HomeMy WebLinkAbout12 Draft Budget 2006 Agenda Item # 12
Workshop
To: Board of Directors
From: Peter Holzmeister
Date: October 28, 2005
Subject: Draft Budget for 2006
Why this matter is before the Board: This matter involves review of a draft Budget for
2006. The Board reviews and ultimately adopts a budget for the District
History: When the Budget for 2005 was adopted Directors expressed an interest in having
more time to review a draft budget before it is presented to them for adoption. We conducted
the strategic plan workshop with Bob Rauch and set up a procedure for reviewing the budget
assumptions and structure at a series of workshop meetings held during the month
September and early October. At the conclusion of those meetings I worked with the District
department heads to prepare a draft Budget for 2006.
New information: The draft Budget for 2006 is complete, except for drafting a few narratives
and printing it. We will do that on Monday and deliver it to the Directors on Monday, or
Tuesday afternoon at the latest. (I am giving myself a little extra room in case we hit a snag
or two) The draft budget proposed an electric rate increase of 5% to cover increased costs,
and an additional increase of 2% to add funds to the rate stabilization fund. The rate
stabilization fund will help position ourselves for the new power supply contract in 2008. 1 am
also recommending that electric connection and facilities charges be increased 5%.
The Budget recommends a 5% water rate increase, and a 2% increase to be set aside for
capital reserves. We have a significant need for funds to replace old water system piping,
and careful modest development of a capital reserve fund will help us.
All of this is presented in the draft Budget. I suggest we spend time at a series of meetings
during November reviewing the details of the Budget.
I am enclosing for your review a booklet prepared by the American Water Works Association
entitled "Avoiding Rate Shock: Making the Case for Water Rates" (suggested to me by Tim
Taylor). It applies specifically to water rates, but the principles apply to electric rates as well.
It recommends that we develop a public outreach program very similar to the program
recommended by Pat Davison of CATT. We should discuss this and implement a plan.
Recommendation: This is a workshop. No formal action is suggested.