FY2019 CWLP BUDGET PRESENTATION January 24, 2018 FY2019 BUDGET - PowerPoint PPT Presentation

CITY WATER LIGHT AND POWER FY2019 CWLP BUDGET PRESENTATION January 24, 2018

FY2019 BUDGET HIGHLIGHTS • Electric and Water Funds Balanced • No Rate Increases • Balancing Decisions Made by CWLP Directors and Managers • Water cut $5.2M from initial requests • Electric cut $13.8M from initial requests • Budgeted headcount at 615 positions • Set a new safety record – Incident Rate of 2.5 2

WATER FUND BUDGET HIGHLIGHTS • Water utilizing $4.78 million from existing funds to balance budget, Sales Revenues are expected to drop 1.2%. • Water Division expenditures lower due to capital projects nearing completion funded from 2012 bonds • Water budgeted debt coverage is 1.62x 3

ELECTRIC FUND BUDGET HIGHLIGHTS • Electric retail load continues to decline • Electric Wholesale Energy and Capacity revenues are decreasing significantly. • Wholesale Sales Revenue to drop $2M (8%) • Capacity Revenue to drop $5M (65%) • Electric Fund budgeted debt coverage is 1.72x 4

CWLP BUDGETED EXPENSES FY2019 vs. FY2018 FY2019 FY2018 $ VARIANCE % VARIANCE Water Fund $ 43,254,796 $ 47,158,157 $ (3,903,361) -8.3% Electric Fund $ 262,167,554 $ 266,334,812 $ (4,167,258) -1.6% Total $ 305,422,350 $ 313,492,969 $ (8,070,619) -2.6% 5

EMPLOYEE DEMOGRAPHICS TOTALS CHANGE YR OVER YR Non‐Minority Minority Minority % Non‐Minority Minority FY13 595 44 6.9% FY14 567 48 7.8% ‐28 4 FY15 534 50 8.6% ‐33 2 FY16 503 56 10.0% ‐31 6 FY17 509 55 9.8% 6 ‐1 FY18 497 68 12.0% ‐12 13 6

EMPLOYEE DEMOGRAPHICS TOTALS CHANGE YR OVER YR Male Female Female % Male Female FY13 521 118 18.5% FY14 505 110 17.9% ‐16 ‐8 FY15 475 109 18.7% ‐30 ‐1 FY16 459 100 17.9% ‐16 ‐9 FY17 465 99 17.6% 6 ‐1 FY18 461 104 18.4% ‐4 5 7

CWLP SAFETY SUCCESSES • New Safety Record Set - Incident Rate of 2.5 Comparing OSHA Incidence Rate for CWLP & APPA 18 American Public Power Association 16 15.99 14 Incidence Rate OSHA Incidence Rate 11.63 12 11.89 10 8.84 8.56 8.17 8 6.85 8.16 7.11 7.18 7.14 5.85 5.48 6 6.78 6.74 OSHA 6.36 6.39 4.75 5.46 5.58 5.27 4.69 4 3.36 2.50 3.02 2 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 CWLP IR CWLP IR APPA IR APPA IR 8

CWLP SAFETY SUCCESSES • Since the inception of CWLP’s Safety Leadership Council in 2007, there has been an approximate reduction in claims by 9 82% and costs by 94% in 2017.

CWLP SAFETY SUCCESSES Number of Da Number of Days Lost Time ys Lost Time 2000 1828 1800 1600 1509 1400 1200 1112 1062 1000 834 794 746 800 721 600 507 356 400 331 200 55 29 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 10

CWLP’S CONTRIBUTION TO CORPORATE FUND Free Services FY2018 FY2019 • Street light FY2016 FY2017 Projection Budget maintenance & ELECTRIC FUND: electricity for ~ 17,500 lights PILOT $8,058,000 $7,965,387 $7,958,106 $8,162,904 Free Services $4,653,192 $4,449,904 $4,510,896 $4,534,582 Traffic light • Shared Services Payment NA NA NA $1,193,760 maintenance and Electric Total $12,711,192 $12,415,291 $12,469,002 $13,891,246 electricity for ~ 300 intersections WATER FUND: PILOT $416,044 $439,950 $425,392 $425,762 • Information Systems Free Services $385,126 $411,827 $394,847 $382,002 Division services to Shared Services Payment NA NA NA $246,840 City Corporate fund Water Total $801,170 $851,777 $820,239 $1,054,604 Water for street • cleaning, sewer CWLP Total $13,512,362 $13,267,068 $13,289,241 $14,945,850 flushing, and fire fighting 11

CWLP BUDGET HEARING Water Fund Budget January 24, 2018

FY2019 WATER FUND EXPENSES EQUIPMENT TRANSFERS 1% 1% WATER FUND EXPENSES COMMODITI OTHER ES & 3% CONTRACT S 20% PERSONAL SERVICES $ 14,526,620 CAPITAL IMPROVEMENTS 10,778,846 DEBT SERVICE 16% COMMODITIES & CONTRACTS 8,757,192 DEBT SERVICE 7,057,398 PERSONAL EQUIPMENT 405,474 SERVICES 34% TRANSFERS 425,762 OTHER 1,303,504 CAPITAL IMPROVEME NT TOTAL $ 43,254,796 25% 13

WATER FUND EXPENSES WATER FUND EXPENSES FY2019 FY2018 $ VARIANCE % VARIANCE PERSONAL SERVICES $ 14,526,620 $ 15,110,897 $ (584,277) -3.9% CAPITAL IMPROVEMENTS 10,778,846 13,053,153 (2,274,307) -17.4% COMMODITIES/CONTRACTS 8,757,192 9,273,089 (515,897) -5.6% DEBT SERVICE 7,057,398 7,059,773 (2,375) 0.0% EQUIPMENT 405,474 819,500 (414,026) -50.5% TRANSFERS 425,762 429,689 (3,927) -0.9% OTHER 1,303,504 1,412,056 (108,552) -7.7% TOTAL $ 43,254,796 $ 47,158,157 $ (3,903,361) -8.3% 14

FY2019 WATER FUND RESOURCES FUND AUXILIARY BALANCE & SERVICES OTHER WATER FUND RESOURCES 3% 12% WHOLESALE SALES 6% RETAIL & OTHER OPERATING $ 26,432,848 CONTRIBUTIONS BOND PROCEEDS 6,664,406 3% FUND BALANCE & OTHER 5,115,228 WHOLESALE SALES 2,508,257 RETAIL / AUXILIARY SERVICES 1,255,884 BOND OTHER PROCEEDS OPERATING 15% CONTRIBUTIONS 1,297,620 61% TOTAL $ 43,274,243 15

WATER FUND RESOURCES WATER FUND RESOURCES FY2019 FY2018 $ VARIANCE %VARIANCE RETAIL & OTHER OPERATING $ 26,432,848 $ 26,842,700 (409,852) ‐1.5% BOND PROCEEDS 6,664,406 9,165,573 $ (2,501,167) ‐27.3% FUND BALANCE & OTHER 5,115,228 6,284,128 (1,168,900) ‐18.6% WHOLESALE SALES 2,508,257 2,444,239 64,018 2.6% AUXILIARY SERVICES 1,255,884 1,270,289 (14,405) ‐1.1% CONTRIBUTIONS 1,297,620 1,185,547 112,073 9.5% TOTAL $ 43,274,243 $ 47,192,476 $ (3,918,233) ‐8.3% 16

WATER REVENUE / SALES TREND Retail R tail Revenue & nue & Units Sold Units Sold $29.00 8.40 Units in Millions Revenue in Millions $28.50 8.20 $28.00 8.00 $27.50 7.80 $27.00 7.60 $26.50 7.40 $26.00 7.20 $25.50 7.00 $25.00 6.80 $24.50 $24.00 6.60 FY13 FY14 FY15 FY16 FY17 RETAIL REVENUE $28,349,475 $26,776,349 $26,525,528 $25,898,904 $25,660,034 17 RETAIL UNITS 8,320,275 7,705,445 7,489,343 7,291,588 7,305,191

WATER FUND BALANCES Water F r Fund Cash Balance nd Cash Balance $20 Millions Millions $17.82 $18 $16 $13.96 $14 $11.70 $12 $10 $7.67 $6.99 $8 $6 $4 $2 $- FY2014 FY2015 FY2016 FY2017 FY2018 YTD 18

WATER FUND DEBT COVERAGE All–In Debt Coverage All–In Debt Co rage 2.5 2.04 2 1.92 1.65 1.68 1.83 1.73 1.5 1.36 1.48 All Before Aux Minimum 1.25 All After Aux 1 0.5 0 19 FY14 FY15 FY16 FY17

WATER FUND PROJECTS • Water Purification Plant Equipment Upgrades • Engineering to Renovate & Add Filters - $1M • Supplemental Source of Supply • Supplemental Engineering - $1M (Current Revenues) • Mains, Meters, Hydrants Repair and Replacements - $3.5M • Lake Services Net Cost - $2.4m 20

WATER FUND VEHICLES • Work Trucks (3) $163,250 • Lake Services Dump Truck (1) $90,000 • Equipment Trailers (3) $30,000 21

WATER FUND PROJECTS ANNUAL LONG TERM PROJECTS  Implement Best Management Practices – Lake Springfield Watershed  $250k-$300k per year for 10-20 years  Applying for assistance  Install sewer on all Lake Properties  329 properties still on septic, past averages 35-40 per year  $250k-$300k per year for 5-7 years ~ $1.88M  Coming - Chapter 96 changes speed up conversion process  Installation of Automated Meter Reading  37,300 meters out of 52,232 to install  $375k-$600k Per year for 8-9 years ~ $7.5M  Best if we could increase spending to get the benefit of reduced labor costs 22

WATER FUND FUTURE PROJECTS BONDED PROJECTS  Supplemental Water Supply : $110M - $150M • FY19 Land Purchases - $2.75 million • FY19 Legal / Appraisal - $200,000 • FY19 Engineering - $2.5 million  Water Main Replacement Programs  $1M for 1 mile per year for next 20-30 years  Lead Service Line Replacement Program  Future Requirement by USEPA  8,000-12,000 lead service lines  $40M - $60M over next 10-15 years 23

WATER SWOT ANALYS IS IS • SWOT – S trengths, W eaknesses, O pportunities, T hreats • S trengths • Low water rates with good cash position • Water treatment plant upgrades • South Fork pump station • Strong safety commitment/reducing accidents • W eaknesses • Uncertainty of Supplemental Water Supply option • Age of distribution infrastructure • Very little revenue available for infrastructure projects • Low customer charge – sensitive to changes in demand • Water sales flat, debt coverage dropping, cash position dropping 24

WATER SWOT ANALYSIS • O pportunities • Supplemental Water Supply progress • Lake Springfield Watershed Committee • Further Safety Improvement • Rate restructuring – desensitize to weather, smooth revenues • T hreats • Cost of Supplemental Water Supply Option • Main breaks (aging infrastructure, extended cold) • High efficiency fixtures (reduce revenues) • Extended drought – lost revenue from water restrictions (low customer charge) • Delayed State payments 25

CWLP BUDGET HEARING Electric Fund Budget January 24, 2018