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

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

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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

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SLIDE 1

CITY WATER LIGHT AND POWER

FY2019

CWLP BUDGET PRESENTATION

January 24, 2018

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SLIDE 2
  • 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

FY2019 BUDGET HIGHLIGHTS

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SLIDE 3
  • 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

WATER FUND BUDGET HIGHLIGHTS

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SLIDE 4
  • 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

ELECTRIC FUND BUDGET HIGHLIGHTS

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SLIDE 5

5

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%

CWLP BUDGETED EXPENSES

FY2019 vs. FY2018

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SLIDE 6

6

EMPLOYEE DEMOGRAPHICS

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 CHANGE YR OVER YR TOTALS

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SLIDE 7

7

EMPLOYEE DEMOGRAPHICS

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 CHANGE YR OVER YR TOTALS

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SLIDE 8
  • New Safety Record Set - Incident Rate of 2.5

8

CWLP SAFETY SUCCESSES

15.99 11.63 11.89 8.84 8.56 8.17 6.85 5.85 5.27 7.11 3.02 3.36 2.50 8.16 7.18 7.14 6.78 6.74 6.39 6.36 5.46 5.48 5.58 4.69 4.75 2 4 6 8 10 12 14 16 18 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

CWLP IR CWLP IR APPA IR APPA IR

Comparing OSHA Incidence Rate for CWLP & APPA

OSHA OSHA Incidence Rate Incidence Rate

American Public Power Association

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SLIDE 9
  • Since the inception of CWLP’s Safety Leadership Council in

2007, there has been an approximate reduction in claims by 82% and costs by 94% in 2017.

9

CWLP SAFETY SUCCESSES

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SLIDE 10

10

CWLP SAFETY SUCCESSES

1828 1509 1062 1112 746 834 794 721 507 331 356 55 29 200 400 600 800 1000 1200 1400 1600 1800 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Number Number of Da

  • f Days Lost Time

ys Lost Time

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SLIDE 11

11

CWLP’S CONTRIBUTION TO CORPORATE FUND

  • Street light

maintenance & electricity for ~ 17,500 lights

  • Traffic light

maintenance and electricity for ~ 300 intersections

  • Information Systems

Division services to City Corporate fund

  • Water for street

cleaning, sewer flushing, and fire fighting FY2016 FY2017 FY2018 Projection FY2019 Budget ELECTRIC FUND: 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 Shared Services Payment NA NA NA $1,193,760 Electric Total $12,711,192 $12,415,291 $12,469,002 $13,891,246 WATER FUND: PILOT $416,044 $439,950 $425,392 $425,762 Free Services $385,126 $411,827 $394,847 $382,002 Shared Services Payment NA NA NA $246,840 Water Total $801,170 $851,777 $820,239 $1,054,604 CWLP Total $13,512,362 $13,267,068 $13,289,241 $14,945,850

Free Services

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SLIDE 12

CWLP BUDGET HEARING Water Fund Budget

January 24, 2018

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SLIDE 13

13

FY2019 WATER FUND EXPENSES

PERSONAL SERVICES 34% CAPITAL IMPROVEME NT 25% DEBT SERVICE 16% COMMODITI ES & CONTRACT S 20% EQUIPMENT 1% TRANSFERS 1% OTHER 3%

PERSONAL SERVICES 14,526,620 $ CAPITAL IMPROVEMENTS 10,778,846 COMMODITIES & CONTRACTS 8,757,192 DEBT SERVICE 7,057,398 EQUIPMENT 405,474 TRANSFERS 425,762 OTHER 1,303,504 TOTAL 43,254,796 $

WATER FUND EXPENSES

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SLIDE 14

14

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%

WATER FUND EXPENSES

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SLIDE 15

15

FY2019 WATER FUND RESOURCES

BOND PROCEEDS 15% RETAIL / OTHER OPERATING 61% FUND BALANCE & OTHER 12% AUXILIARY SERVICES 3% WHOLESALE SALES 6% 3% CONTRIBUTIONS

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

WATER FUND RESOURCES

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SLIDE 16

16

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%

WATER FUND RESOURCES

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SLIDE 17

17

WATER REVENUE / SALES TREND

FY13 FY14 FY15 FY16 FY17 RETAIL REVENUE $28,349,475 $26,776,349 $26,525,528 $25,898,904 $25,660,034 RETAIL UNITS 8,320,275 7,705,445 7,489,343 7,291,588 7,305,191 6.60 6.80 7.00 7.20 7.40 7.60 7.80 8.00 8.20 8.40 $24.00 $24.50 $25.00 $25.50 $26.00 $26.50 $27.00 $27.50 $28.00 $28.50 $29.00

Units in Millions Revenue in Millions

Retail R tail Revenue & nue & Units Sold Units Sold

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SLIDE 18

18

WATER FUND BALANCES

$17.82 $13.96 $11.70 $7.67 $6.99 $- $2 $4 $6 $8 $10 $12 $14 $16 $18 $20 FY2014 FY2015 FY2016 FY2017 FY2018 YTD

Millions Millions

Water F r Fund Cash Balance nd Cash Balance

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SLIDE 19

19

WATER FUND DEBT COVERAGE

2.04 1.65 1.92 1.68 1.83 1.36 1.73 1.48 Minimum 1.25 0.5 1 1.5 2 2.5 FY14 FY15 FY16 FY17

All–In Debt Co All–In Debt Coverage rage

All Before Aux All After Aux

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SLIDE 20
  • 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 PROJECTS

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SLIDE 21
  • Work Trucks (3)

$163,250

  • Lake Services Dump Truck (1)

$90,000

  • Equipment Trailers (3)

$30,000

21

WATER FUND VEHICLES

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SLIDE 22

22

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

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SLIDE 23

23

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
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SLIDE 24
  • SWOT – Strengths, Weaknesses, Opportunities, Threats
  • Strengths
  • Low water rates with good cash position
  • Water treatment plant upgrades
  • South Fork pump station
  • Strong safety commitment/reducing accidents
  • Weaknesses
  • 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 IS

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SLIDE 25
  • Opportunities
  • Supplemental Water Supply progress
  • Lake Springfield Watershed Committee
  • Further Safety Improvement
  • Rate restructuring – desensitize to weather, smooth

revenues

  • Threats
  • 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

WATER SWOT ANALYSIS

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SLIDE 26

CWLP BUDGET HEARING

Electric Fund Budget

January 24, 2018

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SLIDE 27

27

FY2019 ELECTRIC FUND EXPENSES

PERSONAL SERVICES 22% CAPITAL IMPROVEMEN TS 6% DEBT SERVICE 13% COMMODITIES & CONTRACTS 53% EQUIPMENT 1% TRANSFERS 3% OTHER 2%

PERSONAL SERVICES 58,706,616 $ CAPITAL IMPROVEMENTS 14,765,073 DEBT SERVICE 35,452,725 COMMODITIES & CONTRACTS 138,618,467 EQUIPMENT 2,458,686 TRANSFERS 8,162,904 OTHER 4,003,083 TOTAL 262,167,554 $

ELECTRIC FUND EXPENSES

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SLIDE 28

28

ELECTRIC FUND EXPENSES

FY2019 FY2018 $ VARIANCE % VARIANCE PERSONAL SERVICES 58,706,616 $ 59,663,613 $ (956,997) $

  • 1.6%

CAPITAL IMPROVEMENTS 14,765,073 16,134,788 (1,369,715)

  • 8.5%

DEBT SERVICE 35,452,725 35,458,575 (5,850) 0.0% COMMODITIES & CONTRACTS 138,618,467 141,038,055 (2,419,588)

  • 1.7%

EQUIPMENT 2,458,686 1,722,500 736,186 42.7% TRANSFERS 8,162,904 7,958,106 204,798 2.6% OTHER 4,003,083 4,359,175 (356,092)

  • 8.2%

TOTAL 262,167,554 $ 266,334,812 $ (4,167,258) $

  • 1.6%

ELECTRIC FUND EXPENSES

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SLIDE 29

29

FY2019 ELECTRIC FUND RESOURCES

RETAIL & OTHER OPERATING 86% WHOLESALE 11% CONTRIBUTI ONS & OTHER 1% FUND BALANCE 1% DEPOSIT TO ERIRF

  • 1%

RETAIL & OTHER OPERATING 231,893,528 $ WHOLESALE 28,956,137 CONTRIBUTIONS & OTHER 2,132,712 FUND BALANCE 2,455,000 DEPOSIT TO ERIRF (3,250,790) TOTAL 262,186,587 $

ELECTRIC FUND RESOURCES

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SLIDE 30

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ELECTRIC FUND RESOURCES

FY2019 FY2018 $ VARIANCE % VARIANCE RETAIL & OTHER OPERATING $231,893,528 228,783,950 $ 3,109,578 $ 1.4% WHOLESALE 28,956,137 38,415,891

  • 9,459,754
  • 24.6%

FUND BALANCE 2,455,000 2,987,500

  • 532,500
  • 17.8%

CONTRIBUTIONS & OTHER 2,132,712 2,395,263

  • 262,551
  • 11.0%

BOND, LOAN & GRANT PROCEEDS 500,000

  • 500,000
  • 100.0%

DEPOSIT TO ERIRF

  • 3,250,790
  • 3,239,808
  • 10,982

0.3% TOTAL 262,186,587 $ 269,842,796 $ (7,656,209) $

  • 2.8%

ELECTRIC FUND RESOURCES

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SLIDE 31
  • Bucket Trucks (3)
  • $558,500
  • Digger Derrick Trucks (2)
  • $450,000
  • End Loader (1)
  • $225,000
  • Passenger Vehicles (7)
  • $185,250
  • Dump Trucks (3)
  • $150,000
  • Trouble Truck (1)
  • $97,500
  • Fork Lift (1)
  • $50,000
  • Trailers (2)
  • $27,000

31

ELECTRIC FUND VEHICLES

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SLIDE 32
  • Transmission & Distribution Projects
  • Line Clearance - $2,650,000
  • Grand Valley Village Underground Rebuild
  • Contract Labor - $400,000 / Materials - $150,000
  • Ash Street Underpass - $150,000
  • Jackson Underground Reconductor - $350,000
  • Stanford Pole Relocation - $80,000
  • Westchester Underground Rebuild - $75,000

32

ELECTRIC FUND T&D PROJECTS

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SLIDE 33
  • Solar Farm Engineering and Materials - $1.2 million
  • Streetlighting
  • 11th Street - $75,000
  • Hill Street - $35,000
  • Stanford and 11th to Fox Bridge - $7,500
  • Developer Paid
  • Memorial Medical Center - $30,000
  • Jackson Street Corridor - $90,000

33

ELECTRIC FUND T&D PROJECTS

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SLIDE 34
  • CWLP’s share of MISO transmission projects - $4.1M
  • $4 million budgeted for FY18
  • $3.2 million budgeted for FY17
  • $2.4 million budgeted for FY16
  • No cost recovery mechanism – IOU’s can recover via rates
  • Transmission lines for socializing wind power
  • Integrated Resource Plan
  • 20 year look
  • Restructuring staff

34

ELECTRIC FUND T&D PROJECTS

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SLIDE 35
  • Power Plant Projects
  • Dallman / Interstate Controls Upgrade - $1.5 million
  • Fly Ash Engineering Fees and Fixed Equipment - $1.35 million
  • Unit 33 Scrubber Hydroclones - $690,000
  • Groundwater & Landfill Studies - $375,000

35

ELECTRIC FUND PROJECTS

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SLIDE 36
  • Future Items/Concerns
  • Dispatch/Corporate Data Center $6-10 million
  • ISD Infrastructure $1-2 million
  • ELG – Effluent Limitation Guidelines $41-55 million
  • CCR – Coal Combustion Residual

$50-100 million

  • ERIRF – Environmental and Regulatory Initiatives and

Rebate Fund

  • Deposits of $3.25M expected in FY19
  • FY19 Budgeted Withdrawal for Fly Ash Engineering $1.35M
  • Fund Balance of $13.4M

36

ELECTRIC FUND PROJECTS

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SLIDE 37
  • Strengths
  • Generation portfolio covers CWLP load (limited market exposure)
  • Rate & PILOT Restructuring/Bond Refunding/Improved Ratings
  • Reduced coal price for 5 years
  • Investments in pollution controls (SO2, NOx, Mercury)
  • Low number of outages & fast outage response/restoration
  • Strong safety commitment/reducing accidents
  • Working cash improvement
  • Weaknesses
  • Lack of Specialized Rates
  • High Load Factor, Electric Vehicle, Distributed Energy Resource
  • Limited resources for capital projects (financial & human)
  • Delayed State payments
  • Excess generation, low market energy & capacity

37

ELECTRIC SWOT ANALYSIS

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SLIDE 38
  • Opportunities
  • Energy and capacity sales to the market
  • Further safety improvement
  • Shield CWLP customers from rising energy prices
  • Revise specialized rates
  • High Load Factor – Attract large customer, data center
  • Electric Vehicle – Incentivize Off Peak Charging
  • Distributed Energy Resource – Recover cost of infrastructure
  • Economic Incentives – Attract business, Increase our sales
  • Threats
  • Load decline – national trend
  • EPA regulations
  • Employee loss to competitors (compensation)
  • Restructuring MISO capacity auction reducing revenues

38

ELECTRIC SWOT ANALYSIS

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SLIDE 39

SECURITY

  • Patrol parks, substations, CWLP Facilities
  • Open/close buildings, parks, restrooms
  • Road control around lake
  • Lake duties
  • Boat tows, debris remove, patrol, search/recovery
  • Maintain buoys
  • No arresting authority
  • Can only write citations against Chapter 96
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SLIDE 40

SECURITY

  • Work with Homeland Security, FBI, NERC/SERC to

maintain best practices for utility security

  • DNR and SPD also patrol on the lake
  • Currently down 3 officers
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SLIDE 41

SECURITY SWOT ANALYSIS

  • Strengths
  • Knowledge of Lake and Lake Property
  • Quick response to lake related emergencies / events
  • Strong relationships with DNR, SPD, SCRS, SFD, Home owners,
  • Conduits with NERC, FERC, DHS, FBI
  • Visibility of Security in parks, lake and CWLP property
  • Weakness
  • Lack of training
  • Aging equipment
  • Understaffed
  • Large and multiple areas to patrol, limited patrols on water
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SLIDE 42

SECURITY SWOT ANALYSIS

  • Opportunities
  • Bring in income from Boat License (approx. $250,000 / year)
  • 2 new officers in the process of being hired
  • Update technology – monies budgeted to replace / increase cameras
  • Utilize SPD to provide training
  • Improved perimeter security (currently being completed)
  • Local resources available – DNR, Homeland Security, FBI, SPD, SFD
  • Threats
  • Retirement of experienced staff
  • Unprotected assets, such as substations and electric poles
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SLIDE 43

CWLP BUDGET HEARING

The End

January 24, 2018