December 31, 1998 - CURRENT
Section 9. 1998 Income Statement and Debt Service Coverage for City Utilities
One important indicator of the current financial health of the City’s utilities is the difference between current revenues and current expenses, or net income. As can be seen from the table below, City Light took a loss in 1998, and the other City utilities generated positive net income.
Table 4. Income Statement for the City’s Utilities (in $000’s)
Light |
Water |
Drainage and Wastewater |
Solid Waste |
|
| Operating Revenue | 363,913 |
82,847 |
120,706 |
80,244 |
| Operating Expenses: | ||||
| Operations and Maintenance | 99,348 |
23,828 |
90,656 |
52,703 |
| Net Purchased/Interchanged Power |
97,105 |
0 |
0 |
0 |
| Administrative and General | 37,832 |
15,080 |
4,065 |
5,853 |
| Billing and Collecting | 20,594 |
3,833 |
3,769 |
3,762 |
| Taxes | 38,162 |
8,489 |
13,227 |
11,758 |
| Depreciation and Amortization | 54,213 |
18,617 |
6,119 |
4,633 |
| Total Operating Expenses | 347,254 |
69,847 |
117,836 |
78,709 |
| Nonoperating Revenues (Expenses) | ||||
| Investment Income | 7,223 |
2,486 |
1,836 |
191 |
| Interest Expense | (39,888) |
(14,165) |
(3,140) |
(2,830) |
| Other | (6,570) |
(931) |
446 |
370 |
| Total Nonoperating Revenues (Expenses) | (39,235) |
(12,610) |
(858) |
(2,269) |
| Operating Transfers | 0 |
0 |
0 |
1,450 |
| Net Income (loss) | (22,576) |
390 |
2,012 |
716 |
| Net Income Percentage | (6.2%) |
0.5% |
1.7% |
0.9% |
Another important financial indicator for the utilities is the debt service coverage ratio. This ratio measures how many times available revenue covers annual debt service payments, with "available revenue" generally defined as gross revenue less operating expenses exclusive of City taxes and depreciation. So, for example, if the actual debt service coverage ratio for a City utility is 1.5, that means the utility generated sufficient revenue to pay its operating expenses (excluding depreciation and City taxes) and had enough left over to cover 150% of its debt service payment in that year. The table below shows the City utilities’ legal debt service coverage requirements, policy targets as set by the City, and actual debt service coverage ratios in 1998. In all cases actual ratios are comfortably above legal minimums. With respect to policy targets, City Light came in somewhat below its target, while the other utilities exceeded their targets.
Table 5. Debt Service Coverage Ratios for the
City’s Utilities
(First Lien Debt)
| Debt Service Coverage | City Light |
Water |
Drainage and Wastewater |
Solid Waste |
| Legal | 1.0 |
1.25 |
1.25 |
1.25 |
| Policy Target | 1.8 |
1.7 |
1.5 |
1.5 |
| 1998 Actual | 1.5 |
2.0 |
3.6 |
3.4 |
 Back to
Table of Contents |
