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HomeMy WebLinkAbout7 Finance Master Plan Agenda Item # TRUCKEE DONNER Public Utility District Workshop To: Board of Directors From: Mary Chapman, Administrative Services Manager Date: October 31, 2007 SUBJECT: Discussion of the Finance Master Plan 1. WHY THIS ITEM IS BEFORE THE BOARD On November 7, 2007, the Board will be considering the 2008 budget. The 2008 budget recommends a 9.94% electric rate increase to balance the electric budget. A 6% water rate increase approved in July of 2006 has been included in the 2008 budget. To help the Board with this decision, staff has updated the Finance Master Plan. 2. HISTORY The Finance Master Plan was developed as a tool to help the Board and staff evaluate the financial impact of decisions that are being made today and how they will affect the current and future finances of the District. The finance master plan forecasts revenue and expenses through the end of the current fiscal year, includes the current budget year being proposed and projects future revenue and expenses based on a set of assumptions. 3. NEW INFORMATION Because of the slowing of the housing market in Truckee that is currently being experienced, staff took a conservative approach when estimating growth in energy sales and new connection and facilities fees that will be collected. We used the following assumptions in the projections from 2008 forward: Increase in energy and water sales - all years 1.0% Increase in new electric and water service connections 150 connections Continued decrease in standby fees as new connections are made 7.0% Interest earnings on investments - all years 4.0% Increase in power supply costs for years after 2008 1.0% Increase in power supply costs because of growth for years after 2008 1.0% Increase in operating and administrative costs for years after 2008 3.5% Increase in interdepartmental rent for years after 2008 3.0% 1 Workshop-finance master plan 4. GOALS AND OBJECTIVES RELATING TO THIS ITEM Objective 6—Manage the District in an effective, efficient and fiscally responsible manner. Goal 6.6—Develop appropriate financial procedures to assure responsible financial management. 5. RECOMMENDATION This is a tool for the Board to use to try out various approaches to increase rates. In the next agenda item, staff has proposed a few options for the Board to consider. There may be other options that the Board would like us to try. �' Qzw /Z (rn Mary Cha an U 11`J n Ulrich Administrative Services Manager terim General Manager 2 Workshop-finance master plan FINANCIAL MASTER PLAN - WORK IN PROCESS AS OF 11/, A D I E F I G I H I I J K IL 1 Table 1: All Funds Summary 2 Forecast Draft Budget Projection Projection Projection Projection Projection Projection Projection P 3 Fiscal Year Ending2007 2008 2009 2010 2011 2012 2013 2014 2015 4 WATER FUNDS r5 6 Water General Fund 7 Operatin Revenue $ 9,053,320 $ 9,636,165 $ 9,717,300 $ 9,801,070 $ 9,886,481 $ 9,973,491 $ 10,062,066 $ 10,152,171 $ 10,243,777 $ 8 9 To DSC and Operating Reserve Fund (271,600) (514,821) (549,137) (554,629) (560,175) (565,777) (571,435) (577,149) (582,920) 10 To Glenshire Assessment Reserve (166,786) (166,786) (166,786) (166,786) (166,786) (166,786) (166,786) (166,786) (166,786) 11 Operating Expense (6,861,141) (6,588,459) (6,775,288) (6,968,986) (7,169,001) (7,375,549) (7,588,851) (7,809,141) (8,036,655) 12 Non Operating Revenue/(Expense) (1,017,132) (886,973) (853,624) (818,566) (785,842) (754,274) (737,591) (725,220) (666,172) _ 13 Net Revenue $ 555,595 $ 1,294,626 $ 1,189,418 $ 1,107,227 $ 1,017,951 $ 922,513 $ 806,924 $ 681,492 $ 596,937 $ 14 15 Capital Improvements $ (261,850) $ (365,932) $ (225,000) $ (250,000) $ (200,000) $ (476,842) $ (200,000) $ (200,000) $ (200,000) $ 16 Debt Proceeds/(Principal Payment) (833,648) (928,694) (932,501) (950,602) (957,189) (998,041) (1,035,671) (1,059,461) (1,122,312) _ 17 Adjustment to Revenue $ (1,095,498) $ (1,294,626) $ (1,157,501) $ (1,200,602) $ (1,157,189) $ (1,474,882) $ (1,235,671) $ (1,259,461) $ (1,322,312) $ 18 19 Debt Service Coverage(2) 1.38 1.34 1.29 1.24 1.18 1:12 1.E36 1.00 20 (1.25 requirement) 21 23 Ending Cash Balance 939,894 939,894 971,811 878,435 739,197 186,828 (241,919) (819,888) (1,545,263) 24 26 27 District Pipeline Replacement Projects 2781 Capital Improvements (2,767,086) (3,147,625) (2,890,727) (2,866,570) (663,314) (615,000) (650,000) (650,000) (650,000) 29 30 31 Interest Earning 384,571 281,007 171,738 58,285 - - 1,547 12,576 24,326 _ 32 Net Annual Cash Change (2,382,515) (2,866,618) (2,718,989) (2,751,603) 195,202 302,297 275,711 293,771 312,709 33 Ending Cash Balance 7,878,388 5,011,770 2,292,781 (458,822) (263,620) 38,677 314,388 608,158 920,868 34 35 Capital Improvement Reserve UNI 36 37 Interest Earning 5,080 12,526 20,407 28,545 37,082 38,612 38,127 37,629 37,118 38 39 Net Annual Cash Change $ 186,147 $ 197,026 $ 203,453 $ 213,421 $ 38,242 $ (12,121) $ (12,436) $ (12,786) $ (13,171) $ 40 Ending Cash Balance 313,151 510,176 713,629 927,050 965,292 953,171 940,735 927,950 914,779 41 111212007 of 2:12 PM 1 2008 Budget,attchmnt-RnMstd FINANCIAL MASTER PLAN - WORK IN PROCESS AS OF 11/: q Table 1: All Funds Summary D E F G H I J K L r32 ary Forecast Draft Budget Projection Projection Projection Projection Projection Projection Projection P Fiscal Year Endin 2007 2008 2009 2010 2011 2012 2013 2014 2015 DSC and Operating Reserve Fund 46 Revenue $ 271,600 $ 514,821 $ 549,137 $ 554,629 $ 560,175 $ 565,777 $ 571,435 $ 577,149 $ 582,920 $ 47 48 Interest Earning 10,864 31,891 55,133 77,256 75,835 74,381 72,888 71,354 _ 49 Net Annual Cash Change $ 271,600 $ 525,685 $ 581,029 $ 553,079 $ (35,520) $ (36,360) $ (37,308) $ (38,360) $ (39,513) $ 50 Ending Cash Balance 271,600 797,285 1,378,314 1,931,393 1,895,873 1,859,513 1,822,205 1,783,845 1,744,333 51 55 Facility Fees 56 Facility Fees&Interest Received $ 2,085,093 $ 798,202 $ 685,351 $ 664,200 $ 664,200 $ 664,200 $ 664,200 $ 664,200 $ 664,200 $ 57 Costs (2,917,398) (2,504,104) (1,249,775) (200,000) (512,208) (1,116,993) (450,000) (439,983) (280,000) 58 Debt Service Cost (507,610) (504,958) (506,931) (505,854) (506,519) (506,064) (508,250) (509,233) (509,033) 59 Net Annual Cash Change $ (1,339,915) $ (2,210,859) $ (1,071,355) $ (41,654) $ (354,527) $ (958,856) $ (294,050) $ (285,016) $ (124,833) $ 60 Ending Cash Balance 2,739,625 528,766 (542,589) (584,243) (938,770) (1,897,627) (2,191,677) (2,476,693) (2,601,525) 61 62 Donner Lake Assessment TT Revenue $ 800,852 $ 800,852 $ 800,852 $ 800,852 $ 800,852 $ 800,852 $ 800,852 $ 800,852 $ 800,852 $ 64 Debt Service Cost(SRF) (800,852) (800,852) (800,852) (800,852) (800,852) (800,852) (800,852) (800,852) (800,852) _ 65 Net Annual Cash Change - - 66 Ending Cash Balance 1,898,760 1,898,760 1,898,760 1,898,760 1,898,760 1,898,760 1,898,760 1,898,760 1,898,760 67 68 Glenshire Assessment 69 Revenue $ 166,786 $ 166,786 $ 166,756 $ 166,786 $ 166,786 $ 166,786 $ 166,786 $ 166,786 $ 166,786 $ 70 Debt Service Cost (166,786) (166,786) (166,786) (166,786) (166,786) (166,786) (166,786) (166,786) (166,786) _ 71 Net Annual Cash Change 0 0 0 0 0 0 0 0 0 72 Ending Cash Balance 119,501 119,501 119,501 119,501 119,501 119,501 119,501 119,501 119,501 73 74 Donner Lake Surcharge 5 Revenue $ 97,861 $ 100,258 $ 99,333 $ 97,619 $ 96,443 $ 99,984 $ 99,145 $ 98,016 $ 96,615 $ 7 76 Debt Service Cost (97,861) (100,258) (99,333) (97,619) (96,443) (99,984) (99,145) (98,016) (96,615) _ 77 Net Annual Cash Change - - - - - - 78 Ending Cash Balance - - - 79 80 Land Sales Trust Fund 81 From Internal Debt Repayment $ 55,105 $ 55,105 $ 55,105 $ 55,105 $ 55,105 $ 55,105 $ 55,105 $ 55,105 $ 55,105 $ 82 From FF for Glenshire Well and Pipeline 694,222 - - - - - _ 83 Glenshire Land Sale 170,000 - - - - 84 Interest Earning 104,775 145,739 153,772 162,127 170,817 179,854 189,252 199,026 209,192 _ 85 Net Annual Cash Change 1,024,101 200,844 208,878 217,233 225,922 234,959 244,357 254,132 264,297 86 Ending Cash Balance 3,643,464 3,844,308 4,053,186 4,270,419 4,496,341 4,731,300 4,975,657 5,229,789 5,494,086 87 88 Total Annual Cash Change $ (2,780,485) $ (4,153,922) $ (2,765,068) $ (1,902,899) $ (69,919) $ (1,022,451) $ (252,473) $ (366,229) $ (325,885) 89 Ending Cash Balance 17,804,382 13,650,460 10,885,393 8,982,493 8,912,575 7,890,124 7,637,651 7,271,423 6,945,538 91 94 2 2008 Budget,attchmnt-FinMstd 111212007 of 2:12 PM FINANCIAL MASTER PLAN - WORK IN PROCESS AS OF 11/: q I D E F G H I T J K I L Table 1: All Funds Summary L32 Forecast Draft Budget Projection Projection Projection Projection Projection Projection Projection Pi Fiscal Year Ending 2007 2008 2009 2010 2011 2012 2013 2014 2015 95 96 ELECTRIC FUNDS 97 98 General Fund 99 Operating Revenue $ 20,932,119 $23,200,452 $ 23,434,119 $ 23,670,417 $ 23,909,369 $ 24,150,998 $24,395,329 $ 24,642,385 $ 24,892,193 100 - 1,800,000 - - 101 To/From 2003 COP Energy Buyout-Reserve (300,000) (300,000) - - 102 From CA Solar Initiative - 177,400 177,400 177,400 177,400 177,400 177,400 177,400 177,400 103 From F?t�CA Solar Initiative ssarve�' �� (�i4,425) (6.472) MAW : ) (6,668), (6,734) (6,602) (6,870) 104 Operating Expense (15,107,840) (18,(64,271) (18,575,935) (19,039,986) (19,516,717) (20,006,505) (20,509,734) (21,026,803) (21,558,122) (. 105 Non Operating Revenue/(Expense) (415,781) (446,984) (328,814) (184,903) (19,013) 159,140 224,621 369,223 472,781 106 Net Revenue $ 4,729,030 $ 4,045,955 $ 4,274,726 $ 4,186,565 $ 4,110,311 $ 4,035,898 $ 5,638,029 $ 3,708,123 $ 3,525,628 $ 107 108 Capital Improvements $ (923,886) $ (1,301,724) $ (1,122,551) $ (1,054,826) $ (1,084,513) $ (1,054,941) $ (1,086,590) $ (1,119,187) $ (1,152,763) 109 Debt Proceeds/(Principal Payment) (2,649,481) (2,744,231) (2,798,276) (2,901,719) (2,991,867) (3,164,725) (3,331,901) - - _ 110 Adjustment to Revenue $ (3,573,367) $ (4,045,955) $ (3,920,828) $ (3,956,544) $ (4,076,380) $ (4,219,666) $ (4,418,491) $ (1,119,187) $ (1,152,763) $ 111 112 Debt Service Coverage(2) 1.50 1.42 1.36 1.29 1.22 debt payoff no debt no debt no 113 (1.20 requirement) 1T4- 115 r r r 116 ,Ending Cash Balance 7,576,958 7,576,958 7,930,856 8,160,877 8,194,808 8,011,040 9,230,578 11,819,513 14,192,379 117 r rr• r rr r rill r rr r r rr r rill r rr , 118 119 120 Electric Rate Reserve Fund 121 122 Interest Earnings 30,121 46,504 66,533 86,217 106,859 128,499 151,177 174,938 1 _ 123 Net Annual Cash Change $ 409,589 $ 500,721 $ 492,105 $ 516,045 $ 540,985 $ 566,966 $ 594,029 $ 622,219 $ 651,580 $ 124 Ending Cash Balance 1,162,609 1,663,329 2,155,434 2,671,479 3,212,464 3,779,430 4,373,459 4,995,677 5,647,258 125 126 Public Benefit Reserve 12 7 Revenues $ 64,425 $ 6,472 $ 6,536 $ 6,602 $ 6,668 $ 6,734 $ 6,802 $ 6,870 128 Revers��s ve (64,425) (6,472) � (6.536) �(6,602) (6,668) �, (6,734) (602) 129 Interest Earnings 2,577 362 379 397 415 435 455 _ 130 Net Annual Cash Change $ 64,425 $ (55,376) $ 427 $ 444 $ 463 $ 482 $ 502 $ 523 $ 131 Ending Cash Balance - 64,425 9,049 9,475 9,920 10,383 10,865 11,366 11,889 132 133 2003 AIB COP Idacorp Buyout-Reserve _ 134 Revenues $ 300,000 $ 300,000 $ - $ - $ - $ _ $ $ _ $ $ 135 To General Fund for Last Debt Payment - - - - - (1,800,000) _ 136 Net Annual Cash Change $ 300,000 $ 300,000 $ - $ - $ - $ - $ (1,800,000) $ _ $ $_ 137 Ending Cash Balance 1,500,000 1,800,000 1,800,000 1,800,000 1,800,000 1,800,000 138 3 2008 Budget,attchmnt-FinMstn 111212007 of 2:12 PM FINANCIAL MASTER PLAN - WORK IN PROCESS AS OF 11/; A I D E F G H I J I K I L 1 Table 1: All Funds Summary 2 Forecast Draft Budget Projection Projection Projection Projection Projection Projection Projection P 3 Fiscal Year Endin 2007 2008 2009 2010 2011 2012 2013 2014 2015 139 Facility Fees 140 Facility Fees Received $ - $ 225,000 $ 225,000 $ 225,000 $ 225,000 $ 225,000 $ 225,000 $ 225,000 $ 225,000 141 Interest Earnings - 47,753 142 Costs - (2,234,504) (563,920) (957,205) (912,830) (769,153) (225,000) (225,000) (225,000) _ 143 Net Annual Cash Change $ - $ (1,961,750) $ (338,920) $ (732,205) $ (687,830) $ (544,153) $ - $ - $ - $ 144 Ending Cash Balance 1,910,127 (51,623) (390,543) (1,122,748) (1,810,578) (2,354,731) (2,354,731) (2,354,731) (2,354,731) 145 146 Total Annual Cash Change $ 1,865,252 $ (1,096,604) $ 451,708 $ 14,287 $ (112,470) $ (160,492) $ 14,050 $ 3,211,656 $ 3,024,968 7 Ending Electric Cash Balance 12,149,693 11,053,088 11,504,796 11,519,083 11,406,613 11,246,121 11,260,170 14,471,826 17,496,795 14 148 4 2008 Budget,attchmnt-FinMstr 111212007 of 2:12 PM