HomeMy WebLinkAbout10 Budget 2022 2023 Workshop #3 v2
October 20, 2021 1 Workshop #3-Agenda Item # 10
Budget 2022/2023 2 Financial Master Plan•Rates•Changes since Workshop #2•Electric and Water–Current draft Budget Summary •Overheads•Historical Financial Metrics–•Introduction•Today’s
Agenda AgendaAgenda Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 3 IT/CyberRegulatoryReservesGoalsInitiativesPlan Strategic MaintRepairs & PersonnelDebt ServiceInvestmentCapital act for manydoing a balancing balanced budget a BackgroundBackground
Workshop #3-Budget 2022/2023 Workshop #3-
The 4 BACKGROUND / HISTORYBACKGROUND / HISTORY Workshop #3-Budget 2022/2023 Workshop #3-Budget 2022/2023 Budget 2022 & 2023Review and approval of –Public Hearing and Action Item –(6pm
start) 3, 2021November services, Revenue/Rates, Reserves & Financial Master Plan draftsOperating and Capital Budgets for all support –Workshop #3 –(tonight)20, 2021October 11/3/2021
Public Hearing on Budget 2022 & 2023 ApprovalElectric and Water Utilities, and Financial Master Plan drafts; Public Hearing Notice of Purchased Power Plan, Operating & Capital Budgets
for –#2 Workshop –6, October Assumptions Discussion of Goals, Objectives, and Key -#1 Workshop –18, 2021 August schedule is as follows:2023 workshops and approval -2022current Board
approved (6/16/2021) Budget
Budget 2022/2023 5–Work Life Balance•commitmentsMeet our goals and –Timeliness•Own it–Accountability•ethicalHonest and –Integrity•Send and receive –Communication•Safety is our way –Safety
•of the DistrictValues •at the lowest practical cost. resources in a safe, open, responsible, and environmentally sound manner reliable, high quality utility and customer services while
managing District of the Truckee Donner Public Utility District is to provide MissionThe •Alignment with the Mission and Values of the District•Goals and Objectives -Budget 2022 and
2023 BACKGROUND / HISTORYBACKGROUND / HISTORY Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 6 and successGoal #5: Developing and inclusive culture drives organizational integration •add value to the communityGoal #4: Take the best of private sector thinking
to modernize the utility and •transparent way to identify opportunitiesGoal #3: Engage with our customers and communities in a welcoming and •Environmental Stewardship#3: Goal •Manage
for financial stability and resiliency#1: Goal •Goals-Alignment with the Strategic Plan of the District •Goals and Objectives -Budget 2022 and 2023 BACKGROUND / HISTORYBACKGROUND /
HISTORY Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 7 GenerationClean Power Local •% Clean Renewable100••Undergrounding of Overhead Power Lines•Initiatives-Alignment with the Strategic Plan of the District •Goals and
Objectives -Budget 2022 and 2023 BACKGROUND / HISTORYBACKGROUND / HISTORY Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 8 identified in the Strategic Plan. Refer to Strategic Plan for additional details.Goals, as and 2023 Budget includes specific sub goals of each of the above 2022
The successGoal #5: Developing and inclusive culture drives organizational integration and •Goal #4: Take the best of private sector thinking to modernize the utility and add value
to the community•Goal #3: Engage with our customers and communities in a welcoming and transparent way to identify opportunities•Environmental Stewardship#3: Goal •Manage for financial
stability and resiliency#1: Goal •Strategic Plan Goals–Key Assumptions BACKGROUND / HISTORYBACKGROUND / HISTORY Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 9 The 2022 and 2023 Budget needs to include resources to further momentum on •solar, hydro or biomass energy-Local Clean Power Generation•100% Clean Renewable•High Speed
Broadband•Undergrounding of Overhead Power Lines•Strategic Plan Initiatives–Key Assumptions BACKGROUND / HISTORYBACKGROUND / HISTORY Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 10 Financial Metrics New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 11 Financial Metrics New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 12 MetricsFinancial AdditionalProvidesReportStaff MetricsFinancial New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 13 projectscapital to cost distributes administrate –Construction Overhead•costsdistributes Purchasing/Warehousing –Overhead Administrative •fleet distributes the cost
of our –OverheadTransportation •costsdistributes cost of all payroll related –Overhead Labor •financialsapplied throughout the District’s Overhead charges, four, •, they do not add
costsdistribute costsOverheads •.with prior yearscalculation methodologies and application to B22 and B23 are consistent The •Overheads New InformationNew Information Workshop #3-Budget
2022/2023 Workshop #3-
Budget 2022/2023 14$0.33m all other labor overhead components (OPEB $115k, Vision $75k, LTD/Life $118k)•%down 22–0.24m Workers Compensation insurance $•up 8.5%–$0.77m FICA/Medicare
payroll taxes, employer portion •%up 18–productive labor costs -$1.5m Non•up 4%–costs $2.8m Medical/Dental insurance •up 13%–Costs $2.8m Pension •Overhead and change to B21:components
for Labor Cost •Labor Overhead amount for B22 is $8.44m up 8% to B21•projects productive compensation costs across all our operations/work orders/capital -cost of all payroll related
costs (taxes, insurance, pension) and nonDistributes •Labor Overhead New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 15 Value of Benefits (labor overhead) numerator smaller value and lower growth rate of 8%•Productive Labor of $9.1m denominator larger value and higher growth rate of
14%•Decrease driven by :•Labor Overhead rate of 92.24% for B22 has decreased from 97.70% in B21•Labor Overhead New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 16 Labor Overhead New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 17 Labor Overhead New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 18 compares to $11.24 in B21The overhead rate charged per applicable transportation hour for B22 of $13.82 to B21. This was driven primarily by the addition of vehicle
mechanic position. The Transportation Overhead amount for B22 of $1.3m increased $269K or 27% •projects.Distributes the cost of our Fleet across all our operations/work orders/capital
•Transportation Overhead New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 19 Transportation Overhead New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 20 number of overall labor hours for District in total due to FTE increase4.4% in B21. The rate decrease is due to the cost being spread over a larger overhead rate
charged per applicable labor hour for B22 of 4.1% compares to The •and inflation. B21. This was driven primarily by cost increases driven by rate of pay changes The Administrative
Overhead amount for B22 of $373k increased $20K or 6% to •orders/capital projectscommon costs across operations and work Purchasing/Warehousing Distributes •Administrative Overhead
New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 21 Administrative Overhead New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 22 16.7% compares to 16.9% in B21. overhead rate charged per applicable labor hour capital projects for B22 of The •inflationprimarily by cost increases driven by rate
of pay changes and Increase •B21 The Construction Overhead amount for B22 of $273k increased $14K or 5% to •Distributes administrate overhead cost to all capital projects•Construction
Overhead New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 23 OverheadConstruction New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
NEW INFORMATION 24 NEW INFORMATION
NEW INFORMATION 52 NEW INFORMATION
NEW INFORMATION 26 NEW INFORMATION
NEW INFORMATION 27 NEW INFORMATION
Budget 2022/2023 28 Reserve/General FundNet Change from 10/6 draft, greater increase in Operating $141 •Capital Reserves, increased usage$50 •Debt issuance costs estimate added($185)
•Capital expenditures refinement, net decrease $356 •Expense refinements, net increase($80) •Changes from 10/6 Draft-B22 –Electric $ thousands New Information $ thousands New
Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 29 Reserve/General FundNet Change from 10/6 draft, greater increase in Operating $ 853 •Capital Reserves, increased usage$ 720 •($1,000) Facility Fees use decrease
in B22, project shifted to out year•Debt issuance costs estimate added($285) •B22 (same total)net decrease ($4,281)Debt issuance, •Capital expenditures refinement, net decrease B22$5,887
•Expense refinements, net increase($188) •Changes from 10/6 Draft-B22 –Water $ thousands New Information $ thousands New Information Workshop #3-Budget 2022/2023 Workshop
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Budget 2022/2023 30 New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 31 New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 32 Capital Expenditures–New Information Capital Expenditures–New Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 st capital projects detail 1–Electric 33 Capital Expenditures–New Information Capital Expenditures–New Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 st capital projects detail 1–Electric 34 Capital Expenditures–New Information Capital Expenditures–New Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 35 Capital Expenditures–New Information Capital Expenditures–New Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 st capital projects detail 1–Water 36 Capital Expenditures–New Information Capital Expenditures–New Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 st capital projects detail 1–Water 37 Capital Expenditures–New Information Capital Expenditures–New Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 38 9.3%–August 2021 –Electricity –SOH –FRED CPI •2022 and 6.0% in 2023 Electric Utilities current draft recommends a rate increase of 8.5% in •wildfire mitigation
costs. targets, regulatory mandates, and reserve , headwinds, including labor costs, strategic professional services firm. The cost of service includes numerous party electric cost
of service -underway being performed by a thirdElectric Utility currently has an active cost of service study The •2.7% increase for 2020 3.0% increase for 2021 (2.7% Residential)•2017
was the first rate increase since 2009•Electric Rates–Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 39 renewable energy. green rate will feature a power supply mix which is from 100% This •as part of the new electric rates public hearingpresented will be process and
-rate is inof a 100% green energy Development •Electric Rates–Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 approximately 450 kWh/monthassuming average residential usage is surcharge for 100% renewable energy consistent with a $0.02/kWh The SMUD monthly surcharges are $0.008/kWh
SurchargeGreen Tariff 100% RenewableHetchy)(HetchSewerPowerWaterFranciscoSanBased on Feed In Tariff (FIT)$0.01/kWh surchargeStandard RatesLocal Sol 100% Local SolarDeep Green 100% RenewableLight
Green 60% RenewableEnergyCleanMarin$20/month for 1 MWh block Commercial$0.002/kWh surcharge Residential100% RenewableVoluntary Renewable Power Program PowerMunicipalAlamedaSurcharge/month8$Surcharge
/month4$Renewable%100Renewable%50Greenergy(SMUD)DistrictUtilityMunicipalSacramentosurcharge/kWh002.0$Renewable%100ProgramGreenAltoPaloofCityRateNameProgramEntityServingLoad 40$.estimated
$.01 to –TDPUD’s Green Rate Program •Sample of current Green Rate Programs•Electric Rates–Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 41 requesting 40%+ increase–Liberty 2022 Rate Case Rates Comparative2020 –Key Assumptions BackgroundBackground Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 portion of rates changed for ResidentialIn 2021, only the Customer Charge 42 2021over $7.68 an increase of 98.09, of $bill equates to an average for 2021 + 8.5% recommended
for 2022 2.7% + Blended(3)TDPUD •an increase of $8.01 over 2021equates to an average bill of $102.23, + 2.6% for 2021 + 8.5% recommended for 2022 •an increase of $7.20 over 202191.92,
of $bill equates to an average for 2021 + 8.5% recommended for 2022 2.9% + TDPUD Primary(1)•Residential Average Monthly Bill @ 500 kWhElectric Rates –Key Assumptions New InformationNew
Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 Compounded Annual Growth Rate (CAGR)43 5 Years 2017 to 2022–CAGR 3.8% •10 Years 2012 to 2022–CAGR 2.1% •12 Years 2010 to 2022–CAGR 1.8% •2022 equates to of $102.23 for
•2022to 2017 Years 5 –CAGR 4.1% •2022to 2012 Years 10 –CAGR 2.3% •12 Years 2010 to 2022–1.9% CAGR •of $91.92 for 2022 equates to TDPUD Primary(1)•Residential Average Monthly Bill @
500 kWhElectric Rates –Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 44 on all out yearsAND further compounding thereafter, •$303,000 impact on 2023•$284,000 impact on 2022 ($1.63/month per customer)•a 1.0% rate increase or decrease
for 2022 Electric Rates–Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 45 approved water ratesStaff does not currently recommend any change to the above •.incorporation in Budget revenue expectations to balance the budgetrevenue requirement
will be determined and recommended for The •2023of 8.9% for 2021, 8.9% for 2022 and 7.9% for Water rate approvals in December 2020 included an average increase •3.3% increase for 2020•Water
Rates–Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 46 improvement plan expenditure levelyear capital -the 10primarily to the current low reserve balances compared to policy targets and Water Utility achieves the policy
target balances only in the final year 2031, due •Electric Utility achieves the policy target balances most years in the plan.•balances. The key measure of financial stability for the
District in the FMP is reserve •the utilitiesincorporates the 10 year capital improvement plans of FMP •FMP makes assumptions on customer growth and inflation. •balances, in activities
and financial position10 year horizon view of the financial •goalsterm -understand how the proposed budget impacts longThe Financial Master Plan (FMP) is a tool to help the Board and
staff •Financial Master Plan New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 RecommendedElectric–Plan MasterFinancial 47 District Code (DC)New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 3.4%–2031 CAGR rates in Years 10yr All most yearshas shortfall in Capital Reserve prioritizedReserve Operating RecommendedElectric–Plan MasterFinancial 48 District Code
(DC)New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 than FMP RecommendedEnd of year 2031 reserves total is Capital Reserve remains under until latter yearsOperating Reserve below target of 50% in all yearsCreates negative
operating cash flows in all years except for 2031 3.2%–2031 CAGR rates in All Years 10yr 2022rate increase in 6.5% not 8.5% Only Change is Scenario 1Electric–Plan MasterFinancial 49
District Code (DC)New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 End of year 2031 reserves total is $3.5 million greater than FMP RecommendedCapital Reserve remains under until latter yearsOperating Reserve below target of 50% through
2025Creates negative operating cash flows 2022 and 2023 3.6%–2031 CAGR rates in All Years 10yr 5.0%to 2025 to Change 2024 2022 6.5% Scenario 2Electric–Plan MasterFinancial 50 District
Code (DC)New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 End of year 2031 reserves total is $8.8 million greater than FMP RecommendedCapital Reserve improves sooner.Operating Reserve below target of 50% in 2022 & 2023 (at
49%) and 75% at EndAllows positive operating cash flows 2022 and 2023 and all years 3.7%–rates in 2031 Thereafter 2.0%2026 3.0%2024 to 2025 5.0%2023 7.0%2022 7.5% Scenario 3Electric–Plan
MasterFinancial 51 District Code (DC)New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 52 FMP Water–New Information FMP Water–New Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 53 FMP Water–New Information FMP Water–New Information Workshop #3-Budget 2022/2023 Workshop #3-
•FISCAL IMPACTFISCAL IMPACT Workshop #3-Budget 2022/2023 Workshop #3-Budget 2022/2023 30 years into the future.-debt is planned, impact 20the upcoming next two years, 2022 and 2023;
and to the extent new will affect the District’s expenditures and revenue requirements for This budget workshop is part of an overall budget cycle process that There is no direct fiscal
impact associated with this workshop item.
•55 RECOMMENDATIONRECOMMENDATION Workshop #3-Budget 2022/2023 Workshop #3-Budget 2022/2023 Thank You 2022 & 202311/3/2021 for the Budget is scheduled on Public Hearing A Budget -Note
strategic direction to staff regarding Budget 2022 & 2023 preparationsthe information from this workshop item and provide A) Receive
<#>
•47 RECOMMENDATIONRECOMMENDATION Workshop #3-Budget 2022/2023 Workshop #3-Budget 2022/2023 Purchased Power from Workshop 2•Backup Slides, after this page
Budget 2022/2023 in 2017MWh161,518 in 2018MWh158,790 in 2019 MWh160,683 in 2020 MWh166,209 58)MWhHours (-Megagwatt)Last Twelve Months (LTM 6.9%–Variance to 2019 3.4%–Variance to 2020
LTM August 2021–MWh171,793 Jan’21 to Aug’21, Actual–MWh114,451 Sep’20 to Dec’20 Actual–MWh57,342 MWhof 172,651 represents a 0.5% increase over the LTM MWhThe Budget 2022 ••growingis
Demand •conservative either (have rate reserve)-Not a line item miss in Budget; not a line item to be ultra•Budget.in approximately 53% of Electric Utility’s operating expenses, therefore
an important estimate Represents •Purchased Power–Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 59 MHhDollars in Thousands except for Cost/)MWhHours (-Megagwatt)Last Twelve Months (LTM+$273K/2.1% cost/ ++MWh$321k/2.4% +B22 vs B21 Variance:Purchased Power-Budget
Draft New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 60 budgeted operating expenses, excluding depreciation and purchased powergeneral fund should have a cash reserve equal to one half of the annual Electric •revision
to the following:Recommended •budgeted operating expenses, excluding depreciationgeneral fund should have a cash reserve equal to one half of the annual Electric •District code wording
for Electric is as follows:Current •process.to this policy during the budget revision recommends Staff –\] 3.01.04Fund Operating Reserve \[District Code General Reserve modification–District
Code –Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 61 End result, shift some General Fund dollars to Capital Reserve.. designationThe subject funds are rate generated, the reserve fund ‘bucket’ is a Board •calculation
seems duplicative, considering the existence of RRIncluding purchase power costs in General Fund ‘operating’ cash reserve •RR balance is currently $6.4 million and is at target goal
for 2021•balance of 50% of annual purchase power costsAlready have a separate Electric Rate Reserve (RR) with target goal reserve •operating costsAs currently written, includes Purchased
Power costs, which are 53% of •Rational for 3.01.04 wording change Reserve modification–District Code –Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop
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Budget 2022/2023 62$470 / 1.9% All other changes, net•$443 / 1.8% Strategic organization structure changes•$311 / 1.3% Strategic plan initiatives•including overhead impact(4.5% in
2022), $338 / 1.4% Labor rate of pay increase •$500 / 2.1% Wildfire defensible space increase•$594 / 2.5% Purchased Power increase (discussed previously)•Variance explanation:–up $2,656
or 11.0% compared to B21 $26,824-Operating Expenses B22 -Electric $ thousands New Information $ thousands New Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 63 B22 has ben increased to $1,530•budget levelIn 2020 and 2021, the Board approved $500,000 increase each year to this •B21 included $1,030 for contract services related
to wildfire defensible space•Wildfire Defensible SpaceOperating Expenses B22 -Electric $ thousands New Information $ thousands New Information Workshop #3-Budget 2022/2023
Workshop #3-
Budget 2022/2023 64 pension costsAmounts include overhead impact on payroll taxes, workers compensation, •MOU specifies October BLS figure, subject to 5.0% maximum•W in August was 4.9%,
next update is October-Fed BLS CPI•$234 impact of draft 4.5% rate of pay increase for 2022•B20/B21 assumed 3.0% and 3.0% , Actual ~6% and 2% •expectations$104 impact of rate of pay
increases in 2020 and 2021 greater than Budget •Operating Labor Increase of $338Operating Expenses B22 -Electric $ thousands New Information $ thousands New Information Workshop
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Budget 2022/2023 65 Survey services (Dept. Gen.Mgmt–15 $•Avian program development (Dept. ELOps)–30 $•(Dept. ELOps)safety programs, costs increases $23 and new SDS subscription $25 –48
$•services (Dept. Gen.Mgmt)Micro imaging Laserfiche & –28 $•Grant application/writing professional services (Dept. Gen.Mgmt)–$30 •Undergrounding, Broadband, 100% Clean Renewables, Local
Generation•$160 professional services to continue momentum on Board Initiatives Big4•Strategic Initiatives, vendor items of $311Operating Expenses B22 -Electric $ thousands New Information
$ thousands New Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 66 FTEs General Services organizational structure changes, add 2 -345 $•)(across all departments Compensation Study contingency, including overhead –$ 64 •(Dept. ELOps)drop
½ FTE, Electrician 2nd half of 2022 –132) ($•(Dept. ELOps)transfer 1 FTE, Electrician to Water Operations –($264) •(Dept. Gen.Mgmt)additional FTE, 50% Electric, Communications Specialist
–$ 87 •all Depts.)Mechanic (cost charged through Transportation Overhead, across additional FTE, ~50% Electric, Vehicle –$ 94 •(Dept. Gen.Mgmt)additional FTE, 50% Electric, Safety
& Risk Coordinator –$ 99 •Director (Dept. Gen.Mgmt)additional FTE, 50% Electric, Human Resources –$150 •Strategic Initiatives, personnel items of $443Operating Expenses B22 -Electric
$ thousands New Information $ thousands New Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 67 2.2% All other changes, net-($217) / •$935 / 9.5% Strategic organization structure changes•$72 / 0.7% Strategic plan initiatives, vendor expenses•including overhead
impact(4.5% in 2022), $338 / 3.5% Labor rate of pay increase •Variance explanation:–up $1,128 or 11.5% compared to B21 $10,922-Operating Expenses B22 -WATER $ thousands New Information
$ thousands New Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 68 pension costsAmounts include overhead impact on payroll taxes, workers compensation, •MOU specifies October BLS figure, subject to 5.0% maximum•W in August was 4.9%,
next update is October-Fed BLS CPI•$234 impact of draft 4.5% rate of pay increase for 2022•B20/B21 assumed 3.0% and 3.0% , Actual ~6% and 2% •expectations$104 impact of rate of pay
increases in 2020 and 2021 greater than Budget •Operating Labor Increase of $338Operating Expenses B22 -WATER $ thousands New Information $ thousands New Information Workshop
#3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 69 Gen.Mgmt)Survey services (Dept. –15 $•services (Dept. Gen.Mgmt)Micro imaging Laserfiche & –$27 •)Grant application/writing professional services (Dept. Gen.Mgmt–$30
•Strategic Initiatives, vendor items of $72Operating Expenses B22 -WATER $ thousands New Information $ thousands New Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 70)(across all departments Compensation Study contingency, including overhead –$ 64 •(Dept. Water Ops)Water maintenance program lead, + 1 FTE –$177 •)Water Ops. (Dept
Operations Water from Electric to transfer 1 FTE, Electrician –$264 •(Dept. Gen.Mgmt)additional FTE, 50% Electric, Communications Specialist –$ 87 •across all Depts.)Transp. OH, Mechanic
(cost charged through additional FTE, ~50% Electric, Vehicle –$ 94 •(Dept. Gen.Mgmt)additional FTE, 50% Electric, Safety & Risk Coordinator –$ 99 •Director (Dept. Gen.Mgmt)additional
FTE, 50% Electric, Human Resources –$150 •Strategic Initiatives, personnel items of $935Operating Expenses B22 -WATER $ thousands New Information $ thousands New Information
Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 71 organizational structure are recommendedGoals, Objectives, Regulatory mandates; these changes to To ensure alignment with Mission, Values, and Strategic Plan; 0.5
electrician full year impact)-80.0 Full Time Equivalents, Budget 2023 (•Full Time Equivalents, Budget 202280.5 •recommended staff changes for 2022/2023+5.5 •Full Time Equivalents,
currently approved75.0 •+2.0 approved changes in 2020/2021•Full Time Equivalents, currently approved73.0 •Full Time Equivalents–Personnel –Key Assumptions New InformationNew Information
Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 72 transferred from Electric Ops to Water Ops (no FTE impact)Electrician position 0 •-0.5 Electrician position eliminated beginning July 2022 (-••+1 Facilities Manager
•Water maintenance program lead–Ops +1 Water •benefited)-) (nontime/seasonal helpers (1 FTE-two part–Ops +1 Water •Safety & Risk Coordinator–Administration +1 General •Analyst/TechCommunications
–Administration +1 General •+ 5.5 recommended staff changes for 2022•Full Time Equivalents–Personnel –Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop
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Budget 2022/2023 73 Favorable renewal, effective rate shift from 3.2% of wages to 2.2% of wages•252k B23$$308k B21 $237k B22 -Workers Compensation •renewal coming in with modest
premiums change +3.0% Medical, 0% Dental•2.9m B23$2.8m B22 $$2.7m B21 -Medical/Dental •Insurance –Personnel –Key Assumptions use of October 2021 BLS value is defined in union MOU,
with 5.0% maximum cap•August was 4.9% and 4.3% at W (SFO) for June -Bureau of Labor Statistics (BLS) CPIBased on current trend of Federal •2023 for all employee classesRate of pay
labor cost increase of 4.5% for Budget 2022 and 3.0% for Budget •Rate of Pay Change–Personnel –Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 74 Network System Improvements $550,000, Various IT specific $265,000 •$ level consistent with current budget-Information Technology •+ 4 in 2022 for $316,000 and
+2 in 2023 for $512,000•Vehicle Additions•10 year replacement schedule updated and refined to balance cash flows y2y•Vehicle Replacements •at this timeall projects/amounts are preliminary
planning -See next two pages for further information •Integrate into budget and financial master plan•Electric and Water have 10 year capital improvement plans•Capital Expenditures–Key
Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 75 Contributed Capital projects. Refer to Attachment 3 for further details.time. Above amounts exclude projects/amounts are preliminary planning at this All •(excluding
$10.5m in building* related in ’22)$5.2m average per year-2022 to 2031 –Electric •Vehicles0.76m $• all other various projects$1.45m •IT projects0.76m $• Glenshire Substation rebuild,
planning costs $0.37m •ELF Deployment 0.33m $• Replacements0.76m Pole and SRIP Pole $•Upgrades$0.52m Line Extensions and • Rebuild$1.40m Martis Valley Substation •Electric 2023 $6.35m•all
other various projects• $1.31m costsSubstation rebuild, planning 0.36m Glenshire $•$0.32m ELF Deployment • $0.39m Martis Valley Substation rebuild, planning costs•$0.50m Vehicles• $1.30m
SCADA Reliability Phase 6•$0.65m IT projects• 1.50m District Office drainage/paving*$•0.52m Line Extensions and Upgrades• $* $3.00m District Office Building Modernization•0.90m Pole
and SRIP Pole Replacements• $$6.00m new Electric Operations Building (new debt)*•Electric 2022 $16.75m ($6.25m excluding building* related 2022 items)•Electric–Capital Expenditures
–Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 76 Contributed Capital projects. Refer to Attachment 3 for further details.projects/amounts are preliminary planning at this time. Above amounts exclude All •$8.33m
average per year-2024 to 2031 –Water •$1.92m all other various projects•• $0.51 Pump station replacementfinancedWell replacement, new debt $0.43 •• $1.36 GeneratorNew pipeline, new
debt financed 1.35m $•$1.26m Pump station rehabilitations •financednew debt replacement, 1.67m Pipeline $•Water 2023 $8.78m•four truck replacements and two trailer replacement–Vehicles
$0.64m •new debt financed $1.97m New pipeline, •$0.81m all other various projects•debt financed new replacement, Pipeline $2.38m •projects$0.46m Information Technology •new debt financed
, station replacementMartiswoods pump 2.72m $•$0.95m Water tank rehabilitations•new debt financed pipeline, New Water Tank (6170) and $3.00m •$1.35m Pump station rehabilitations•portionfees
pipeline, facility New Water Tank (6170) and 1.00m $•Water 2022 $15.28m•Water–Capital Expenditures –Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop
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Budget 2022/2023 77 DWR Prop55 Loan (ended in 2021)-2015/2016 Refunding COPS-40% of current Pension Obligation Bonds-2023+ ~1,032,000/year to 2035•drop of $1m-$1,252,200 –2022 •$2,286,669–2021
•$2,441,989–2020 •Water Utility (excluding DLAD/SRF)both end in 2022-Dark Fiber loan-Obligation Bonds60% of current Pension -$0-2023+ •$340,729–2022 •$656,266–2021 •$648,722–2020 •Electric
Utility Current LTD Debt Service BackgroundBackground Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 78 month\]per $5.93 -customers Service $960,000 \[@13,500 Debt Annual •300k B22 9.3m Total Interest Cost $•currently) % (4% used for conservatism, estimate ~3.25%
4.0Years, Interest Rate Term 25 •Various Projectsmillion, 15 $-Principal •Water•$2.53 per month\]-Annual Debt Service, $441,000 \[@14,500 customers •B22 H2 Interest only $120k$2.9m
Interest Total •(4% used for conservatism, estimate ~3.25% currently) 4.0% 20 Years, Interest Rate Term •new Electric Operations Buildingfor million, $6 -Principal •Electric•New Debt
Recommended Impact New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 79$30M, DS Total 17.3mPrincipal $, $12.7mTotal Interest 4.00%, years, Rate 30 Term •, DS Total $25M$16.0mPrincipal , $ 9.0mTotal Interest %, 3.75years, Rate 25 Term
•20M, DS Total $Principal $14.2m , Total Interest $ 5.8m.50%, 3•month\] equates to the following Principal / Interest amounts:per $5.95 -Debt Service (DS) of $1.0m for reference purposes–Debt
Service Examples New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 80 No new POBs in current DRAFT.payment. . Bond debt service payment replaces all/portion of current UAL alternativePension Obligation Bonds will be evaluated
as a potential refinancing •.the PEPRA plan, the UAL payment in 2021 was $15,000For •CalPERS projects a $1.2 million UAL payment requirement in 2022. $1,036,000 with full annual payment
in July 2021 (which the District paid). required minimum annual payment for 2021 was $1,071,000, discounted to Miscellaneous Plan (Traditional) Unfunded Actuarial Liability (UAL) CalPERS
•$1,150,000 from prior year end. The 12/31/2020 Net Pension Liability was $14.0 million, an increase of 9% or •Pension Liability and POBs–Key Assumptions New InformationNew Information
Workshop #3-Budget 2022/2023 Workshop #3-
Budget 2022/2023 81 term savings-financing alternative, with the goal of generating long-rePension Obligation Bonds will be evaluated as a potential Net Pension Liability •3.07 Debt
Issuance and Management Policy and section 3.01.03 Debt GoalsAny debt issuance will be in accordance with District Code, Title 3, Chapter •Master Plan modelIntegrate into Budget 2022/2023
cash flows, as well as, the 10 year Financial •Be aligned with District’s goals, objectives, and strategic plan•issuances, Electric and Water, as applicable; and further:Budget will
assess and incorporate, as applicable, potential new debt •Debt Service / New Debt–Key Assumptions New InformationNew Information Workshop #3-Budget 2022/2023 Workshop #3-