HomeMy WebLinkAbout9-Consideration of Approving Action Items Related to the FY14 and FY15 Budget1 •
TRUC EE D 11 NE
Public Utility District
ACTION
To: Board of Directors
From: Robert Mescher
Date: November 20, 2013
Subject: Consideration of Approving Action Items Related to the FY14 and
FY15 Budget
a) Approve a Resolution Adopting the FY14 and FY15 Budget and
Overhead Allocation Rates
b) Adopt the FY14 and FY15 Purchase Power and Resource Plan
c) Approve the Related Transfers from Reserve Funds
1. WHY THIS MATTER IS BEFORE THE BOARD
This item completes the FY14 and FY15 Budget preparation process.
2. HISTORY
District Code requires the District to prepare a two-year budget.
BUDGET PROCESS SCHEDULE
September 4, 2013
• Discuss the budget objectives, goals, assumptions, and debt
September 18, 2013
• Review the Purchased Power Plan
• Discuss CEC Changes to the Renewable Portfolio Standard (RPS)
• Review the Proposition 218 process for water rates
October 2, 2013
• Discuss the Electric and Water Utility operational and capital budgets
October 16, 2013
• Set a public hearing date for the budget
• Discuss the supporting services operational and capital budgets
• Review a draft summary of FY14 and FY15 Budget
• Review a draft ten-year Financial Master Plan
• Review revenue requirements
• Discuss the projected reserve fund balances
November 6, 2013
• Receive the draft FY14 and FY15 Budget and Financial Master Plan
• Conduct a public hearing regarding the FY14 and FY15 Budget
• Receive a water rate study (HDR Engineering, Inc.)
• Accept a draft ordinance to set water rates
• Set a date for a public hearing regarding water rates
November 20 (tonight)
• Consider adopting the FY14 and FY15 Budget with the overhead allocation
rates and Purchased Power Plan
BUDGET ASSUMPTIONS
At the September 4, 2013 Board Meeting, staff presented the following budget
assumptions:
• Annual inflation is expected to be 3%
• New development activity will increase
• No new debt
• No planned electric rate increase in FY14 & FY15
• Estimated water rate annual increase of 3% in FY14 & FY15
• $5 monthly water meter surcharge (7.5%) ends December 31 st
• Estimated labor rate increase of 2% in FY14
• Estimated labor rate increase of 3% in FY15
• One IT employee added in FY14
• One Work Order employee restored in FY15
Budget Highlights
Electric Department
• No rate increase
• Budgeted revenue flat in FY14; 1 % increase in demand in FY15
• No other significant changes in year-to-year expenses
• Focus will continue on system maintenance, Master Plan projects, SCADA
Reliability Improvement project, and the reliability of Donner Lake substation
• New construction is anticipated to increase compared to recent years
Water Department
• Estimated annual rate increase of 3% in FY14 and FY15
• Budgeted 1 % increase in demand in FY14 and FY15
• No significant changes in year-to-year expenses
• Focus will continue on the water SCADA project, meter installations, and a
water main project in FY14
Reorganization of Power Supply/GIS departmental expenses
• Name will change to Information Technology (IT)/GIS department
• Power supply expenses will be charged to the Electric Operations department
• All departmental IT costs will be charged to the IT/GIS department
• 2013 budget and actual results were normalized to account for these changes
Supporting Services
• One additional position in IT/GIS in FY14
• One work order position restored in FY15
• No significant changes in other expenses
• Focus on improving reliability and security of communications and SCADA
systems
McZIWITAI'1;101NLTi1_110lei L
No changes have been made to the FY14 and FY15 Budget as drafted and presented
on November 6, 2013. Attachment 1 is a summary of the proposed budget as
compared to the approved FY13 Budget.
The overhead allocation rates used in the proposed budget are as follows:
Overhead Type
FY14
FY15
Labor
97%
99%
Transportation
$ 11.65
$ 12.20
Administration
5%
5%
Construction
16%
21 %
No changes have been made to the FY14 and FY15 Purchased Power Plan as drafted
and presented on September 18, 2013. Attachment 2 is a summary of the Purchased
Power Plan.
Attachment 3 is a list of the fund transfers required to balance the FY14 and FY15
Budget.
Attachment 4 is a draft of the resolution to adopt the budget and overhead rates.
4. FISCAL IMPACT
No electric rate increases are proposed.
An annual 3% water rate increase is proposed in FY14 and FY15. A public hearing is
scheduled on January 15, 2014 regarding the proposed increase.
Staff is proposing a balanced budget for FY14 and FY15. Total revenue and transfers
from other existing funds will equal total expenses and transfers to reserves.
5. RECOMMENDATION
a) Approve the Resolution 2013-24 to adopt the FY14 and FY15 Budget and overhead
allocation rates as presented on November 6, 2014.
b) Adopt the FY14 and FY15 Purchase Power Plan as presented on September 18,
2013.
c) Approve the budgeted transfers listed in Attachment 3.
Robert Mescher
Administrative Services Manager
Michael D. Holley
General Manager