SFPUC - Annual Reports The Future Is Now | Page 13

The Statement of Net Position is a useful indicator of
fi nancial position. Our Statements of Net Position continued
to refl ect a strong and healthy fi nancial condition over the
last several fi scal years. Investments in capital assets
constituted 89% 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, commercial paper,
notes, or other borrowings that are attributable to the
acquisition, construction, or improvement of those assets.
While total assets were increasing in the last fi ve years,
liabilities increased by $514 million in fi scal year 2017
from increased pension liability and debt issuance to
fund capital projects.
• Other Liabilities: Payments due on obligations owed by
SFPUC within the next 12 months.
• Restricted Assets: Cash and investments set aside for a
specifi c purpose.
• Unrestricted Assets: Agency-owned assets that can be
used for any purpose.
• Capital Contributions: Funds that are used for capital and
expansion projects.
• Change in Net Position: The total of net income (loss) plus
capital contributions.
There are fi ve 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. • Depreciation and Amortization Expense: If an asset is
expected to produce a benefi t in future periods, some of
these costs must be deferred rather than treated as a
current expense.
1. Assets are resources with present service capacity
that the government presently owns or controls. • Income (Loss) Before Capital Contributions: The
difference between total revenue less total expenses.
2. Deferred outfl ows 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. • 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.
3. Liabilities are present obligations to sacrifi ce resources
that the government has little or no discretion to avoid,
such as debts owed, and represent claims against assets.
4. Deferred infl ows 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.
5. Net position is the residual of all other elements
presented in a statement of fi nancial 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 fi nancial position is improving or worsening.
Defi nitions
• 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.
• Current and Other Assets: Assets easily converted to
cash or consumed within one year: cash, investments,
receivables, and prepaid expenses.
• 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 6/30/17.
The Statements of Revenues, Expenses, and Changes
in Net Position refl ected continued revenue growth.
SFPUC strives to achieve strong fi nancial performance
and effectively controls its operating costs to not exceed
revenues. Total revenues increased by $114 million due
to adopted water and wastewater rate increases and
new revenues source generated from the CleanPowerSF
Program. Total expenses increased by $245 million, as
compared to prior year. This is primarily due to increases of
$130 million in pension costs resulting from the adoption
of GASB Statement No. 68, Accounting and Financial
Reporting for Pensions; $19 million in purchased electricity
and $18 million in depreciation and amortization expense
due to completion of capital projects, offset by a decrease of
$49 million in net transfers is mainly due to $30 million to City
Real Estate Division for the Central Shop Relocation Project.
• Long-Term Debt Outstanding: Payments due on debt that
are more than 12 months in the future.
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