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2021 CAW Financial Plan

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2021 CAW Financial Plan ABUNDANT DEPENDABLE HIGH-QUALITY LOW-COST SAFE WATER 2021 FINANCIAL PLAN The Government Finance Officers Association of the United States and Canada (GFOA) presented a Distinguished Budget Presentation Award to Central Arkansas Water for the Utility’s 2020 annual budget. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operation guide, as a financial plan, and as a communication device. The award is valid for a period of one year only. We believe the current budget continues to conform to program requirements, and we are submitting it to GFOA for an award. Central Arkansas Water Financial Plan 2021 i TABLE OF CONTENTS INTRODUCTION ABOUT CENTRAL ARKANSAS WATER.............................................................................................. 1 BOARD OF COMMISSIONERS........................................................................................................... 10 MANAGEMENT AND FINANCIAL PLAN DEVELOPMENT TEAMS.................................................... 11 ORGANIZATIONAL CHART................................................................................................................. 12 BUDGET MESSAGE............................................................................................................................ 13 BUDGET PROCESS AND CALENDAR............................................................................................... 23 FINANCIAL POLICIES AND GOALS.................................................................................................... 25 STRATEGIC PLAN............................................................................................................................... 33 SOURCES AND USES OF FUNDS OVERVIEW........................................................................................................................................... 41 STATEMENT OF SOURCES AND USES OF FUNDS......................................................................... 47 STATEMENT OF SOURCES AND USES OF FUNDS (FIVE-YEAR FORECAST).............................. 50 REVENUES, EXPENSES, AND NET POSITION OVERVIEW........................................................................................................................................... 51 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION (BY NATURAL CLASSIFICATION – PERCENTAGE CHANGES)................................................................................ 72 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION (BY DEPARTMENT – PERCENTAGE CHANGES)..................................................................................... 73 STATEMENT OF REVENUES.............................................................................................................. 74 STATEMENT OF OPERATING EXPENSES (BY DEPARTMENT AND NATURAL CLASSIFICATION)................................................................................................................................ 76 STATEMENT OF NET POSITION......................................................................................................... 78 BUDGETED POSITIONS..................................................................................................................... 79 DEBT-SERVICE OVERVIEW........................................................................................................................................... 83 DEBT-SERVICE SCHEDULE............................................................................................................... 89 CAPITAL IMPROVEMENT PLAN OVERVIEW........................................................................................................................................... 91 2021 FUNDING SOURCES.................................................................................................................. 101 2021 JUSTIFICATIONS........................................................................................................................ 107 FIVE-YEAR PLAN................................................................................................................................. 117 SIGNIFICANT PROJECT DETAIL........................................................................................................ 127 CONSOLIDATIONS PARON-OWENSVILLE......................................................................................................................... 179 Central Arkansas Water Financial Plan 2021 ii POWA STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION (BY NATURAL CLASSIFICATION – PERCENTAGE CHANGES)............................................................... 181 POWA 2021 CAPITAL IMPROVEMENT PLAN BY FUNDING SOURCE............................................. 182 POWA DEBT SERVICE........................................................................................................................ 183 DEPARTMENTS ADMINISTRATION................................................................................................................................ 185 INFORMATION SERVICES.................................................................................................................. 213 CUSTOMER SERVICE......................................................................................................................... 221 FINANCE.............................................................................................................................................. 226 ENGINEERING..................................................................................................................................... 232 WATER PRODUCTION........................................................................................................................ 237 DISTRIBUTION..................................................................................................................................... 243 APPENDIX STATISTICAL INFORMATION.............................................................................................................. 255 GLOSSARY OF KEY BUDGET TERMS............................................................................................... 267 GLOSSARY OF ACRONYMS AND ABBREVIATIONS......................................................................... 271 Central Arkansas Water Financial Plan 2021 iii INTRODUCTION About Central Arkansas Water Central Arkansas Water (CAW or the Utility) is the largest water supplier in the state of Arkansas. The Utility plays an integral role in the quality of life for residents and the economic health of the communities it serves. As a regional water supplier serving a population of approximately 500,000, CAW contributes to the public health and well- being of one in every six Arkansans. In addition, CAW supplies the water needed by industries that compete in regional, national, and international markets. The Utility serves approximately 207,000 metered connections through retail and wholesale service to customers in Pulaski, Saline, Grant, Perry, Lonoke, White, and Faulkner counties. CAW’s retail service boundaries encompass the cities and communities of: • Little Rock • North Little Rock • Sherwood • Maumelle • Paron-Owensville Central Arkansas Water Financial Plan 2021 1 • Alexander • Brushy Island Public Water Authority • Cammack Village • College Station • Wrightsville • Wye Mountain • 145th Street Water and Sewer Improvement District • Frazier Pike Public Facilities Board • Unincorporated Pulaski County CAW provides treated water for several areas in central Arkansas. CAW furnishes all of the treated water for: • Bryant (Saline County) • Shannon Hills (Saline County) • Ridgefield Estates Public Facilities Board (Pulaski County) • Salem Water Users Association (Saline County) • Saline County Water & Sewer Public Facilities Board aka Woodland Hills (Saline County) The Utility contributes supplemental treated water supply to: • Jacksonville Water Works (Pulaski County, including the Little Rock Air Force Base) • Sardis Water Association (Saline and Grant counties) • Cabot WaterWorks (Lonoke County) • Mid-Arkansas Utilities (Pulaski and Faulkner counties) Central Arkansas Water Financial Plan 2021 2 The Utility’s service boundaries encompass approximately 696 square miles. and has multiple components within its service area. There are two raw water supplies, Lake Maumelle and Lake Winona. The combined safe yield from these two surface water sources is 120 million gallons a day (MGD). From the sources, the water then travels to one of three water treatment plants. The Jack H. Wilson Water Treatment Plan (Wilson Plant) is located in the Pleasant Valley area of Little Rock and has a maximum treatment capacity of 133 MGD. The Ozark Point Water Treatment Plant (Ozark Point Plant) has a maximum treatment capacity of 24 MGD and is located in the Hillcrest area of Little Rock. The Paron Water Treatment Plant (Paron Plant) is a recent addition to the CAW system via a merger with the Paron- Owensville Water Authority (POWA), which occurred in June 2020. The Paron Plant treats approximately 750,000 gallons per day. CAW has one regulating water storage facility, located at Jackson Reservoir in Little Rock. There are also currently 39 storage tanks in the CAW service area. These locations have 50.5 million gallons (MG) in remote storage capacity serving 22 pressure systems and another 25 MG storage in clearwells at the treatment plants. Overall,
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