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Home My WebLink About11 FY20 and FY21 Budget WorkshopBoardofDirectorsReginaWiseOctober02,2019AgendaItem#IIITRUCKEEDONNERPublicUtilityDistrictSubject:FY20andFY21Operating/CapitalBudgetPresentations:a)BoardofDirectorsandGeneralManagementb)AdministrativeServicesc)Conservation____d)informationTechnology___________________________1.WHYTHISMATTERISBEFORETHEBOARDThisitemcontinuesthepreparationprocessoftheFY20andFY21Budget.2.HISTORYDistrictCoderequirestheDistrictprepareatwo-yearbudget.BUDGETPROCESSSCHEDULE(UpdatedsincetheAugust21,2019Meeting)August21.Discusstheobjectives,goals,assumptions,laboranddebt.September4-.DiscussthePurchasedPowerPlan;and.DiscusstheoperatingandcapitalbudgetfortheElectricandWaterUtilities.October2-(Tonight).Discusstheoperatingandcapitalbudgetforsupportingservices;.DiscussRevenue,Rates,Fees,andCharges;.DiscussReservefunds;and.Reviewthe10yearFinancialMasterPlanprojections.October16.PresentadraftoftheFY20&FY21Budget;and.ConsiderationtosetaPublicHearingregardingtheDraftFY20&FY21Budget.November6.ConsideradoptionoftheFY20&FY21Budget.WORKSHOPTo:From:Date: BUDGETASSUMPTIONSAttheAugust21,2019BoardMeeting,staffpresentedthefollowingbudgetassumptions:.3%inflation;.Nonewdebt;.Budgetedelectricrevenueincludesthe2.7%scheduledrateincreasesforFY20and3%forFY21;.Budgetedwaterraterevenueincludesthemaximumpotentialrateincreasesof3%forFY20and3%forFY21;and.Laborcostincreaseof3%budgetedforFY20andFY21forallemployeeclasses3.NEWINFORMATIONStaffisproposingabalancedbudgetbybalancingtherevenueandexpensesandbuildingorutilizingexistingreservesintheshort-termtoachievetheDistrict’sfinancialgoalsinthelong-term.Attachment1showsthesummarydraftforFY20andFY21BudgetfortheElectricandWaterUtilitiescombined.Highlightingtheareaswewillbereviewinginthisworkshop;BoardofDirectors,GeneralManagement,AdministrativeServices,Conservation,andInformationandTechnology.CostsofsupportingservicesaresharedbetweentheElectricandWaterUtilitiesthoughwewilllookattheminwholeforthepurposeofthisreview.BoardofDirectorsandGeneralManagement.PrimarybudgetdriversassociatedwithmaintainingBoardofDirectorsandGeneralManagementasdisplayedinthetableonattachment2areasfollows:.The86%increaseinFY20expensescomparedtoFYi9forBoardofDirectorsisattributedtotheanticipatedincreaseinexpensesfortheGeneralManagertransitioninadditionto$15Kinelectionexpenses;.GeneralManagementisproposinga4%decreaseinexpensesinFY20comparedtoFY19;.ReductionstotheGeneralManagementexpensesinFY20comparedtoFY19include;.AllHumanResourcesexpensesweremovedtotheAdministrativeServicescostcenter;and.TheSpecialProjectsManagerretired..AdditionstotheGeneralManagementcostcenterexpensesinFY20comparedtoFYi9include;.ContractsadministrationmovedtoGeneralManagementfromAdministrativeServices;.ARecordsCoordinator/AdministrativeTechnicianpositionisproposedtobeaddedinFY20,thisistoaddressneededadministrativesupportfortheElectricandWaterutilitiesprovidingbackfillsupportforgapsleftbytheretirementoftheSpecialProjectsManager;and.FY20includesincreasedprofessionalservicesforleadershipdevelopmentcomparedtotheFYi9Budget..GeneralManagementisproposinga16%increaseinexpensesforFY21comparedtoFY20theprimarydriverbeingtheproposalforanadditionaladministrativetechniciantobeaddedinFY21,however,thisisessentiallycost neutralasAdministrativeServiceshasplannedforareductioninstaffinginFY21,increasedtechnologyhasenabledadministrativeservicestocapitalizeonefficienciesthatallowsforstaffingtobeshiftedformuchneededadministrativesupport..NonewcapitalexpendituresareplannedfortheBoardofDirectorsandGeneralManagementcostcenters.AdministrativeServices.AdministrativeServicesexpensesareproposedtobefairlyflatincreasingjust1%inFY20comparedtoFY19,anddecreasing1%inFY21comparedtoFY20whileincludingalloftheadjustmentsmentionedabove;and.NonewcapitalexpendituresareplannedfortheAdministrativeServicescostcenter.Conservation.PrimarybudgetdriversassociatedwithmaintainingConservationasdisplayedinthetableonattachment2areasfollows:.AdecreaseinPublicBenefitProgramsandInformationexpensesof6%and13%areproposedinFY20andFY21respectfullyinlinewithsteadilydecliningprogramparticipationbycustomersthroughouttheDistrict.TheDistrictislookingforwardtotheopportunitiesthenewelectricmeteringsystemwillbringtoenhancethecontinuedsupportofenergyconservationprograms,dollarshavebeenreservedforR&Dtoenhanceconservationprogramssupportedbydatafromthenewsystem;and.AincreaseinOperatingExpensesof146%for$56KinFY20isproposedcomparedtoFY19BudgettosupportthedevelopmentofnewprogramsandoverallDistrictpublicoutreachprogramsandinformation..ConservationdoesnothaveanydirectcapitalprojectsplannedintheFY20andFY21budgetbutplanstosupportenergyefficiencyprogramsofDistrictfacilitiesandoperations.InformationTechnology.PrimarybudgetdriversassociatedwithmaintainingInformationTechnology(IT)operationsasdisplayedinthetableonattachment2areasfollows:.The68%increaseinoperatingexpensesforITisattributedprimarilyto:.ThetwoadditionalpositionsaddedinFY18andFY19oftheSeniorDataAnalystandtheITSecurity&ApplicationsManager;and.AdditionaloperatingcostsrequiredforITtosupportandmaintainthenewlyinstalledtechnologyincludingthenewelectricmetersysteminstalledinFY18andFY19..ITcapitalincludesroutinenetworkinfrastructureimprovementsinadditiontovariousdistrictprojectsforFY20andFY21.AdditionalBudgetdriverswillbediscussedinmoredetailintheFinancialMasterPlanreviewfollowingthisoperatingexpensereviewofSupportServices. 4.FISCALIMPACTThisbudgetworkshopispartoftheoverallbudgetprocessthatwillaffecttheDistrict’sspendingforthenexttwofiscalyears.5.RECOMMENDATIONReceivethisreportandprovidecommentstostaff.::/ZReginaWiseMichaelD.HolleyFinance&AccountingManagerGeneralManager Attachment 1 FY20 and FY21 Draft Budget Summary -Electric Utility fin thousands) Budget %Variance - 2019 2020 2021 FY20 vs.FY19 FY21 vs.FY20 Electric and Water Revenues and Transfers SalesRevenues 38,536 40,709 41,890 6%3% Interest Income 205 481 492 135%2% Transfers 4,295 5,677 5,593 32%-1% Total Revenues and Transfers $43,036 $46,867 $47,975 9%2% Expenses Board of Directors &General Management 297 552 332 86%.-40% General Management 1,519 1,465 1,701 -4%16% Administrative Services 2,841 2,878 2,846 1%-1% Conservation 1,057 1,047 922 -1%-12% Electric Operations 4,764 5,785 5,979 21%3% Water Operations 4,963 5,750 5,992 16%4% Information Technology 1,330 2,235 2,298 68%3% Purchased Power 12,785 12,788 12,915 0%1% Building Maintenance 515 427 440 -17%3% Interdepartmental Rent 542 507 537 -7%6% Total Operating Expenses $30,612 $33,434 $33,963 9%2% Transfers and Debt Service 4,377 4,247 5,498 -3%29% Net Available for Capital 8,047 9,186 8,514 14%-7% Scheduled Capital 8,047 9,186 8,514 14%-7% Total --- Attachment2BoardofDirectorsandGeneralMgmtBudgetsSVariance¾Variance(inthousands)FY21FY20vs.vsFY20vs.FY21vs.FY19FY20FY21FY19FY20FY19FY20BoardofDirectorsOperatingExp$297$552$332$255$(220)86%-40%GeneralManagementOperatingExp$1,519$1,465$1,701$(54)$236-4%16%TotalExpenses$1,816$2,017$2,033$201$1611%1%AdministrativeServicesBudgets(inthousands)FY19FY20FY21AdministrativeServicesOperatingExpS2,841$2,878$2,846ConservationBudgets(inthousands)FYi9PublicBenefitProgramsandInformation$1,019OperatingExpenses$38FY20$953$94FY21$825$98TotalExpensesIs1,057$1,047$922%VarianceFY20vs.FY21vs.FYi9FY201%-1%¾VarianceFY20vs.FY21vs.FY19FY20-6%-13%146%4%-1%-12%InformationandTechnologyBudgetsSVariance%Variance(inthousands)FY21FY20vs.vs.FY20vs.FY21vs.FY19FY20FY21FY19FY20FY19FY20OperatingExpenses$1,330$2,235$2,298$905$6368%3%CapitalExpenditures73776979432254%3%TotalExpenses$2,067$3,004$3,092$937$8845%3%$VarianceFY21FY2Ovs.vs.FY19FY20S37$(32)$VarianceFY21vs.FY20FY20vs.FYi9$(66)$56$(129)$4$(10)$(125)