GLWA Capital Improvement
Program
Summary and Financing Observations
January 26, 2016
TFG
THE FOSTER GROUP
FY 2017 CIP Summary
Definitions
• Two Separate CIP Plans
GLWA (Regional System)
DWSD-R (Local System)
• COMBINED CIP Financing
Requirements are still referenced
Programs for the Regional and Local
systems still need to be coordinated
Where not specified in this presentation,
figures refer to the COMBINED CIP
TFG
2
THE FOSTER GROUP
FY 2017 COMBINED Water CIP
Recent CIP Financing Req’ts
• FY 2016 Approved CIP
Approved by BOWC in March 2015
• POS Estimate
Used for pursuit of bond consent and refunding
issue in December 2015
Reflects initial estimates from Master Plan
Update (Water) and independent estimates in
later years (Sewer)
• FY 2017 Preliminary CIP
Presented today for review
Plan is for ultimate approval March 2016 as
part of overall FY 2017 Financial Plan
TFG
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THE FOSTER GROUP
FY 2017 COMBINED CIP
Recent CIP Financing Req’ts
• We’ve been asked to review and provide
commentary on the PRELIMINARY
CIP’s, with specific focus on:
Alignment with / impact on existing financial
plans;
Comparisons to prior programs;
Alignment with cost of service categories;
Separation of distinct GLWA and DWSD-R
projects
TFG
4
THE FOSTER GROUP
FY 2017 COMBINED CIP
Recent CIP Financing Req’ts
• In order to evaluate these overall CIP
plans, we have aligned the first 5 years
of these programs through FY 2020,
included an estimate for FY 2015, and
prepared resulting “6-year” programs for
comparative purposes
TFG
5
THE FOSTER GROUP
Water CIP Summary
TFG
THE FOSTER GROUP
FY 2017 GLWA Water CIP
Total CIP Financing Requirements
• Six Year Financing Requirements for FY
2015* through FY 2020
FY 2016 Approved CIP = $587 million
POS Estimate = $674 million
FY 2017 Preliminary CIP = $697 million
• Increase is largely in “out” years, as short
term financing requirements are actually
lower
Increased Regional Transmission System
projects
 Additional Lake Huron Plant projects
TFG
7
THE FOSTER GROUP
FY 2017 COMBINED Water CIP
6-Year Financing Req’ts - $ millions
1,000
900
800
700
600
500
400
300
200
100
0
FY 2016 CIP
Current Estimate
GLWA Projects
FY 2017 Prelim CIP
DWSD-R Projects
TFG
8
THE FOSTER GROUP
FY 2017 COMBINED Water CIP
Comparison to Prior Plans - $ millions
250
FY 2016 Approved CIP
200
Estimate for POS
FY 2017 CIP
150
100
50
0
2015
2016
2017
2018
2019
2020
TFG
9
THE FOSTER GROUP
FY 2017 GLWA Water CIP
Comparison to Prior Plans - $ millions
180
160
FY 2016 Approved CIP
Estimate for POS
140
FY 2017 CIP
120
100
80
60
40
20
0
2015
2016
2017
2018
2019
2020
TFG
10
THE FOSTER GROUP
FY 2017 DWSD-R Water CIP
Comparison to Prior Plans - $ millions
50
FY 2016 Approved CIP
45
Estimate for POS
40
FY 2017 CIP
35
30
25
20
15
10
5
0
2015
2016
2017
2018
2019
2020
TFG
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THE FOSTER GROUP
FY 2017 COMBINED Water CIP
Major Category Breakdown
Springwells
Water Works Park
Lake Huron
NE & SW
Transmission Mains
Pumping Stations &
Reservoirs
General & Other
DWSD-R Local
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THE FOSTER GROUP
FY 2017 GLWA Water CIP
Potential Financial Plan Impact
• GLWA CIP will continue to be financed by
•
•
a combination of bond proceeds and
revenues
The overall plan continues to focus on
increasing the amount of CIP funded by
revenues (and less through debt)
The Preliminary 2017 CIP identifies a
“preferred funding source”
Not intended to be definitive as future financing
plans need to consider market and other
conditions
TFG
13
THE FOSTER GROUP
FY 2017 GLWA Water CIP
Preferred Funding Source Summary - $ millions
180
160
140
120
100
Debt Eligible
Preferred Revenue Funded
80
60
40
20
0
2016
14
2017
2018
2019
2020
2021
TFG
THE FOSTER GROUP
FY 2017 COMBINED Water CIP
Potential Financial Plan Impact
• Current financing plan set forth in the consent
pursuit / refunding bonds document
 Projects a ~ $230 million bond sale Spring 2016
• Preliminary FY 2017 CIP does not significantly
alter this plan
 Next bond sale may be deferred a few months
 Will not materially impact 2017 debt service
projections
 Will modify overall plan for subsequent bond sales
• Updated Financial Plan will have to reflect and
accommodate separation of GLWA and DWSDR financing requirements and sources
TFG
15
THE FOSTER GROUP
FY 2017 COMBINED Water CIP
Potential Financial Plan Impact - $ millions
400
350
300
250
FY 17 CIP
Revenue Transfers
Bond Proceeds
200
SRF Loans
Beginning Balance
150
Est CIP - POS
100
50
0
2016
16
2017
2018
2019
2020
TFG
THE FOSTER GROUP
Sewer CIP Summary
TFG
THE FOSTER GROUP
FY 2017 GLWA Sewer CIP
Total CIP Financing Requirements
• Six Year Financing Requirements for FY
2015* through FY 2020
FY 2016 Approved CIP = $587 million
Current Estimate = $674 million
FY 2017 Preliminary CIP = $697 million
• Increase is largely in “out” years, as short
•
18
term financing requirements are actually
lower
Increased Regional Sewer System
projects, including improvements to the
NIEA
TFG
THE FOSTER GROUP
FY 2017 COMBINED Sewer CIP
6-Year Financing Req’ts - $ millions
1,000
900
800
700
600
500
400
300
200
100
0
FY 2016 CIP
Current Estimate
GLWA Projects
FY 2017 Prelim CIP
DWSD-R Projects
TFG
19
THE FOSTER GROUP
FY 2017 COMBINED Sewer CIP
Comparison to Prior Plans - $ millions
200
FY 2016 Approved CIP
180
Estimate for POS
160
FY 2017 CIP
140
120
100
80
60
40
20
0
2015
2016
2017
2018
2019
2020
TFG
20
THE FOSTER GROUP
FY 2017 GLWA Sewer CIP
Comparison to Prior Plans - $ millions
200
FY 2016 Approved CIP
180
Estimate for POS
160
FY 2017 CIP
140
120
100
80
60
40
20
0
2015
2016
2017
2018
2019
2020
TFG
21
THE FOSTER GROUP
FY 2017 DWSD-R Sewer CIP
Comparison to Prior Plans - $ millions
35
FY 2016 Approved CIP
30
25
Estimate for POS
FY 2017 CIP
20
15
10
5
0
2015
2016
2017
2018
2019
2020
TFG
22
THE FOSTER GROUP
FY 2017 COMBINED Sewer CIP
Major Category Breakdown
WWTP
Regional Sewer System
Combined Sewer System
Sewer Lift Stations
General & Other
DWSD-R Local
TFG
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THE FOSTER GROUP
FY 2017 GLWA Sewer CIP
Potential Financial Plan Impact
• GLWA CIP will continue to be financed by a
combination of bond proceeds and revenues
• A significant portion of the projected short term
projects have SRF commitments
• The overall plan continues to focus on
increasing the amount of CIP funded by
revenues (and less through debt)
• The Preliminary 2017 CIP identifies a “preferred
funding source”
 Not intended to be definitive as future financing
plans need to consider market and other conditions
TFG
24
THE FOSTER GROUP
FY 2017 GLWA Sewer CIP
Preferred Funding Source Summary - $ millions
160
140
120
100
Debt Eligible
80
SRF Loans
Preferred Revenue Funded
60
40
20
0
2016
25
2017
2018
2019
2020
2021
TFG
THE FOSTER GROUP
FY 2017 COMBINED Sewer CIP
Potential Financial Plan Impact
• Current financing plan set forth in the consent
pursuit document
 SRF Funding in short term defers any new
“regular” bond issuances until at least FY 2019
• Preliminary FY 2017 CIP does not significantly
alter this plan
 Still no bond sale required in the short term
 No change to 2017 debt service projections
 Will modify overall plan for subsequent bond sales
• Updated Financial Plan will have to reflect and
accommodate separation of GLWA and DWSDR financing requirements and sources
TFG
26
THE FOSTER GROUP
FY 2017 COMBINED Sewer CIP
Potential Financial Plan Impact - $ millions
300
250
200
Prelim FY 2017 CIP
Revenue Transfers
Bond Proceeds
150
SRF Loans
Beginning Balance
Est CIP - POS
100
50
0
2016
27
2017
2018
2019
2020
TFG
THE FOSTER GROUP