HomeMy WebLinkAbout15-Consideration of FY12 Year-End Financial Results and Request for Transfers and Budget Carry-oversAgenda Item # 15
ACTION
To: Board of Directors
From: Robert Mescher
Date: February 20, 2013
Subject: Consideration of FY12 Year -End Financial Results and Request for
Transfers and Budget Carry-overs
1. WHY THIS MATTER IS BEFORE THE BOARD
Title 3, Section 3.02.010.2 of the District Code requires the budget performance to be
reviewed at a Board workshop semiannually after the close of June and December
accounting periods for each fiscal year.
2. HISTORY
The FY12 & FY13 budget was adopted November 16, 2011 and additional transfers
and budget carry-overs were authorized on February 15, 2012. The FY12 mid -year
results were reviewed on July 18, 2012 and no changes were made to the FY12
budget.
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Preliminary FY12 results indicate that both the Electric and Water Departments
exceeded the budget expectation and ended the year with net operating income in
excess of budget. Staff proposes to carry-over projects from FY12 to FY13 and to
increase the capital reserves with the remaining unallocated funds.
The number of Electric and Water customers were 13,219 and 12,489 respectively,
and were on target with the budgeted 13,200 and 12,400. The average number of
employees was 65 which is target with the FY12 Budget.
ELECTRIC DEPARTMENT
The net rate -funded excess for the Electric Department was $1,415,000 as compared
to the budget. Operating revenue was 3% lower than budget primarily due to milder
winter weather. Operating expense, excluding purchased power was $435,000 (6%)
less than budgeted, but was partially offset with additional rate funded capital projects
as approved by the Board. Purchased power expense was $1,765,000 (15%) less
than budget due to decreased consumption, lower market -priced energy, and
$242,000 of unbudgeted carbon auction proceeds from California's Cap and Trade
Program. These proceeds were netted against the purchased power costs and are
restricted for certain qualified expenses. The carbon auction and the qualified
expenses will be discussed in a Board Meeting later this year. The overall net
operating income of $5,401,000 was $1,498,000 (38%) more than budgeted. Other
income and expenditures were $22,000 less than budgeted and rate -funded capital
expenditures were $61,000 (3%) higher than budget.
Attachment 1 reports the actual results of FY12 as compared to the adopted budget
for the Electric Department.
WATER DEPARTMENT
The net rate -funded excess for the Water Department was $494,000 as compared to
the budget. Operating revenue was $84,000 (1 %) higher than budget. Operating
expense was $145,000 (2%) less than the FY12 budget primarily due to lower labor
costs. The net operating income for the Water Department was $229,000 (6%) more
than budgeted. Other income and expenditures were $684,000 less than the FY12
budget, primarily due to reduced transfers from the Capital Reserve for capital
projects. Rate -funded capital expenditures were $949,000 less than budgeted,
primarily due to delays in the Water SCADA project, resulting in an overall
unappropriated $494,000 excess of funds.
Attachment 2 reports the actual results of FY12 as compared to the adopted budget
for the Water Department.
FACILITIES FEES
The District establishes and collects facility fees on new developments for electric and
water system improvements attributable to new developments in accordance with the
Electric and Water Master Plans. Attachment 3 reports the status of the restricted
Facilities Fees Fund as of the end of FY12. The District is in compliance with spending
facilities fees within the mandated 5-year period.
TRANSFERS AND CARRY-OVERS
Attachment 4 lists the routine year-end transfers and staff's recommended carryovers
into FY13.
4. FISCAL IMPACT
The excess from FY12 can be used to carry-over FY12 projects into FY13 and to
increase the Electric and Water Capital Reserves. Attachment 5 shows the beginning
balances of the various reserve funds and the ending balances after the proposed
transfers and carry-overs.
5. RECOMMENDATION
Authorize the transfers and carry-overs as listed in Attachment 4.
Robert Mescher
Administrative Services Manager
Michael D. Holley
General Manager