HomeMy WebLinkAbout4 Budget Workshop Agenda Item # 4
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Memorandum
To: Board of Directors
From: Peter Holzmeister
Date: January 14, 2005
Subject: Budget workshop
Why this matter is before the board: The board is in the process of reviewing
the draft budget for 2005. We traditionally hold one or more workshop before the
board considers final adoption of the budget.
History: You have received copies of the draft budget, a five-year capital budget
and the budget detail sheets. We talked a bit about the budget at the January 5
meeting.
New information: Attached is an outline of items that we would like to discuss
with the board on Wednesday evening. Also attached are a few overheads that I
would like to use to prompt some discussion. Some of the overheads are not yet
complete, but will be by Wednesday evening. Please remember to bring your
budget documents with you to the workshop.
Recommendation: No action is necessary on Wednesday evening. It is just a
workshop. However, we do hope there is sufficient discussion to allow the
directors to understand what is in the budget.
Budget Workshop Discussion Items
January 19, 2005
Agenda
Key points in departmental budgets
Status of District's finance goals
Status of Surplus Land Sales Trust Fund
Discussion of Building Fund
Review of draft electric and water rate change
Review of water and electric connection
charges
Key Points in Department Budgets
Board
Organizational issues
Board focus
Rates versus fees
Wholesale power
NCPA / DAMPS
Water rate study
General Manager
Organizational issues
Broadband
Corporation yard
Labor / Management
Outside community
Administrative Services
Human resources
Finance
Customer service technology
Planning
Conservation
Green Building movement
Customer communication
Support Services
Corporation yard
Sale of land
Warehousing and purchasing functions
Bar-coding
Vehicle maintenance
Sale of land
Electric ops
Growth
O&M
Capital
Power Supply
Power supply contract
NCPAIUAMPS
Western
GIS
Work management system
Outage management system
Water ops
Growth
O&M
Capital
Donner Lake
Status of Finance Goals
Planning Goals
• Review master plans at least every five
years — Due in 2006 and 2007
• Review our finance master plan each year
• Prepare annually five-year capital
replacement budget - Done
• Review rate structure and levels at least
once every three years — Water in 2005,
Electric in 2006
• Review Financial Goals every three years —
Due in 2007
Revenue Goals
• Set operating revenues to capture entire
cost to provide service plus maintain
reserves and satisfy debt coverage ratios —
We have not yet satisfied reserves
• Review connection charges each year and
set then to recover all costs
• Review facilities fees every three years —
Water in 2005, Electric in 2006
Debt Goals
• Separate debt that is serving development
(facilities fees), debt serving current
customers (rates), and debt serving a
special assessment district (assessments).
• One-half the debt service for all Long-term
debt in the aggregate is due in the first ten
years
• No more than one half the projected annual
facilities fee revenue committed to debt
service - Done
• No more than twenty-five percent of general
fund revenues committed to debt service -
Done
• No debt more than 25 year maturity - Done
• No debt longer than useful life of the project
- Done
Cash Reserve Goals - Operations
• Water general fund should have a reserve
equal twice the highest month budgeted
• Electric general fund should have a cash
reserve equal to twice the highest month
budgeted
• Electric rate stabilization fund should
maintain a balance of $1 ,000,000 — Current
balance is $441 ,000
Capital Reserve Goals
• There should be a revolving water capital
reserve fund in the amount of $4,000,000 to
permit projects to be initiated and funded
prior to arrangement of long-term debt or
other financing.
• There should be an electric capital reserve
fund in the amount of $1 ,000,000.
Debt Reserve Goals
• There should be a reserve fund for each
debt instrument equal to one year's principal
and interest
STATUS OF LAND SALE TRUST FUND (2.0.136.98): 12/31/04
Proceeds from land sales less sales expenses $3,660,255.01
Interest earnings through 12/2004 $50,783.46
Temporary transfers from funds:
Dl water system expenses ($1,523,710.40)
Donner Tract project (384,421.45)
Glenshire water system expenses (824,530.91)
Purchase Steele property-Water share (329,140.50)
Water General Fund - portion of overdraft at 12/31/02 (649,235.21)
Balance after transfers ($3,711,038.47)
Balance @ 12/31/04 $0.00
Status of Building Fund
Balance as of November 30, 2005 $2747202
Emergency power supply to building 35,000
Air condition second floor of building 85,000
Corporation yard development 154,202