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Home My WebLink About14 Budget Presentation on Utility OperationsAgendaItem#14TRUCKEEDONNERWORKSHOPTo:BoardofDirectorsFrom:ReginaWiseDate:September04,2019Subject:FY20andFY21BudgetPresentations:a)Operating/CapitalBudget:ElectricOperationsb)Operating/CapitalBudget:WaterOperations1.WHYTHISMATTERISBEFORETHEBOARDThisitemcontinuesthepreparationprocessoftheFY20andFY21Budget.2.HISTORYDistrictCoderequirestheDistricttoprepareatwo-yearbudget.BUDGETPROCESSSCHEDULE(UpdatedsincetheAugust21,2019Meeting)August21.Discusstheobjectives,goals,assumptions,laboranddebt.September4-(Tonight).DiscussthePurchasedPowerPlan;and.DiscusstheoperatingandcapitalbudgetfortheElectricandWaterUtilities.September18-TherewillnotbeaBudgetworkshopatthismeeting.October2.PresentadraftoftheFY20&FY21Budget;.Discusstheoperatingandcapitalbudgetforsupportingservices;.DiscussReveenue,Rates,Fees,andCharges;.DiscussReservefunds;and.Reviewthe10yearFinancialMasterPlanprojections.October16.ConsiderationtosetaPublicHearingregardingtheDraftFY20&FY21Budget.November6.ConsideradoptionoftheFY20&FY21Budget. BUDGETASSUMPTIONSAttheAugust21,2019BoardMeeting,staffpresentedthefollowingbudgetassumptions:.3%inflation;.Nonewdebt;.Budgetedelectricrevenueincludesthe2.7%scheduledrateincreasesforFY20and3%forFY21;.Budgetedwaterraterevenueincludesthemaximumpotentialrateincreasesof3%forFY20and3%forFY21;and.Laborcostincreaseof3%budgetedforFY20andFY21forallemployeeclasses.3.NEWINFORMATIONAttachment1andattachment2illustratethesummarydraftbudgetforFY20andFY21fortheElectricandWaterUtilities.ThefocusofthisworkshopisbudgetedexpenseswithintheoperatingandcapitalbudgetsfortheElectricandWateroperationsashighlightedintheattachments.BudgetHighlightsforElectric&WaterOperationsExpensesElectricOperatingExpenses.Primarybudgetdriversassociatedwithmaintainingelectricserviceasdisplayedinthetableonattachment3areasfollows:.Operatingexpensesincludesalloperatingexpensesassociatedwithmaintainingelectricservice.The19%increaseinoperatingexpensesforFY20comparedtoFYi9budgetisprimarilyduetotheincreaseinvegetationmanagementexpensesrequiredforregulatorycompliance;.Maintenanceexpensesincludesthevariablecostsofmaintainingsubstationequipment,andoutageexpensesincludingstandbyandstormdamages.The42%increaseinmaintenanceexpensesforFY20comparedtoFYi9budgetisprimarilyduetotheincreaseinstormdamagerepairexpensesastheDistricthasseenaconsistantincreaseinstormdamagerepairexpensessinceFY17;.The40%increaseinCapitalexpendituresinFY20comparedtoFY19includestheTruckeeSubstationRebuild,SCADAReliabilityPhase5,andtheAdministrativeOfficeRehabilitationatheadquarters.DetailedCapitalisincludedinAttachment4;and.TheElectricoperationsdepartmentbudgetincludes26FTE’sforFY20andFY21asfollows;theElectricOperationsDirector,ElectricOperationsManager,AssistantElectricOperationsManager,ElectricEngineeringManager,ElectricEngineers(2),ElectricForeman(3),ElectricianForeman,Electricians(4),SubstationLineman/Inspector,LeadLineman,JourneymanLineman(7),andApprenticeLineman(3).FY19Budgetcontained24FTE’s,theadditionaltwoFTE’sbeingincludedinthebudgetareforsuccessionplanningofstaffthatisnearingeligibilityforretirement. WaterOperatingExpenses.PrimarybudgetdriversforwateroperatingexpensesasdisplayedinAttachment3includethefollowing:.OperatingandMaintenance(O&M)expensesencompassallcostsassociatedwithoperatingandmaintainingdistributionandoperationsofwaterservice.The19%increaseinoperatingandmaintenanceexpenseisattributedtooperatingchangesrequiredtoadequatelycomplywithpendingregulatorycompliancemeasuresformetermaintenanceoperationsandmaintenanceofwaterdistributionlines..CapitalfocusfortheWaterUtilityforFY20includesimplementingfacilitiesmeteringimprovements,SCADAreplacement,andwell,pumpstation,andtankmaintenanceprojects.Thedetailedlistofcapitalprojectsisincludedinattachment5..WaterOperationsproposedstaffingincludes16.25FTE’sforFY20and17FTE’sforFY21comparedto17.5and16inFY18andFY19respectfully.ThisincludesaWaterUtilityDirector,WaterSystemEngineer,WaterOperationsManager,WaterQualityInspector,WaterForeman(2),WaterLeadmen(2),WaterServiceTechnicians(5),WaterServiceTechnician-intraining(2),FacilitiesMaintenanceCoordinator,andMechanic.TheGeneralManagerwhohasannouncedhisplansforretirementcurrentlyservesastheDistrict’sWaterUtilityDirectorinadditiontohisGeneralManagerduties.Withthis,theBudgetproposessuccessionplanningbyincludingphasinginaWaterUtilityDirectorandWaterOperationsManagerinFY20tocontinuecontinuityofoperations.4.FISCALIMPACTThisbudgetworkshopispartoftheoverallbudgetprocessthatwillaffecttheDistrict’sspendingforthenexttwofiscalyears.5.RECOMMENDATIONReceivethisreportandprovidecommentstostaff./zReginaWiseMichaelD.HolleyFinance&AccountingManagerGeneralManager Attachment I Expenses Board of Directors &General Management 148 276 166,110 166 86%-40% General Management 801 788 902,536 903 -2%15% Administrative Services 1,466 1,433 1,417,121 1,417 -2%-1% Conservation 938 946 817,370 817 1%-14% Electric Operations 4,764 5,785 5,979,295 5,979 21%3% Information Technology 702 1,486 1,529,658 1,530 112%3% Purchased Power 12,785 12,788 12,915,399 12,915 0%1% Building Maintenance 515 427 440,391 440 -17%3% Total Operating Expenses $22,120 $23,928 $24,167,880 24,168 8%1% Transfers and Debt Service 960 829 1,114,975 1,115 -14%34% Net Available for Capital $4,827 $6,773 $6,504,986 $6,505 40%-4% Scheduled Capital $4,827 $6,773 $6,504,986 $6,505 40%-4% Total --- FY20 and FY21 Draft Budget Summary -Electric Utility (in thousands) Electric Revenues and Transfers Sales Revenues Interest Income Tra nsfers Total Revenues and Transfers $ 2019 2020 2021 2021 25,399 128 2,380 27,906 Budget %Variance FY20 vs.FY19 FY21 vs.FY20 26,912 321 4,238 31,531$$ 27,684,511 27,685 6%3% 388,712 389 199%2% 3,714,618 3,715 789’o 31,787,841 31,788 13%1% Attachment 2 Scheduled Capital $3,220 $2,413 $2,009 %Variance FY20 vs.FY19 FY21 vs.FY20 -25%-17% FY20 and FY21 Draft Budget Summary -Water Utility (in thousands) Water Revenues and Transfers Sales Revenues Interest Income Ira nsfers 2019 13,138 78 Budget 2020 2021 13,797 100 14,206 103 1,878 16,187TotalRevenuesandTransfers Expenses Board of Directors &General Management General Management Administrative Services Conservation Water Operations Information Technology Interdepartmental Rent Total Operating Expenses Transfers and Debt Service Net Available for Capital 5% 29% -25% 1% 3% 3% 31% 6% 1,915 1,439 $15,130 $15,336 148 276 166 86%-40% 717 678 798 -6%18% 1,375 1,445 1,429 5%-1% 119 101 105 -15%4% 4,963 5,750 5,992 16%4% 628 749 768 19%3% 542 507 537 -7%6% $8,492 $9,505 9,795 12%3% 3,418 3,418 4,383 0%28% $3,220 $2,413 $2,009 -25%-17% Total Attachment3ElectricOperationsBudgets(inthousands)%VarianceFYi9FY20FY21FY20vs.FYi9FY21vs.FY20OperatingExpenses$4,264$5,074$5,24519%3%MaintenanceExpenses50071173442%3%TotalO&MExpenses$4,764$5,785$5,97921%3%CapitalExpenditures4,8276,7736,50540%-4%TotalExpense$9,591$12,558$12,48431%-1%WaterOperationsBudgets(inthousands)%VarianceFYi9FY20FY21FY20vs.FYi9FY21vs.FY20O&MExpenses$3,718$4,430$4,65919%5%EnergyCosts1,2451,3201,3336%1%TotalExpenses$4,963$5,750$5,99216%4%CapitalExpenditures3,2202,4132,009-25%-20%TotalExpense$8,183$8,163$8,0010%-2% Attachment4ElectricUtilityCapitalProjects&EquipmentFY20$705,211970,272266,798742,656482,651450,506121,52687,036875,153445,000550,000100,000350,000431,379195,100$6,773,288FY21$1,370,09572,428275,011769338500,583466,1101,222,65879,388103,232450,000550,000445,160200,983$6,504,986ElectricOperationsElectricMasterPlanProjectsTruckeeSubstationRebuildVariousDistrictProjectsRoutineReplacementsPoles,Reclosures,Regulators,TransformersLineExtension&UpgradesDistributionReplacements&ImprovementsElectricOperationsBuildingElectricSCADAUpdateSCADAReliabilityPhase5&6VehiclesBuildingMaintenanceAdministrativeOfficesRehabilitationDistrictBuildingExteriorPaintAsphaltandDrainageImprovements-DistrictHQBldg.InformationTechnologyNetworkInfrastructureImprovementVariousDepartmentITProjects Attachment5WaterUtilityCapitalProjects&EquipmentFY20FY21WaterOperationsFacilitiesMeteringImprovements$999,330-WaterSCADAReplacementProject645,133670,111MartisWoodsPumpStationReplacement-537,896SandersWellRehabilitation-76,696ControlValveRehabilitationProject104,80199,746FiberboardWellRehabiliationProject59,764-WaterlankCoatings114,244115,500WaterProductionMeterProject42,58546,061SouthsideWell#1Rehabilitation41,336-AirportWell45,081GlenshireDriveDischargeAssembly102,292-Vehicles160,000270,000InformationTechologyNetworkInfrastractureImprovement88,35591,177VariousDepartmentIIProjects55,02856,687$2,412,868$2,008,955