HomeMy WebLinkAbout12 Mid Year BudgetAgenda Item #12
TRUCKEE DONNER
Public Utility District
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ACTION
To:
From:
Date:
Subject:
Board of Directors
Regina Wise
February 17,2016
Mid-Cycle Budget Review
a)FY15 Year-End Financial Results
b)Consideration of Routine Transfers
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 FY15 Budget was adopted November 20,2013 and additional transfers and
budget carry-overs were authorized on February 11,2015.The FY15 mid-year results
were reviewed on August 19,2015 and no changes were made to the FY15 Budget.
3.NEW INFORMATION
Preliminary FY15 year-end results indicate that the Electric Utility operations exceeded
budget expectation of net operating income.This performance allowed the District to
prioritize and complete capital projects in FY15 and Board approved capital projects
carried over from prior years.The Water Utility net operating income was slightly
under budget due to decreased revenue (4%)attributed to conservation and
decreased consumption.The District received higher than expected facility fees for
the Water Utility and staff recommends we utilize these funds towards debt service.
This utilization of funds balances the FY15 year-end results to the budget for the
Water Utility.
The number of Electric and Water customers were 13,559 and 12,772 respectively,
compared to the budgeted 13,550 and 12,803.The average number of employees
was 70,slightly higher than the FY15 Budget of 68.This increase is primarily
attributed to parallel staffing of new employees with upcoming retirees for succession
planning and training.In addition,the District reinstated the Finance and Accounting
Manager position.
ELECTRIC UTILITY
As a result of completion of significant capital projects the net rate-funded cash
position for the Electric Department was $1,071,000 lower as compared to budget.
Operating revenue was 4%less than budget primarily due to milder winter weather
and AT&T joint pole revenue being 57%lower than budgeted.The AT&T joint pole
revenue shortfall of $174,000 is the primary driver of the 'Other'operating revenue
27%decrease shown on Attachment 1.Revenue decrease was offset by 7%lower
operating expenses.Operating expenses,excluding purchased power were on target
with the budget.Purchased power expense was $1,067,000 (9%)less than budget
due to lower consumption and lower transmission costs.The overall net operating
income of $3,078,000 exceeded budget expectations.The investment income
increased due to the additional diversification of including the Utah's Public
Treasurers'Investment Fund to the District's investment portfolio.The vehicle
purchases funded from the Vehicle Reserve were $12,000 less than budget.The
capital projects funded by operations were $2,141,000 excess of budget including
projects carried over from prior years,the Plug-In Electric Vehicle Charge Stations
($181,000),Donner Lake Sub Rebuild ($1,578,000),and Radio System Upgrade for
Communications ($400,000).Lastly,this total also includes a staff recommendation to
restrict an additional $697,000 for future payment from the Capital Reserve of a
invoice held in dispute between Sierra Pacific Power dba NV Energy and the District,
in response to the District's 2009 Donner Lake Circuit #3 underbuild capital project.
Attachment 1 summarizes the actual results of FY15 as compared to the adopted
budget for the Electric Utility.
WATER UTILITY
There is no rate-funded excess or shortage for the Water Utility.Operating revenue
was $457,000 (4%)lower than budget which was partially offset by lower operating
expenses.Other income and expenditures were on target with the budget.Investment
income increased due to the diversification explained above for the Electric
Department.Capital projects that were funded by operations finished $206,000 in
excess of budget primarily due to the addition of the Sun Valley Pipeline Replacement
Project in FY15.The vehicle reserve funded $266,000 in vehicle purchases for FY15,
which included an early purchase of a backhoe for $126,000 and a service truck for
$85,000.To put these vehicles into service additional funds were necessary to cover
internal labor and additional utility specific parts totaling $9,000,an amount which is
included in the year-end routine transfers.The cost of the meter installations in FY15
came in $284,000 less than budgeted.Currently more than 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 FY15 as compared to the adopted budget
for the Water Utility.
TRANSFERS AND CARRY-OVERS
Attachment 3 lists the routine year-end transfers for FY15.
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 FY15.$404,000 of the restricted Electric Utility
facility fees were applied to the Donner Lake Substation project in FY15.
The water facility fee balance is higher than expected due to greater collections in
facility fees in FY15 due to development and new construction within the District.Staff
recommends a portion of the facility fee balance be applied to the Water Utility
towards Debt Service which is consistent with the District's plan for restricted facility
fees collected.The District is obligated to utilize facilities fees collected within the
mandated 5-year period.
4.FISCAL IMPACT
Attachment 5 shows the beginning balances of the various reserve funds and the
ending balances after the proposed transfers.The decrease of reserve balances
represents planned use of reserves and proactive restriction of $697,000 final
payment currently held in dispute for the 2009 NV Energy underbuild project.Fiscal
impact is in alignment with the Board approved FY16 FY17 budget and ten-year
Financial Master Plan.
5.RECOMMENDATION
Accept this report and authorize the transfers as listed in Attachment 3.
Jeremy Popov
Administrative Services Manager
Michael D.Holley
General Manager
Truckee Donner Public Utility District
Budget vs.Actual Revenue &Expenditures
Fiscal Year Ending December 31,2015
ELECTRIC DEPARTMENT
ATTACHMENT 1
PRELIMINARY
Variance
FY15 FY15 Favorable
Type Budget Actual (Unfavorable)%
OPERATING REVENUE
Residential $12,128,000 $11,689,000 $(439,000)-4%
Commercial 9,198,000 8,816,000 (382,000)-4%
Interdept.Sales &Rent 1,627,000 1,582,000 (45,000)-3%
Other 592,000 430,000 (162,000)-27%
Total Operating Revenue 23,545,000 22,517,000 (1,028,000)-4%
OPERATING EXPENSE
Board of Directors 127,000 97,000 30,000 24%
General Management 584,000 613,000 (29,000)-5%
Administrative Services 1,365,000 1,221,000 144,000 11%
Conservation &Public Information 1,406,000 1,197,000 209,000 15%
Operations 4,398,000 4,355,000 43,000 1%
IT&GIS 613,000 608,000 5,000 1%
Purchased Power 12,415,000 11,348,000 1,067,000 9%
Total Operating Expense 20,908,000 19,439,000 1,469,000 7%
NET OPERATING INCOME 2,637,000 3,078,000 441,000
OTHER INCOME (EXPENDITURE)
Investment Income (Loss)15,000 96,000 81,000
Transfers to Rate Reserve (427,000)(427,000)
Transfers to Vehicle Reserve (180,000) (180,000)
Transfers from CA Solar Initiative 177,000 180,000 3,000
Transfers from Cap &Trade AB32 Reserve 860,000 860,000
Transfers to Capital Reserve (300,000) (300,000)
Total Other Expenditure 145,000 229,000 84,000
CAPITAL EXPENDITURES
Capital Expenditures Funded by Operations 2,782,000 4,378,000 (1,596,000)
2014 Capital Project Carryovers 545,000 (545,000)
Total Operations Funded Capital 2,782,000 4,923,000 (2,141,000)
Cash inflow from 2014 Capital Project Carryovers 545,000 545,000
NET OPERATIONS FUNDED CASH INFLOW (OUTFLOW)$$(1,071,000)$(1,071,000)
CAPITAL EXPENDITURES FUNDED BY RESERVES
Vehicle Reserve
Facility Fees for Donner Lake Substation
Total Capital Expenditures Funded by Reserves
68,000
68,000
56,000
404,000
460,000
12,000
(404,000)
(392,000)
ATTACHMENT 2
Truckee Donner Public Utility District
Budget vs.Actual Revenue &Expenditures PRELIMINARY
Fiscal Year Ending December 31,2015
WATER DEPARTMENT
Variance
FY15 FY15 Favorable
Type Budget Actual (Unfavorable)%
OPERATING REVENUE
Residential $9,269,000 $9,081,000 $(188,000)-2%
Commercial 1,471,000 1,237,000 (234,000)-16%
Interdept.Sales 2,000 2,000 0%
Other 418,000 383,000 (35,000)-8%
Total Operating Revenue 11,160,000 10,703,000 (457,000)-4%
OPERATING EXPENSE
Board of Directors 127,000 95,000 32,000 25%
General Management 462,000 481,000 (19,000)-4%
Administrative Services 1,184,000 1,167,000 17,000 1%
Conservation &Public Information 332,000 361,000 (29,000)-9%
Operations 4,741,000 4,717,000 24,000 1%
Power Supply &GIS 613,000 521,000 92,000 15%
Interdept.Rent 389,000 389,000 0%
Total Operating Expense 7,848,000 7,731,000 117,000 1%
NET OPERATING INCOME 3,312,000 2,972,000 (340,000)
OTHER INCOME (EXPENDITURE)
Investment Income (Loss)53,000 89,000 36,000
Transfer to Vehicle Reserve (151,000)(151,000)
Facility Fund Reimbursement for Facility Fee Debt 509,000 509,000
Debt Service (2,262,000)(2,261,000)1,000
Total Other Expenditure (2,360,000)(1,814,000)546,000
CAPITAL EXPENDITURES FUNDED BY OPERATIONS 952,000 1,158,000 (206,000)-22%
NET OPERATIONS FUNDED CASH INFLOW (OUTFLOW:$$$
CAPITAL EXPENDITURES FUNDED BY RESERVES
Vehicle Reserve
Meter Reserve
Capital Reserve Pipeline Replacement
Total Capital Expenditures Funded by Reserves
96,000
450,000
1,155,000
1,701,000
266,000
166,000
1,263,000
1,695,000
(170,000)
284,000
108,000
222,000
Truckee Donner Public Utility District
FY15 Transfers
Electric Department
Transfer from Capital Reserve to 2009 NV Energy Underbuild Project Reserve
Water Department
Transfer from Facility Fund to General Fund to pay for a portion of the
2015 COP refunding and the MSG 1551 debt payment 1
Transfer from Vehicle Reserve Fund to General Fund to cover labor and
additional utility parts for the heavy duty service truck and the 41 OL Backhoe
ATTACHMENT 3
697,000
$697,000
509,000
9,000
$518,000
1.A portion of the 2006 COP (currently known as 2015 Refunding)and the MSG 1551 (Bridge Street tank construction)
qualified for facility fee funds to be used for future debt payments.
ATTACHMENT 4
FACILITIES FEES ANNUAL STATUS REPORT 12131/15 Preliminary
ELECTRIC FACILITIES FEES:1.0.136.90
2011 2012 2013 2014 2015
Beginning Balance $510,148.77 $596,404.38 $615,140.87 $0.00 $205,185.65
Facilities fees collected during year 165,536.75 63,310.58 80,768.00 204,614.80 198,082.00
Interest earnings during period 2,846.86 2,255.91 1,792.03 570.85 922.76
Project expenditures during period (82,128.00) (46,830.00)(697,700.90)0.00 (404,190.41)
Ending Balance $596,404.38 $615,140.87 $0.00 $205,185.65 $0.00
WATER FACILITIES FEES:2.0.136.25
2011 2012 2013 2014 2015
Beginning Balance $879,220.49 $394,849.12 $127,186.98 ($0.00)$452,032.64
Facilities fees collected during period 163,973.16 204,473.48 282,053.61 451,695.96 567,524.95
Interest earnings during period 4,527.79 2,183.38 749.68 336.68 3,739.61
Project expenditures during period (146,353.32)(165,214.00)0.00 0.00 0.00
Loan Payments:
Debt Payments -facilities fees share (506,519.00)(309,105.00) (409,990.27)0.00 (509,033.00)
Ending Balance $394,849.12 $127,186.98 $0.00 $452,032.64 $514,264.20
Summary 5 Years
Ended 12131/2015
$510,148.77
712,312.13
8,388.41
(1,230,849.31 )
$0.00 Total amount available-See NOTE
720,700.54 Less:Amount collected over last 5 years
(720,700.54)Amount greater than 5 years old-NONE
Summary 5 Years
Ended 12131/2015
$879,220.49
1,669,721.16
11,537.14
(311,567.32)
(1,734,647.27)
$514,264.20 Total amount available-See NOTE
1,681,258.30 Less:Amount collected over last 5 years
(1,166,994.10)Amount greater than 5 years old-NONE
NOTE:If "Total amount available"is greater than "Amount collected over the last 5 years",then the District has facilities fees on hand that are greater than 5 years old.
If the amount of facilities fees on hand is greater than 5 years old,the District would have to either refund the money to customers or the Board would have to issue
a finding that the money greater than 5 years old was being held to pay for a specific project.This report shows that the District does not have any electric or
water facility fees on hand that are greater than 5 years old.
ATTACHMENT 5
PRELIMINARY FY15 YEAR-END RESERVE BALANCES
1/1/2015 FY15 12/31/2015 Proposed Adjusted Board
Balance Activity Balance Transfers Balance Goal
ELECTRIC UTILITY
General Fund $5,299,000 $(1,122,000)$4,177,000 $-$4,177,000 $10,000,000
Rate Reserve 3,587,000 463,000 4,050,000 -4,050,000 3,000,000
Capital Reserve 3,041,000 324,000 3,365,000 (697,000)2,668,000 1,000,000
Vehicle Reserve 216,000 136,000 352,000 -352,000 352,000
Facility Fees
AB 32 Cap&Trade 839,000 108,000 947,000 -947,000 947,000
Total Reserves $12,982,000 $(91 ,000)$12,891 ,000 $(697,000)$12,194,000 $15,299,000
2009 Underbuild $-$-$-$697,000 $697,000 $
Future Payout
WATER UTILITY
General Fund $2,535,000 $(756,000)$1,779,000 $518,000 $2,297,000l $3,000,000
Operating Reserve 3,630,000 (241,000)3,389,000 -3,389,000
Capital Reserve 809,000 (809,000)- --4,000,000
Vehicle Reserve 159,000 (70,000)89,000 (9,000)80,000 80,000
Facility Fees 452,000 571,000 1,023,000 (509,000)514,000 514,000
Meter Reserve 795,460 (162,460)633,000 -633,000 633,000
Total Reserves $8,380,460 $(1,467,460)$6,913,000 $-$6,913,000 $8,227,000