FirmoGraphs tracks and analyzes weekly and monthly meeting minutes from more than 1000 municipal and utility boards nationwide. One current application of this research, and our related natural language processing tools, is to look at COVID-related discussions around infrastructure.This week we are looking at how local and regional utilities are withstanding the financial effects of the pandemic. FirmoGraph’s researchers are seeing trends in increased customer financial support participation, decrease in revenue from commercial services, and organizations re-examining their two and five year budget plans. Here are some specific examples of what is happening throughout the country.
City of Bellevue Environmental Services Commission,Bellevue, Washington
On July 23, 2020, the City of Bellevue Environmental Services Commission held a meeting and discussed how Utilities will be mitigating the 2020 COVID Utility impacts. For planning purposes, revenue is estimated to be $8.6 million lower than expected in 2020, a 2.7% decrease. The City is planning on using cost reductions, including staff vacancy and operational savings, to address most of the impact. The wholesale bill for King County is expected to be lower because of reduced sewer volume.
The financial impacts of COVID-19 are expected to linger into the next biennium. These impacts will be addressed with cost-containment efforts in local operations and reserves where appropriate. Reasons for the lower than expected revenue are primarily due to a foreseen decrease in revenue from commercial customers. Due to the two-month billing cycle, the Assistance Director state they are uncertain of the current financial effects, but Utilities is seeing lower revenues from commercial customers and slightly higher revenues from residential customers.
Oakland’s East Bay Municipal Utility District, Oakland, California
On July 28, 2020, the East Bay Municipal Utility District Board of Directors conducted a meeting to discuss a financial plan for 2021. The Principal Management Analyst presented a summary of the District’s proposed plans to issue revenue bonds of up to $160 million to meet predicted debt needs for the Water System and pursue a State Revolving Fund loan and a federal Water Infrastructure Finance and Innovation Act loan in FY21. It was noted that financial impacts from the COVID-19 pandemic would inform the amount of funds needed and the timing to issue bonds.
The District’s debt composition at the end of FY20 was reviewed including its current credit ratings by S&P, Moody’s and Fitch, and FY20 debt activity for the Water and Wastewater Systems. Due to recent high capacity charge revenues and corresponding high reserve levels, the staff does not expect to issue new revenue bonds for the Wastewater System. The staff will monitor the market and bring any opportunities to refund or restructure existing debt to the Board for consideration.
Orlando City Council, Orlando, Florida
On July 20, 2020, authorities in Orlando gave a brief overview of the impact of COVID-19 on the FY2020 Budget and revenues. They concluded that, although affected, the City of Orlando's finances are still stable, due to the strong financial management budgeting practices which helped to withstand healthy reserves across all the funds. COVID-19 pandemic did affect the City back in March, but that revenue was ahead of budget, which allowed the City to absorb some of the revenue declines that began to be seen in April and May of 2020.
The Commissioners also went over how COVID-19 has impacted the FY2020 budget. They pointed out that pandemic has affected City's Enterprise Fund Revenues, stating that revenues are slightly trending down in the Water Reclamation Fund and that there are no significant impacts on the Streets and Stormwater fund.
We do this work to help our customers know where their utility and municipal customers are headed.
We provide insights to help you pivot and move your business during and after the COVID-19 pandemic. FirmoGraphs will continue to employ our Power Search tool, watching developments in municipal infrastructure and meeting minutes.
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