Financial ResiliencyFinancial Resiliency——Financial ResiliencyFinancial Resiliencya rural Authority’s a rural Authority’s yy

PerspectivePerspectivePresented October 22, 2009 at the Presented October 22, 2009 at the ,,

VGFOA ConferenceVGFOA Conferenceby Debbie White,by Debbie White,

Director of FinanceDirector of FinanceDirector of Finance,Director of Finance,Augusta County Service AuthorityAugusta County Service Authority

General InformationGeneral Information——Augusta Augusta CountyCounty

P l ti 71 000P l ti 71 000 Population 71,000Population 71,000 22ndnd largest Countylargest County in state at 970 square miles but in state at 970 square miles but

significant acreage in national forest land on eastsignificant acreage in national forest land on eastsignificant acreage in national forest land on east significant acreage in national forest land on east and west mountainous bordersand west mountainous borders

Surrounds the cities of Surrounds the cities of StauntonStaunton & & WaynesboroWaynesboroyyand the town of and the town of CraigsvilleCraigsville

Rural farmingRural farming with with limited economiclimited economic development development l i t t tl i t t t II 64 d I64 d I 81 hi h i t t81 hi h i t talong interstatesalong interstates II--64 and I64 and I--81 which intersect near 81 which intersect near

StauntonStaunton

General InformationGeneral Information——Augusta Augusta County Service AuthorityCounty Service AuthorityCounty Service AuthorityCounty Service Authority

Created by Augusta County in 1966 to Created by Augusta County in 1966 to y g yy g yhandle a number of inefficient and/or handle a number of inefficient and/or failing community systemsfailing community systemsg y yg y y

Today, 112 (5 in Finance) fullToday, 112 (5 in Finance) full--time time employees handling:employees handling:employees handling:employees handling: 14,500 water customers served by 12 14,500 water customers served by 12

independent water systemsindependent water systemsindependent water systemsindependent water systems 8,000 sewer customers served by 9 8,000 sewer customers served by 9

independent sewer systemsindependent sewer systemsindependent sewer systemsindependent sewer systems

General InformationGeneral Information——Augusta Augusta C S i A h iC S i A h iCounty Service AuthorityCounty Service Authority

R i l tiR i l tiRegional cooperation:Regional cooperation: Operators of regional sewer treatment plant Operators of regional sewer treatment plant

with City of Stauntonwith City of Stauntonwith City of Stauntonwith City of Staunton Contract operators & fiscal agents for regional Contract operators & fiscal agents for regional

landfill (separate financial entity)landfill (separate financial entity)landfill (separate financial entity)landfill (separate financial entity)Mutual wholesale agreements with Mutual wholesale agreements with

Staunton, Waynesboro and Craigsville forStaunton, Waynesboro and Craigsville forStaunton, Waynesboro and Craigsville for Staunton, Waynesboro and Craigsville for customers more easily served by another customers more easily served by another jurisdictionjurisdiction

ACSA Long Term Financial PlanACSA Long Term Financial Plangg

S lfS lf ffi i t d t i t b ili tffi i t d t i t b ili t SelfSelf--sufficient and strive to be resilientsufficient and strive to be resilientHowever, apply for State and Federal However, apply for State and Federal

grants or subsidized loansgrants or subsidized loans to help pay for to help pay for costly mandated capital projectscostly mandated capital projects

Set rates and fees to be fair and equitableSet rates and fees to be fair and equitable

Financial OverviewFinancial Overview——Annual Capital Asset Annual Capital Asset Growth Leveraged with Dedications/GrantGrowth Leveraged with Dedications/GrantGrowth Leveraged with Dedications/Grant Growth Leveraged with Dedications/Grant

Funding and New Connection FeesFunding and New Connection FeesAugusta County Service Authority

Increase in Capital Assets and Capital Contribution Funding

25County Grant or Dedication

15

20

ons)

yFed/State Grant or DedicationDeveloper DedicationCustomer New Connection FeesIncrease in Capital Assets

10

15

Dol

lars

(mill

io

-

5

-2009200820072006200520042003200220012000

Fiscal Year

ACSA Long Term Financial PlanACSA Long Term Financial PlanACSA Long Term Financial PlanACSA Long Term Financial PlanAnnual review of rates based onAnnual review of rates based on five year forecast:five year forecast:Annual review of rates based on Annual review of rates based on five year forecast:five year forecast:

Number of connections and consumptionNumber of connections and consumption Operating budgetOperating budgetp g gp g g Capital plan (costs and funding)Capital plan (costs and funding)——equipment, planned equipment, planned

facility/infrastructure maintenance, regulatory facility/infrastructure maintenance, regulatory requirements and expansionrequirements and expansionrequirements, and expansionrequirements, and expansion

Cash flow requirementsCash flow requirements Debt service payments & Bond requirementsDebt service payments & Bond requirements Debt service payments & Bond requirementsDebt service payments & Bond requirements Board designated reserve levelsBoard designated reserve levels

ACSA Long Term Financial PlanACSA Long Term Financial Plan——S i l i k fS i l i k fSpecial risk factorsSpecial risk factors

$48 6 million in outstanding debt$48 6 million in outstanding debt (6/30/09) and(6/30/09) and$48.6 million in outstanding debt$48.6 million in outstanding debt (6/30/09) and (6/30/09) and growing to $62 million in next 18 monthsgrowing to $62 million in next 18 months——over over $2000 debt service payments/connection in FY09!$2000 debt service payments/connection in FY09!

Currently net assets of $103.6 millionCurrently net assets of $103.6 millionCritical bond master indenture requirements:Critical bond master indenture requirements:

Debt service coverage: Annual operating revenue less Debt service coverage: Annual operating revenue less operating income (not including depreciation) plus new operating income (not including depreciation) plus new connection fees must be higher than 110% of debt connection fees must be higher than 110% of debt service payments (can’t include use of cash reserves)service payments (can’t include use of cash reserves)

Adopted rates and current consumption must be high Adopted rates and current consumption must be high enough to pay for future debt payments on new bond enough to pay for future debt payments on new bond g p y p yg p y p yissuesissues

Financial OverviewFinancial Overview——Approaching debt capacity Approaching debt capacity with three ongoing WWTP ENR upgradeswith three ongoing WWTP ENR upgradeswith three ongoing WWTP ENR upgradeswith three ongoing WWTP ENR upgrades

Total Annual Debt Service Payments, FY2010 Proposed CIP

6.0

2 03.04.05.0

mill

ions

)

0.01.02.0

03 05 07 09 11 13 15 17 19 21 23 25 27 29 31 33$

(m

2003

2005

2007

2009

2011

2013

2015

2017

2019

2021

2023

2025

2027

2029

2031

2033

Fiscal YearProposed New Debt--SD WWTP, ColesRun Dam, FY09 filtration projectsExisting debt service sewer (includingExisting debt service--sewer (includingFV/MR WWTPs under construction)Existing debt service-water

ACSA Long Term Financial PlanACSA Long Term Financial Plan——Ri k Mi i iRi k Mi i iRisk MitigationRisk Mitigation

Sewer variable rates increased at least 9% perSewer variable rates increased at least 9% per Sewer variable rates increased at least 9% per Sewer variable rates increased at least 9% per year since 2004year since 2004 to cover high cost of three to cover high cost of three Chesapeake Bay Initiative WWTP upgradesChesapeake Bay Initiative WWTP upgrades——no no sewer rate shock voiced by customers although sewer rate shock voiced by customers although rates highest in regionrates highest in region

“Chesapeake Bay” “Chesapeake Bay” Reserves intentionally built Reserves intentionally built from surplusfrom surplus oneone--time fees and sewer revenuetime fees and sewer revenue, , created to decrease debt and cover startcreated to decrease debt and cover start upupcreated to decrease debt and cover startcreated to decrease debt and cover start--up up costs and shortcosts and short--term financingterm financing

Financial OverviewFinancial Overview——Operating Income Operating Income averages $900K surplus which, along with nonaverages $900K surplus which, along with non--g p , gg p , g

cash depreciation expense ($3.5M), covers cash depreciation expense ($3.5M), covers O&M CIP and debt serviceO&M CIP and debt service

Augusta County Service Authority Operating Income

10

12

14

s

6

8

10

llars

(mill

ions

Charges for Services

0

2

4 DoOperating Expenses (includingdepreciation)

02009200820072006200520042003200220012000ª

Fiscal Year

And then the recession hit theAnd then the recession hit theAnd then the recession hit the And then the recession hit the nation!nation!

Special Risk Assessment: Special Risk Assessment: October 2008October 2008

Presented to Board in October 2008 all Presented to Board in October 2008 all perceived risks to Authority due to national crisis perceived risks to Authority due to national crisis based on internet research and based on internet research and discussions with discussions with bank/investment managers financial advisorbank/investment managers financial advisorbank/investment managers, financial advisorbank/investment managers, financial advisor

High cash reserves for current and pending High cash reserves for current and pending capital projectscapital projects——Principal safePrincipal safe SignificantSignificant losslosscapital projectscapital projects Principal safePrincipal safe. Significant . Significant loss loss of interest earnings expected.of interest earnings expected.

Risk of VRA or state to issue bonds needed for Risk of VRA or state to issue bonds needed for authorized but unissued bonds/grantsauthorized but unissued bonds/grants——Higher Higher interest rates anticipatedinterest rates anticipated

Higher VRS rates due to loss of asset valueHigher VRS rates due to loss of asset value Higher VRS rates due to loss of asset valueHigher VRS rates due to loss of asset value

Special Revenue Risk Special Revenue Risk Assessment: January 2009Assessment: January 2009

Board presentation: Graphed consumption Board presentation: Graphed consumption p p pp p phistory of top 10 water and sewer customers history of top 10 water and sewer customers who brought in 23 to 30% of operating revenuewho brought in 23 to 30% of operating revenueI i d i d i l f j dI i d i d i l f j d Interviewed industrial customers for projected Interviewed industrial customers for projected use in next 6 months; kept track of announced use in next 6 months; kept track of announced layoffslayoffslayoffslayoffs

Looked for patterns between County issued Looked for patterns between County issued construction permits and new water/sewer construction permits and new water/sewer connections to predict potential growthconnections to predict potential growth

Interviewed financial institutions for projected Interviewed financial institutions for projected interest rates and VRS for new contribution ratesinterest rates and VRS for new contribution ratesinterest rates and VRS for new contribution ratesinterest rates and VRS for new contribution rates

Financial Financial Total Water Consumption 12 month Rolling Average through June'09

OverviewOverview——ConsumptionConsumption

12 month Rolling Average through June 09

1,2751,3001,3251,350

mill

ionspp

on decline in all on decline in all sectorssectors 1,150

1,1751,2001,2251,2501,275

Gal

lons

(m

sectorssectors 2001 2002 2003 2004 2005 2006 2007 2008 2009Calendar Year

Total Sewer Consumptionp12 month Rolling Average through June '09

850

900

ons)

Changed customer behavior can be long-term, expect slow

750

800

Gal

lons

(milli

o , precovery similar to behavior following the droughts in 2001 2003

7002001 2002 2003 2004 2005 2006 2007 2008

Calendar Year

droughts in 2001-2003

Financial OverviewFinancial Overview——New connections at New connections at hi t i l ith l f thi t i l ith l f thistoric lows with slow recovery forecasthistoric lows with slow recovery forecast

New Connections per Fiscal Year

350400450

200250300350

onne

ctio

ns

050

100150200

umbe

r of C

o

0

FY95

FY96

FY97

FY98

FY99

FY00

FY01

FY02

FY03

FY04

FY05

FY06

FY07

FY08

FY09

est

FY10

est

FY11

pro

j

FY12

pro

j

FY13

pro

j

FY14

pro

j

FY15

pro

jNu

New Water Connections New Sewer Connections

Special actions to preserve longSpecial actions to preserve long--t fi i l l F b 2009t fi i l l F b 2009term financial plan: Feb. 2009term financial plan: Feb. 2009

Based FY10 five year budget and rates on lowerBased FY10 five year budget and rates on lower Based FY10 five year budget and rates on lower Based FY10 five year budget and rates on lower revenue projected with gradual recovery starting revenue projected with gradual recovery starting in FY12 (consumption, new connections)in FY12 (consumption, new connections)

Added a 30% VRS rate increase starting with Added a 30% VRS rate increase starting with FY11 budget; engaged more staff in determining FY11 budget; engaged more staff in determining added operating expense in FY10 due to newadded operating expense in FY10 due to newadded operating expense in FY10 due to new added operating expense in FY10 due to new water and sewer facilities starting upwater and sewer facilities starting up

Employees implemented successful energy and Employees implemented successful energy and savings programsavings programsavings programsavings program

Moved $5 million out of LGIP into a number of 7Moved $5 million out of LGIP into a number of 7--18 month local bank CDs earning 218 month local bank CDs earning 2--3% interest 3% interest ggto diversify and boost interest earningsto diversify and boost interest earnings

FY10FY10--FY15 Rate Model DashboardFY15 Rate Model DashboardChallenge: All built-up cash reserves utilized for critical capital projects and new debt service payments by FY12—sewer rates continue increasing 9% through FY13

Special actions to preserve longSpecial actions to preserve long--term financial plan: Spring 2009term financial plan: Spring 2009 VRA Bonds sold or issued at rates lower than expectedVRA Bonds sold or issued at rates lower than expected VRA Bonds sold or issued at rates lower than expectedVRA Bonds sold or issued at rates lower than expected

Committed but unissued $9 million DEQ (WWTP Committed but unissued $9 million DEQ (WWTP upgrade) bond sold by VRA, 3.35% interestupgrade) bond sold by VRA, 3.35% interest$1 5 million VDH bond issued at 2 86% (1% below AA$1 5 million VDH bond issued at 2 86% (1% below AA $1.5 million VDH bond issued at 2.86% (1% below AA $1.5 million VDH bond issued at 2.86% (1% below AA market) with Build America Bond election (35% interest market) with Build America Bond election (35% interest reduction)reduction)

Employee morale boostersEmployee morale boosters:: Employee morale boostersEmployee morale boosters:: Applied for VDH and DEQ ARRA grantsApplied for VDH and DEQ ARRA grants——awarded awarded

“green” DEQ grant of $365,000“green” DEQ grant of $365,000Director of field operations received Class A contractorDirector of field operations received Class A contractor Director of field operations received Class A contractor Director of field operations received Class A contractor licenselicense——now able to outsource undernow able to outsource under--utilized utilized experienced and highly skilled laborexperienced and highly skilled labor

Board suggested and approved an employee incentiveBoard suggested and approved an employee incentive Board suggested and approved an employee incentive Board suggested and approved an employee incentive plan based on operating expense savings and specific plan based on operating expense savings and specific revenue surpluses for FY09 and FY10revenue surpluses for FY09 and FY10

Review of revenue risk: Sept 2009Review of revenue risk: Sept 2009Review of revenue risk: Sept 2009Review of revenue risk: Sept 2009 Reviewed with Board, FY09 revenue based Reviewed with Board, FY09 revenue based

f llf llon full year on full year —— Authority “recessionAuthority “recession--resistant” but not “recessionresistant” but not “recession--

proof”proof”proofproof Overall consumption down 3Overall consumption down 3--4% (even residential)4% (even residential)

Six month update of top 10 customersSix month update of top 10 customers Six month update of top 10 customersSix month update of top 10 customers Decision to continue to monitor these customers Decision to continue to monitor these customers

more closely. more closely. FY09 revenue “saved” only because of FY09 revenue “saved” only because of increased increased

production at two “snack food” manufacturing production at two “snack food” manufacturing facilitiesfacilities----but would that continue?but would that continue?facilitiesfacilities but would that continue?but would that continue?

Review of revenue risk: Sept 2009Review of revenue risk: Sept 2009Review of revenue risk: Sept 2009Review of revenue risk: Sept 2009

Evaluated impact ofEvaluated impact of high number of statehigh number of state Evaluated impact of Evaluated impact of high number of state high number of state agencies in customer baseagencies in customer base that were that were affected by budget reductionsaffected by budget reductionsy gy g

Collection policies reviewed and Collection policies reviewed and determined to be solid with normal level of determined to be solid with normal level of cutcut--off noticesoff notices

However, many However, many more customers using more customers using yy ggcredit cards for paymentcredit cards for payment (with higher bank (with higher bank fees assumed by ACSA)fees assumed by ACSA)

MidMid--year update of rate model: year update of rate model: O b /N b 2009O b /N b 2009October/November 2009October/November 2009

Need to Need to determine how much debt to issue on determine how much debt to issue on last WWTP ENR projectlast WWTP ENR project ($15 million project)($15 million project)——Board resolution required at November meetingBoard resolution required at November meeting

Higher WQIF grant percentage awarded but onlyHigher WQIF grant percentage awarded but only Higher WQIF grant percentage awarded but only Higher WQIF grant percentage awarded but only 65% of award to be paid out after July 1, 201065% of award to be paid out after July 1, 2010

Lower revenue than budgeted FY09 and FY10Lower revenue than budgeted FY09 and FY10 Lower revenue than budgeted FY09 and FY10Lower revenue than budgeted FY09 and FY10 Lower cash at end of FY09 than projectedLower cash at end of FY09 than projected Interest earning less than the 0.75% budgetedInterest earning less than the 0.75% budgeted Interest earning less than the 0.75% budgetedInterest earning less than the 0.75% budgeted Incentive plan payout unbudgeted (but based on Incentive plan payout unbudgeted (but based on

expenditure savings)expenditure savings) Less costly alternative selected for an expensive Less costly alternative selected for an expensive

regulatory dam upgraderegulatory dam upgrade

Potential risks not quantifiedPotential risks not quantifiedPotential risks not quantifiedPotential risks not quantified Unexpected shutdown of major customerUnexpected shutdown of major customer——p jp j

seeking greater assistance in monitoring seeking greater assistance in monitoring customer base (input from new County customer base (input from new County economic director?)economic director?)economic director?)economic director?)

New EPA notification of lower nutrient levels New EPA notification of lower nutrient levels than DEQ has permittedthan DEQ has permitted——more costly WWTPmore costly WWTPthan DEQ has permittedthan DEQ has permitted more costly WWTP more costly WWTP upgrades requiredupgrades required??

Possible Possible inability of County to pass or prevent inability of County to pass or prevent state preemption of ordinances that protect state preemption of ordinances that protect groundwater sources or regulate alternative groundwater sources or regulate alternative septic systemsseptic systems——significant longsignificant long--term capitalterm capitalseptic systemsseptic systems——significant longsignificant long--term capital term capital costs to correct potential problems?costs to correct potential problems?

Financial Resilience ChecklistFinancial Resilience ChecklistFinancial Resilience ChecklistFinancial Resilience Checklist ACSA practices ACSA practices DiversityDiversitypp yy

Multiple, clearlyMultiple, clearly--defined reservesdefined reserves FY09: Cash/investments more diversifiedFY09: Cash/investments more diversified FY10: FY10: Seeking more input on revenue riskSeeking more input on revenue risk (Board, (Board,

County staff, employees)County staff, employees)——no ability to reduce risk of no ability to reduce risk of high dependency on top 10 customershigh dependency on top 10 customers

ACSA practices ACSA practices RedundancyRedundancy Multiple, clearlyMultiple, clearly--defined reservesdefined reserves——connection fees connection fees

set aside and not used for recurring expensesset aside and not used for recurring expensesset aside and not used for recurring expensesset aside and not used for recurring expenses High cash reserves has allowed time to consider High cash reserves has allowed time to consider

alternatives to debt issuancealternatives to debt issuance Redundant water sources and storage in each systemRedundant water sources and storage in each system

Financial Resilience ChecklistFinancial Resilience ChecklistFinancial Resilience ChecklistFinancial Resilience Checklist ACSA is ACSA is DecentralizedDecentralized

Departments establish annual budgets and monitorDepartments establish annual budgets and monitor Departments establish annual budgets and monitor Departments establish annual budgets and monitor them monthly and in realthem monthly and in real--timetime

FY09: IntranetFY09: Intranet--based savings center has produced based savings center has produced ti id f ll l d i lfti id f ll l d i lfcreative ideas from all employees and is selfcreative ideas from all employees and is self--

motivatingmotivating FY08FY08--FY09: FY09: Interdepartmental energy committee has Interdepartmental energy committee has

produced savings and alternative energy strategies produced savings and alternative energy strategies that have been implemented successfully. Ideas are that have been implemented successfully. Ideas are the basis of Stimulus grant awardthe basis of Stimulus grant award..gg

FY10: Operating departments help monitor customer FY10: Operating departments help monitor customer consumption, more aggressively track “leaks”consumption, more aggressively track “leaks”

FY09FY09 FY10: Construction and maintenance crewsFY10: Construction and maintenance crews FY09FY09--FY10: Construction and maintenance crews FY10: Construction and maintenance crews generate extra revenue by outsourcing themselves, generate extra revenue by outsourcing themselves, do work previously contracted outdo work previously contracted out

Financial Resilience ChecklistFinancial Resilience ChecklistFinancial Resilience ChecklistFinancial Resilience Checklist

ACSA maintainsACSA maintains TransparencyTransparency ACSA maintains ACSA maintains TransparencyTransparency Monthly budget versus actual given to Board and staff Monthly budget versus actual given to Board and staff

along with projected “Incentive Plan” savings in areas along with projected “Incentive Plan” savings in areas the staff can controlthe staff can control

Monthly reportMonthly report on reserve fund and individual project on reserve fund and individual project activity and balances made readily availableactivity and balances made readily availableactivity and balances made readily availableactivity and balances made readily available

Budget, assumptions, and changes discussed with Budget, assumptions, and changes discussed with staff and Board throughout threestaff and Board throughout three--month processmonth process

FullFull--cost accounting used with Landfill, regional cost accounting used with Landfill, regional wastewater treatment plant with Staunton, and for wastewater treatment plant with Staunton, and for (some) County and customer(some) County and customer--funded projectsfunded projects(some) County and customer(some) County and customer--funded projectsfunded projects

Financial Resilience ChecklistFinancial Resilience ChecklistFinancial Resilience ChecklistFinancial Resilience Checklist ACSA practices ACSA practices CollaborationCollaboration

Support County’s comprehensive planSupport County’s comprehensive plan in order toin order to Support County s comprehensive planSupport County s comprehensive plan in order to in order to have infrastructure ready for development. Provide have infrastructure ready for development. Provide County project management expertise on potential County project management expertise on potential expansion areas and fire flow issuesexpansion areas and fire flow issuesexpansion areas and fire flow issuesexpansion areas and fire flow issues

Work with Work with County on securing necessary ordinancesCounty on securing necessary ordinancesto maintain construction standards and groundwater to maintain construction standards and groundwater

t tit tiprotectionprotection Coordinate with Staunton, Waynesboro and Coordinate with Staunton, Waynesboro and

Craigsville on border issues and shared resourcesCraigsville on border issues and shared resourcesgg Involve entire organization, Board, public (developers) Involve entire organization, Board, public (developers)

in annual budget, LTFP and ratein annual budget, LTFP and rate--setting processsetting process Review with Board annually the organizational goalsReview with Board annually the organizational goals Review with Board annually the organizational goals Review with Board annually the organizational goals

and rateand rate--setting objectivessetting objectives

Financial Resilience ChecklistFinancial Resilience ChecklistFinancial Resilience ChecklistFinancial Resilience Checklist

ACSA has ways toACSA has ways to Fail gracefullyFail gracefully ACSA has ways to ACSA has ways to Fail gracefullyFail gracefully Rate model available yearRate model available year--roundround to run to run

through different “whatthrough different “what--if” scenarios or to if” scenarios or to determine the determine the impact of budget “errors” or impact of budget “errors” or changing conditionschanging conditionsSupervisors free to shift manpower andSupervisors free to shift manpower and Supervisors free to shift manpower and Supervisors free to shift manpower and budget items within departments or entity as budget items within departments or entity as conditions changeconditions changegg

FY10: Accidents happenFY10: Accidents happen——departmentdepartment--level level outout--ofof--box solutions to maintain needed fleet box solutions to maintain needed fleet

d i t l ld i t l land equipment levelsand equipment levels

“Debbie White ‘Safety’ Award”“Debbie White ‘Safety’ Award”——Messed up Messed up first day on the job and they didn’t fire me!first day on the job and they didn’t fire me!

Financial Resilience ChecklistFinancial Resilience ChecklistFinancial Resilience ChecklistFinancial Resilience Checklist ACSA practices ACSA practices FlexibilityFlexibility

C ti l h t d ti tC ti l h t d ti t Continuously change water production to Continuously change water production to meet customer demand levels and main line meet customer demand levels and main line breaksbreaks——can reduce some operating costs, if can reduce some operating costs, if b ea sb ea s ca educe so e ope at g costs,ca educe so e ope at g costs,necessary. Alarms and computer systems necessary. Alarms and computer systems allow for remote, unmanned “corrections”allow for remote, unmanned “corrections”OO ff Operating crews crossOperating crews cross--trained and shift work trained and shift work as neededas neededFlexible inFlexible in house rate modelhouse rate model Flexible inFlexible in--house rate modelhouse rate model

FY09FY09--FY10: higher monitoring of consumption FY10: higher monitoring of consumption and other areas of high risk in order to makeand other areas of high risk in order to makeand other areas of high risk in order to make and other areas of high risk in order to make timely adjustmentstimely adjustments

Financial Resilience ChecklistFinancial Resilience Checklist ACSA manages with ACSA manages with ForesightForesight

Board and senior management take seriously Board and senior management take seriously g yg ylonglong--term financial and infrastructure planning, term financial and infrastructure planning, especially in light of regulatory changesespecially in light of regulatory changesE l t j t f lE l t j t f l t ti dt ti d Evaluate projects for longEvaluate projects for long--term operating and term operating and maintenance (maintenance (present worth lifepresent worth life--cyclecycle) costs) costs

Organizational emphasis on monitoring andOrganizational emphasis on monitoring and Organizational emphasis on monitoring and Organizational emphasis on monitoring and implementing “best practices”implementing “best practices”

Evaluate organization against rating agency Evaluate organization against rating agency g g g g yg g g g yexpectations (key ratios) for A or AA expectations (key ratios) for A or AA organizationsorganizations——keep current revenues high keep current revenues high enough to meet bond indenture requirementsenough to meet bond indenture requirementsenough to meet bond indenture requirements enough to meet bond indenture requirements for new debt issuefor new debt issue

Free Resources that got ACSA Free Resources that got ACSA through this remarkable yearthrough this remarkable yearthrough this remarkable yearthrough this remarkable year

CPA Letter Daily (AICPA daily news summary)CPA Letter Daily (AICPA daily news summary) AICPA free webinars on financial managementAICPA free webinars on financial management Monthly “Snapshot”Monthly “Snapshot”——Fed Reserve (Richmond) Fed Reserve (Richmond)

economic updates (as well as FOMC presseconomic updates (as well as FOMC presseconomic updates (as well as FOMC press economic updates (as well as FOMC press releases on fed fund rates)releases on fed fund rates)

www bls gov (monthly CPI releases)www bls gov (monthly CPI releases) www.bls.gov (monthly CPI releases)www.bls.gov (monthly CPI releases) LGIP electronic newsletters LGIP electronic newsletters

Also monitor performance against S&P Govt. Also monitor performance against S&P Govt. p gp gInvestment Pool Indices (GFOA best practice)Investment Pool Indices (GFOA best practice)

GFOAGFOA——Best Practices (look for updates)Best Practices (look for updates)GFOAGFOA S K h’ i di LTFP l ttS K h’ i di LTFP l tt GFOAGFOA——S. Kavanagh’s periodic LTFP newsletterS. Kavanagh’s periodic LTFP newsletter

Free Resources that got ACSA Free Resources that got ACSA h h hi k blh h hi k blthrough this remarkable yearthrough this remarkable year

Bank stabilitBank stabilit Bank stability:Bank stability: Internet searches on bank stock to evaluate the Internet searches on bank stock to evaluate the

strength of a bank (market perception), especiallystrength of a bank (market perception), especiallystrength of a bank (market perception), especially strength of a bank (market perception), especially after their quarterly earnings announcementafter their quarterly earnings announcement

Virginia Treasury websiteVirginia Treasury website——Virginia Public Deposit Virginia Public Deposit A i ( hl dA i ( hl d ll li dll li dAct section (monthly reports on underAct section (monthly reports on under--collateralized collateralized banks), January SPDA presentation 1/26/09banks), January SPDA presentation 1/26/09

FDIC website (but not very upFDIC website (but not very up--toto--date)date) FDIC website (but not very upFDIC website (but not very up toto date)date) VGFOA Listserv, conferences and seminarsVGFOA Listserv, conferences and seminars VEC “Community Profiles” updated monthlyVEC “Community Profiles” updated monthly VEC Community Profiles updated monthlyVEC Community Profiles updated monthly

No winter No winter lasts forever;lasts forever;lasts forever; lasts forever;

no spring no spring p gp gskips its skips its

ttturn.turn.

(Hal Borland, (Hal Borland, American author)American author)))