Agenda Information Sheet
DEPARTMENT: Finance
DCM: Bryan Langley
Date: June 12, 2017
SUBJECT
Title
Receive a report, hold a discussion and give staff direction on the Water 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 customer service and strong financial management of the City's Water Utility System. The budgetary focus remains on the long term maintenance of utility assets and system reliability. There are two budget exhibits attached to this report, a baseline budget that include no rate adjustments over the next five fiscal years (Exhibit 1) and a proposed budget that includes average rate adjustments of 2.0% over the last three years of the five year budgeting period (Exhibit 2). The first two fiscal years are identical in the baseline and proposed budgets and the five year capital programs are identical.
For FY 2017-18 no rate increase is recommended, which is below the 4.0% increase estimated in the prior year. The following cost containment measures are recommended in the FY 2017-18 budget:
* Budgeting of salary savings due to regular turnover at 1.5% of salaries and benefits
* Reduction in several line item expenses based on reviews of historical expenses
* Balancing of debt issuance with timing of CIP projects and cash flow schedules
* Budgeting of revenue funded capital on a five year smoothing method while maintaining targets at 100% of distribution replacement funding and 25% of treatment plant infrastructure funding
The PowerPoint presentation for this agenda item is attached as Exhibit 3. 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 Water Utility Budget at the June 26, 2017 meeting.
STRATEGIC PLAN RELATIONSHIP
The...
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