HomeMy WebLinkAbout#9 Capital Budget Agenda Item # 9
Public
BUDGET
To: Board of Directors
From: Bob Mescher
Date: October 07, 2009
Subject: Operating/Capital Budget Presentations:
a. Board of Directors and General Management
b. Administrative Services
c. Conservation
d. Power Supply
1. WHY THIS MATTER IS BEFORE THE BOARD
This item continues the preparation process of the FY10 and FY11 budget.
2. HISTORY
In July 2008, the Board adopted a revision to Title 3 requiring the General Manager to
submit to the Board a two-year budget beginning 2010.
Since July 2009, staff has been preparing the FY10 and FY11 budget.
The FY10 and FY11 purchase power plan was presented in the September 2, 2009
Board Meeting. It is estimated that purchase power costs will decrease over 2% in
FY10 as compared to the FY09 budget, but increase over 5% in FY11 as compared to
FY10.
At the September 16, 2009 Board Meeting, the District's Mission Statement,
Objectives and Goals were reviewed.
Additionally, Staff presented the following budget assumptions:
• Labor Rates are estimated to be flat in FY10 and increased an estimated 3% in
FY11 (actual rates will depend on union contract negotiations)
• Staffing level changes include a reduction in four full-time positions through
attrition
• Three reductions in Electric
• One reduction in Water
�he
67 total FTEs in FY10 & FY11
• District's fiber assets will provide an additional revenue source
• Most other operational expenses will remain flat or slightly increased, ranging
from 0% to 3% per year
• No new debt will be incurred
3. NEW INFORMATION
In refining the budget, two new assumptions have been added to those previously
discussed:
• The costs of employee benefits, particularly medical insurance and retirement
benefits are projected to increase in FY10 and FY11
• The District will focus on more water conservation programs in FY11. Water
conservation programs will be increased about 10% in FY11 from FY10, and an
additional employee in the Conservation Department is proposed for the last
half of FY11, to add capacity for new water programs
Budget Highlights for Board of Directors, General Management, Administrative
Services, Conservation, and Power Supply:
Board of Directors
• No major changes in year-to-year expenses except for $20,000 additional
election expenses in FY10 only
• No capital expenditures
General Management
• Overall, FY10 expenses decrease $30,000 as compared to FY09 budget due to
decreased professional services and industry membership dues
• No significant changes in FY11 expenses
• No capital expenditures
Administrative Services
• General insurance costs decrease $20,000 in FY10 as compared to the FY09
budget
• No significant changes in FY11 expenses
Conservation
• Conservation program expenses increase $18,000 in FY10 and again in FY11
• Expenses increase $60,000 in FY11 for an additional employee
Power Supply
• Labor costs decrease $50,000 in FY10 due to one less budgeted FTE
• No significant changes in FY11 expenses
• Capital expenditures increase $10,000 in FY10 and $60,000 in FY11 for
computer software
Next steps of the budget process:
October 21,2009
• Operating/Capital Presentations
• Electric Operations
• Water Operations
• Reserve funds
• Revenue, rates, fess and charges
• Set public hearing date
November 4, 2009
• Draft budget
• Financial Master Plan
• Public hearing
November 18, 2009
• Adopt budget
• Adopt rates, fees, and charges
• Adopt overhead rates
4. FISCAL IMPACT
This budget workshop is part of the overall budget process that will affect the District's
spending for the next two fiscal years.
5. RECOMMENDATION
Receive this report and provide comments to staff.
rY'Y)Gt,A.�
Mary Chap an Michael D. Holley
Administrative Services Manager General Manager