical Power Plant Siting Act. The FPSC also exercises jurisdiction under the National Energy Act, including electric ase 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. Rese changes can arise from continuing legislative, regulatory and judicial action respecting the standards and procedures. nerefore, there is no assurance that the units in operation, under construction, or contemplated will always remain subject to the regulations currently in effect or will always be in compliance with future regulations.

P t

B-10 l

KISSIMMEE UTILITY AUTHORITY

? NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 An inability to comply with environmental standards or deadlines could result in reduced operating levels l l

or complete shutdown ofindividual electric generating units not in compliance. Furthermore, compliance with environmental standards or deadlines may substantially increase capital and operating costs. l l

Bnsis of Accountine: The KUA maintains its accounts on an accrual basis in accordance with generally accepted accounting principles. The accounts are substantially in conformity with accounting principles and methods prescribed by the Federal Energy Regulatory Commission and other regulatory authorities.

Budeet: The KUA is required by charter to adopt an annpal budget (budget). The budget is adopted on i l

a basis consistent with generally accepted accounting principles.

The KUA follows these procedures in establishing the budget:

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

J' 2. During several workshops, which are open to the public, the stafTand 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.

ne President and General Manager is authorized to approve all budget transfers and all interdepartrnental

transfers are reported 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 made during the fiscal year. Operating expense budgets lapse at year end. Capital projects are budgeted for the project life rather than for the current fiscal year. The unexpended portion of project budgets do not lapse until the conclusion of the project. .

.f Costs to be Recovered from Future Revenue: The KUA's electric rates are established based upon debt

} service and cash operating requirements. Depreciation and other non cash items are not considered in the i

ccst of service calculation. This results in timing differences between when costs are included in the ratemaking process versus when costs are incurred. Costs to be recovered from future revenue consist principally of the difference between depreciation and the amortization of the gain and loss on bond refunding and the debt principal requirements included in the determination of rates. The recognition in income of outstanding amounts associated with costs to be recovered from future revenue will coincide with the inclusion of these amounts in rates charged to custorners. This method was adopted in accordance with Statement of Financial Accounting Standards (SFAS) No. 71, " Accounting for the Effects of Certain Types of Regulation" in order to reflect the economics of regulation in the determination of reinve'sted eamings.

Revenues: The KUA accrues base revenue for services rendered but unbilled to provide a closer matching 1

of revenues and expenses. .

B-Il

KISSIMMEE UTILITY AUTHORITY -

NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 l Utility Planti Property, plant and equipment are stated at cost when purchased or constructed.

Depreciation is provided using the straight-line method. De estimated useful lives of the various classes of depreciable property, plant and equipment are as follows:

Production 131/3 to 331/3 Transmission 29 2/3 to 50 Distribution 121/3 to 331/3 General x 6 2/3 to 331/10 a

ne cost of maintenance and repairs, including renewal of minor items 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. De cost of units replaced or retired, including cost of removal, net of any salvage value, is charged to accumulated depreciation.

Nuclear Fuel: Amortization of nuclear fuel is based on cost, which is prorated by fuel assembly batch in accordance with the thermal energy that each assembly produces. The KUA is currently paying 1 mill per KWh for re'sidual future disposal costs in addition to estimated labor and waste burial costs.

Inventory: Inventory is stated at weighted average cost.

Other Assets: Unamortized bond discounts and issuance costs on long-term debt are amortized over the life of the issue on a straight-line basis. The KUA considered the effective interest method of amortizing bond discounts and determined that no material difference results from the continued use of the straight-line method. Unamortized gains or losses on refunded debt are amortized to income over the remaining life of the reew debt consistent with the methods used for setting rates. Unamortized gains and losses on bond refundings have been netted for financial statement purposes.

Reserves: A portion of accumulated reinvested eamings has been reserved for the highest maximum debt service in any year. This maximum occurs in fiscal year 2018. ,

Advances for Construction: The KUA receives funds from developers for electric line extensions and from co-owners of the Cane Island Units I and 2. These funds are recorded as reductions to gross plant costs and amortized over the life of related assets. ,

Deferred Cost of Power Adiustment: Deferred cost of power adjustment represents the KUA's cost of power adjustm'ent 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.

Enerry Conservation Cost Recovery: Energy conservation cost recovery represents the KUA's energy conservation cost revenues collected, but for which costs have not been incurred or costs that have been incurred, but for which energy conservation cost recovery revenues have not been collected.

Payments to the City of Kissimmee: By charter the KUA is required to pay to the City of Kissimmee a minimum ofS6.24 per 1,000 KWh. This payment is treated as an operating and maintenance expense in the Statements of Revenue, Expenses and Changes in Accumulated Reinvested Eamings. The total amount B-12

i. .

o

• 4 KISSIMMEE UTILITY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 paid to the City of Kissimmee was approximately $5,192,100 and $5,021,400 for the years ended September 30,1995 and 1994, respectively. The amount owed to the City of Kissimmee was approximately $921,400 and $869,600 at September 30,1995 and 1994, respectively.

The KUA collects revenues from ratepayers who live outside the City of Kissimmee which corresponds to the City of Kissimmee Utility Tax. The KUA has agreed to transfer twenty-five percent of these revenues collected to the City of Kissimmee for Parks and Recreation use. The total amount paid to the City of Kissimmee was approximately $420,700 and $397,800 for the years ended September 30,1995 and 1994, respectively. The amoimt owed to the City of Kissimmee was approximately $43,400 and

$38,600 at September 30,1995 and 1994, respectively.

The KUA collects revenues on behalf of the City of Kissimmee for City of Kissimmee utility services including water, sewer, solid waste and utility taxes. %e City of Kissimmee also performs printing services for the KUA. He amount paid to the City of Kissimmee by the KUA for utility service revenues collected, printing services and other miscellaneous fees was approximately $21,700,900 and $21,372,300 for the years ended September 30,1995 and 1994, respectively. The amount owed to the City of Kissimmee was approximately $114,200 and $165,000 at September 30,1995 and 1994, respectively.

a ,

The KUA performs certain customer related services for the City of Kissim nee for which the City of 4

Kissimmee paid the KUA approximately $620,600 and $567,600 for the years ended September 30,1995 and 1994, respectively. The amount owed by the City of Kissimmee to the KUA was approximately

$54,000 and $48,200 at September 30,1995 and 1994, respectively.

Cash and Cash Eauivalents: Cash and cash equivalents include short-term, highly liquid investments that l are both readily convertible to known amounts of cash and whose original maturity is three months or less. l l

nese c.onsist of repurchase agreements, the State Board of Administration Pool and the carrying amount li of the KUA's deposits with financialinstitutions.

l ll Compensated Absences: In accordance with GASB No.16," Accounting for Compensated Absences",

li, the KUA accrues aliability for employees' rights to receive compensation for future absences whm certain conditions are met. The KUA has not normally, nor is it legally required to, accumulate expendable ,

! available financial resources to liquidate this obligation. Accordingly, the liability for compen;ated absences is included with the Current Liabilities (Payable from Current Assets). l Non Cash Activities: Acquisitions of capital assets of approximately $899,000 and $2,959,000 were i included in accounts payable as of September 30,1995 and 1994, respectively. Accordingly, these non l cash transactions have been excluded from the accompanying Statements of Cash Flows.

Reclassifications: For comparability purposes certain reclassifications have been made to the 1994 financial statements to conform with the 1995 financial statements.

2. CASII, CASII EQUIVALENTS, INVESTMENTS AND INTEREST RECEIVABLE l .

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 l

B-13 l

I

KISSIMMEE UTIUTYAUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 United States Govemment and certain instruments guaranteed by the U.S. Govemment. Revenue Bond Covenants also restrict the type and maturities ofinvestments in the required trust funds (see Note 10).

Investments (excluding deferred compensation plan assets) are recorded at cost. Deferred compensation plan assets are stated at market value (see Note 9). 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.

Investmen'ts must be in the KUA's name and placed in a safety-deposit box in a bank or institution carrymg adequate safety-deposit insurance or represented by bank trust receipts which enumerate the various securi-ties held.

'Ihe Statutes also require depositories of public funds to provide collateral each month at least equal to 50 l l

percent of the average daily balance of all public deposits in excess of deposit 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.

The components of the KUA's total cash, cash equivalents, investmerits and interest receivable at their respective carrying amounts at September 30,1995 and 1994 are as follows 1

Restricted Designated Unrestricted Total 1995 Cash & Cash Equivalents S 38,588,902 510,163,598 $ 7,753,018 $ 56,505,518 Investments 40,354,666 33,749,635 4,750,000 78,854,301 Interest Receivable 575.442 348.155 70.895 994.492 TOTALS $ 79.519.010 $44.261.388 S12.573.913 $136.354.311 s

1994

)

Cash & Casti Equivalents $ 31,455,861 S 4,969,941 S12,744,314 S 49,170,'116  ;

Investments - 64,164,164 33,247,448 500,000 97,911,612 ,

Interest Receivable 852.270 318.206 6.100 1.176.576 TOTALS $ 96.472.295 $38.535.595 $13.250.414 $148.258.304 l

The level of credit risk assigned to investments are defined and summarized as follows:

Category 1 - Insured or registered, with securities held by the KUA or its agent in the KUA's name.  ;

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

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

B-14

KISSIMMEE UTILITY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 CATEGORY OF RISK (000's) 1 2 3 Total Market Value 1995 U.S. Govemment - 368 - 368 368

. Securities U.S. Instrumental 77.654 _- 8J2 78.486 77 524 l Securities Total Investments $224L4 $363 $3).2 $18314 $22222 l 1994 U.S. Govemment - 387 - 387 387 Securities U.S. Instrumental 96.750 _- 775 97.525 98.826

. Securities Total Investments $,2fjjQ $232 $22j, S.22212 S.222d).

The balance in the State Board of Administration Pool (SBA) was approximately $56,476,000 and

$25,777,000 at September 30,1995 and 1994, respectively, and is collateralized in accordance with Florida Statutes. All investments 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 ovemight repurchase agreements of securities guaranteed by the United States Govemment. We value of repurchase agreements held with the KUA's depository bank was approximately $430,000 and $23,761,000 at September 30, 1995 and 1994, respectively. Repurchase agreements are held in the name of the KUA's depository bank.

He maximum repurchase agreement was $27,119,000 and $23,761,000 for 1995 and 1994, respectively.

At September 30,1995 and 1994 the carrying amount of the KUA's deposits with fmancial institutions was approximately ($447,000) and ($358,400), respectively, and the bank, balance was approximately

$347,500 and $386,000, respectively. All bank balanc.:s are fully insured in accordance with Florida Statute 280, which established the multiple financial institution collateral pool.

3. RESTRICTED ASSETS Restrictions are made in accordance with bond resolutions, ' contracts with developers and Florida Municipal Power Agency (FMPA), agreements with customers, and in accordance with Nuclear Regulatory Commission (NRC) rules and regulations. Restricted assets, which consist of cash, cash equivalents, investments and interest receivable at September 30,1995 and 1994 included the following:

- B-15

KISSIMMEE UTILITYAUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 1995 1994 Debt Service Reserve $20,271,150 S 20,271,150 Sinking Fund 9,678,758 9,511,178 Construction Fund 27,998,351 56,215,333 Capitalized Interest 15,296,842 4,484,168 Renewal, Replacement & Improvement 1,500,000 1,500,000 Advances for Construction 997,446 580,012 Customer Deposits 2,889,471 2,831,815 Line Extension Fund - 295,658 Crystal River Unit #3 Decommissioning 886.992 782.981 TOTAL $ 79.519.010 $ 96.472.295 Effective October 1,1994, the Board of Directors approved a redesignation of a portion of the 1993 bond proceeds. In accordance with SFAS No. 71, as a result of this redesignation, the KUA capitalized additional interest of approximately $3,345,000 in 1995 and will capitalize interest of approximately '

$7,680,100 and $7,616,700 for the years ended September 30,1996 and 1997, respectively. This redesignation was in lieu ofincreasing customer rates to recover interest costs associated with the Cane Island project.

4. DESIGNATED ASSETS Certain designations are made in the fmancial records during the fiscal year to identify a portion of cash, cash eqtivalents, investments and interest receivable intended to be used for specific purposes in a future period. Designated assets at September 30,1995 and 1994 included the following:

1995 1994 CapitalImprovements $40,633,916 $34,509,749 Co-Insurance 2,297,605 2,029,142 Decommissioning 350,412 331,799 Combined Cycle Maintenance 979,455 1,664,905 Deferred Compensation 1.760.257 1.325.350 Total $46.021.645 S39.860.945 B-16

l. .

I KISSIMMEE UTILITY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994

+

5. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment is comprised of the following:

1995 1994 Nuclear Production S 5,011,592 $ 4,900,357 54,023,126 19,981,421 Steam Production ,

D 60,663,359 41,037,182 Other Production 29,726,833 21,571,541 Transmission Plant 40,872,741 39,469,467 Distribution Plant General 17.911.797 15.478.319 SUBTOTAL 208,209,448 142,438,287 l Less: Accumulated Depreciation (65.068.681) (56.639.189) i TOTAL $ 143.140.767 $ 85.799.098

6. CONSTRUCTION PROJECT INTEREST COST l

0n January 27,1993, the Board of Directors elected to restructure the project funds to fund capitalized interest on the Kissimmee Utility Authority Electric System Improvement and Refunding Revenue Bonds, Series 1991. This election was effective beginning with the issuance of the bonds and will be effective during the construction period for the gas turbine at Cane Island. On June 17,1993, the KUA issued the i Electric System Improvement and Refunding Revenue Bonds,$eries 1993. The portion of the respective i

bonds relating to the funding of system improvements is approximately 77% and 54% for each series, g- respectively. Accordingly, the KUA capitalized approximately $7,680,100 and $7,209,100 for the years

! ended September 30,1995 and 1994, respectively. KUA will capitalize interest expense after Cane Island is in service in the amounts of approximately $7,680,100 and $7,616,700 for the years ended September 30,1996 and 1997, respectively (see Note 3).

The KUA capitalizes, as part of construction costs, interest eamings ontnonies held in the construction '

fund. Recognition of this item as a contribution to the utility plant is consistent with the current accounting adopted under SFAS No. 71 (see Note 1). The KUA capitalized interest income of approximately

$1,972,800 and $2,759,100 in 1995 and 1994, respectively.

7. PARTICIPATION AND POWER SUPPLY AGREEMENTS The KUA is party to the following participation and power supply agreements at September 30,1995:

! A. Cane Island Proicct (the Proiecth

• During 1992, the KUA entered into a Participation i Agreement with Florida Municipal Power Agency (FMPA) for the joint construction, ownership and I operation of the KUA's Cane Island Project. The Project is located at Cane Island,14 miles west of the KUA's existing service territory on 990 acres ofland. The Project is owned and operated by the KUA.

B-17

KISSIMMEE UTILITY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 De agreement resulted in a 50 percent ownership in generating facilities constructed on this site beginning with the first unit, a 40.6 MW combustion turbine which began commercial operation on January 1,1995.

%e second unit is approximately 120 MW and is a combined cycle unit which began commercial operation on June 1,1995.

B. Stanton Enerev Center Unit No.1 (SEC I): In 1984, the KUA entered into a Participation Agreerpent with Orlando Utilities Commission (OUC) to acquire a 4.8193% (20MW) undivided ownership interest in SEC 1 and to participath in the use of related common and extemal facilities. The capacity and energy of the KOA's ownership interest in SEC 1 is transmitted through 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 Ki.1immee. In addition to SEC 1, the Stanton Energy Center is capable of accommodating three more mits with a total capacity at the Stanton Energy Center of approximately 2000 MW. Each participant in the project fmanced their share of the cost independently and no liability exists for the debt service required by the other participants. The KUA's benefit in the Agreement is the added availability of capacity and energy of the facilities through its panicipation in future energy purchased and it does not otherwise maintain an ongoing financial interest or responsibility for the project. Stanton Energy Center began commercial operations on July 1,1987. The KUA does not exercise signi9 cant influence or control over operating or financial policies of OUC.

C. Crystal River Unit No.3 (CR3): In 1975, the KUA entered into a ParticipaOn Agreement with Florida Power Corporation (FPC) to purchase a .6754% undivided interest in their 806 et MW nuclear )

powered electric generating plant designated Crystal River Unit No.3. The KUA is billed foi % share of l operating and capital costs. Capital costs are included in Property, Plant and Equipment and opnting l costs are included as power generation expenses. The KUA's benefit in the Agreement is the added i availability of capacity and energy of the facilities through its participation in future energy purchases and it does not otherwise maintain an ongoing financial interest or responsibility for the projec:. The KUA does I not exercise significant influence or control over the operating or financial policies of FPC. l

)

D. Indian River Combustion 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 extemal facilities.

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.

E. Florida Municipal Power Acency (FMPA): In*1981, the KUA entered into a Power Supply Acquisition Agreement with the FMPA. The 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. -

In 1991, the KUA entered into a second Power Supply Acquisition Agreement with the FMPA. The KUA is to receive 16.4887% power entitlement, approximately 15.2 MW,in Stanton Energy Center Unit No.

2 (SEC 2) which is scheduled to' be brought on line in the latter part of Fiscal Year 1996. In 1995, the KUA entered into a Transfer Agreement with the City of Lake Worth for the transfer of all of the City of

. Lake Worth's share of the FMPA SEC 2 Project. KUA acquired the City of Lake Worth's 8.2443%

B-18 l

KISSIMMEE UTILITY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 power entitlement share in SEC 2, approximately 7.6 MW. Additionally, in 1995 the KUA entered into a Transfer Agreement with the City of Homestead for the transfer of approximately 50% of the City of Homestead's Power Entitlement Share of the FMPA SEC 1 and the FMPA SEC 2 Projects. KUA acquired 12.195% power entitlement share in SEC 1, approximately 50.6 MW and 8.24435% power entitlement share in SEC 2, approximately 7.6 MW. The participation costs will be included in purchased power expenses after the unit is brought on line. The KUA does not exercise significant influence or control over the operatmg or financial policies of FMPA. In conjunction with the power supply agreements, the KUA acquired its share of the SEC common facilities related to its ownership of SEC 1.

None of the participation agreements to which the KUA is a party meet the criteria of ajoint venture as

specified under GASB No.14. He KUA lacks operational control over the SEC 1, CR3 and Indian River.

According to the participation agreements, each participant must provide its own financing and each participants' share of expenses for operations of the plants are included in the conesponding operating t expenses ofits own income statement. The amounts of utility plant in service for CR3 and Indian River .

do not include the cost of common and extemal facilities for which participants pay user charges to the I operating entity. Accumulated depreciation on utility plant in service is determined by each participant -

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

Following is a summary of the KUA's proportionate share of the non-operated jointly owned plants '

at September 30:

SEC1 CR3 Indian River .

1995 Utility Plant in Service $20,424,596 $5,011,592 $2,731,082 Less: Accum. Deprec. (4.757.253) (2.897.354) (567.981)

$15.667.343 S2.114.238 $2.163.101 Net Plant in Service

! 1994 Utility Plant in Service $19,981,421 $4,900,358 $2,729,153 Less: Accum. Deprec. (4.120.858) (2.378.50I) (486.049)

Net Plant in Service $15.860.563 $2.521.857 $2.243.104

8. PENSIONS De KUA employees participate in a multiple-employer cost sharing Retirement Plan for both employees of the City of Kissimmee and the KUA (Plan). He Plan was established in 1968 and amended and restated in 1975 to cover substantially all full-time employees, except City of Kissimmee police officers and firefighters. Annual costs of the plan are actuarially computed and include amortization of past service costs over a 30 to 40 year period beginning January 1,1974. An actuarial study was conducted as of January 1,1995 and 1994.

The table below shows relevant data for the Plan as a whole and for the KUA's portion where this was B-19

KISSIMMEE UTIUTY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 available:

TOTAL PLAN 1995 1994 Unfunded Accmed Liab. S 5,603,083 $ 1,545,778 Value of Assets $22,871,934 $20,983,415 Vested Benefits $13,623,660 ,$10,860,850 Nonvested Benefits S 1,621,082 ) 1,056,069 Normal Costs S 1,932,802 S 1,343,591

% OF  % OF TOTAL TOTAL KUA'S PORTION 1995 PLAN

• 1994 PLAN Vested Benefits $5,968,839 43.8 % S4,914,596 45.3 %

Nonvested Benefits $791,156 48.8% $545,931 51.7 %

Normal Costs $872,692 45.2 % $617,891 46.0%

% OF  % OF COVERED COVERED PAYROLL PAYROLL Covered Payroll S7,146,860 $6,428,090 Normal Costs $872,692 12.2 % $617,891 9.6%

Employer Contributions $872,692 12.2 % $732,950 11.4%

The Entry-Age Normal-Level Percentage of Pay actuarial cost method was utilized in the January 1, 1994 valuation. The significant assumptions for the 1994 Plan are:

1. Life expectancy is calculated using the GA-1951 Male Mortality projected to 1965 by Scale C with a five-year set-back for females. l

2. An interest retum of 7.5% compounded annually. )

3. A salary increase of 6% per year.

The Aggregate Actuarial Cost Method was utilized in the January 1,1995 valuation. The significant assumptions for the 1995 Plan are:

1. Life expectancy is calculated using the 1983 Group Annuity Mortality Table.

2. An interest retum of 8.0% compounded annually.

3. A salary increase of 6% per year.

As of January 1,1995, the plan included 642 employees at a total annual basic compensation of approximately $15,797,100. Of these numbers, the KUA employees were 253 at a total annual basic compensation of approximately S 7,146,900. The current year payroll for all of the KUA employees was B-20 ,

KISSIMMEE UTIUTY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 approximately $9,336,900.

Membership in the Plan is comprised of the following:

Retirees receiving benefits 46 Beneficiaries receiving benefits 36 Vested terminated employees 27 l

. Disabled employees receiving benefits 6 j

< Active employees: l Fully vested 151 Partially vested 210 Nonvested 166

' 6 91 Normal retirement eligibility is def'med as attainment of age 62 and completion of 10 years of credited service. Eligibility for early retirement is attained at age 55 and completion of 10 years of credited service.

The Plan also provides for disability retirement and a death benefit. The KUA's contribution is calculated by the actuary based on membership. There are no employee contributions made to the Plan. The administrative cost of the Plan is allocated proportionately between the City of Kissimmee and the KUA and paid separately. As of January 1,1995 the pension benefit obligation was calculated as follows:

Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits S 5,008,423 Accumulated employee contributions including allocated investment 847,353

, income .

I Employer Financed - vested 11,225,425 i .

Employer Financed - nonvested _2A35.870 Total Pension Benefit Obligation 19,517,071 Less: Actuarial value of assets 22.196.843 Assets in excess of pension benefit obligation $ (2.679.772)

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-concem basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among Public Employees Retirement Systems (PERS) and employers.

B-21

KISSIMMEE UTIUTY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 On October 4,1994 the City of Kissimmee Commission adopted Ordinance No. 2003 which amended the pension plan to reduce the normal retirement age from 65 and 10 years of credited service to age 62 and 10 years of credited service. Other changes included providing an additional $100 per month to age 65 and $25 per month thereafler, and reducing the early retirement penalty from 5% per year to 3% per year.

The table below shows the effect of these changes for the plan as a whole. 'Ihe KUA's portion was not available.

, , Plan at Revised Plan at TOTAL PLAN September 30.1994 j October 4,1994 .

Unfunded Accrued Liability $1,545,778 $4,820,817 Value of Assets $20,983,415 S20,983,415 Vested Benefits $10,860,850 $12,621,864 Nonvested Benefits $1,056,069 S1,325,857 Normal Costs $1,343,591 SI,511,734 Amortization of Unfunded Liability $139,076 $397,031 Interest Adjustment $111,200 $143,157 Actuarial Funding Requirement $1,593,867 S2,051,922 Historical trend information presenting the Retirement Plan's progress in accumulating sufficient assets to pay benefits when due is presented in Table 4 of the Statistical Section of this report.

9. 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 Intemational City Managers Association (ICMA) and the United States Conference of Mayors (USCM). The plans, available to all of the KUA employees, permit them to defer a portion of their salary until future years. The deferred compensation is not available to employees until temunation or unforeseeable emergency (including death, retirement and disability).

Intemal Revenue Code Section 457 requires that all amounts of compensation deferred, all property and rights purchased, and all income eamed are (until paid or made available to employees or their beneficiaries) solely the property and rights of the KUA, subject only to the claims of the K'UA's general creditors. Participants' rights under the plans are equal to those of general credifors 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.

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

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. i KISSIMMEE UTIUTY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 _

\

10. LONG-TERM DEBT The Revenue Bond resolutions provide for.

A. Establishment and maintenance of various funds:

Revenue Fund records all operating revenues and expenses of the system; i (1) I (2) Sinking Fund records principal and interest requirements; Bond Amortization Fund records funds held for the retirement of term bonds; j (3) '

, (4) Reserve Fund records funds held for the maximum annual debt service requirement;

(5) Renewal, Replacement & Improvement Fund is to be used only for. making improvements, l i

i extensions and replacements to the system; and (6) Construction Fund records the cost of major additions to the System financed by revenue bonds.

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 to the Budget; (2) Deposits to the Sinking Fund Account are required on or before the 25th day of each month equal to one-sixth (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; i t (3) Deposits to the Bond Amortization Fund are required on or before the 25th of each month

' equal to one-sixth (1/6) of the amortization installment coming due on the next semi-annual payment date; (4) Deposits to the Reserve Fund are to be made when required to maintain the Fund at the reserve equirements (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. The total annual deposit may net be less than 5% of the gross revenues for the 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 i

be required when the amount in such fund shall at least equal $1,500,000.

C. Rate Covenant:

'Ihe KUA will at all times establish, fix, prescribe and collect rates and charges for the services and facilities furnished by the Electric System which, together with other income, are reasonably expected to yield annual Net Revenues in each Fiscal Year at least equal to 125% of the bond service requirement in the Bond Year which ends one day after such Fiscal Year.

D. Eas!y redemption:

l The bond ordinance provides for early redemption of outstanding bonds, except original issue B-23

c KISSIMMEE UTIUTY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 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.

E. Investment restrictions:

(1)  ; Funds of the Sinking Fund, Bond Amortization Fund, Reserve Fund and Renewal, Replacement & Improvement Fund are required to be continuously secured in the same manner as municipal 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 Bopd Amortization Fund shall be invested only in direct obligations of, or obligations on which the principal and interest are guaranteed by the United States of America and which do not permit redemption prior to maturity at the option of the KUA. Monies on deposit in the Revenue Fund, Reserve Fund and Renewal, Replacement & Improvement Fund may be invested as described above as well as in the following: obligations rating 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 ofinvestment companies which invest principally in United States  !

govemment securities.

I Refunding and revenue bonds outstanding at September 30,1995 and 1994 consist of the following serial and term bonds:

FINAL ORIGINAL DESCRIPTION MATURITY AMOUNT 1995 1994 l

l Electric Revenue Bonds, 10/01/12 $ 66,020,000 $ 59,610,000 $ 61,600,000 Series 1987 4.40 % - 6.80 % -

4/1;10/1 Improvements & Refunding 10/01/17 $ 75,550,000 15,835,000 16,475,000 -

Revenue Bonds, Series 1991 4.30 % 6.60 %- 4/1;10/1 Improvements & Refunding 10/01/18 $145,800,000 145,800,000 145,800,000 Revenue Bonds, Series 1993 j 3.90 % - 5.50 % -4/1; 10/1 Refunding Revenue Bonds, 10/01/17 $ 21,165,000 21.165.000 21.165.000 Series 1993A 3.20% - 5.30%

4/1; 10/1 Total Amount Outstanding 242,410,000 245,040,000 Less: Current Portion Long (2.865.000) (2.630.000)

Term Debt $239.545.000 $242.410.000 B-24

= .

KISSIMMEE UTIUTY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 l l

l De annuallong-term debt service requirements (net of capitalized interest) at September 30,1995 are as follows:

1/96 $ 10,435,708 1997 10,484,964 1998 18,101,228

- 1999 18,069,537 18,071,576 2000 2001-2005 91,846,499 2006-2010 95,406,224 2011-2015 100,568,477 2016-2018 60.498.059 Total 423,482,272 Less: Amount RepresentingInterest (183.937.272)

' Long Term Debt $239.545.000 De RUA refunds and defenses debt primarily as a means of reducing debt service, thereby postponing or

~

reducing future electric rate adjustments. Outstanding serial bonds, which were refunded through the full

' cash defeasance method on January 4,1978,and through the net cash defeasance method on February 25, 1982, January 25,1983, December 31,1985, April 1,1987, December 18,1991, June 16,1993 and September 30,1993 follow:

1995 1994 Electric & Water Bond Issues *

$ 100,000 455,000 1967 i l

850,000 850,000 1971 165,000 215,000 1971-A 1973 2,720,000 2,785,000 1975 2,620,000 2,735,000 i

B-25

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KISSIMMEE UTILITY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 Electric Revenue Bonds 1977 Series A 14,515,000 15,125,000 1979-A 2,090,000 2,155,000 1982 43,725,000 44,465,000 1982-A 62,880,000 64,450,000 1984 26,725,000 27,025,000 -

1985 33,905,000 34,420,000 1991 58.780.000 58.780.000

$249.075.000 $153.460.Q00

• Prior to 1977 the KUA which was a department of the City of Kissimmee until October 1,1985, combined their Electric & Water Bond Issues.

Since govemmental 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 has made certain commitments in connection with its continuing capital improvements program.

The KUA estimates that capital expenditures for ongoing business during 1996 will be approximately

$8,130,000 and $34,534,000 for years 1997 through 2000.

The KUA is involved in litigation arising during the normal course ofits business. In the opinion of management, the resolution of these matters will not have a material efTect on the financial position of the company. l The KUA entered into a Power Supply Acquisition Agreement wi a Florida Municipal Power Agency r (FMPA)in 1981. The KUA contracted to receive approximatt. 7 MW of power from the St. Lucie nuclear power plant for the life of the plant. The amount of the KUA's participation costs for 1995 and 1994 were approximately $3,543,300 and $3,324,500, respectively. The participation costs for 1996 are expected to be approximately $4,027.900. Future participation costs are not known at this time (see Note 7).

The KUA entered into a Power Supply Acquisition Agreement with the FMPA, a Transfer Agreement with the City of Lake Worth and the City of Homestead to receive a total of approximately 30.4 MW from SEC 2 and approximately 50.6 MW from SEC 1. SEC 2 is still under construction and future participation costs 1 l

are not known (see Note 7).

l 11 - 2 6 l

KISSIMMEE UTILITY AUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 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 to be paid are as follows: 1 Minimum  ;

Expiration Annual l Date Commitment 2004 S i,149,456 l Orlando Utilities Commission (OUC) ,

2000 2,716,303 Florida Power Corporation (FPC)

NONE 3.524.511 Florida Gas Transmission (FGT)

TOTAL $ 7.390.219 j

Several of the contracts are flexible and allow the KUA to contract more capacity for a short time if '

demand increases more sharply than anticipated, or if the KUA's generating resources become unavailable.

In such an event, the minimum annual commitment would increase in proportion to the increased capacity )

purchased. The charges paid to OUC and FPC are recorded as purchased power while charges pl FGT are recorded as power generation expenses. l

(

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 KU be liable for approximately $861,000 in decommissioning costs in 1989 dollais. In June 1988, the Nucle Regulatory Commission (NRC) required utilities to. provide financial assurance that decommissionin 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 tmst fund. Contributions to this trust fund are not availa for any other purpose except the decommissioning of CR3. The KUA's carrying balance in this Trust l

September 30,1995 and 1994 including interest earhings was approximately $887,000 and $783,000 respectively. Future contributions will be made to this trust account as needed based on updated cos estimates and trust fund eamings.

As a result of their ownership interest in CR3 and St. Lucie purchase power agreement the KUA is subject to the Price Anderson Act which was enacted to provide fmancial protection for the public in the event of a nuclear power plant accident. The first layer of financial protection was the purchase of $200 million public liability insurance 'from pools of commercial insurers. The second layer of financial protect 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 assessment to be made over time as necessary to limit the payment in any one year to no more than $40 million per incident. The KUA'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 KUA has recorded a liability at September 30,1995 and 1994 of approximately $138,600 and

$139,600, respectively, of which approximately $127,800 and $128,300, respectively, is long-term and a related deferred charge for its estimated portion of the costs for the decommissioning and decontamination i B-27

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KISSIMMEE UTIUTYAUTHORITY NOTES TO THE FINANCIAL STATEMENTS YEARS ENDED SEPTEMBER 30,1995 AND 1994 of the United States Department of Energy nuclear fuel enrichment facilities as provided for by the National Energy Policy Act of1992 (Energy Act) for its .6754% share of Crystal River #3. The Energy Act states, among other things, that utilities with nuclear reactors will contribute an aggregate total of $150 million annually, based upon an assessment, for a period of fifteen years, up to a total of $2.25 billion (in 1992 dollars), for such decommissioning and decontamination costs. The Energy Act also provides that these costs are a "necessary and reasonable current cost of fuel and shall be fully recoverable in rates in all jurisdictions in the same manner as other fuel costs." The KUA intends to recover these deferred cost through the Costs of Power Adjustment clause. ,

On November 30,1993, a gas turbine was in the process of being delivered to the KUA's Cane Island site when it was struck by an Amtrak Train. At the time of the accident, delivery had not been made to the KUA nor had the unit been accepted by the KUA; title to the gas turbine had passed to the KUA, however General Electric retained the risk ofloss until the turbine was accepted by the KUA. On May 16,1995, the National Transportation Safety Board determined that the probable cause of the accident was the failure of the transport company to notify the railroad (CSX) in advance ofits intent to cross the railroad track and to ensure through CSX that it was safe to do so. The KUA has been named as a defendant in several lawsuits. In the opinion of management, the resolution of these lawsuits will not have a material effect on the financial position of the KUA.

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!i Statistical L

Section i'

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n. .

m. 4.7m =: ;;;.;

[. Y 1i Statistical tables differ from financial statements because -

ie j, they usually cover more than one fiscal year and may present il non-accounting data. These tables reflect social and

) economical trends of the Kissinunee Utility Authority and its i service territory.

I l

s KISSIMMEE UTILITY AUTHORITY . .

TABLE 1 Operating Revenues By Source / Operating Expenses By Department

• Last Ten Fiscal Years 1989 1988 1987 1986 1994 1993 1992 1991 1990 1995 Operating Revenues: .

Sources

$59,200,205 $49,647,743 $42,094,838 $41,805,328 $34,794,795

$63,373,453 $63,467,877 $59,320,423 $57,381,814 $59.591,743 Aletered Sales

• 87,536 87.169 82,042 76,28I 800,373 742,l27 669,534 $90,572 561,884 94.135 Public Street & Ihghumy Lighting - 1,887 5,370 354,884 - - 5.371 Sales to Other Utihties 199,849 -

788,838 73,849 55,330 19,4h 725,063

- 128,720 124,341 96,804 93,082 Interdepartmental Sales 766,856 770,138 647,019 580.517 2,474,l72 1,366,280 1,143,854 I,278,263 1,334,193 989.151 Other Operating Revenues

$61,580,902 $60,357,340 $50,562,836 - T42.971,579 $43,259.452 W42,318

$66.847,847 $65,698.004 $61,263,522 559,698,337 Teenl operating Revenues Operaring Espenses:

Departments

$884,553 $1,027,636 $879,544 $785,795

$1,248,097 $1,165,620 $1,323,156 $1,063,250 $1,138,120 9

Nuclear Power Generation $1,087,206 15,006,756 13,807,6I4 13,521,919 14,186,062 10,678,524 9,392,800 8,850,'09 6,784,651 4,839,234 4,389,997 Other Power Generation 12,916,048 10.232,845 12,231,779 10,722,351 22,287,889 20,533,442 17,171.119 18,000,904 17,483,408 Puchased Power 18,775,6 t l 579,865 876,468 818,905 656,736 688,632

- - - - 1,092,957 Transmission (I) 1,223,593 914,551 1,100,826 925,953 2,026,431 I,946,742 1,810,395 1,359,428 1,149,311 Distribution 1,768,767 437,272 317,139 718,053 668,927 $43,568 429,805 I,136,601 I,035,283 959,076 1,049,497 Engineering - - - - -

Information Systems (2) 474,641 414,361

• 468,993 - -

1.159,144 977,083 597,353 450,234 2,484,171 2,354,275 2,059,411 2,341,973 1,704,500 Customer Relations 2,649,730 188,066 -

1,223,286 996,428 800,194 545,257 841,912 790,765 616,889 736,461 Finance (3) 237,894 245,570 - - -

321,556 313,509 303,701 309,151 273,712 Materials Management (4) 464,460 407,841 251,063 -

383,054 370,892 267,193 175,719 524,370 Personnet a Risk Management (3) 565,334 180,822 166,770 128,414 160,916 212.014 453,059 416,611 379,125 226,485 206,697 Executive 930,262 884,633 1,506,908 1,698,993 888,963 612,773 764,560 716,801 619,486 1,087,299 Administratin & General 3,594,489 3,194,276 3,330,166 2,321,885 5,787,944 5,796,928 5,053,436 4,980,213 4,029,930 Intergovenunental Transfers (5) 6,094,693 2,370,378 6,435,691 6,550,030 3,715,073 3,475,030 2,483,376 8,682,955 7,508,905 6,875.183

• 562,968 Depreciation .

(3,483,594) (3,158,228) . (2,256,625) (1,945,783) - -

Cost to be recovered from future revenue $27.651,207 $22.273,058 $21,213,769 $18,171,334

$55,213,043 $55,785,303 $53.920,292 $50,013,W $36,700,948 $33,975,992 Total Operating Espen.ws (1) Dis department was combined with other departrnents in 1992.

(2) Dis department was segregatedfran the Finance Department during 1993.

(3) Dese departments were created during 1937.

(4) Dis department was createdJuring 1989.

(3) Payment to City ofKissinoneeprior to 1986 was cortsidered a non-operating expense.

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KISSIMMEE UTILITY AUTHORITY TABLE 2 TEN HIGHEST METER LOCATIONS - ELECTRIC Annual Percent of Consumption Total (MWH) S9 stem

1. Custom Plastics Development, Inc. "091

, 1.16 %

2. Adventist Health Systems 6,093 0.78%

3. Osceola Regional Hospital 4,666 0.60 %

4. Martin Brower 4,384 0.56 %

5. Publix Super Market #351 4,365 0.56 %

6. Resort World of Orlando 4,090 0.52 %

7. Philip Hotels,Inc. 3,574 0.46%

8. Albertson's Store #4410 3,450 0.44 %

9. Osceola County Criminal Justice 3,302 0.42 %

10. City of Kissimmee -Water & Sewer 3,232 0.41 %

SOURCE: Kissimmee Utility Authority, Customer Relations Department 9

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- KISSIMMEE UTILITY AUTHORITY TABLE 3 INSURANCE 4

COMPANY TYPE OF COVERAGE DEDJAGG. MAXIMUM Florida League of Cities General Liability $20,000/1 Mil. l f ,

Aegis Insurance Service,Inc. Excess Liability $500,000

<q Florida League of Cities Workers Compensation $10,000/Fl. Stat.

l

$50,000/ Scheduled

j Hartford Steam Boiler Primary Propeny e

q l Hartford Steam Boiler Boiler & Maintenance Scheduled / Scheduled i

Mt. Airy Insurance Company Public Officials Liab. $25,000/1 Mil.

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l; Aetna Insurance Company Tiduciary Liability $250,000 Max l

The Hartford Public Official Bond $250,000 Max ,

l' The Hartford Miscellaneous & Bond $250,000 Hartford Steam Boiler Data Processing Scheduled

- Humana PPO $200 - 80/20 Humana HMO $5/25 - CO Pay Royal Life Incurance Company Life & AD&D Scheduled by Salary l,

SOURCE: Kissimmee Utility Authority, Personnel & Risk Management Department l

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l KISSIMMEE UTILITY AUTHORITY j CITY OF KISSIMMEE TABLE 4 General Employee Retirement Plan i l

(000's) (6)

(4) Overfunded Overfunded Pension Benefit (3) Pension (5) Obligation as a -

(1) (2)

Net Assets Pension Percentage Benefit Annual Percentage of Plan Avelable Benefit . Funded Obligation Covered Covered Payroll Year For Benefits Obligation (1) \ (2) (2)-(1) Payroll (4)\(5)

$22,872 519,517 117.2 % ($3,356) $15,797 (21.2%)

[994 1993 $20,983 $16,504 127.1% ($4,480) $14,243 (31.5%)

1992 $18,276 514,773 123.7 % ($3,503) $13,102 (26.7%)

$16,390 $13,999 126.1% ($3,391) $11,318 (30.0%)

I991

!990 $13,149 511,343 115.9 % ($1,806) $9,140 (l9.8%)

1989 $12,173 $9,593 126.9 % ($2,580) $7,505 (34.4%)

1988 $9,575 $8,369 114.4 % ($1,206) 56,589 (l8.3%)

1987 $8,322 $7,347 113.3 % ($975) $5,779 (16.9%) ,

NOTE: Analysis of the dollar amounts of net assets available for benefits, pension benefit obligation, and unfunded pension benefit obligation in isolation can be misleading. Expressing the net assets available for benefits as a percentage of the pension benefit obligation provides one indication of the Plan's funding status on a going-concern basis. Analysis of this percentage over dme imlicates whether the system is becoming financially stronger or weaker. Generally, the greater this percentage, the stronger the Plan. Trends in unfunded l pension benefit obligation and annual covered payroll are both affected by inflation. Expressing the unfunded pension benefit obligation as a percentage of annual covered payroll approxir.ately adjusts for the efTect of inflation and aids analysis of the Plan's progress made ir. accumulating sufficient assets to pay benefits when due. Generally, the smaller this percentage, the stronger the plan.

• For Plan Years 1980-1986 the Pension Benefit Obligation was not calculated by the Actuary. Govemment Accounting Standards Board Statement #5, which was issued in November 1986, required this disclosure for subsequent years.

SOURCE: City ofKissimmee/Kissimmee Utility Authority Actuarial Valsation datedJanuary 1, !995.

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i.' KISSIMMEE UTILITY AUTHORITY TABLE 5

) Revenue Bond Coverage l F Last Ten Fiscal Years e

1 i!

{ Income Fiscal Available for Debt Servi Debt Service l Year Debt Service Requireme,ce nt Coverage le $8,812,408 3.22 l i 3 1995 $28,350,804 S24,218,492 $9,186,280 2.64 I' ' 1994

$20,823,098 S10,482,367 1.99 r 1993

$22,599,289 $8,673,756 2.61 1992

$27,903,927 58,564,178 3.26 1991

' $29,242,873 58,576,481 3.41 l 1990

! 1989 $25,913,099 $8,673,567 2.99

$22,770,270 S8,570,081 2.66 1988 S22,466,832 S7,435,601 3.02 1987

$19,222,388 S7,514,756 2.56 1986

$17,247,198 $7,286,426 2.37 1985

$10,371,803 S5,901,623 1.76

, 1984

$8,558,790 S6,032,412 1.42 1983

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KISSIMMEE UTILITY AUTHORITY TABLE 6 Residential Electric Meters LAKE ORANGE OSCEOLA 1995* 85,584 306,731 56,704

. 1994 .

85,422 304,565 57,957,'

1990 73,790 j 267,794 46,372 1985 58,911 207,604 31,593 1980 48,298 170,843 20,552 1975 39,911 143,038 15,667 1970 28,633 110,950 10,206 NOTE: The active residential meterfigures above reflect the overall growth and seasonal changes in housing occupancy.

SOURCE: East Central Florida Regional Planning Council, The Council Quarterly

• Second Quarter, !995 .

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KISSIMMEE UTILITY AUTHORITY TABLE 7 POPULATION LAKE ORANGE OSCEOLA I 1970 69,305 344,311 25,267

- 1975 89,500 421,800 37,100 1980 104,870 470,865 49,287 1985 126,491 556,445 77,412 107,728

, 1990 152,104 677,491 1995 176,931 ' 757,897 136,045 2000

• 200,000 842,500 166,900

'f 2005* 222,200 928,400 194,800 2010* 243,800 1,012,200 222,200 2015* 265,600 1,096,800 250,100 2020* 287,300 1,181,000 278,200 l1 i

SOURCE: East Central Florida Regional Planning Council; The Council Quarterly, Second Quarter,1995

• Projections i

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.. .,1 KISSIMMEE UTILITY AUTHORITY -

l TABLE 8 l CLIMATE Average Monthly Rainfall & Temperature Kissimmee, Florida l l

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. RAIN TEMPERATURE FISCAL YEAR 95 . (Inches) (Degree F) ,

October 4.57 82 i November 1.56 76 l December 1.90 72 January 2.20 70 ,

I February 2.28 72 March 3.46 76 April 2.72 82 May 2.94 87 .

June 7.11 89 July 8.29 90  :

August 6.73 90 September 7.50 88 MONTHLY AVERAGE 4.80 83 SOURCE: Kissimmee/Osceola County Chamber of Commerce S

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r-9 KISSIMMEE UTILITY AUTHORITY TABLE 9 PUBLIC & PRIVATE SCHOOL ENROLLMENT School Year LAKE ORANGE OSCEOLA 25,186 133,371 ~ 25,144 -

1994/95 l< 1993/94 24,362 127,060 23,604 1992/93 23,358 122,938- 22,296 1991/92 22,917 118,437 20,976 1990/91 22,290 114,000 19,692 l !~ 108,979 18,205 l 1989/90 21,492 ii l

NOTE: Public school enrollment includes exceptional children, kindergaden and grades j

,i 1 - 12. School year comprises the third and fourth quaners of one year and tbc l first and second quaners of the following year. Yearly totalis derived by averaging the four quarters. Private school enrollment does not include pre-kindergarten.

SOURCES: County school boards and Florida Department of Education l

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, c KISSIMMEE UTILITY AUTHORITY TABLE 10  ;

HOUSING l

NEWD WELLING UNITS A UTHORIZED B Y BUILDING PERMITS '

i H/95 Single Multi- Mobile Jurisdiction Family Family Homes Total Osceola 423' 69 0 492 l

Kissimmee 137 0 0 137 4 St. Cloud 22 0 0 22 Unincorporated -264 69 0 333

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H/94 Single Multi- Mobile Jurisdiction Family Family Homes Total Osceola 467 4 94 565 i Kissimmee 100 0 0 100 l St. Cloud 38 0 0 38 Unincorporated 329 4 94 427

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SOURCE: East Central Florida RegionalPlanning Council, The Council Quarterly, Second Quarter 1995 i

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