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HomeMy WebLinkAbout17 Mid-Year Financial Update 2022• FY 22 & FY 23 Budget approved November 3, 2021 • District code requires semi-annual budget report comparison to actual res u Its • Mid -year review FY22 -August 3, 2022 (tonight) • Year-end review FY22 - March 2023 • Budget and related budget reports are non-GAAP, cash flow items • Primary differences from GAAP is the exclusion of Depreciation (non - cash) and inclusion cash flow items (Capital Expenditures, debt service principal payments, debt issuance proceeds, and reserve transfers in/out) H�i��Wwafnmpr- M- Operating Reveinues hiterest hicorne 00 AB32 Reserve WitfidirawA $ 45,154,562 r, Biond Piroiceeds Use Total Capital Res,e,irve 185,000 Withdrawals 0% Purrhased Power NectHc Op Exp XII Other 01plExp 1 ,50 ,0 IDebt SeMce 3 M/6 - Debt Nsue Costs Capital IExpedrndau tres Reserve Dejj.msfts Electric - 2022 Budget - Sources and Uses Net - $669,000 Positive, increasing Operating Reserve Electric Utility - Operating Income Components - 1 of 4 Operating.. iM+ rll. 10 YTD 612022 2022, Annual • $31.8m Forecast for 2022 • 101% of Annual Budget • $0.2m favorable variance • RevM ix: 15% Service Cha 2022 Annual reps, 1 85% KWH/Demand • KWH billed per billing day average • Q1'22 543,238 (-0.0% '21 / +8.1% '20) • Q2'22 432,302 (+1.3 % '21 / +2.5 % '20) • YTD'22 4871154 (+0.5% '21 / +2.7% '20) • KWH per customer per billing day • down 1.1% to 2021 • up 3.8 % to 2020 • down 1.7% to 2019 • June 2022 @ 14,595 customer accounts • up 1.2% to June2021 • Budget assumed 0.5% Electric Utility - Operating Income Components - 2 of 4 Purchased w YTD 6/2022 2022 i • $14.4m Forecast for 2022 $ 1a,431 'Red Mesa Solar (DAMPS project) construction delays impact on 2nd half of 2022. • $0.9m or 107% of Annual Budget • Delay increases power source wholesale costs in the $600,000 to $1,200,000 range • Market. Natural Gas prices UP and Hyrdo resources drought impacted • Forecast uses mid -point $892,000 • Board consideration of utilization of Rate Reserve funds in November/December of 2022 Electric Utility - Operating Income Components - 3 of 4 tperating Expenses ($ thousands) Actual, 44.8% Rudl,, CIA] • $13.4m Forecast for 2022 • 98% of Annual Budget • favorable $0.2m • Electric Ops department ytd 49% of annual budget. Forecast Annual is 101% to Budget or $72,000 over; based on estimates of expense timing trend, inflation pressures, and personnel vacancies All other departments trending • forecastor •- • budget Electric Utility - Operating Income Components - 4 of 4 Oiperatinig Income M 4530 YTD 6/2022 2022 Annual 2022 Annual Actual, 81.6,% Budget Forecast, 88% • Annual Forecast, Unfavorable $0.5m or 12% • $0.2m operating revenue, +0.5% • $(0.9m) purchased power, -7% • $0.2m operating expenses, +2% • Board consideration of utilization of Rate Reserve funds in Nov/Dec of 2022 • Primary driver of 2022 results of budget (forecasted) is purchased power • Reserve balance $6.5m (@ policy) • CalOES disaster relief funding for December 2021 Storm • Amount received and when are TBD • Replenishes Operating Reserve funds used for storm • 12/31/2021 Operating Reserve of $5.8m was $0.4m below estimated beginning balance for 2022 Budget due to the storm's impact (and also depleted cash reserve balance further in 2022) $ in Thousands Capital Expenditures ( 16,898) ( 1,851) 8% Investment Income 19 57 2919% Debt Service (447) (224) 510% Debt Issuance Costs (185) 0 0% Transfers In (Out) 13,150 (981) -7% Non -operating cash flows, net ($ 3,861) ($ 2,6091) 66% Capital expenditures under budget due to timing of projects between years Investment Income favorable to conservative budget yield of 0.3% r r J li f 6i7 5 J % (447), % J r% ($33853) A M r Transfers in from Reserves adjusted down for lower capital expenditures Transfers to Reserves: $675k Vehicle Reserve & $326k Rate Reserve; per Budget Transfers from Reserves: $1m from AB32 Reserve and $0.5m Vehicle Reserve, per Budget Transfers from Reserves: Capital Reserve B $6.65m F $1.1m Bond Proceeds Fund B $6.Om Transfers from Reserves: Rate Reserve — pending review in November/December of 2022 F $0.1m (Budget $0 out) Summary Recap Pn Thousands Operating Revenues Operating Purchased '• Power Operating! Operating Income • #cashflows, Net Budget i r •20 • * i (14,431) i i i ii i ! i 41009 • 11r i • s i 853) • i n . M ➢ Annual Forecast Net (increase to Operating Reserves) is off Budget unfavorably $513,000 ➢ Transfers from Reserves: Rate Reserve to Operating — pending review in Nov/Dec of 2022 2022, Budget - WATER - Sourcem as 101perafling Revenues m p n tie r ie s t I rw a,ai rn e I Pirmeeds Use m Ozipitifl Reserve Withdrawak 1% 15,631,202 F 29%, lei $ 22,727,955 Total 1,672,24 285,000 170 Water 01p Exp Rent Expense AN Other OpExIII wn Debt Se rwi ce ,m, Ike b t Is s u c! C as ts - Capitaid ILxpenrHutres m II serve Dq'.!posIits * Water - 2022 Budget - Sources and Uses Net - $713,000 Positive, increasing Operating Reserve Water Utility - Operating Income Components - 1 of 2 Operating Revenues ($ thousands) $16, 4,34 • Billed Gallons YTD June 30th 2022 $16,,306 Residential 212.3m gallons down 17% to prior vear Y "D 6/20/2021 2022 Annual 2022 Annual tua0, 4 `' Budlg t Forecas,t, '% - Drought restrictions impact on revenues core driver of forecast variance. - Annual customer billing revenue dollars mix is —85% Monthly Service Charge and 15% Volume based (and 90%Residential) • Commercial 132.1m gallons down 13% to prior year • May/June driven (-41%/-24%) • 1st Half is 30% of Gallon Volume sold, 2nd half 70% • 142 gallons, average billed gallons per customer per billing day • down 15% to 2021, down 7% to 2020, and up 6% to 2019 • June # of customers 13,511 • up 0.9% to June'21 • Budget assumed 0.5% growth 5l4da '1'1 P1d'1 Month of July KWH / billing day is up 4% to 2020 and up 10% to 2019 V1'ich,101 SaInnon, 8/'16/' 0, 1 Water Utility - Operating Income Components - 2 of 2 Operating Expenses ( thousands) 11,134 11, 11 IB / / 1 Annual Annual Actuall, 3 Budgiet Forecast, % • Cost savings due to drought water use reduction offset by inflation, other Operating Income ($ thousands) $5,300 $5,295 • Forecast unfavorable $5k or 0.1% to Budget • All departments forecasted to be at •-$0.128m operating revenue, -0.7°0 or below 100% of Budget for 2022 • $0.123m operating expenses, 1.1°0 as Thousands Capital Expenditures ($ 9,397) ($ 2,3510) 25% ($ 8,161 87% Investment Income 14 21 143% 29, 203% Debt Service (1,672) (830) 510% (1,672) 100% Debt Issuance Costs (255) 0 0% (286), 100% Transfers In (Out) 5,753 26'9 4% 5,510 82% Non -operating cash flows, net ( 4,587) ( 2,,8917) 63% (" 41580) Non -Operating Cash Flows, Annual Forecast notes: r Capital expenditures adjusted to Forecast, under -budget due to timing of projects between years Investment Income favorable to conservative budget yield of 0.3% Debt Service on budget Transfers to Reserves @ Budget: $240k to Vehicle Reserve, $0 to Capital Reserve Transfers from Reserves: adjusted for capital expenditures variance in Thousands Operating Re Operating Expenses Operating Non -operating cash flows, net Net • Activity Summary Recap (11,134) 5,300 (4,587) $ 1', 7, 743 47% $16,306 99% (4,838) 43% 1�11) 99% 2,910 55©/c, 5,295 1 pia% (2,897) 63% (4,580) 100% 13 2% 715 100% ➢ Annual Forecast Net (increase to Operating Reserves) is on Budget, favorable $2,000 California Average Fuel Prices (source AAA 811/2022) $s.939 $4.21 $5.606 National Average — Regular — Current $6,270 $6.440 TDP,UD YTDUin r Cost per Gallon $438 iiiiiiiiiiiiiiiiiiiiiillillillillillillilliilililI Regiular Diesel Regular Diesel Fuel Costs are a cost charged out across all operations and projects as a component of the Transportation Overhead Rate (per applicable labor hour): 2022 Budget $13.59 YTD June Actual $15.17 * Volume Mix - 40% Regular 60% Diesel * Procuring fuel (renewable diesel) through Town partnership Fuel Costs - $120,000 2022 Budget $180,000 2022 Forecast $60,000 or 50% unfavorable $ in Thousands Pension Obligation Bonds $1,578 $539 Electric 2022 COP Bonds - - Water 2022 COP Bonds - - Water 15/16 COP Bonds 11,924 10,655 Water SELF Loan (Donnerl-k. 3,758 - Total $17,260 $11,194 amounts exclude iii7at-noit&edpi�einiiiii7"ai?dDaik FlberLease Agreement M $539 (1) 10,,655 (2) r (3) (1) 2016 Refunding CaIPERS Sidefund POB - 2.47%, 60%E / 40%W,, one year to gottwo payments, last paymenit 6/30/2022. (2) 2015/2016 refunding of 2006 COPS. 2016COP bal. $332k at 1 .54%, thru November 2021, 2015 bal. $11,260k at -3,7%, thru 2035 (3) Water SRF Loan, 2.34% rate, last scheduled paymient 1/1/2026; made early payoff in full 7/2021 (4) 2022 COPs closed/funded: June 30, 2022 (balance excludes Premium) 2022 Budget - Water Debt Service $1.034m equates to 6.2% of Water operating Revenues. District Code (3.01.01.03) maximum is 25%. $31,320 $20,126 180% YE to YE Change New Debt Issuances —June 2022 Electric Utility Series 2022A Certificates of Participation (COP) $6,470,000 Principal $257,235 Premium 5.0% Face/Coupon 25 year Term $223,701 issuance costs I Rating: S&P A+ 4.32% all in true interest cost $0.428m Average Annual Debt Service - Budget/FMP $0.441m 6/9/2022 Priced/Sold 6/30/2022 Closed/Funded $6,500,000 Project Proceeds (Bdg $6.0m) Projects: new building at corp yard, other electric projects eligible Water Utility Series 2022A Certificates of Participation (COP) $14,825,000 Principal 1 $1,402,590 Premium 5.0% Face/Coupon 1 30 year Term $286,362 issuance costs I Rating: S&P AA- 4.28% all in true interest cost $0.950m Average Annual Debt Service - Budget/FMP $0.960m 6/9/2022 Priced/Sold 6/30/2022 Closed/Funded $15,940,000 Project Proceeds (Bdg $15.0m) Projects: new pipeline, new pump station, pipeline replacement, other water projects eligible Annual Debt Service 7.,,.., 1 , o,.., 2 :< 5 �I ., .y 2 � „0,,. 8 , „2r 0 0", ,.,.. 33 ., e, AO ,v0„, ... , 8 a vc AO,. 2041 .�.. v ;d 20"'It �i �0 4 s ,,.,„Of .,. e .�.,., � , G, ;��,_�., r�r.� �,��,�� ,��r�� ,��. � �a��r. �.�aa„ ,�ta� ,z�.u,�d ,���u�,r ,���t. ��,r'��. r u,,� ��al � ,�cr;�� a���.�.,� ., p.b, r��,� rc���.3 a.7�� ..�.p��s r�¢�a,t xcr�.. �..,�.0 ._.���a ����� ,?G ��� r�,�a �P.���1 ,�ra� k ,a�.u.�r� �:�,.� ��¢.��.�2 Annual Debt Service — 33 years — past 2 actual, 31 forward All years exclude Water's Donner Lake Assessment District funded SRF Debt 2022+ includes new debt issued E & W in June 2022 ---- consistent with Budget and Financial Master Plan Past Due AccOUnts Receivable . l h a n Id December3l, 2020 June 30, 2021 December 3, 2021 May 3, 2022 June 3, 2022 Pandemic driven arrearages peaked in January 2021 @ $583,000 as of June 2022 balance $166,000 Customer payment assistance credits: $212,000 Federal and $128,000 District Electric ws 2022 COP (Project Pones Restricted (R) Pension to atioBonds $8.1 m 6/30/2022 Facility Fees Designated (D) R AB32 u� a $20.Om 6/30/2022 Defer -red Liability Operating (0) Vehicle l s,rve $7.1 m 6/30/2022 Capital i Reserve Rate Reserveouuuuiuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuiuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuiuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuiuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuiuuuuuuuuuuuuuuuuuuuuuuuuuuui Operating Resemumumumumumumumumumumumumumumumumumumumumumumumumumumumumumumumumumumumumuiiumumumumumumumumuuuumumumuuumumumumumumumumumumumumumumumumuim $ $ ,00 ,0001 6/30/2022 n 112/3 /202 $8,00 ,000 $12,1000,000 Balances exclude non -cash Market Adjustments Miscellaneous Others Deferred Liability Vehicle I Reserve Capital Reserve Operating Reserve Iq a ifSIMEMM Restricted (R) $19.4m 6/30/2022 Designated (D) $1.9m 6/30/2022 Operating (0) $6.Om 6/30/2022 $10"0003000 $15,0001,000 / 3 0/ 22 12/31/2021 Balances exclude non -cash Market Adjustments • This financial review of actual to budget activity and year end projections for FY 2022 serve as Board's review of the District's current financial performance. Accept and file the 2022 mid -year financial update. NOT USED SLIDES..... Truckee Donner Public Utility District Attachment 1 2022 Mid -Year Budget Comparison and Arinual Forecast Electric Utility 2022 2022 - 12 Month Electric Utility Annual YTD W022 % of Annual % of Budget Actual Budget Forecast Budget Revenue Residential S 17,523,806 S 9,304,884 53% S 17,520,000 100% Commercial 11,955,692 6,316,540 531e. 12,050,000 402% Interdept. Sales & Rent 1,373,234 533,064 39% 1,360,000 98% Standby 17,000 0% 18,000 111,06% Joint Fare and Pole Attachments 277,231 141,5,87 51% 275,000 99% Mise Revenue 115,785 59,233 51% 116,176 100% Interdeptmental Rent 490,824 245,412 50% 490,824 100% Total S 31,653,572 S 16,600,720 52% S 31,820,0100 101% S 166,428 var to B Operating Expenses Board of Directors s 452,049 S 89,523 210% $ 440,0100 97% General Management 1,465,677 59�8,881 41% 1,420,000 97% Administrative Svcs. 1,427,862 714,427 50% 1,430,000 100% Conservation 983,071 326,262 37% 860,0100 97% Operations 6,986r308 3,458,476 49% 7,060,0100 101% ITIGIS 1,036,071 699,623 43% 1,620,000 93% Building Maintenance 761,214 218,306 2'9% 650,000 85% Total S 13,614,258 S 6,105,496 45% S 13,380,000 98% S 234,258 v,ar to B Purchase Power Expense S, 13,509,000 S 6,798,525 50% $ 14,431,0100 107% S (922,000 var to B Operating Revenue less E�xpenses -i 4,53-0,314 S 3,6'96,698 82% S 4,009,0100 88% S (521,314y var to B Capital Expenditures Rates S 9,250,717 S 1,343,019 15% S 3,351,922 36% Capital Reserve 6,650,000 17,738 0% 1,129,885 17% Vehicle Reserve 497,1193 0% 497,193 203% Facility Fees 0% 203% Total S 16,397,910 $ 1,360,757 8% $ 4,979,000 30% 3 1,418,9 10 yw to B Investment Income S 19,000 56,892 299% 67,173 364% Debt Service S (447,394) S (223,697) 50% (447,394) 100% Debt Issuance Costs S (185,000) S 0% (223,701) 121% Transfers In (Out) 5 13,150,187 S (981,265) .7% 1,730,0172 13% Net Budget Activity - Electric s-"9,197 s 1,187,871 we s 166,150 We S (513,047y vw to B Truckee Donner Public Utility District Attachment 2 2022 Mid -Year Budget Comparison and Annual Forecast Water Utility 2022 2022 - 12 Month Water Utility Annual YTD 612022 % of Annual % of Budget Actual Budget Forecast Budget Revenue Residential 5 14,172,290 S 6,864,760 48% S 14,040,000 919% Commercial 1,815,321 753,133 41% 1,830,000 101% Standby 104342 - 0% 105,0,00 100% Misc Revenue 341,494 38% 331,000 97% Total $ 16,433,847 $ _130,487 7,748,380 47% $ 16,306,000 99% $ (127,847) var to B Operating Expenses Board of Directors $ 292,051 $ 89t523 31% $ 290,0,00 99% General Management 1,367,790 564,313 41% 1,330,0,00 97% Adimninistrative Svcs. 1,396,984 701t949 5,0% 1,400,000 100% Conservation 95,194 2,671 3% 90,0100 95% Operations 6,631,202 2,877,780 43% 6,610,176 100% ITIGIS 859,479 356,656 41% 800,000 93% Interdepartmental Rent 490,824 245,412 50% 490,824 '100% Total S 11,133,524 S 4,838,303 0/6 S 11,0111,000 99% $ 122,524 var to B Operating Revenue less lExpenses S 5,300,323 $ 2,910,077 55% $ 5,295,000 100% $ (5,32!3) var to B Capital Expenditures Rates $ 8,652,925 $ 2,071,089 24% $ 7,634,420 88% Capital Reserve 100,000 - 0% - 0% Vehicle Reserve 644,306 278,758 43% 526,561 203% Facility Fees - - 0% - 203% Total S 9,39-7,231 S 2,349,847 25% $ 8,160,9,81 87% $ 1,236,250 var to B investment lincorne S 14,000 S 20,663 148% 29,063 208% Debt Service $ (1,672,200) $ (836,1010) 50% (1,672,2100) 100% Transfers IN fromi, Reserves/Funds r 1 « I 271121 1 9 $ 45, 087 381257 91831 147151 67993 993 217144 1' 9 14 33 Debt Service (447) (1,672) (2,120) Capital Projects Expenditures (16,398) (9,397) (25,7915) Transfers OUT to Reserves (1,001) (244) (1,241) .Debt Issuance Gusts. (155) (285) (470) Net Budget -increasing Operating Reserve $ 559 $ 713 $ 17352 BalancesElectric Reserve Deferred Liability Vehicle Reserve Capital l Reserve D Rate e�ser e Operating Reserve Restricted (R) $8.1 m 6/30/2022 Designated (D) $20.Om 6/30/2022 Operating (0) $7.1 m 6/30/2022 Balances exclude $ ,000,000 $8,000,000 $12,000,000 non -cash Market 6/30/2022 jjuj6/31/2 2 2/3 /2021 1116l'30/ 0121 Adjustments ReserveWater e ON nwFs ID Did Surcharge D Deferred Liability Vehicle Reserve w Capital R s Iry rrramarairia, OperatingReserve Restricted (R) $19.4m 6/30/2022 Designated (D) $1.9m 6/30/2022 Operating (0) $6.Om 6/30/2022 $5,000,000 $101,1000,0100 $15,00,01,1000 Balances exclude ���/31I/21 22 m 1I2d3 /2 21 �,��s16/3 /2 21 non -cash Market Adjustments