Loading...
HomeMy WebLinkAbout2004-0318 Special Mtg PacketCITY OF kSHLAND Council Communication Title: AFN Update and revised AFN Pro Forma Dept: Electric and Telecom and Finance Date: March 18, 2004 Submitted By: Dick Wandersp~ and Lei ;1;uneberg Approved By: Gino Grimaldi~ Synopsis: City Staff has been working with Navigant Consulting and the AFN Advisory Committee to develop new revenue opportunities, review operating procedures and staffing, develop new marketing ideas and initiatives, and then use this information to revise the AFN Pro Forma. Included with this communication is the revised Pro Forma including this new data. The process used to gather and revise this information will be reviewed and presented to the Mayor and Council and Budget Committee on March 18, 2004, along with future tasks that need to be accomplished in the next few months. Recommendation: The City Council review and adopt the revised Pro Forma which will then be used to prepare the FY 2004-05 budget for AFN and allow staff to begin work on other AFN Financial issues. Fiscal Impact: The revised Pro Forma indicates AFN will have a positive net income beginning in FY 2007-08. While this is good news, an examination of AFN's cash flow indicates that the annual cash flow does not become positive until FY 2008-09. Staffhas begun to work with the City's financial advisors to determine alternatives regarding possible restructuring of AFN's debt in order to improve the annual cash flow. The debt restructuring alternative will be presented to the City Council as soon as staff can complete the work necessary to accomplish this. Background: During last September's Budget Committee meeting it was determined that the City's should bring in an outside consultant to review AFN revenue opportunities, look at internal operations and staffing levels, and help revise the AFN Pro Forma based on their expertise and new information that would be gathered. The City hired Navigant Consulting of Austin Texas via an RFQ process to accomplish these tasks. Navigant visited Ashland in early November to gather information and met with city staff and also had an intial brainstorming meeting with the AFN advisory committee. This committee is made up of Russ Silbiger, Marty Levine, Alan Douma, Rick Barth, Jim Teece, Mayor De Boer and City Staff from AFN, Finance and Administration. Dave Williams has been substituting for Marty Levine however as Marty has been unable to attend recently because of his busy work schedule. Navigant also commissioned a market research phone survey of Ashland Citizens and Businesses in early December to gather more information as a part of their research on this project. ? The Advisory committee met with Navigant a second time on March 1 st, and we have had 2 additional meetings of the committee with Navigant staff joining by phone since then. Working through this process the committee, staff and Navigant have been able to refine Navigant's intial recommendations and the result is a set of initiatives that should improve the revenue that AFN can generate by making our internal operations more efficient and by launching some new products and marketing efforts. All of these ideas were thoroughly reviewed and discussed by everyone involved in the process and the results were then imported into the revised AFN Pro Forma. This Pro Forma has been included with the communication and in the view of the staff, the consultant and the Advisory committee, it represents one possible reasonable, conservative future scenario that is achievable by AFN. With this revised Pro Forma we propose that we use it to continually monitor and report to the council our progress on meeting targets and also continue to use it as a guide to make mid course corrections as circumstances dictate. We hope to use the Pro Forma'to continually update and monitor the progress that is being achieved by the new initiatives and change our operations quickly if warranted. While the Pro Forma represents a reasonable conservative future we hope to exceed plan targets and will do our utmost to achieve maximum performance and improve AFN's bottom line beyond the one spelled out by the Pro Forma. That said, there are still internal borrowing amounts and cash fiow issues that are not resolved by this revision. We hope to continue to work on these in conjunction with the committee, with a goal that solutions to these issues will be presented as soon as staff can complete the work necessary to bring this item back to the City Council. Acceptance of this revised Pro Forma will enable us to prepare the AFN budget for presentation to the Budget Committee in the upcoming budget cycle. Navigant will be present at the March 18th meeting to present their findings on this project and city staff will also review the revised Pro Forma with the Mayor and City Council and Budget Committee. Attachments: AFN Pro Forma U) C') 3: m c: m z 0 m 0 0 0 0 C/) rn CZ t- m z 'C') 0 m O) C~ 'I' Ill C r- m 0 m 0 0 O~ ~0 ~0o 0~ 0 ~ ~ o 0 ,~1o o o~ 000 000~ O0 0 0000 ~ O0 0000 0000 oo m C r' rn m 'ri -ii o ''' ~ ~ ~ ~ ~ ~ o 0 ,0000 0000 0000 0000 0 ~ 0 000 0000 00 ¢~' 0 ~oo ~§ m r"' m m 0 000000 ,,,i- m r- m 0 o o o o °§ ..,. rtl I-- , m m m r- m m 0 0 GO--~ ¢D~ 0 ~ Ill r' m 0 ~o~ 0~ ? . 000~ ~00 ~00 o00 m m ae ~0 ~ ~. ~ m~ ~ ~. ~' ~: ~ m ~-'~ ~" ~~ ~ 0 0 "1 X '0 (I) 0 0 0 0 Z 0 0 Z ~_. t.- t- ~ ~00 00~ ~ o ~ o m i'- m 0 o 0 'rl Z 'TI 0 © ~~~0 O~ 0000000000 O0 0 0 ~~0~0 0o00o0000o O0 ~~0~0 0000000000 O0 ~ 0 ? o ~~0~0 O0 C) rn r- m ill X ..~ m Z i O0 0 ~~~ 0 0oo00ooo00 O0 O0 O0 ~~~0 000000000 O0 ..r m c: r- m ,.~ Ill Z .-hz ---'Z ---'7 Pene~t~on of al hou~ehok~ 0 .o PermtrM~on M ~1 hou~ehokM · · ~' I I I I I I -~z Z ~% zZ ~-~ Municipal System 7' Existing --'Z 0~9'/..t'(:'6 £90'6Pg'l g~'9'l.;-"l. $ IGC'61,./.' I. gg ZZ~ gg ~£ lgl'6 Iii ['01, zg0'6 (slo'l)/Ull~ eARIIn,,,no MA (ISO'l)/Ul~D eNt~munD MA. 01, JegA Rosld ,moa 6uPiOimg IIWeWl mnmlxlg MA muo~ul ~N eAItleOd gt. JeOA 01,~A gl, MA 01. MA SmA etep ot I~oA - enue,q~l qqeD qlng 01.~A 9JeeA g.meA swnoo .maolsnO I~M ~ sWnoD Jmuo~no qlng uo~q~leJ. ~tqeD 01, zeeA slunoD zmuotsnD I~JelNse~ uo~l~J, elq~D gl..mCA 01, MA g,meA · 6ul~ed ~o tueoJed ~M~M uoqMIO. L ~ gl, mA 01, .moa g.meA uo~. edwoo Ueld N-IV