2005 MWMC Financial Plan - Laserfiche WebLink

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• A comprehensive financial policy structure, including: ^ Established debt policies and practices ^ Established budgetary policies and practices ^ Established reserve policies and practices • A CIl' and other asset management tools that address system maintenance, upgrades and capacity enhancement - MWMC maintains 5-year, ~l 0-year, and 20-year CIPs. • Intergovernmental cooperation and coordination -The Commission has a goal of intergovernmental cooperation and has worked hard to maximize the benefits of that cooperation. MWMC is generally thought of as an example of successful intergovernmental cooperation. • Healthy employee relations and sound staffing practices -Staff turnover is low. Staffing levels are reviewed annually. High qualification standards are required of all new personnel. • Successful litigation history - MWMC has little in the way of litigation history but what there is has been successful. • Exposure to growth-sensitive revenue sources - MWMC's major revenue source, user fees, is somewhat sensitive to conservation efforts, but is not growth sensitive. SDC revenue is growth sensitive. While this revenue plays an important role in MWMC capital financing, the greatest. • Long-term operational capacity planning and creation -The Intergovernmental Agreement (IGA) under which MWMC was formed requires planning for new capacity to begin at the point 85 percent of present capacity is being used. • Compliance with environmental laws and regulations - MWMC has an outstanding record of environmental compliance. The common element of many of these qualitative factors is the capability of management and their practices and policies. Moody's states, "Management quality is a key aspect in the... assessment... and it is reflected in their financial operations and budgeting, capital improvement planning, construction management, and ability to operate and meet the demands of a changing regulatory, political and economic environment." The Quantitative Analysis Quantitative measures are performance factors that can be expressed in numbers or ratios. They are useful for comparing an agency with other agencies or with an objective standard. When assessing a sewer utility's credit worthiness, the quantitative measures focus primarily, but not exclusively, on financial indicators. Among the key quantitative factors are the following: • Income statement and balance sheet components and ratios (see additional detail below), • Previous bond ratings, • Reserve levels, • Rate structure, including rate competitiveness, • Account and collections history, • The level of overlapping debt in the user base (a measure of the total public debt load on the customer base in the community from all overlapping jurisdictions), • Outstanding capital needs, 2005 MWMC Financial Plan - Appendix I Page 24