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HomeMy WebLinkAbout9 Title 3 Code ChangesAgendaItem#TRUCKEEDONNERPublicUtilityDistrictCONSENTTo:From:Date:2.HISTORYBoardofDirectorsLisaHallMarch06,2019Subject:ConsiderationofResolution2019-02AdoptingChangestoDistrictCodeTitle3,FinanceandAccounting1.WHYTHISMATTERISBEFORETHEBOARDOnlytheBoardcanmakechangestoDistrictCode.TheBoardatitsAugust1,2012BoardmeetingestablishedfinancialgoalsfortheDistrictincludingdebt,cashreserve,andcapitalrequirements.TheBoardestablishestheDistrict’sfinancialgoalsincludingplanning,revenue,debt,andcashreservegoalsassetforthinDistrictCodeTitle3.01.TheBoardperiodicallyupdatescashreservegoalsinordertomitigateriskandensurecontinuityofoperations.ThesegoalsandfundingdeterminationsarereviewedandsetannuallybytheBoard.CashreservegoalsforboththeElectricandWaterUtilitiesaredetailedinDistrictCodesections3.01.01.04through3.01.01.06.CashreservegoalsfortheWaterUtilitycurrentlyincludetwomonthsoperatingexpendituresandarevolvingwatercapitalreservefundintheamountof$4Mforcapitalimprovementandmaintenanceprojects.CashreservegoalsfortheElectricUtilityincludesixmonthsoperatingexpenditures,anelectricratereserveof$3M,andaminimumcapitalreservefundof$1M.CurrentcashreservegoalsfortheWaterandElectricUtilitiesareapproximately$7M,and$15M,respectively.Cashreserveneedshaveincreasedwithplannedcapitalprojects,inflation,andrisingregulatorycosts.UpdatingcashreservegoalsinDistrictCodeallowsreserveadjustmentsasapprovedbytheBoardtoreflectchangesinoperationalcosts.StaffrecommendsthefollowingchangestoDistrictCodeasshowninAttachment1:.IncreasetheWateroperatingfundfromtwomonthstosixmonths;.UpdatetheElectricratestabilizationfundfromafixedamountof$3Mtosixmonthscostofpurchasedpower;.AddareservefundtitledDeferredLiabilitytocovercostssuchasunfundedpensionexpenses;.ChangetheWatercapitalreservefundfromafixedamountof$4Mtooneyear\I)..b.ct&.’S3.NEWINFORMATION9 costofcapitalreplacement;and.ChangetheElectriccapitalreservefundfromafixedamountof$1Mtooneyearcostofcapitalreplacement.TherecommendedcoderevisionsincreasecashreservegoalscommensuratewithDistrictneedstoatotalof$8.8MfortheWaterUtility,and$23MfortheElectricUtility.TheBoardsetsreservegoalspursuanttoDistrictCodeTitle3,Chapter3.01,FinancialGoals.Resolution2019-02incorporatesstaff’srecommendationsincludedasAttachment2.4.FISCALIMPACTUpdatingcashreservegoalsinDistrictCodeallowsreserveadjustments,asapprovedbytheBoard,toreflectchangesinoperationalcostsandinflation.5.RECOMMENDATIONAdoptResolution2019-02,amendingDistrictCode,Title3,FinanceandAccounting.ttqfrzLisaHallMichaelD.HolleyAdministrativeServicesDirectorGeneralManager TITLE3FINANCEANDACCOUNTINGCHAPTERSFinancialGoalsBudgetControlAuditingGovernmentalAccountingStandardsBoard(GASB)ElectricSupplyProcurementDebtIssuanceandManagementPolicyPurchasingCapitalizationPolicyAccountsReceivableAccountsPayableInvestmentsRestrictedFundsStandbyChargesandAssessmentDistrictsSection:3.01.01FinancialGoals3.01.01.1ThefollowinggoalsareestablishedtopromoteandmaintainthefinancialstrengthoftheDistrict:3.01.01.01PlanningGoals.ReviewWaterandElectricMasterPlansatleasteveryfiveyearsIReviewten-yearFinanceMasterPlaneachyear.Preparetwo-yearoperatingbudgetwithsemi-annualreviews.Prepareten-yearCapitalImprovementPlan;updateannually.Reviewratestructureandlevelseverytwoyears.ReviewFinancialGoalseveryyear3.01.01.02RevenueGoals.Setoperatingrevenuestocaptureentirecosttoprovideserviceplusbuildandmaintainreservesandsatisfydebtcoverageratios3.013.023.043.053.063.073.083.103.123.163.203.243.32CHAPTER3.01FINANCIALGOALSTitle3Page1 e6eä.]opuoILI3cqP0]!flbo]unoweueU!TUOWfl]TSU!qopqoo.iojUfl4oiiosoeqpnoqsoJoqsieooOMOONqe900I0UOWO3eIUOJIB!d83]o:IjebpnqienuueObe]OA8oqjoIBnbOwflW!U!Wppp’ppp’.$ounowe0144U!UflJOMOSO]IU1!d3UUfl9AJOSOJ1e1!deOouiooiobU!AIOAO]eoqpnoqsooqj6U!OUeU!4oqoJoqopW]OT-6U01oTUOWO6UJ]204]O!]dOUflPO1!T!U!eq01soe[odDwedoppp’ppp’$jojunowogU!4UOWOOEIdOJIET!UoiojebpnqIBflUUebBJOAeeqjolenbeUflOMOSOJIe!deo]OMbu!AIoAe]eeqpnoqseeqsieooOMOSONIeNdEOS0i.0I0tsseqBflUUBUUOpJ8O014jAqpouwieepeqIBobeeseeqPUessoouo!suedsqonspepununiojS8M8S8]ep!AO]doS!UflJeqJOUeU!8LApqeflpeiiejepejpunjeAJeseJbU!42]edOpepuseiU!BTU!EWIILISSe!1!I!flJ8eMpU8O!]43eIeq1flOJeModpesqoindosoope4ebpnq8LflJOSUOWXISO}iEnbeeeseiqseoWflW!U!Wppp’ppp’$oeouqBU!EjU!Wpnoqs(eMesedOJ!JeIUflJUOZB4STBJo!JToeI.Uo!Te!oe]dep6U!pnloxe‘sesuedxe6U!jB]edOpee6pnqIflUU8LITJO4IE8U0OieflbeeMesejqseoeeAqiinospunsIB]0U063!JT38I(enpS!qepup4soJeTu!Id!ou!d113!LIMU!UOWegeqAqcqoidII!MSNT)o]n!puedxopeje6pnqguoweg6g__________________Uo!!3e]dep6U!pflIOXe‘sesUedxebU!1B]edopejebpnqIflUUBeqOeuoOinbeeeseiqseoeAqpnoqsUfl4IeUO6JOTBM.SUO!eJOdO-SOOMOSONLS3V00I.0CAO!IOd1UOWO6eUJUEO3UflSSINC‘LOtUO!TO8SSUO!S!AO]deseqooeqnseqeqs‘AITOe!pU!-‘ooejpieq4e‘o!4s!aeqAqpenssiqepeloideqjoeJ!IinesnULflJe6UOqepONAI!]fl1WeeAocULfleiowqepONe3!Mesqepo:pewwoosenueeUflJieieue6joTUeO]edeA!J-ATUeN4ULfleowONeo!AJeSqep01PeTl!WWOOenueeeese!T!I!oeJIflUUpeoeiodeqeUoUeqeowONsieAUeTS]!JeqU!enpS!e46eJ66eeqU!qepW]e-6UO.iojeoesqepeqJIq-eUQe6pnqeqU!pe!1!Uep!Aieiedeseqpnoqsqepose!Jo6eToeseqse6qons6uIqAqPeOUEU!JepPUB(sUewssesse)p!]s!puewssesseIe!oedse6uIAJesqep‘(seiei)sjewosno4U]Jfl36U!AJesjqep‘(seejser!f!oeJ)TUewdoleAep6U!MeSS!qepeTBJEUeSsieooqa£0i0•I0tUBIdesewoUo!eIdwooeqjJe.jeioAoe6pnqMeAeseejse!!I!oeJMe!AedS4SOOIIeooeio:iweqesPUBsieeAoiAieAese6J2qouo!loeuUooMe!Aed ResolutionNo.2019-02ADOPTINGAMENDMENTSTOTHEDISTRICTCODETITLE3WHEREAS,theDistrictCodeprovidesrulesandregulationsintendedtoconveyacomprehensivedescriptionofthemannerinwhichtheDistrictoperates,handlesitsfinancesandperformsitsaccounting;andWHEREAS,theDistricthasidentifiedaneedtoadjustcashreservegoalsandcapitalreservegoalstobeconsistentwithoperational,inflationary,andregulatoryneeds;andWHEREAS,aworkshoponthecashreservegoalsandcapitalreservegoalsanddraftrevisionstoDistrictCode,Title3washeldattheJanuary16,2019Boardmeeting;andWHEREAS,theBoardofDirectorsofTruckeeDonnerPublicUtilityDistricthaschosentoamendtheDistrictCodeTitle3.01;andNOW,THEREFORE,THEBOARDOFDIRECTORSOFTHETRUCKEE-DONNERPUBLICUTILITIESDISTRICTDOESRESOLVEASFOLLOWS:Section1.AllpreviouslyadoptedresolutionsrelatedtoDistrictCodeTitles3.01.01.04and3.01.01.05areherebyrescinded;andSection2.ThattheBoarddoesherebyadopttheamendedDistrictCode,Title3,3O1.01.04and3.01.01.05relatedtoCashReserveGoalsandCapitalReserveGoalsasfollows;3.01.01.04CashReserveGoals-Operations.Watergeneralfundshouldhaveacashreserveequaltoonehalfoitheannualbudgetedoperatingexpenses,excludingdepreciation..Electricgeneralfundshouldhaveacashreserveequaltoonehalfoftheannualbudgetedoperatingexpenses,excludingdepreciation..Electricratestabilizationfund(akaElectricRateReserve)shouldmaintainaminimumcashreserveequaltosixmonthsofthebudgetedcostofpurchasedpower..BoththeElectricandWaterUtilitiesshallmaintainaBoardrestrictedoperatingreservefundtitledDeferredLiability.TheintentofthefundistoprovidereservesforunfundedliabilitiessuchaspensioncostsandthereservegoalshallbedeterminedbytheBoardonanannualbasis.3.01.01.05CapitalReserveGoals.Thereshouldbearevolvingwatercapitalreservefundequaltotheaverageannualbudgetforcapitalreplacementtopermitprojectstobeinitiatedandfundedpriortoarrangementoflong-termdebtorotherfinancing. 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