HomeMy WebLinkAbout11 FY18 and FY19 Budget Presentationenda Item #
BUDGET
To: Board of Directors
From: Regina Wise
Date:
October 04, 2017
Subject: FY18 and FY19 Budget Presentations.
a) Operating/Capital Budget: Electric Operations
b) Operating/Capital Budget: Water Operations
1. WHY THIS MATTER IS BEFORE THE BOARD
This item continues the preparation process of the FY18 and FY19 Budget.
2. HISTORY
District Code requires the District to prepare a two-year budget.
BUDGET PROCESS SCHEDULE
September 6
• Discuss the objectives, goals, assumptions, labor and debt
11
October 4 - (Tonight)
• Discuss the Purchased Power Plan; and
• Discuss the operating and capital budget for the Electric and Water Utilities,
October 18
• Discuss the operating and capital budget for supporting services;
• Reserve funds:
• Revenue, rates, fees, and charges;
• Present the Financial Master Plan; and
• Schedule the public hearing regarding the budget.
November 1
• Review final Purchase Power Plan;
• Present a draft of the FY18 & FY19 Budget; and
• Hold a public hearing regarding the budget.
November 15
• Consider adoption of the FY18 & FY19 Budget.
BUDGET ASSUMPTIONS
At the September 6, 2017
assumptions:
• 3% inflation;
• No new debt;
Board Meeting, staff presented the following budget
• Budgeted electric revenue includes the 3% scheduled rate increases for FY18
and FY19;
• Budgeted water rate revenue includes the maximum potential rate increases of
3% for FY18 and FY19;
• Labor cost increase of 3% budgeted for FY18 and FY19 for represented
employees per existing MOU; and
• Labor cost increase of 4.5% budgeted for FY18 and 3% for FY19 for
unrepresented employees.
3. NEW INFORMATION
Attachment 1 and Attachment 2 illustrate the summary draft budget for FY18 and
FY19 for the Electric and Water Utilities. The focus of this workshop is budgeted
revenue for each utility and budgeted expenses within the operating and capital
budgets for the Electric and Water operations as highlighted in the attachments.
Budget Highlights for Electric &Water Departments
Electric Utility
Electric Revenue
• Budgeted revenue for the FY18 and FY19 is diplayed in the below table.
• Sales as listed in the table encompass all electric sales for residential and
commercial customers combined. The 8% increase in budgeted revenue
for FY18 is from a blended evaluation of last year's extreme winter demand
and prior years milder winters with less demand in addition to the 3%
scheduled rate increases for FY18 and FY19;
• The 64% increased revenue for Pole Replacement/Contacts can be
attributed to the success of joint pole agreements per the current JPA
contract in conjunction with expected pole replacements for each year; and
• Miscellaneous revenue includes; standby, customer service charges, fees,
and interdepartmental rent. The 5% decrease in Miscellaneous Revenue is
a result of decreased interdeparmental rent between the Electric and Water
utilities.
Electric Revenue
Budgets
FY17
(in thousands)
FY18 FY19
%Variance
FY18 vs. FY17 FY19 vs. FY18
Sales
$
215988
$
23,718
$
24,406
8%
3%
Pole Replacement and Contacts
160
262
262
64%
0%
Misc Revenue
$
751
$
712
$
730
-5%
3%
Total Operating Revenue
$
22,899
$
24,692
$
25,399
8%
3%
Electric Department Expenses
• Primary budget drivers for electric department expenses as displayed in the
below table include the following.
• Operating expenses includes all operating costs associated with maintaining
electric service. The 5% increase in operating expenses for FY18 and FY19
respectfully can be primarily attributed to the scheduled 3% wage increase,
and an increase in the annual commitment for tree trimming;
• Maintenance expenses include the variable costs of maintaining substation
equipment, and outage expenses including standby and storm damages;
and
• The 49% increase in Capital Expenditures in FY18 is the planned Meter
Replacement Program, District's Administratrion Building Remodel,
inaddition to routine system maintenance, and additional Master Plan
projects (Attachment 3).
Electric
Budgets
(in thousands)
%Variance
FY17
FY18
FY19
FY18 vs FY17 FY19 vs. FY18
Operating Expenses
$ 3,884 $
4,070
$ 4,264
5%
5%
Maintenance Expenses
476
480
500
1%
4%
Total O&M Expenses
$ 41359 $
41550
$ 41764
4%
5%
Capital Expenditures
4,083
6,091
4,827
49%
-21%
Total Department Exp.
$ 81442 $
10,641
$ 9,591
26%
-10%
Water Utility
Water Revenue
• Budgeted revenue for the FY18 and FY19 is diplayed in the below table:
• Sales as listed in the table below is primarily made up of residential and
commercial potable and non -potable water sales. The 2% and 5% increase
in budgeted revenue for FY18 and FY9 respectfully includes the maximum
rate increase of 3% for each year; and
• Miscellaneous revenue includes standby, customer service charges and
fees, and rents from water properties. The 10% decrease in FY18 is
attributed to a decrease in standby revenue as vacant parcels develop. The
16% increase in FY19 is attributed to budgeted revenue associated with
adding a cross connection fee.
Water Revenue
Budgets
(in thousands)
%Variance
FY17
FY18
FY19
FY18 vs. FY77 FY19 vs. FY18
Sales
$
123084
$
12,288
$ 12,684
2% 5%
Msc Revenue
$
420
$
380
$ 454
-10% 16%
Total Operating Revenue
$
12,504
$
129668
$ 13,138
1% 4%
Water Department Expenses
• Primary budget drivers for the water department expenses as displayed in the
below table include the following:
• Operating and Maintenance (O&M) expenses encompass all costs
associated with operating and maintaining distribution and operations of
water service. The 6% increase in FY18 O&M expenses is attributed to
increased labor costs in addition to an increase in materials for meter
maintenance; and
• Capital focus will continue for the Water Utility on the water SCADA project,
meter installations, pipeline replacements, and pump station and well
maintenance projects (Attachment 4).
Water
Budgets
(in thousands)
%Variance
FY17
FY18
FY19
FY18 vs. FY17 FY19 vs. FY18
O&M Expenses
$
31471
$
31663
$
3,718
6%
1%
Energy Costs
11216
11208
1,245
-1%
3%
Total Expenses
$
41687
$
4,871
$
4,963
4%
2%
Capital Expenditures
21896
21595
31140
-10%
17%
Total Department Exp
$
71583
$
71466
$
8,103
-2%
8%
4. FISCAL IMPACT
This budget workshop is part of the overall
spending for the next two fiscal years.
budget
process that will affect the District's
5. RECOMMENDATION
Receive LHIs report and provide comments to staff.
Regina Wise
Interim Administrative Services Manager
Michael D. Holley
General Manager
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Attachment 3
Electric Utility Capital Projects & Equipment
Electric Operations
Meter Replacement Program
Electric Master Plan Projects
Various District Projects
Routine Replacements
Poles, Reclosures, Regulators, Transformers
Line Extension & Upgrades
Distribution Repalcements & Improvements
Vehicles
Building Maintenance
Mechanics Bay Door/Lift
District Administration Building Remodel
District Building Window Replacement
Asphault District Complex
Paint the Exterior of the District Office Building
Information Techology
Network Infrastracture Improvement
Various Department IT Projects
SCADA Reliability
FY18 FY19
$2,065,253 $1,205,775
5511150 615,733
1631024 170,266
4151318 409194
3041962 318,207
4371182 4671052
422,346 -
160,000 200,000
1,2121425 -
125,000
2001000
80,000
208,149 244,415
1788 1241786
123
27,407 666,571
$6,091,004 $4,826,999
Attachment 4
Water Utility Capital Projects & Equipment
FY18 FY19
Water Operations
Martis Woods Pump Station $0 $188,093
Meter Installation 303,681 2001000
Water Main Replacement 8861200 888,174
Water Tank Painting 93,686 721181
Sanders Well Remodel - 150000
Soma Sierra Booster Generator 881029 -
Donner Trails Booster Generator 881029 -
Water Production Meter Project 58,477 641832
Meter Replacement 811391 801000
Vehicles - 429,838
Information Techology
Water SCADA replacement 663,877 697,724
Network Infrastracture Improvement 208,150 2441415
Various Department IT Projects 123,788 124,786
$2,595,308 $3,140,043