SFPUC - Annual Reports Utility of the Future | Page 12

11

Annual Report for the Fiscal Year Ended June 30, 2016

Keeping Our Rates Affordable

The Statement of Net Position is a useful indicator of financial
position. Our Statements of Net Position continued to reflect
a strong and healthy financial condition over the last several
fiscal years. Investments in capital assets constituted 88%
of our net position and represented the amount by which the
carrying value of capital assets exceeds capital-related debt,
which comprises the outstanding balances of any bonds,
mortgages, notes, or other borrowings that are attributable to
the acquisition, construction, or improvement of those assets.
While total assets were increasing in the last five years, liabilities
increased $364 million in fiscal year 2016 from additional debt
issuance to fund capital projects.

Single Family Residential FY 2015-2016
Average Monthly Water and Sewer Bill...................$91
Cost per Person/Day................................................$1.01
Total Cost per Gallon, Water and Sewer.................$0.022
Total Combined Bill as % of San Francisco
Median Household Income........................................1.4%

For the last six fiscal years, since 2010, this report
has won the prestigious “Award for Outstanding
Achievement in Popular Annual Financial Reporting”
from the Government Finance Officers Association.

2. Deferred inflow of resources is an acquisition of net assets by
the government that is applicable to a future reporting period—
for example, deferred revenue and advance collections.

This award recognizes our commitment to increase
public awareness by providing an overview of our
financial condition. While the financial information
is drawn from the audited financial statements in the
SFPUC’s Fiscal Year 2016 Comprehensive Annual
Financial Report (CAFR) using the full accrual basis
of accounting and providing complete financial
information and disclosures in conformance with
generally accepted accounting principles (GAAP),
this report is not audited and not intended to comply
with GAAP as note disclosures have been excluded
from this report. Our CAFR, which provides complete
financial information and disclosures in conformance
with GAAP, is available online at sfwater.org/finance.

3. Liabilities are present obligations to sacrifice resources that
the government has little or no discretion to avoid, such as
debts owed, and they represent claims against assets.

Credit Ratings
Fiscal Year...................................2016

2015

2014

Water
Standard & Poor’s ......................AAMoody’s Investor Services.........Aa3

AAAa3

AAAa3

Power
Fitch.............................................AAStandard & Poor’s......................A+

AAA+

Sewer
Standard & Poor’s ......................AA
Moody’s Investor Services.........Aa3

AAAa3

AAAa3

Average Borrowing Rate
Water 4.22%

Power 2.80%

Sewer 3.04%

Current and Other Assets: Assets easily converted to cash
or consumed within one year: cash, investments, receivables,
and prepaid expenses.

Long-Term Debt Outstanding: Payments due on debt that are
more than 12 months in the future.

1. Assets are resources with present service capacity that the
government presently owns or controls.

Financial Performance

Capital Assets: Include depreciable, amortizable, non-amortizable
and non-depreciable facilities and buildings, improvement,
machinery and equipment, intangible assets, land and
rights-of-way as well as construction work in progress, net
of depreciation and amortization.

Deferred Outflow of Resources: Represents outflow of
resources that apply to future periods and that, therefore,
will not be recognized as an expense until that time.

There are five components in the Statement of Net Position,
which is intended to present what the entity owns (assets),
owes (liabilities) and its residual or net position.

Calculation is based on average 45 gallons per person per day.

Definitions

4. Deferred outflow of resources is a consumption of net assets
by the government that is applicable to a future reporting
period—for example, prepaid items and deferred charges.

Other Liabilities: Payments due on obligations owed by SFPUC
within the next 12 months.
Restricted Assets: Cash and investments set aside for a
specific purpose.
Unrestricted Assets: Agency-owned assets that can be used
for any purpose.
Capital Contributions: Funds that are used for capital and
expansion projects.

5. Net position is the residual of all other elements presented
in a statement of financial position, i.e., the residual interest
in the items owned or controlled after deducting debts. Over
time, increases or decreases in net position may serve as a
useful indicator of whether the financial position is improving
or worsening.

Change in Net Position: The total of net income (loss) plus
capital contributions.

Our Statements of Net Position summarize resources balanced
against debt and other liabilities as of June 30, using the full
accrual basis of accounting. Full accrual accounting records
revenues when earned and liabilities when incurred, regardless
of the timing of cash flows. The statements of net position
present assets, deferred outflows of resources, liab ilities,
and deferred inflows of resources as of the end of the fiscal
year. The difference between these amounts is reported as
net position, which comprises net investment in capital assets,
restricted, and unrestricted.

Income (Loss) Before Capital Contributions: The difference
between total revenue less total expenses.

The Statements of Revenues, Expenses, and Changes in
Net Position reflected SFPUC’s efforts to achieve strong
financial performance and effectively control its operating
costs to not exceed revenues.

Depreciation and Amortization Expense: If an asset is expected
to produce a benefit in future periods, some of these costs
must be deferred rather than treated as a current expense.

Net Position: The sum of total net position at the beginning
of the fiscal year plus the change in net position resulting in
ending net position at the end of the fiscal year.
Non-Operating Revenues and Expenses: Revenues and
expenses that are incidental to SFPUC’s main purpose
and derived from activities not directly related to SFPUC’s
operations: taxes and penalties, interest earnings and rental
income, and costs associated with debt.
Operating Expenses: Expenses incurred in the provision of
water, sewer, and power services.
Operating Revenues: Revenues for the sale of water, sewer,
and power services to customers, services, inspections, and
programs provided by SFPUC.
Average Borrowing Rate: Weighted average interest rate on
outstanding long-term debt as of 6/30/16.

Annual Report for the Fiscal Year Ended June 30, 2016

12