JEFFERSON PUD 2019 DRAFT BUDGET

Transcription

1 JEFFERSON PUD 2019 DRAFT BUDGET August 20, 2018 Prepared by Larry Dunbar, General Manager Tammy Lehman, Interim CFO Mike Bailey, Financial Services Manager w/ Will O Donnell, Communications Manager

2 HANDOUTS FOR PRESENTATION Draft 2019 budget resolution Draft financial policy w/ changes Available on request: Draft budget detail 2

3 June-July Preliminary Budget Review and Development BUDGET TIMELINE August Aug 20 th Budget Workshop w/boc September Sept 1st File Budget w/ Jefferson County Auditor October Oct. 1 st Budget Hearing w/boc October Board Review and Discussion. Staff revisions. November Nov 30 Deadline to File Approved Budget w/auditor 3

4 Expanded Planning and Training GUIDING PRINCIPLES Heightened Focus on Service, Reliability, & Safety Revenue Positive Budget Maintain Key Financial Ratios No Planned Rate or Staffing Increases 4

5 2019 SPECIAL PROJECTS $4M $750K $500K Consolidated Facility Construction Project Remodel and expansion of Four Corners Operations Center to bring all staff onto one campus, provide onsite board meeting space, and improved working conditions. Funded with unrestricted cash reserves. Expanded Tree Trimming Program 50% increase in spending on our tree trimming program. Downed trees or tree limbs are the PUD s single most frequent source of outages and service interruptions. Funded out of Electrical Expenses. Community Solar Project at Dana Roberts Substation 100KW ground mount solar panel installation in Port Townsend in a vacant PUD owned lot adjoining the Dana Roberts Substation. Will be largest solar installation in Jefferson County once constructed. Funded by sales of shares to participants. 5

6 CONSOLIDATED FACILTY PLAN 6

7 COMMUNITY SOLAR PROJECT 7

8 ENHANCED RELIABILITY CAUSE OF OUTAGES BY NUMBER OF INCIDENCES Customers 3% Planned Maintenance 12% Overload 6% Vehicle 1% Squirrels 13% Equip Fail 9% Trees 40% Unknown 9% Other 3% No Outage 3% Wind, Weather 1% 8

9 2019 SPECIAL PROJECTS continued Comprehensive Strategic Planning In 2019 Jefferson PUD will embark on a number of studies to review current departments, Safety training projects, program included and processes. Includes in Plans expense for: Board budget Strategic Planning, Staff Succession, Telecommunications, Electric System, IT and GIS. Funded from reserves, grants, and operating expenses. Expanded Safety and Training Renewed commitment to safety and training in Increased safety trainings, customer service trainings, and staff development. Increased capital expenditures on worker safety equipment. Funded from expenses and cash reserves. Downtown Broadband Pilot Project Funding to install fiber optic cable in the conduit and tunnel areas installed and identified during the Water Street Construction Project in Funded from cash reserves. $305K $135K $50K 9

10 BROADBAND PILOT, PLANNING, SAFETY & TRAINING 10

11 2019 OPERATING REVENUES Electric 91% Water 7% General 2% Electric Utility Revenues $35,546,621 Water Utility Revenues $2,940,463 General Fund Revenues $704,036 Total Operating Revenues $39,191, total: $39.1M 11

12 2019 REVENUE ASSUMPTIONS 2019 budget status quo including 2018 rate increases Use tax revenues to support low-income subsidy program Estimated $250K revenues from new late fees Shine Plat Consolidation and Bywater Bay Water System Improvements LUD bond Use property and forest surplus funds to supplement consolidated facility improvements if necessary Transition toward growth paying for growth regarding electric line extensions Community Solar Project Costs entirely funded by program participants 12

13 Purchased Power 42% Distribution-Operation 4% Transmission 4% Distribution- Maintenance 7% Customer Accounts & Service 4% Administrative & General 10% Depreciation & Amortization 15% 2019 OPERATING EXPENSES BY CATEGORY % of Total Budget 2019 Power Purchase 46% Financing & Taxes 29% 2019 total: $38.6M Interest on Long-Term Debt 8% Tax Expense Other 6% Operations 25% 13

14 2019 OPERATING EXPENSES Expense Electric Utility Water Utility General Fund Cost of Purchased Power $15,884,692 $127,488 $0 Transmission Expense $1,631,035 0 $0 Distribution-Operation $917,887 $759,575 $0 Distribution-Maintenance $2,357,399 $333,232 $0 Customer Accounts $1,252,862 $209,084 $0 Customer Service & Informational $135,767 $29,446 $0 Administrative & General $3,047,648 $605,802 $194,017 Depreciation & Amortization $5,091,919 $745,634 $0 Tax Expense Other $2,171,131 $122,803 $0 Interest on Long-Term Debt $2,782,107 $211,714 $56,266 Total Operating Expenses $35,272,446 $3,144,778 $250,283 Net Operating Margins (Loss) $274,175 ($204,315) $453,753 Non-Operating Margins (Loss) $1,021,678 $370,806 $0 Net Margins (Loss) $1,295,853 $166,491 $453,753 14

15 2019 EXPENSE ASSUMPTIONS Assumed 5% increase in BPA wholesale power rates beginning Oct 2019 Assumes no additional BPA spill surcharges Financial audit services by private agency, approximately $40K Reduction of $17.8K in membership costs vs 2018 $50K to PT Broadband Fiber Pilot Project Expanded Low Income Support, from $200K in 2018 budget to $400K in

16 STAFFING ASSUMPTIONS No change in staffing numbers from 2018 Includes new Water Engineer (added into 2018 budget) Wage increase for represented employees per collective bargaining agreements Salary survey and COLA for non-represented employees Electrical engineer in-house advancement opportunities (2 positions) Clothing allowance of $75 for office personnel (Laborers and Non-Represented) 16

17 CAPITAL IMPROVEMENT PROJECTS General, $4,069,000 Planning, $275,000 Water, $791, total: $9.52M Electric, $4,391,000 17

18 GENERAL CAPITAL COSTS Four Corners Facilities Upgrade $4,000,000 IT Upgrades $69,000 $4.07M PLANNING CAPITAL COSTS Electric System Plan $150,000 Telecommunications Strategic Plan $75,000 IT and GIS Strategic Plan $50,000 $275K 18

19 ELECTRIC UTILITY 19

20 ELECTRIC UTILITY CAPITAL IMPROVEMENT PROJECTS New Line Construction $423,000 Substation Changes $748,000 Miscellaneous Distribution Equipment $755,000 Other Distribution Items $270,000 Transmission Line and Station Changes $60,000 Other Transmission Items $40,000 Communications $100,000 Conversions $550,000 Community Solar Project $500,000 Warehouse Yard Improvements $45,000 $3.49M Source of Funds for Electric Utility Capital Costs: Unrestricted Cash--$3,216,000 Community Solar Project Shares Sold--$500,000 20

21 ELECTRIC FLEET AND EQUIPMENT CAPITAL COSTS Bucket Truck $250,000 Small Bucket Truck $160,000 Tools $50,000 Pickup $135,000 Personal Protection Equipment $80,000 $675K 21

22 WATER UTILITY 22

23 WATER UTILITY CAPITAL PROJECTS Snow Creek Well Treatment Plant & Well House $150,000 Hydrant Maintenance $30,000 Shine LUD Construction Distribution System $250,000 Shine LUD Construction Well and Well House $250,000 Bywater SCADA $20,000 $700K WATER FLEET AND EQUIPMENT CAPITAL COSTS Pickup $31,087 Tools $30,000 Personal Protection Equipment $30,000 $91K 23

24 2019 UNRESTRICTED CASH RESERVES BY SOURCE Cash-Operating Depository $309,758 Cash-Jeff Co Treasurer General $5,465,784 Cash-BOA-Permit #U05-24 $29,347 Cash-Payroll Clearing-BOA $15 Working Funds $2,150 Cash-1996 Bond LUD #6 $16,019 Cash-1996 Bond LUD #8 $57,947 Temp Invest JeffCo Treasurer Gen $5,866,876 Tax Revenue Fund $2,169,405 Tax Revenue Fund Investment $1,925,000 Add RUS Bond Fund $1,808 Add RUS Bond Fund Investment Account $1,101,352 Add 2019 Budgeted Net Margins $1,916, Ending Unrestricted Cash $18,861,557 $18.8M 24

25 2019 DESIGNATED CASH RESERVES 90 Days O&M Expenses less Depreciation $8,750,000 Consolidated Facility $4,000,000 Electric Capital Expenses $3,216,000 Water Capital Expenses $200,000 General Capital Expenses $119,000 Fleet and Equipment Capital Expenses $766,087 Fleet Replacement Fund $660,527 IT Equipment Replacement Fund $32, Total Designated Cash $17,743,864 $17.7M 2019 Unrestricted Ending Cash Balance $1.1M 25

26 TIER AND DSC 2018 Mid Budget Actual Budget TIER OTIER DSC ODSC

27 FINANCIAL POLICY CHANGES Line Extension Policy Changes Change to section 5 under Controls. Outlines plan to make growth pay for growth. Electric line extensions will recover 75% of all associated costs paid by the applicant. all costs associated with water, sewer, or fiber optic line extension, except for Port Townsend Pilot Project, to serve and internal to new parcels or developments must be fully paid by the applicant. Remove Depreciation from 90 Day Reserves Change to section 1 under Reserves. The District shall develop financial plans and rates to maintain end of year cash balances sufficient to provide designated funding for a minimum of 90 days of expenses, not including depreciation based on the planned year's budget. Vehicle and IT Replacement Funds When actual end of year available cash balances exceed 125% of the targeted minimum cash balances for both the year end and subsequent operating year, the Board may direct staff to use the excess cash for debt retirement, a rate stabilization fund, rate reduction, customer rebates, capital improvements, equipment replacement or other legal purposes. 27

28 Safe, Reliable, and Affordable Public Utility Services Improved Working Conditions Increased Customer Focus BUDGET AS FIRST DRAFT OF 2019 STRATEGIC PLAN Economic and Environmental Sustainability Enhanced Quality of Life for our Customers 28

29 Aug 20 Aug 20 th Budget Workshop w/boc NEXT STEPS September Sept 1st File Budget w/ Jefferson County Auditor October Oct. 1 st Budget Hearing w/boc October Oct 16: Adopt budget or further Board Review and staff revisions. November Adopt budget or further Board Review and staff revisions. November Nov 30 Deadline to File Approved Budget w/auditor 29