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Home My WebLink About7 Adopt 2003 Budget Agenda Item # . . Memorandum To: Board of Directors From: Peter Holzmeister Date: December 13, 2002 Subject: Adoption of the budget for 2003 WHY THIS ITEM IS BEFORE THE BOARD This item involves adoption of the budget for 2003, along with the budget overheads. Only the board of directors is authorized to adopt the budget. HISTORY We began preparation of the budget in September with the Strategic Planning Workshop facilitated by Bob Rauch. Based on the results of that workshop, and with assistance from the management staff of the District, I have prepared a draft budget for 2003 and submitted it to the board for review. We will hold a public hearing and workshop on December 18. At the conclusion of the workshop and hearing you will be able to amend the budget if you wish and you may adopt it. I have already described the unresolved issues that have significant fiscal impacts for the District. We have not yet completed the Finance Master Plan. We are still working on revision of the power supply contract. We are reviewing the water and electric Master Plans and the facilities fees. We will resolve the SRF funding for Donner Lake water system and complete the condemnation trial. We will complete sale of District-owned land. Some time during the first six months of 2003 these issues will clear up, and we will need to revisit this budget. In the meanwhile, I have prepared a bare bones budget that will let us perform the most routine operations and maintenance functions. NEW INFORMATION With respect to the draft budget for 2003 there is not really any new information that I have to offer. I have prepared a high level comparison of the significant differences between the 2002 and 2003 budgets, a copy of which is attached. The important new information will come as we resolve the above listed strategic issues. RECOMMENDATION I recommend that the board adopt the resolution adopting the budget for 2003. MINIMUM Resolution No . 2002 -XX ADOPTING THE BUDGET AND OVERHEAD RATES FOR 2003 WHEREAS the Board of Directors and staff of the District participated in a strategic plan workshop in August of 2002 to identify priority issues to be addressed by the District during 2002 and to initiate budget preparation; and WHEREAS District staff has prepared a draft budget for District operations and capital spending for the year 2003 taking into account the strategic plan issues; and WHEREAS the Board of Directors of the District has participated in a budget workshop and has conducted a public hearing on the draft budget; and NOW THEREFORE BE IT RESOLVED by the Board of Directors of Truckee Donner Public Utility District as follows: 1. The draft budget for 2003 is hereby adopted 2. The following budget overhead rates are adopted Overhead Item Overhead Rate Labor Overhead 46.00% Transportation Overhead 28.70% Inventory Overhead 77.67% Administrative Overhead 1.87% Construction Overhead 48.50% Non-inventory Material Overhead 25.00% PASSED AND ADOPTED by the Board of Directors at a meeting duly called and held within the District on the 18th day of December, 2002 by the following roll call vote: AYES: NOES: ABSENT: TRUCKEE DONNER PUBLIC UTILITY DISTRICT By J. Ronald Hemig, President ATTEST: Peter L. Holzmeister, Clerk of the Board COMPARISON OF BUDGETS— 2002 AND 2003 Comparison of Electric Budgets—2002 and 2003 Budget Item 2002 Budget 2003 Budget Difference Rate Stabilization 2,292,459 -0- - 2,292,459 Purchased Power 12,113,352 7,014,535 + 5,098,817 Debt Service 490,057 4,655,832 - 4,165,775 Capital from Ops 589,812 135,050 + 454,762 TOTAL - 904,655 Proposed rate increase generates $841,049 How to view this budget and the future This budget is bare bones regarding maintenance, repair and capital This budget covers power supply for the long term —we think! Over the years we will have increase in customer base —this will help cover fixed costs We need to build cash reserve W need to commit more to capital from operations TRUCKEE DONNER PUD -Preliminary Headquarters Building Payoff Information 1) Funds Available: Electric Building Fund $1,431,358.44 Electric Reserve Fund 271,108.99 Subtotal $1,702,467.43 Water Building Fund 465,465.68 Total Funds Available $2,167,933.11 2) Amount Owing: Balance of Loan $2,030,000.00 Accrued Interest Due through 1/31/02 52,135.92 2% Premium for 2/1/03 Payoff- Estimate 40,600.00 Total Amount Owing $2,122,735.92 3) Surplus funds: There may be additional fees $45,197.19 due to process the payoff by the Trustee or others Note: There is a legal process tied to a formal noticing procedure that must be followed in order to call the outstanding bonds. The next payment(principal and interest)is due on February 1, 2003.