Loading...
HomeMy WebLinkAbout13-Mid Cycle Budget Review-FY14 Year End Financial Results and Routine TransfersAgenda Item #13 To: From: Date: Subject: Board of Directors Robert Mescher February 11, 2015 Mid-Cycle Budget Review a) FY14 Year-End Financial Results b) Consideration of Routine Transfers ACTION 1. WHY THIS MATTER IS BEFORE THE BOARD District Code requires the budget performance to be reviewed at a Board workshop semiannually after the close of June and December accounting periods for each fiscal year. 2. HISTORY The FY14 Budget was adopted November 20, 2013 and additional transfers and budget carry-overs were authorized on February 5, 2014. The FY14 mid-year results were reviewed on July 16, 2014 and no changes were made to the FY14 Budget. 3. NEW INFORMATION Preliminary FY14 results indicate that both the Electric and Water Departments slightly exceeded the budget expectation and ended the year with net operating income in excess of budget. Staff proposes that the unallocated funds be used to increase the Electric and Water capital reserves. The number of Electric and Water customers were 13,349 and 12,668 respectively, and were slightly lower than the budgeted 13.,416 and 12,677. The average number of employees was 67 which is on target with the FY14 Budget. ELECTRIC DEPARTMENT The net rate-funded excess for the Electric Department was $545,000 as compared to the budget. Operating revenue was 5% less than budget primarily due to milder winter weather and AT&T joint pole revenue $291,000 (71%) less than budget. Operating expenses, excluding purchased power were on target with the budget. Purchased power expense was $1,207,000 (10%) less than budget due to lower consumption and lower transmission costs. The overall net operating income of $2,924,000 was on target with the budget. Other income and expenditures were on target with the budget, except for Investment Income. The investment income increased due to investment earnings from the District's participation in the Place County Treasurer's Investment Portfolio and an upward market adjustment of investments. The Government Accounting Standards Board (GASB) requires the recording of market adjustments even if it is a "paper gain or loss" that is never realized. The capital projects funded by operations were $470,000 less than budgeted primarily due to SCADA and communication related projects that were deferred into next year. The vehicle purchases funded from the Vehicle Reserve were $37,000 less than budgeted. Robert Mescher Michael D. Holley Administrative Services Manager General Manager Attachment 1 reports the actual results of FY14 as compared to the adopted budget for the Electric Department. WATER DEPARTMENT The net rate-funded excess for the Water Department was $113,000 as compared to the budget. Operating revenue was $173,000 (2%) lower than budget, but was offset by the lower operating expenses. The net operating income for the Water Department was on target with the budget. Other income and expenditures were on target with the budget except for investment income for the same reason as explained above for the Electric Department. Capital projects that were funded by operations were $103,000 less than budgeted primarily due to SCADA and communication related projects deferred into next year. No vehicles were purchased for the Water Department in FY14 and the budgeted $48,000 was deferred to the next year. The cost of the residual meter installations in FY14 were $113,000 less than budgeted. Currently, 95% of the District's customers have water meters and the District will install meters for the remaining customers in the next few years. Attachment 2 reports the actual results of FY14 as compared to the adopted budget for the Water Department. TRANSFERS AND CARRY-OVERS Attachment 3 lists the routine year-end transfers for FY14. FACILITIES FEES The District establishes and collects facility fees on new developments for electric and water system improvements attributable to new developments in accordance with the Electric and Water Master Plans. Attachment 4 reports the status of the restricted Facilities Fees Fund as of the end of FY14. The District is in compliance with spending facilities fees within the mandated 5-year period. 4. FISCAL IMPACT The excess from FY14 can be used to increase the Electric and Capital Reserve, and the Water Capital Reserve can be utilized to partially fund unbudgeted board-approved FY14 capital projects. Attachment 5 shows the beginning balances of the various reserve funds and the ending balances after the proposed transfers. 5. RECOMMENDATION Accept this report and authorize the transfers as listed in Attachment 3.