HomeMy WebLinkAbout7 FY12 and FY13 Budget Agenda Item ## 7
TRUCKEE DONNER
CTION
To: Board of Directors
From: Robert Mescher
Date: November 16, 2011
Subject: Consideration of Approving Action Items Related to the FY12 and
FY13 Budget
a) Approve a Resolution Adopting the FY12 and FY13 Budget and
Overhead Allocation Rates
b) Approve the Related Transfers from Reserve Funds
c) Adopt the FY12 and FY13 Purchase Power and Resource Plan
I. WHY THIS MATTER IS BEFORE THE BOARD
This item completes the FY12 and FY13 Budget preparation process.
2. HISTORY
District Code requires the District to prepare a two-year budget.
The Board, staff, and public have participated in the following 9 workshops:
budget worksho •September 7
• Discussed the budget objectives, goals, and assumptions
October 5
• Discussed the:
• Budget overview;
• Purchase power plan; and
• Supporting services budget.
October 19
• Discussed the Electric and Water Utility operational and capital budgets
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November 2
• Held a public hearing
• Presented a draft of the FY12 and FY13 Budget
• Presented the Financial Master Plan Summary
Attachment 1 summarizes these workshops.
3. NEW INFORMATION
No changes have been made to the FY12 and FY13 Budget as drafted and resented
on November 2, 2011. p
No changes have been made to the FY12 and FY13 Purchase Power Plan as drafted
and presented on October 5, 2011.
4. FISCAL IMPACT
No rate increases are proposed.
Staff is proposing a balanced budget for FY12 and FY13. Total revenue and transfers
from other existing funds will equal total expenses and transfers to reserves.
Attachment 3 is a list of transfers included in the FY12 and FY13 Budget.
The overhead allocation rates used in the proposed budget are as follows:
Overhead Rate Metric FY12 FY12
Labor Payroll Dollars 97% 99%
Transportation Pavroll Hours $ 11.80 $ 12.09
l ]Inventory Inventory Issues 21% 21%
Administration Payroll Dollars 3% 3%
Construction Payroll Dollars 18% 18%
5. RECOMMENDATION
a.) Approve the resolution to adopt the FY12 and FY13 Budget and overhead
allocation rates (Attachment 2).
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b.)Approve the budgeted transfers listed in Attachment 3.
c.)Adopt the FY12 and FY13 Purchase Power Plan as presented on October 5 2012.
Robert Mescher
Administrative Services Manager Michael D. HolleyGeneral
Manager
Attachment 1
FY12 and FY13 Budget WorkshopSummary
At the previous workshops, staff presented the following:
• Key Assumptions
• Electric and Water Budget Drivers
• Reserve Fund Projections and Goals
• Revenue Requirements
• Elements of the FY12 and FY13 Budget
• FY12 and FY13 Purchased Power Plan
Kev Assumptions
• Customer utility rates will not be increased in FY12 and FY13;
• Direct labor rates are estimated to be flat in FY12 and increased an
estimated 3% in FY13;
• Staffing level changes include a reduction of two employees from the
FY11 Budget;
• Most other operational expenses will remain flat or slight) increased
ranging from 0% to 4% per year;
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P Y ,
• No new debt will be incurred; and
• The budget will be balanced.
Electric and Water Budget Drivers
Electric Department
• One less employee
• No other significant changes in year-to-year expenses
• Focus will continue on system maintenance, the SCADA Reliability
Improvement Project, and the reliabilityof the Donner La
Lake Substation
Water Department '
• One less employee
• Power supply costs are reduced as leaks were repaired and residential
meters were installed
• Focus will continue on completing the new residential water meter
installations and the replacement of the Water SCADA system
Page 1 of 6
Attachment 1
Reserve Fund Proiections and Goals
The District continues to fund the reserves for the Electric Department, but those
reserve fund balances have not yet reached the District's goals. However, once
the Electric Department's debt is extinguished in FY12, the District will be able to
quickly reach its operating and capital reserve goals.
By the end of FY11, the District will reach and exceed its reserve fund goals for
the Water Department. These reserve balances will protect the District from the
revenue uncertainties of the new residential volumetric billing and provide the
District with internal funding for the last phase of the meter installation project.
The following are the total projected reserve fund balances and the current goals
for Electric and Water.
FY11 FY12 FY13 Goal
Electric $ 71665,000 $ 81081,000 $ 81669,000 $11,0002000
Water $10,531,000 $ 91918,000 $ 91617,000 $ 61700,000
Staff proposes that the Electric reserve goal be increased to 180 days of total
annual expenditures. This proposal, along with the existing reserve goals and
balances will be discussed with the Board again in the second quarter of next
year.
Revenue Requirements
To fund the budgeted expenditures, no rate increases are proposed:
FY12 FY13
Electric 0% 0%
Water 0% 0%
Page 2 of 6
Attachment 1
Elements of the FY12 and FY13 Budget
For the November 2, 2011 Board Meeting, staff presented a draft of the proposed
FY12 and FY13 Budget. It included: p
• Executive Summary;
• Part I District's Mission Statement and Goals;
• Part II Electric Utility's Operating, Repair and Maintenance Plan;
• Part III Water Utility's Operating, Repair and Maintenance Plan;
• Part IV Electric and Water Capital Improvement Plans; and
• Part V Appendices
0 1 Interdepartmental Rent
o II Budgeted Positions by Department
0 1 1 1 Labor Overhead
o IV Transportation Overhead
o V Inventory Overhead
0 VI Administrative Overhead
o VII Construction Overhead
o VIII Electric Debt Schedule
0 IX Water Debt Schedule
o X Vehicle Replacement Schedule
FY12 and FY13 Budget
FY12 Budget FY13 Budget
Electric Water Total Electric Water Total
Revenue $23,230 $10,910 $34,140 $23,240 $10,910 $34,150
Expenses 19,480 7,430 26,910 19,990 7,710 27,700
Income $ 3,750 $ 3,480 $ 73230 $ 31250 $ 31200 $ 6 450
Plus:
From Funds $ 19470 $ 3,610 $ 5,080 $ 11150 $ 31300 $ 4 450
Less:
Debt Service 25540 3$ 20 51860 890 31320 4 210
Capital Projects 2,240 21190 4,430 2,890 1,720 4,610
To Reserves 440 1,580 2,020 620 1,460 2080
Surplus (Deficit) $ - $ - $ _ _ '
Page 3 of 6
Attachment 1
FY12 and FY13 Purchase Power Plan
For the October 5, 2011, staff presented the following Purchase Power Plan.
The FY12 and FY13 Purchase Power Plan continues with the goals of the FY10
and FY11 plan. The District will maintain a more diversified purchase power
portfolio that includes many different resources and has the goals of meeting the
Renewable Portfolio Standard. The District may be adopting by the end of 2011
its Procurement Plan" to implement SBx1 2, 33% RPS by 2020.
The FY12 Purchase Power Plan projects a similar load compared to FY11 with
energy conservation and energy efficiency measures accounting for 1% to 3% of
the load. Greater conservation has and will reduce future market purchases. The
FY12 Plan projects a flat or same load as FY11 with conservation and energy
efficiency measures again accountingfor 1% to 3° he
/° of the load reduction. The
FY13 has a modest growth rate compared to FY12. The budgeted load in MWh
is shown below.
Year Budgeted MWh
FY11 162,000
FY 12 162,000
FY13 163,082
Page 4 of 6
Attachment 1
The details of the purchase power expenditures for FY12 and FY13 are listed in
the next two tables. Costs for natural gas, electric market purchases and
renewable market purchases are projected, along with average hydrologic
conditions.
PURCHASE POWER PLAN EXPENDITURES DETAIL
2012 BUDGET
2011 to 2012
Budget Budget $BUDGET
Purchased Power and Resource Costs 2011 2012 CHANGE
Total Energy Supply-Various $ 10,130,484 $10,757,413 $626,929
$/MWh $62.53 $66.40
Transmission-NVEnergy $ 1,043,766 $1,049,546 $5,781
Scheduling-NCPA $ 77,993 $68,859 ($9,134)
WAPA cost/(credit)toward MM's $76,416 ($28,012) ($104,429)
Total Bulk Power Costs $ 11,328,658 $ 11,847,806 $ 5199147
4.4%
Total Annual MWh 162,000 162,000 0.00%
0
Total Delivered Cost$IMWh $69.93 $73.13 $3.20
4.38%
2013 BUDGET
2012 to 2013
Budget Budget $ BUDGET
Purchased Power and Resource Costs 2012 2013 CHANGE
Total Energy Supply-Various 1 $10,757,413 $10,918,075 $160,663
$IMWh $66.40 $66.95
Transmission- NVEnergy $1,049,546 $1,081,033 $31,486
Scheduling -NCPA $68,859 $73,226 1 $4,367
WAPA cost/(credit)toward MWh's ($28,012) ($28,012) $0
Total Bulk Power Costs $ 119847,806 $ 12,044,322 $ 196,516
1.6 0
Total Annual MWh 162,000 163,082 1,082
0.67%
Total Delivered Cost$IMWh $73.13 $73.85 $0.72
0.97%
Page 5 of 6
Attachment 1
The mix of resources for the FY12 and FY13 Purchase Power Plan is illustrated
in the graphs below:
FY12 Resource Mix
UAMPS Pool
Payson-Nat Gas 5%
6%
Wind-PPM
0%
St
Fallon
Exchange
2%
FY13 Resource Mix
DAMPS Pool
4% New Resource 5%
Payson- Nat Gas
6% Wind-PPM 0%
Fallon Exchange
3%
Page 6of6
Attachment 2
TRUCKEE III
DONNER
Resolution No. 2011 - XX
ADOPTING THE BUDGET AND OVERHEAD RATES
FOR FYI 2 and FYI 3
WHEREAS The Board of Directors adopted a Mission Statement and statement of goals and
objectives for the District; and
WHEREAS District staff used that Mission Statement and statement of goals and objectives
to prepare a draft FY12 and FY13 Budget; and
WHEREAS the Board of Directors, Staff, and the public participated in budget workshops in
the months of September, October, and November of 2011; and
WHEREAS on November 2, 2011, the Board of Directors received a draft FY12 and FY13
Budget; and
WHEREAS on November 2, 2011, a public hearing was held; and
WHEREAS the Board of Directors accepts the organization changes as directed in the draft
FY12 and FY13 Budget.
WHEREAS the draft budget for District operations and capital spending for the years FY12
and FY13 describes accounting overhead allocation rates for labor,transportation, inventory,
administration, and construction costs; and
NOW THEREFORE BE IT RESOLVED by the Board of Directors of Truckee Donner
Public Utility District as follows:
1. The draft FY12 and FY13 Budget is hereby adopted.
2. The General Manager and Staff are authorized to implement the biannual FY12 and
FY13 Budget.
3. The following Budget overhead allocation rates are adopted:
Overhead Rate FY12 FY13
Labor 97% 99%
Transportation $ 11.80 $ 12.09
Inventory 21% 21
Administration 3% 3%
Construction 18% 18%
Attachment 2
PASSED AND ADOPTED by the Board of Directors at a meeting duly called and held within
the District on the 16th of November 2011 by the following roll call vote:
AYES:
ABSTAIN:
NOES:
ABSENT:
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
By
Jeff Bender, President of the Board
ATTEST:
Michael D. Holley, Clerk of the Board
TRUCKEE DONNER PUBLIC UTILITY DISTRICT
FY12 and FY13 BUDGETED TRANSFERS
ELECTRIC UTILITY
Vehicle
General Fund Rate Reserve Replacement
Reserve
FY12
Vehicle Replacement Reserve Annual Contribution $ (164,440) $ 1649440
Rate Reserve Annual Contribution (272,174) 2729174
FY13
Vehicle Replacement Reserve Annual Contribution (1699373) 169,373
Rate Reserve Annual Contribution (4450760) 445,760
Total Transfer To(From)Funds $ (190515747) $ 7179934 $ 3339813
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TRUCKEE DONNER PUBLIC UTILITY DISTRICT
FY12 and FY13 BUDGETED TRANSFERS
WATER UTILITY
Debt Service Donner Lake Reserve for
General Fund Coverage Capital Vehicle Repl. Assessment Facilities
g Reserve Reserve Fees Future Water
Reserve District Meters
F_
2006 Certificates of Participation Debt Service Payment 258,931 (9%984) (1589947)
MSG 1551 Debt Service Payment 1509158 (1509158)
Residential Meter Project 558 043 558 043
Vehicle Reserve Fund Annual Contribution (137,917) 1375917
Capital Reserve Annual Contribution (1579379) 157,379
Debt Service Coverage Reserve Annual Contribution (3355850) 3359850
F_
2006 Certificates of Participation Debt Service Payment 348,987 (995145) (24%842)
MSG 1551 Debt Service Payment 1509158 (15%158)
Residential Meter Project 578,090 (5789090)
Vehicle Reserve Fund Annual Contribution (142,055) 1429055
Capital Reserve Annual Contribution (157,379) 157,379
Debt Service Coverage Reserve Annual Contribution (2969785) 2969785
Total Transfer To(From)Funds $ 817,002 $ 6329635 $ 314,758 $ 279,972 $ (1999129) $ (7099105) $ (19136,133)
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