HomeMy WebLinkAboutBudget Assumptions 2006 Budget Assumptions for 2006
August 9, 2005
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Budget Meetings
• August 9 GIVI presents budget assumptions
• August 15 Electric Operations budget planning
August 22
Water Operations budget planning
• August 25 Admin Services budget planning
• September 12 Support Services and Planning budget planning
September 14 ',"Power Supply and GIS budget planning
• October 3
Board of Directors, GIVI and appendices, assembly
of the water and electric funds
• October 10 , Workshop on rates
• November 2*
• November 9
• November 16*
• November 30
• December 7* - Budget hearings and adoption of the budget
• December 21 * - Adopt delegations resolution
Budget Structure
• We have lots of departments, but just two utilities
• Allocation between electric and water based on best
estimates (actual costs, 60/40, 50/50)
• Electric and water rates pay for service to existing
customers , -
• Developer fees and charges pay for extending service to
new development
• Facilities fees pay for water and electric system additions
required to pay for the impacts of growth
• Whatever we plan for in September — it will be somewhat
different in 2006, so be flexible and respond to reality
Inflation
• Inflation will increase parts of the 2006 budget over the
2005 budget
• Basic inflation rate is 2.4% (for a certain basket of
consumer goods)
• Medical insurance increases faster than inflation
• Liability insurance increases faster than inflation
• Construction materials have been increasing faster — as
much as 20% during the past year
• In Truckee, contract bids are increasing very quickly
• Gasoline prices are an unknown
• Natural gas prices are an unknown
• Truckee is different — economy is exploding
Revenues
• We are adding an average of 300 new
customers per year — infill
• We see a bubble for the next couple of
years
• Revenues will increase about 2 .0% to
2 .5% in 2006 over 2005 (conservative)
Rates
• Increase at about the rate of inflation
• Rates competitive with SPPCo and local water purveyors
• Think about ramping rates to what is needed in 2008 —
2011 to cover power supply contract �
• Build rate stabilization fund x'
• A small increase in water and electric rates
(approximately 1 %) is required just to build reserves
• Connection charges should be increased about 2.5%
• Facilities fees should be increased about 2.5%
Specific Budget Items
• More time dealing with customer outreach
• Stuff to clean up from 2005 and prior
• Organization study
• Water rate study
• Broadband
— lawsuit will be settled in January of 2006,
— appeal will be settled in June of 2006 — and we will prevail.
— system construction can begin in September of 2006
• Major new developments will need to the addressed in 2006. This impacts
construction costs — does not produce new revenues for a couple of years
• We will have a new MOU negotiated by January of 2006 — new costs will be near rate
of inflation
• We will look for ways to outsource tasks where it is economical and practical
• We will incur new long-term debt related to Donner Lake and Glenshire
• Restore land sales trust fund
• Water leaks are a problem that needs a more comprehensive solution — new debt
• Need to construct water transmission line or lines
• Corp yard will move forward into final planning and land will be sold
• Labor — Truckee's cost of living