Agenda Information Sheet
DEPARTMENT: Finance
ACM: Bryan Langley
Date: June 12, 2017
SUBJECT
Title
Receive a report, hold a discussion and give staff direction on the Denton Municipal Electric Fiscal Year 2017-18 Operating and Capital Budget.
Body
BACKGROUND
The City’s emphasis for this year’s budget process in on cost containment while maintaining excellent system reliability and strong financial management of the City’s Electric Utility System. The budgetary focus remains on the long term maintenance and expansion of utility assets and system reliability. The proposed budget is attached to this report as Exhibit 1. The proposed budget calls for an overall rate decrease of 1% in FY 2017-18 and future year decreases of 2% in the following three fiscal years. FY 2017-18 is the final year to pay off the TMPA debt associated with the generation plant. The proposed budget anticipates some drawdown in the reserve balance to cover a portion of this last debt payment. The Electric Utility has built us reserves in prior years in anticipation of some drawdowns for TMPA debt repayment.
The following cost containment measures are recommended in the FY 2017-18 budget:
• Removing five vacant engineering positions and using engineering consulting services for these design duties
• Elimination of two management positions
• Budgeted for salary savings of $308,000 for regular turnover
• Use of four internally developed software packages for improved EMO operations
The PowerPoint presentation for this agenda item is attached as Exhibit 2. Exhibit 3 contains additional project detail for the FY 2017-18 Capital Program. I look forward to the discussion of this proposed budget and working with the Public Utilities Board during this budget season.
RECOMMENDATION
No formal recommendations is required at this meeting. Staff will request consideration of the Electric Utility Budget at the June 26, 2017 meeting.
STRATEGIC PLAN RELATIONSHIP
The City of Denton’s Strategic Plan is an action-oriented road map that will help the City achieve its vision. The foundation for the plan is the five long-term Key Focus Areas (KFA): Organizational Excellence; Public Infrastructure; Economic Development; Safe, Livable, and Family-Friendly Community; and Sustainability and Environmental Stewardship. While individual items may support multiple KFAs, this specific City Council agenda item contributes most directly to the following KFA and goal:
Related Key Focus Area: Public Infrastructure
Related Goal: 2.3 Promote superior utility services and facilities
EXHIBITS
1. Proposed FY 2017-18 Budget
2. Presentation
3. Capital Budget Detail
Respectfully submitted:
Chuck Springer, 940-349-8260
Director of Finance