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Home My WebLink About11 Financial Master Plan Agenda Item # I I 'TRUCKEE DONNER BUDGET To: Board of Directors From: Robert Mescher Date: November 02, 2011 Subject: Financial Master Plan 1. WHY THIS MATTER IS BEFORE THE BOARD This item continues the preparation process of the FY12 and FY13 Bu dget. 2. HISTORY The Financial Master Plan is a tool to help the Board and Staff u proposed budget impacts long-term o understand how the - g gals. It includes a projection of the revenue and expenses for FY12 through FY21 using the actual revenue and expenses f recent twelve months, the proposed FY12 p or the most p and FY13 Budget, and a set of assumptions. The Financial Master Plan should be reviewed to en proposed budget is consistent with long-term goals. sure that the 3. NEW INFORMATION The following assumptions were used for projectingthe FY14 through FY21: revenue and expenses for • 1% annual increase in customer growth • 3% annual inflation • No staffing increase • No new debt • Interest earned is 1% in FY14, 2% in FY15, 3% in FY16 through o thereafter gh FY18, and 4/o • Net change in operating cash is $0 due to transfers to/from re Proposed new cash and reserve goal for serves • g the Electric Utility equal; to 180 da of annual expenditures beginning FY14 Ys • No proposed change to cash and reserve goal for the Water Utility Attachment 1 is a summary of the Electric Utility's Financial Ma electric rates need to be raised onlymini Master Plan. It shows that and eventual) achieve orally to complete necessary capital projects y chieve its reserve goals. Attachment 2 graphs the reserve balances usingthe data in reserves are projected to meet the Attachment 1. The cash current goal by FY18 and a more aggressive goal by FY21. Attachment 3 is a list of the proposed Electric Utilitycapital ' p projects.sects. Attachment 4 is a summary of the Water Utility's Financial Master Plan. It shows that the water rates need to be raised only modestly to complete necessary capital projects and maintain its reserve goals. Attachment 5 graphs the reserve balances using the data in Attachment 3. The cash reserves currently exceed the District's goals and can be utilized to complete capital projects such as the Residential Water Meter Installation and SCADA. Attachment 6 is a list of the proposed Water Utility capital projects. P At the workshop, Staff will have an Excel spreadsheet-based mode the sensitivity of revenue and cash as rates change Ito demonstrate . 4. FISCAL IMPACT The Financial Master Plan verifies that the proposed FY12 an consistent with the District's long-term goals p d FY13 Budget is . 5. RECOMMENDATION Receive this report and provide comments to staff. �I Robert Mescher Administrative Services Manager Michael D. Holley General Manager Truckee Donner Pu ATTACHMENT 1 blic Utility District Financial Master Plan Summary FY12 through FY21 (in thousands) ELECTRIC y Mi A ��4FY14Operating Cash Flow � FY15 FY16 FY17 FY18 FY19 FY20 FY21 lit Operating revenuers ` 40 Operating n ex rit �� y $23,910 $24,621 $25,112 $25,613 $ 26 125 P g expenses yi f� 20, $ 26,646 $ 271179 $ 27,722 ( 702) (21,078) (21,400) (21,731) 22 Other revenue/(expenses) :� � ; ( ,731) (23,147) (23,572) (24,008) d`- u.z�.LY.r ,� ��Rx ��z? �� 583 691 � Fr 802 869 942 1,066 1,147 1,233 Net Income ' � x�R' $ $ 3 791 4 Transfers $ 4,514 $ sfers fr �y �� ?3r,��°� � $ ,234 4 751 $ 4 336 om/(to)funds 1 116) 7 $ 4,565 $ 4 754 $ 4 947 400 ' Debt principle payments ' , ,y ( ' S 25 (1,524) (621) (629 718 .... (534) (593) (656) 723 7 ) ( ) � � ( ) 95 87 Rate-funded capital projects ( ) ( 1) (952) (1,038) i4 {} 2 141 4 041 3,933 4,053 2,017 3,0 73 3,173 3,191 Change in Operating Cash k ' peratin ' y £s {y �E $ - y` — — — Ni 5 a a� N crSr"s ; Cash &Reserve Balances 9,614 $ 9,415 $ 9 217 $ 9,424 $ 10,941 $ 11 937 $ 12 791 $ 13 � � f y t 959 .,x �d sky y'*{yar r t N Debt service coverage ' ! } °�� 3.89 4.13 4.16 4.20 3.56 3.54 (1.20 required until 2012• � r� �=� ��a� t �� 3.52 3.50 wl 10 required until 2022) sY iYn"T'3fY""`�t.'t1'E fi 'S,J ss N 3 2 f T ,i........ ''�ri'y` ........ "ga Transfer to/(from)reserves s £,s 2 F,�f x 1% - .4/o -0.2/0 6.3/0 2.4% 2.4% 2.7% Proposed rate increase 2 0% '�.�°�► o Electric Projected Cash & Reserve Balance ATTACHMENT 2 (in thousands $16,000 $14,9000 Proposed New Goal $12,000 $10OOO, Goal $8,POOO Cash & Reserve $6,pOOO Balances $4,pOOO $2,pOOO FY11 FY12 FY13 FY14 FY15 FY16 FY 17 FY18 FY19 FY20 FY21 Truckee Donner Public Utility District ATTACHMENT 3 Electric Capital Projects FY12 through FY21 Rate Funded 2- 2014 20115- 2016 2. 017 2..._ 2019_ 2020 2021 Line Extension &Upgrades 261,009 284,582 293,228 302,025 311,086 32 Pole Replacements 0,418 330,031 339,932 350,130 360,634 92,429 96,013 98,514 101,469 104,513 107,649 110,878 114,205 117,631 121160 Meter Test& Purchase 20,570 21,201 21,832 2 Purchase& Ins. Transformers-rate portion 14,754 18,842 19 2,487 23,162 23,857 24,573 25,310 26,069 26,851 Various District Projects ,387 19,968 20,567 21,184 21,820 22,474 23,148 23,843 � 168,817 174,814 180,388 185,799 191,373 197,115 203,028 209,119 215 392 Electric Master Plan Projects 300,158 500,409 481,097 487,280 493,649 5 221,854 Reclosers &Regulators 82,360 93,642 96,302 97,337 9 08,458 523,712 539,423 555,606 572,274 Conduit& Boxes -rate portion 8,403 101,355 104,396 107,528 110,754 114,076 P 10,838 11,033 6,253 6,441 6,634 6,833 7,038 7,249 7 467 Distribution Replacement& Improvement 414,873 430,107 442,493 455,768 469,441 7,691 Upgrade Donner Lake Substation 483,524 498,030 512,971 528,360 - 900,000 200,000 544,211 AMR Meters _ _ - - - _ - 2,000,000 2,000 Substation Upgrade _ 000 2,000,000 _ - - From Administrative Services 40,000 45,000 46,350 47,741 - 1,000,000 1,000,000 1,000,000 From HQ Maintenance � 49,173 50,648 52,167 53,732 55,344 57,005 170,940 43,820 100,000 200,000 50,000 100,000 50,000 50,000 50,000 50 00 From Power SupplylGlS 209,000 175,000 155,000 115,000 115,000 1 0 31,650 91,000 91,000 133,350 91,000 Total Capital Projects 1,785,748 2,794,463 2,140,844 4,041,315 3,933,001 4, 052,691 G91 2 016 672 3 072 942 3,173,250 3 190 598 Truckee Donner Public Utility District ATTACHMENT 4 Financial Master Plan Summary FY12 through FY21 (in thousands) WATER Operating Cash Flow FY12 FY13 FY14 FYI FYI FY17 FY18 FY19 FY20 FY21 Operating revenue r ' $ 10,497 $ 10,905 $ 11,330 $ 11,662 $ 12,003 $ 12 355 1 Operating expenses $ 2,717 $ 13,091 (7,939) ( 9 15 � � f ) (8,410) 8 650) (8,896) ( 0) (9,411) (9,679) Other revenue and expenses ��F��k � ��r ��,�r� 733 643 550 512 471 xx Net income £3 4 4 1 374 321 270 � ' � $ 1,825 $ 2,084 $ 2,370 $ 2,500 $ 2,636 $ 2,831 $ 2,985 $ 3 142 Transfers from/(to)funds ' ` }� �'N w' r ....s , 9 �� 451 339 199 42 (11) (123) (180 x £ ) (412) ebt principle payments y�� r �� Y ,k.g (961) (1,001) (1,034) 1,074 (1,113) Rate-funded capital projects ; ( ) (1,160) (1,210) (1,097) p p 1,315 (1,422) (1,535) 1 468 1 512 1 ' 1 595 1 633 Change in OperatingY Lf nFt $ _ $ $ _ , 8 Cash _ '_ ' � � , 1c t t Cash &Reserve Balances F $ 8 452 $ 7,418 $ 7,087 $ 6,906 $ 6,916 $ 7,161 $ 7,138 $ 7,458 . st3, a Debt service coverage y�� 1.30 1.39 1.54 ran 4 1.51 1.81 1.87 1.92(1.25 required until 2036) ,fr 3 v 2.13 yx �a s � 7S,ys�a'F 'ro> Transfer to/(from)reservesg 3'''°yY' ate 9 3y � y y3 L -5.9% -4.6% -3.2% -1.8% -1.3% ° o 0 g ;Y -0.4/0 0.0/0 1.8/o ,Y V�A� �s�� .AAPro osed rate increase 28 � 2.0% 2.0% 200 fQ 2r°% � Water Projected Cash & Reserve Balance ATTACHMENT 5 (in thousands) 11,2,pOOO Cash & Reserve Balances alances $8,pOOO Goal $6,pOOO $4,vOOO $2,pOOO FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 Truckee Donner Public Utility District ATTACHMENT 6 Water Capital Projects FY12 through FY21 2 2_ 2_ 2_ 2_ 2- 2_ 2019 2 Rate Funded/Capital Reserve 020 2021 SCADA 1,236,251 799,571 915,249 1,021,994 - _ _Tank Maintenance - - - 300,000 - - Replace Hydro Stations 309,000 - 318 _ _,270 - 327,818 Pipeline Replacement _ _ 300,000 - 309,000 - 318,270 - 327,818 - From CC9-SCADA 150 - 1,125,509 1,159,274 1,194,052 1,229,874 1,266,770 1,304,773 ,000 150,000 100,000 100,000 100,000 - Total Rate Funded Capital 1,386,251 949,571 1,315,249 1,421,994 1,534,509 ,509 11468,274 1,512,322 1,548,144 1,594,588 1,632,591 Funded from Meter Reserve Meters 558,043 578,090 523,464 539,169 - _ Total Capital Projects 1,944,294 1 527 662 1 838 713 1,961,163 1,534.509 1,468,274 1 512 322 1.548144 1 594,588 1,632L591