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Home My WebLink AboutBoard Workshop #5 PowerPointPublic Utility District Paula Null W,Idd o �, "►�'i,' Strategic N�'�� Business VII Planning TDPUD 2020-2021 Board Workshop #5 February 22, 2021 4:00 p. m. -7:00 pm Virtual Zoom Meeting Focus on Goals, Initiatives, Capital Projects Ideas and Discussion for Board Initiative Next Steps Funding Alternatives: Incremental Drivers for 2022-23 Budget Operating Expense/Capital Expenditure Other Opportunities for Funding Application of Cash Cow Model Introduction of Environmental Social Governance Model -ff MID Groun Ules • Mutual RespectY`a _ . • '' a'R • Active Listening • Strategic Thinking- No Wrong Answer - Collaboration` T - IN Prdj . iz t 0 TDPUD Strategic Planning Pillars TDPUD TDPUD TDPUD Community Board of Executive Employees Directors Leadership Team Board Goals 2021-2024 4 Language and Vc Board Initiated Usually validated by the c Are usually not included i revenue stream Can be ongoing multiple Included in the Budget IManage for Financial Stability and Resiliency -#N Environmental Stewardship: Create a sustainable, 1-0 resilient environment for all our communities NMI Engage with our customers and communities in a welcoming and transparent way to identify oppoi Take the best of private sector thinking to modernize the utility and add value to our communities Developing an inclusive culture drives organizational integration and success Nesting Initiatives and Capital Projects Under our Goals Synthesis to Applicati Staff Recommend Board Initiative: Undergrounding of Overhead Power Lines Key Goal Related Capital Projects: Electric Projects: Address Power Reliability • Truckee Substation Rebuild (2021) $1m to complete • Glenshire Substation (2022) $2.1m • Electric Projects- Address Power Reliability • TR-02 Rebuild (2022) $600k • Martis Valley Substation Updates (2023) $500k • Energy Limiting Fuses (phases each year, —$300k per year) (part of Wildfire Mitigation Strategy) Water Projects — address water quality, pressure, fire flow, and operational efficiency • Martiswoods Pump Station Replacement (2021) $800k • Generators at four locations (2021) $2.4m • Hirschdale Connection Pipeline (2022) $400k • New Pipeline Projects(4) (2022) $1.5m • 8" Water Main Replacement, —3000' per year (2021/2022/2023) $2.1m/year • Pump Replacements, 8 per year (2021/2022/2023) $1.3m/year • Tank and Well Replacements/Rehabilitations (annual) $1.1m average per year • All $ amounts are current planning estimates Board Initiatives: • 100% Clean Renewable • Clean Power Generation, solar, hydro or biomass energy Capital Projects: • Emergency Generators (2021) $1.9m (also on GOAL #1 list) • New Water Tank - 6170 Tank (2022) $4m • New 12" Water Pipeline (2024/25) $4.3m • Facility Master Plan — HQ Project (2021/22) $2m • Facility Master Plan — Corp Yard Project (2022/23) $2m Other Proiects: • Green Rate (live in 2021) Exploration Projects Workforce Housing Legacy Trail Easements Fuel Station — partnership with other agencies Projects Educate Community o APPA RP3 Diamond certification in power reliability (pending notice of achieving Diamond, expected in March 2021) o Wildfire prevention/awareness campaign o Renewables, carbon -free mix — current and known upcoming (Red Mesa) o Water Loss Performance Standards o Water quality o Water GHG Inventory Reduction Board Initiative • Explore high speed internet/broadband for our community • Capital Projects: • Fiber Ring Completion — Phase 1 (2022), Phase 2 (2023), Phase 3/Final (2024) 1 $1.2m per • Other Projects: • RFP for Service Proposal Options — wholesale, retail, other (2022) • Consulting & Legal Services for Broadband community service (2022) $200k 1. Staff Development (leadership boot camp, cross -functional projects collaboration) 2. Marrying Values to Culture Definition 3. Community Service Projects 4. Quarterly Employee Engagement Meetings 5. Annual Employee Cultural survey 6. APPA Safety Award of Excellence Program TDPUD Strategic Planning Workshop #5 15 Expenditures (cash outflows) Types Expense — 1 year or less period of benefit (Operating and Maintenance (O&M)), includes payroll, purchased power, supplies, parts, repairs Capital —useful life at least 2 years and minimum cost of $101000 [DC 3.10] Debt Service — principal and interest payments Transfers -are from one reserve to another, net zero outflow 2/23/2021 2/22/2021 Strategic Pla, v- snop - Financial Perspectives $ Thousands Electric 2021 Budget Water r O&M Expenses 11,252 9,975 21,227 Purchased Power 12,915 0 12,915 Capital 6,977 3,124 10,101 Debt Service 643 3,088 3,730 Total Budget 31,788 16,186 47,974 H=Horizontal Mix V=Vertical Mix O&M Expenses Purchased Power Capital Debt Service Total Budget Electric H Mix V Mix 53% 35% 100% 41% 69% 22% 17% 2% 66% 100% Water H Mix V Mix 47% 62% 0% 0% 31% 19% 83% 19% 34% 100% 2/23/2021 2/22/2021 Strategic Plan Workshop- Financial Perspectives l I U211 f, H Mix V Mix 100% 44% 100% 27% 100% 21% 100% 8% 100% 100% TPDUD $ Thousands 2021 Budget- Electric $ 28,073 Revenues (12,915) Expense -Purchase Power (11,253) Expense -All other (24,168) Total Expenses 3,905 Net Operating (rev-exp) (7,620) total other Outflows 3,715 total other I nflows $ - Net Balanced Budget Other Outflows: (6,505) capital expenditures (215) to Vehicle Reserves (257) to Capital Reserves (643) pay debt service (7,620) total other Outflows TRUCKEE DONNER� 6 1 Public Utility District Other Inflows: 1,400 use of AB32 Resv Fnds 450 use of Vehicle Reserves 1,773 use of Capital Reserves 72 use of Facility Fees 20 overhead transfer sidefd 3,715 total other I nflows This is a cash basis/sources and uses budget, excludes Depreciation Expense $3.0m. (1,751) B'21 Net change (decrease) in E capital/vehicle reserves (1, 625) B'20 Net change (decrease) in E capital/vehicle reserves In 2020, post-2019 results, the Board approved $1m transfer GenFd to Capital Reserves. Forecast similar in 2021. 2/23/2021 2/22/2021 Strategic Plan Workshop- Financial Perspectives 18 Flartrir a Proforma Perspective 1 $ 3,900 OP Revenue less OP Expenses (ops cash flow) (650) current debt service (3,000) capex baseline at DepExp level (just to keep up with depreciation) $ 250 left to fund all other (not much!) a Proforma Perspective 2 $ 3,900 Op Rev - Exp (650) current debt service (4,500) capex @ 1.5x depr exp $ (1,250) negative r 2.95 co 1 Capex/Depreciation Ratio. Five utility company examples. As you can 1.49 co 2 see from the table, the capital expenditures of the utility companies 1.71 co 3 exceeds the depreciation charge. 1.43 co 4 2.38 co 5 Debt - Electric currently has minimal Long Term Debt 1.99 average 60% of POB Bond Debt. Above excludes AB32 Auction Revenues and Facility Fees 2/23/2021 2/22/2021 Strategic Plan Workshop- Financial Perspectives 19 TRUCKEE DONNER� 6 1 Public Utility District Electric — 14,200 Customers $500,000 is 4.4% of $11.3m or 2.0% of $24.2m $5001000 / 14,200 = $35.21 $35.21 / 12 = $2.93 month $3 / $70 is 4.3% for initiatives Before Baseline necessary changes for existing ops 2/23/2021 2/22/2021 Strategic Plan Workshop- Financial Perspectives 20 TRUCKEE DONNER� 6 1 Public Utility District Electric — 14,200 Customers Debt Service Example $501#0001#000 / 14,200c / 20 years _ $176/year /12 = $15 per month (f%J$37m in debt principal) 2/23/2021 2/22/2021 Strategic Plan Workshop- Financial Perspectives 21 TRUCKEE DONNER� 6 1 Public Utility District Electric — 14,200 Customers $15/month = $2,556,000 per year $7/month = $1,1921800 per year $5.87/month = $1,000,000 per year Op Exp and/or Debt Service combined 2/23/2021 2/22/2021 Strategic Plan Workshop- Financial Perspectives Electric—14,200 Customers � One Example Initiative X - $250,000 in 2022 Op Exp Initiative Y - $250,000 in 2022 Debt Service (via $3.7m capital project 20yr bond financed) $500,000 revenue requirement $35.21 per customer per year $2.93 per month per customer Incremental Op Exp and Debt Service combined 2/23/2021 2/22/2021 Strategic Play--,�snop- Financial Perspectives TRUCKEE DONNER� 6 1 Public Utility District Broadband Undergrounding Power Lines Local Generation 100% Renewables 2/23/2021 2/22/2021 Strategic Plan Workshop- Financial Perspectives 24 TRUCKEE DONNER� 6 1 Public Utility District Broadband - Fiber build out on back of Electric (near term) — a capital plan prioritization - Business plan development/details an operating expense at this point (consulting $) - Funding — partnership/JV, grants, debt - Wholesale vs Retail Direct to Customer - anew separate Division, if Retail direction 2/23/2021 2/22/2021 Strategic Plan Workshop- Financial Perspectives TRUCKEE DONNER� 6 1 Public Utility District Local Generation Consulting to help analysis of options — EXPENSE -lower priority, so no or few $ in near term - Infrastructure expenditures would be Capital and have Debt potential - Grants, Partnership opportunities 2/23/2021 2/22/2021 Strategic Plan Workshop- Financial Perspectives TRUCKEE DONNER� 6 1 Public Utility District 100% Renewables Purchased power is an operating expense Budget 2021 - $12,915,000 A 5% increase equates to $645,750 or $45 per customer or $3.79 per month 2/23/2021 2/22/2021 Strategic Plan Workshop- Financial Perspectives TRUCKEE DONNER� 6 1 Public Utility District Undergrounding Power Lines Capital expense (gray) — engineering analysis project Actual Project — Bonds and likely AD(s) Operating Expense — consultant to help with Assessment District and or tax measure Evaluate Wildfire Defensible space — cost benefit options How much biomass def space cost savings by UG? Federal / State Grant funds — for fire defense 2/23/2021 2/22/2021 Strategic Plan Workshop- Financial Perspectives 28 Board Initiatives Next Steps Concept to Application 29 Undergrounding of Overhead Powerlines- Community Priority • Identify Potential Partners and have Meetings • Define Scope of Work • SWOT • Updated Cost Analysis including nontraditional funding streams • Funding Analysis • Regulatory Review • Preliminary Project Plan • Public Workshops • Plan Adoption Board Discussion: Your thoughts? What are we missing? High Speed Internet/Broadband- Community Priority • Identify and meet with potential Public/Private Partners • SWOT • Enhanced Community Survey • Regulatory Analysis (LAFCO, FCC, etc) • Preliminary Project Plan Review • Cost of Service Analysis • Funding Analysis • Public Workshops • Plan Adoption Board Discussion: Your thoughts? What are we missing? 100% Clean Renewable • Public Workshop on current energy market and TDPUD Energy Portfolio • Identify Short term and Long Term Clean Energy Goals • Establish District energy emissions (GHG)goals • Coordinate with Local Partnerships (Public/Private) • Evaluate Local Green Energy Rate • Adopt District Plan/Resolution Board Discussion: Your thoughts? What are we missing? Clean Power Generation -solar, hydro or biomass energy: • Identify and evaluate local generation opportunities o Solar (Rooftop, Community) o Small Hydro o Biomass • SWOT • Identify Project Scope • Identify Public/Private Partnerships • Public Workshops • Preliminary Project Plan • Adopt Plan Board Discussion: Your thoughts? What are we missing? Application f4 H COW Initiatives and Capitol Projects 34 Market/ Product Analysis "Cash Cow Model" Based on Boston Consulting Group / Pamela Hurt Associates Trademark #1330 Higr- :entiai High :entlal Ri_irc: E--'V� `"Rising Impact ��-- Lo.. Ec�V l'ow impact r'1 0% Clean renewable C can Power Generation Solar, Hydro or b omass energy Electric Rate Payers Water Rate Payers MaWre Systems. finding. Prou High Ec I alu'e ,9est Impac i High Speed Broadband - Undergrounding Overhead Power Lines Lor. - :ential L eA't'11 ( t m act Goal Resources �Y Long Term Sincerity A9010�TD P U D Environmental, Social, Governance Model Market/Community Responsi bi I i ter -- This is a self r gutating Business h s Modet that will measure the sustainability and societal impact Sustainability Ethics of the District, our clients and the communities we serve. �I Next Steps Board Workshop Dates March 31St: Continue Financial Modelling- Milestone Mapping April 215t: Organizational Culture/Values/Staff Development May 19t": Board acceptance of goals, Major Initiatives & Strategic Plan 0 I Our Focus Groups Registrants/Participants Focus Group Registrants Actual Participants Tahoe Donner/Donner 248 105 4 Lake/Armstrong Tract Spanish Speaking 0 11 Prosser/Grays Crossing/Industrial 116 73 6 Way/Downtown Sierra Meadows/Gateway/West 87 29 3 River Street Make Up Session 37 12 3 Glenshire/Old Greenwood/Olympic 82 21 2 Heights Total 540 251 4 etrics: Goal was 300 Registrants and 1/2 of those to be