HomeMy WebLinkAbout10 Mid-Cycle Budget Reviewenda Item #
To: Board of Directors
From: Regina Wise
Date: March 01, 2017
Subject: Mid -Cycle Budget Review
a) FY16 Year -End Financial Results
b) Consideration of Routine Transfers
1. WHY THIS MATTER IS BEFORE THE BOARD
10
District Code requires the budget performance to be reviewed by the Board
semiannually after the close of June and December accounting periods for each fiscal
year.
2. HISTORY
The FY16 Budget was adopted November 18,
year-end financial results were reviewed with
There were no significant carry-overs to FY16
FY16 Budget.
3. NEW INFORMATION
2015. On February 17, 2016 FY15
approval of final transfers for FY15.
and no changes were made to the
Preliminary FY16 year-end results indicate that the Electric Utility operations exceeded
budget expectation of net operating income. Revenues for FY16 exceeded budget by
5% and operating expenses were less than budget by 4%. The Water Utility net
operating income also exceeded budget expectation of net operating income, albeit
more narrowly. Revenues for FY16 exceeded budget by 1 % which compensated for
operating expenses finishing 1 % higher than budget.
The number of Electric and Water customers as of December 31, 2016 were 13,680
and 12,892 respectively, compared to 13,559 and 12,772 as of December 31, 2015.
The average number of employees was in line with FY16 Budget of 70 employees.
ELECTRIC UTILITY
The net rate -funded year-end cash position for the Electric Utility is favorable
$1,822,828 compared to budget. Operating revenue was 5% higher than budget
primarily due to colder winter weather than we have experienced in recent years. The
joint pole revenue shortfall shown on the report of $131,000 is simply a timing issue,
as the District billed 37 poles to AT&T for $212,000 in January 2017.
Operating expenses were also favorable to budget. The District purchased more
energy in FY16 than budgeted but Purchased Power expense was $433,862 (4%)
less than budget due to decreased energy costs. The overall net operating income of
$3,708,345 exceeded budget expectations. Investment income increased due to the
additional diversification of including the Utah's Public Treasurers' Investment Fund to
the District's investment portfolio. The FY16 vehicle purchase of the mini bucket truck
funded from the Vehicle Reserve came in $17,000 more than budget. The capital
projects funded by operations were just under budget by $9.7K for FY16.
Attachment 1 summarizes the actual results of FY16 as compared to the adopted
budget for the Electric Utility.
WATER UTILITY
The Water Utility has minor rate -funded year-end cash shortage of $60,951 for FY16.
Operating revenue was 1 % in excess of budget, this includes the $171,514 arbitrage
rebate the District received in FY16 and the $100,000 one time payment negotiated in
FY16 for wireless satellite rental space. The revenue surplus offset a 1 % overage in
operating expenses. Investment income increased due to the diversification explained
above.
The Water Utility aggressively worked to complete system improvements in FY16.
Capital projects for the Water Utility funded by rates and the operating reserve (per
Board approval on November 2, 2016) totaled $3,688,535 for FY16 compared to a
$2,603,838 budget. This included carry over expenses from FY15 projects, pipeline
replacement, water SCADA reliability and replacement, in addition to maintenance
projects on Well 20, Prosser Village well, and Ponderosa Palisades Hydro Pump
Station.
The vehicle reserve funded $248,128 in vehicle purchases for FY16, which included a
compact excavator, loader, and cargo trailer. The cost of the meter installations in
FY16 came in $180,433 less than budgeted. Currently more than 96% 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 FY16 as compared to the adopted budget
for the Water Utility.
TRANSFERS
Attachment 3 lists the routine year-end transfers for FY16. For the Electric Utility staff
is recommending to leave $1,000,000 of FY16 surplus in the General Fund for FY17
realized storm expenses and transfer the remaining $822,828 to the Capital
Replacement Fund. The $822,828 transfer to the Capital Replacement Fund will
ensure adequate funds for future projects contained in the Electric Master Plan, which
post the meter replacement project, will require replenishment of funds.
The additional transfer request is for the Water Utility to move $1,430 to the General
Fund from the Board restricted fund for Mantis Wood Estates. These were prepaid
connection fees that the District can utilize when a property connects and one property
connected in FY16.
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 FY16. The Electric Utility did not have any
budgeted project expenditures for facilities fees for FY16. In FY15 $404,190 was
utilized for the Donner Lake Substation project.
The water facility fee collection exceeded expectations in FY16 due to development
and new construction within the District. Per Board approval on November 2, 2016
staff utilized $150,158 towards qualifying debt service for the Bridge Street Tank 6160
loan. Additionally, per the approved FY16 budget $356,594 was utilized for the
qualifying debt service for the Water Utility's 2006 COP debt service. The District is
obligated to utilize facilities fees collected within a 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. Fiscal impact is in alignment with the
Board approved FY16 & FYI budget and ten-year Financial Master Plan,
5. RECOMMENDATION
Accept this report and authorize the transfers as outlined in Attachment 3.
Jeremy Popov
Administrative Services Manager
Michael D. Holley
General Manager
ATTACHMENT 1
PRELIMINARY
Truckee Donner Public Utility District
Budget vs. Actual Revenue & Expenditures
Fiscal Year Ending December 31, 2016
ELECTRIC DEPARTMENT
Variance
FY16 FY16 Favorable
Type Budget Actual (Unfavorable) %
OPERATING REVENUE
Residential
Commercial
Interdept. Sales &Rent
Standby
Joint Pole
Other
Total Operating Revenue
OPERATING EXPENSE
Board of Directors
General Management
Administrative Svcs.
Public Info. & Consrv.
Operations
IT/GIS
Building Maintenance
Purchase Power
GASB 68 Sidefund Principle
Total Operating Expense
NET OPERATING INCOME
OTHER INCOME (EXPENDITURE)
Investment Income (Loss)
Transfers to Rate Reserve
Transfers to Vehicle Reserve
Transfers to CA Solar Initiative
Transfers from Cap & Trade AB32 Reserve
Total Other Income (Expenditure)
CAPITAL EXPENDITURES FUNDED BY OPERATIONS
$ 11,588,514 $ 12,556,528 $ 968,014 8%
8,9811341 911579086 175,745 2%
137535602 137819242 279640 2%
239171 22,190 (981) -4%
160,000 285939 (131,061) =82%
164,668 170,374 55706 3%
2256719296 2337169359 13045,063 5%
130,439 102,499 27,940 21
4845224 5015868 (179644) 4%
1,383,342 112299279 1549063 11 %
192665201 131075497 158,704 13%
410645179 451629979 (985800) -2%
6089536 5785172 305364 5%
4975596 4467517 519079 10%
1199459170 1135115308 4333862 4%
3675895 367,895 - 0%
2097479582 2030089014 7393568 4%
1,923,714 3,708,345 1,784,631
60,000 101,040 41,040 68%
(3203985)
(185,078) (1859078) - 0%
1773400 1825550 59150 3%
9655000 9473269 (175731) -2%
696,337 724,796 289459 4%
296205051 216105313 95738
NET OPERATIONS FUNDED CASH INFLOW (OUTFLOW) - 158225828 198225828
CAPITAL EXPENDITURES FUNDED BY RESERVES
Capital Replacement (AMI)
Vehicle Reserve
1,710,258 77,962 1,632,296
150,000 167,358 (17,358)
1,860,258 245,320 1,614,938
ATTACHMENT 2
PRELIMINARY
Truckee Donner Public Utility District
Budget vs. Actual Revenue & Expenditures
Fiscal Year Ending December 31, 2016
WATER DEPARTMENT
Variance
FY16 FY16 Favorable
Type Budget Actual (Unfavorable) %
OPERATING REVENUE
Residential
Commercial
Standby & Fire Protection
Other
Total Operating Revenue
OPERATING EXPENSE
Board of Directors
General Management
Administrative Svcs.
Public Info. & Consrv.
Operations
IT/GIS
Interdepartmental Rent
GASB 68 Sidefund Principal
Total Operating Expense
NET OPERATING INCOME
OTHER INCOME (EXPENDITURE)
Investment Income (Loss)
Transfers to Vehicle Reserve
Facility Fund Reimbursement for Facility Fee Debt
Debt Service
Total Other Income (Expenditure)
CAPITAL EXPENDITURES FUNDED BY OPERATIONS
$ 10,125,616 $ 9,893,429 $ (2329187)
1,283,892 15422,769 138,877 11 %
1459840 1383480 (71360) -5%
2689641 521,501 2523860 94%
1198239989 1139769179 1529190 1 %
130,439 101,134 29,305 22%
4705903 4765310 (59407) -1 %
1,260,494 112199222 419272 3%
2839208 2619012 229196 8%
494805448 45676,584 (196,136) 4%
5489865 5389903 95962 2%
553,602 553,602 0 0%
2885104 2883104 0 0%
89016,063 8,114,872 (989809) -1%
3,807,926 3,861,307 53,381
51,161 71,368 20,207 39%
(155,227) (155,227) 0 0%
356,594 5065752 1509158 42%
(21125,584) (29125,584) 0 0%
(198739056) (1,702,691) 1709365
199343870 2,2191567 (2849697) =15%
NET OPERATIONS FUNDED CASH INFLOW (OUTFLOW) - (609951) (607951)
CAPITAL EXPENDITURES FUNDED BY RESERVES
Operating Reserve
Vehicle Reserve
Meter Reserve
Total
668,968 1,468,968 (800,000)
- 248,128 (248,128)
285,275 104,842 180, 433
9541243 118215938 (8673695)
Truckee Donner Public Utility District
FY16 Transfers
Electric Utility
Fund Capital Replacement Reserve with FY16 surplus
Water Utility
ATTACHMENT 3
822, 828
$ 822,828
Reimburse General Fund for one Connect Fee from Martis Wood Estates Fund 1,430
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