HomeMy WebLinkAbout13 Year end Financial Results REVISED Agenda Item # 13
Public Utility District 1.
ACTION
To: Board of Directors
From: Bob Mescher
Date: February 17, 2010
Subject: Consideration of the 2009 Year-End Financial Results and Request
for Budget Carry-overs and Transfers
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 FY09 budget was adopted November 5, 2008 and additional carry-overs and
transfers were authorized February 4, 2009. The mid-year results were were reviewed
July 15, 2009, but no other changes were made to the FY09 budget.
The FY10 & FY11 budget was adopted November 18, 2009 and included the transfer
of anticipated surpluses from FY09 to FY10. The appropriated surpluses were
$355,000 for Electric and $61,000 for Water.
3. NEW INFORMATION
Preliminary FY09 results indicate that both the Electric and Water Departments
exceeded budget expectation and ended the year with surpluses, that staff propose to
use towards increasing reserves.
The net rate-funded surplus for the Electric Department was $457,000 as compared to
a balanced budget. Despite revenues being $980,000 (4.1%) less than budgeted, the
overall net operating income of $5,732,000 was $580,000 (11.3%) more than
budgeted, primarily due to decreased purchased power of $1,411,000. Interest
earnings were $163,000 lower than budget, but were partially offset by $71,000 less
other expenses and $118,000 less rate-funded capital expenditures, resulting in an
overall surplus of $457,000. The FY10 budget includes $355,000 funding from the
FY09 surplus, leaving an unappropriated surplus of$102,000.
The net rate-funded surplus for the Water Department was $896,000 as compared to
a balanced budget. The Water Department revenues were $508,000 (4.7%) more
than budgeted and operating expenses were $250,000 (3.6%) less than the FY09
budget. The resulting net operating income for the Water Department was $758,000
(19.4%) more than budgeted. Other income was $82,000 more than budget and rate-
funded capital expenditures were $56,000 less than budgeted, resulting in an overall
surplus of $896,000. The FY10 budget includes $61,000 funding from the FY09
surplus, leaving an unappropriated surplus of$835,000.
Attachment 1 reports the actual results of FY09 as compared to the adopted budget.
Additionally, the District staff has identified unbudgeted repairs and projects needed
for FY10. These include replacement of the Water SCADA system, repairs to the
Airport Tank, continued contribution to the Water Meter Replacement Fund, and
replacement of the District's headquarters roof. If authorized, the Electric and Water
Departments would each pay one half of the roof replacement cost.
Attachment 2 summarizes staff's recommended transfers of the surpluses.
4. FISCAL IMPACT
The FY09 rate-funded surplus can be used to increase reserves.
5. RECOMMENDATION
Staff recommends the Board authorize the appropriation of the anticipated FY09
surpluses as budgeted for FY10
• Appropriate $355,000 of the FY09 Electric surplus to the FY10 General Fund
• Appropriate $61,000 of the FY09 Water surplus to the FY10 General Fund
Staff also recommends that the Board authorize the following transfers:
• Transfer $102,000 from the Electric General Fund to the Electric Capital
Reserve Fund
• Transfer $835,00,0 from the Water General Fund to the Water Capital Reserve
Fund
Mary ChapKfj4 Michael D. Holley
Administrative Services Manager General Manager
ATTACHMENT 1
Truckee Donner Public Utility District
Budget vs Actual Revenue & Expenditures PRELIMINARY
Electric Department
Fiscal Year Ending December 31, 2009
Variance
FY09 FY09 Favorable
Type Budget Actual (Unfavorable)
OPERATING REVENUE
Residential $ 12,039,000 $ 11,577,000 $ (462,000) -3.8%
Commercial 9,476,000 8,976,000 (500,000) -5.3%
Interdept. Sales & Rent 1,876,000 1,827,000 (49,000) -2.6%
Other 455,000 486,000 31,000 6.8%
Total $ 23,846,000 $ 22,866,000 $ (980,000) -4.1%
OPERATING EXPENSE
Board of Directors $ 82,000 $ 75,000 $ 7,000 8.5%
General Management 476,000 388,000 88,000 18.5%
Administrative Services 1,720,000 1,717,000 3,000 0.2%
Conservation 1,334,000 1,333,000 1,000 0.1%
Operations 3,417,000 3,422,000 (5,000) -0.1%
Power Supply 560,000 505,000 55,000 9.8%
Purchased Power 11,105,000 9,694,000 1,411,000 12.7%
Total $ 18,694,000 $ 17,134,000 $ 1,560,000 8.3%
NET OPERATING INCOME $ 5,152,000 $ 5,732,000 $ 580,000 11.3%
OTHER INCOME (EXPENDITURE)
Interest Income $ 185,000 $ 22,000 $ (163,000) -88.1%
Transfers to Reserves (585,000) (614,000) (29,000) 5.0%
Debt Service (3,541,000) (3,590,000) (49,000) 1.4%
Total $ (3,941,000) $ (4,182,000) $ (241,000) 6.1%
RATE-FUNDED CAPITAL EXPENDITURE $ 1,211,000 $ 1,093,000 $ 118,000 9.7%
NET RATE-FUNDED CASH INFLOW(OUTFLOW) $ - $ 457,000 $ 457,000
Surplus Appropriated for FY10 355,000
Surplus Unappropriated Balance $ 102,000
Page 1 of 2
ATTACHMENT 1
Truckee Donner Public Utility District
Budget vs Actual Revenue & Expenditures PRELIMINARY
Water Department
Fiscal Year Ending December 31, 2009
Variance
FY09 FY09 Favorable
Type Budget Actual (Unfavorable)
OPERATING REVENUE
Residential $ 8,227,000 $ 8,608,000 $ 381,000 4.6%
Commercial 1,143,000 1,141,000 (2,000) -0.2%
Meter Reserve Surcharge 752,000 799,000 47,000 6.3%
Interdept. Sales 1,000 1,000 - 0.0%
Other 714,000 796,000 82,000 11.5%
Total $ 10,837,000 $ 11,345,000 $ 508,000 4.7%
OPERATING EXPENSE
Board of Directors $ 79,000 $ 73,000 $ 6,000 7.6%
General Management 399,000 303,000 96,000 24.1%
Administrative Services 1,158,000 1,155,000 3,000 0.3%
Conservation 185,000 160,000 25,000 13.5%
Operations 4,514,000 4,418,000 96,000 2.1%
Power Supply 243,000 219,000 24,000 9.9%
Interdept. Rent 349,000 349,000 - 0.0%
Total $ 6,927,000 $ 6,677,000 $ 250,000 3.6%
NET OPERATING INCOME $ 3,910,000 $ 4,668,000 $ 758,000 19.4%
OTHER INCOME (EXPENDITURE)
Interest Income $ 131,000 $ 71,000 $ (60,000) -45.8%
Transfers to Reserves (1,642,000) (1,581,000) 61,000 -3.7%
Debt Service (2,195,000) (2,114,000) 81,000 -3.7%
Total $ (3,706,000) $ (3,624,000) $ 82,000 -2.2%
RATE-FUNDED CAPITAL EXPENDITURE $ 204,000 $ 148,000 $ 56,000 27.5%
NET RATE-FUNDED CASH INFLOW(OUTFLOW) $ - $ 896,000 $ 896,000
Surplus Appropriated for FY10 61,000
Surplus Unappropriated Balance $ 835,000
Page 2of2
ATTACHMENT 2
Truckee Donner Public Utility District
Proposed Transfers
February 17, 2010
Transfers Transfers
From To
Electric General Fund $102,000
Electric Capital Reserve Fund $102,000
Water General Fund $835,000
Water Capital Reserve Fund $835,000
Agenda Item # 13
Public Utility District
ACTION
To: Board of Directors
From: Bob Mescher
Date: February 17, 2010
Subject: Consideration of the 2009 Year-End Financial Results and Request
for Budget Carry-overs and Transfers
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 FY09 budget was adopted November 5, 2008 and additional carry-overs and
transfers were authorized February 4, 2009. The mid-year results were were reviewed
July 15, 2009, but no other changes were made to the FY09 budget.
3. NEW INFORMATION
Preliminary FY09 results indicate that both the Electric and Water Departments
exceeded budget expectation and ended the year with surpluses, that staff propose to
use towards increasing reserves.
The net rate-funded surplus for the Electric Department was $377,000 as compared to
a balanced budget. Despite revenues being $980,000 (4.1%) less than budgeted, the
overall net operating income of $5,732,000 was $580,000 (11.3%) more than
budgeted, primarily due to decreased purchased power of $1,411,000. Interest
earnings were $163,000 lower than budget, but were partially offset by $71,000 less
other expenses and $38,000 less rate-funded capital expenditures, resulting in an
overall surplus of$377,000.
The net rate-funded surplus for the Water Department was $896,000 as compared to
a balanced budget. The Water Department revenues were $508,000 (4.7%) more
than budgeted and operating expenses were $250,000 (3.6%) less than the FY09
budget. The resulting net operating income for the Water Department was $758,000
(19.4%) more than budgeted. Other income was $82,000 more than budget and rate-
funded capital expenditures were $56,000 less than budgeted, resulting in an overall
surplus of$896,000.
Attachment 1 reports the actual results as compared to the adopted budget.
Additionally, the district staff has identified unbudgeted repairs and projects needed
for FY10. These include replacement of the District's headquarters roof, repairs to the
Airport Tank, and continued contribution to the Water Meter Replacement Fund. If
authorized, the Electric and Water Departments would each pay one half of the roof
replacement cost.
Attachment 2 summarizes staffs recommended transfers of the surpluses.
4. FISCAL IMPACT
The FY09 rate-funded surplus can be used to increase reserves.
5. RECOMMENDATION
Staff recommends that the Board authorize the following transfers:
• Transfer $177,000 from the Electric General Fund to the Electric Rate
Stabilization Fund
• Transfer $200,000 from the Electric General Fund to the Electric Capital
Reserve Fund
• Transfer $696,000 from the Water General Fund to the Reserve for Future
Water Meters
• Transfer $200,000 from the Water General Fund to the Water Capital Reserve
Fund
/4,7
Mary Chaprrfi Michael D. Holley
Administrative Services Manager General Manager
ATTACHMENT 1
Truckee Donner Public Utility District
Budget vs Actual Revenue & Expenditures PRELIMINARY
Electric Department
Fiscal Year Ending December 31, 2009
Variance
FY09 FY09 Favorable
Type Budget Actual (Unfavorable)
OPERATING REVENUE
Residential $ 12,039,000 $ 11,577,000 $ (462,000) -3.8%
Commercial 9,476,000 8,976,000 (500,000) -5.3%
Interdept. Sales & Rent 1,876,000 1,827,000 (49,000) -2.6%
Other 455,000 486,000 31,000 6.8%
Total $ 23,846,000 $ 22,866,000 $ (980,000) -4.1%
OPERATING EXPENSE
Board of Directors $ 82,000 $ 75,000 $ 7,000 8.5%
General Management 476,000 388,000 88,000 18.5%
Administrative Services 1,720,000 1,717,000 3,000 0.2%
Conservation 1,334,000 1,333,000 1,000 0.1%
Operations 3,417,000 3,422,000 (5,000) -0.1%
Power Supply 560,000 505,000 55,000 9.8%
Purchased Power 11,105,000 9,694,000 1,411,000 12.7%
Total $ 18,694,000 $ 17,134,000 $ 1,560,000 8.3%
NET OPERATING INCOME $ 5,152,000 $ 5,732,000 $ 580,000 11.3%
OTHER INCOME (EXPENDITURE)
Interest Income $ 185,000 $ 22,000 $ (163,000) -88.1%
Transfers to Reserves (585,000) (614,000) (29,000) 5.0%
Debt Service (3,541,000) (3,590,000) (49,000) 1.4%
Total $ (3,941,000) $ (4,182,000) $ (241,000) 6.1%
RATE-FUNDED CAPITAL EXPENDITURE $ 1,211,000 $ 1,173,000 $ 38,000 3.1%
NET RATE-FUNDED CASH INFLOW(OUTFLOW) $ - $ 377,000 $ 377,000
Page 1 of 2
ATTACHMENT 1
Truckee Donner Public Utility District
Budget vs Actual Revenue & Expenditures PRELIMINARY
Water Department
Fiscal Year Ending December 31, 2009
Variance
FY09 FY09 Favorable
Type Budget Actual (Unfavorable) %
OPERATING REVENUE
Residential $ 8,227,000 $ 8,608,000 $ 381,000 4.6%
Commercial 1,143,000 1,141,000 (2,000) -0.2%
Meter Reserve Surcharge 752,000 799,000 47,000 6.3%
Interdept. Sales 1,000 1,000 - 0.0%
Other 714,000 796,000 82,000 11.5%
Total $ 10,837,000 $ 11,345,000 $ 508,000 4.7%
OPERATING EXPENSE
Board of Directors $ 79,000 $ 73,000 $ 6,000 7.6%
General Management 399,000 303,000 96,000 24.1%
Administrative Services 1,158,000 1,155,000 3,000 0.3%
Conservation 185,000 160,000 25,000 13.5%
Operations 4,514,000 4,418,000 96,000 2.1%
Power Supply 243,000 219,000 24,000 9.9%
Interdept. Rent 349,000 349,000 - 0.0%
Total $ 6,927,000 $ 6,677,000 $ 250,000 3.6%
NET OPERATING INCOME $ 3,910,000 $ 4,668,000 $ 758,000 19.4%
OTHER INCOME (EXPENDITURE)
Interest Income $ 131,000 $ 71,000 $ (60,000) -45.8%
Transfers to Reserves (1,642,000) (1,581,000) 61,000 -3.7%
Debt Service (2,195,000) (2,114,000) 81,000 -3.7%
Total $ (3,706,000) $ (3,624,000) $ 82,000 -2.2%
RATE-FUNDED CAPITAL EXPENDITURE $ 204,000 $ 148,000 $ 56,000 27.5%
NET RATE-FUNDED CASH INFLOW(OUTFLOW) $ - $ 896,000 $ 896,000
Page 2 of 2
ATTACHMENT 2
Truckee Donner Public Utility District
Proposed Transfers
February 17, 2010
Transfers Transfers
From To
Electric General Fund $377,000
Electric Rate Stabilization Fund $177,000
Electric Capital Reserve Fund(for roof replacement) $200,000
Water General Fund $896,000
Reserve for Future Water Meters $696,000
Water Capital Reserve Fund(for roof replacement) $200,000