The URL can be used to link to this page

Home My WebLink AboutMinutes - May 23, 2017 SSLODI CITY COUNCIL SHIRTSLEEVE SESSION CARNEGIE FORUM, 305 WEST PINE STREET TUESDAY, MAY 23, 2017 A. Roll Call by City Clerk An Informal Informational Meeting ("Shirtsleeve" Session) of the Lodi City Council was held Tuesday, May 23, 2017, commencing at 7:16 a.m. Present: Council Member Chandler, Council Member Johnson, Council Member Mounce, Mayor Pro Tempore Nakanishi, and Mayor Kuehne Absent: None Also Present: City Manager Schwabauer, City Attorney Magdich, and City Clerk Ferraiolo NOTE: Mayor Kuehne left the meeting at 8:05 a.m. B. Topic(s) NOTE: The following topics were discussed out of order. B-2 Third Quarter Fiscal Year 2016/17 Water, Wastewater, and Electric Utility Department Financial Reports (CM) Utilities Manager Lance Roberts provided a PowerPoint presentation regarding Fiscal Year 2016/17 Water and Wastewater quarterly update. Specific topics of discussion included Wastewater Fund cash flow summary, operating results, and cash balances; Water Fund cash flow summary, operating results, and cash balances; and Water/Wastewater Utility activities. Council Member Chandler pointed out that the water, wastewater, and electric utility funds all have reserves well in excess of the targets and questioned what the plan is for those funds. Mr. Roberts explained that all of the reserve money is allocated for specific projects to maintain or repair the 80 -year-old wastewater system and will ultimately be spent down. Deputy City Manager Andrew Keys concurred, stating the amounts above the reserve targets are earmarked for future large-scale capital projects to maintain a healthy, yet aging, system or to address any unexpected issues with the system. Council Member Chandler stated he believes there should be a better reporting mechanism to adequately explain the reasoning behind the higher reserve amounts. Mr. Keys agreed, stating staff is in the process of preparing long-term Capital Improvement Program (CIP) projections that would show upcoming, planned projects. Council Member Mounce agreed with Council Member Chandler, stating that the public is already upset over rate increases and will likely not understand a high reserve level. Public Works Director Charlie Swimley further explained that two years ago staff planned for the construction of an electrical building facility, septic receiving facility, and coarse screening facility, budgeted at roughly $12 million, which was delayed in order to complete the preliminary design, the contract for which was approved two months ago. Those funds were captured in the account knowing they would be expended in the future. He stated the goal is to ensure funding is secured instead of financing the improvements. The wastewater fund balance is trending upward because of these pending projects, while the water fund balance is decreasing due to the water meter program. He stated that, while not perfectly planned, the increase in the wastewater reserve fund has been anticipated because of the needs at the White Slough Water Pollution Control Facility and that staff opted to slow down the pace of the projects until they were adequately studied. Mr. Swimley stated that, at this time, staff does not anticipate raising wastewater rates this July because of the fund balance. 1 In response to Council Member Johnson, Mr. Roberts explained there are many planned projects; however, for various reasons, they could not be completed and were, therefore, extended on the project timeline. Council Member Johnson agreed with earlier Council comments, stating that the report should also list the future, planned projects and rough cost estimates, as well as what projects, if any, have fallen off of the list. Mr. Schwabauer confirmed that the CIP will cover those details. Mr. Keys stated the CIP will be a City-wide, five-year projection that will be provided to Council annually in a robust, detailed report and also provided as part of the quarterly update. In response to Mayor Pro Tempore Nakanishi, Mr. Schwabauer stated the City had two levee failures: one at the White Slough plant, which is being repaired by the Federal government; and the other at the Lodi Lake Nature Area, for which the City is applying for reimbursement. Mr. Roberts stated that staff will meet with Federal Emergency Management Agency staff later in the day to discuss recovery costs. Mr. Schwabauer stated that the hole in Lodi Lake is 30 feet deep and staff anticipates repairs will cost $130,000. Electric Utility Rates & Resources Manager Melissa Price provided a PowerPoint presentation regarding Fiscal Year 2016/17 Electric Utility (EU) Department quarterly update. Specific topics of discussion included EU Fund cash flow summary, Reserve Policy, cash balances, power sales, Energy Cost Adjustment revenue, operating results, power supply costs, and load coverage. Council Member Mounce questioned why the City holds more funds with the Northern California Power Agency (NCPA) than is required. Ms. Price stated the reserves at NCPA earn greater interest than if they were held by the City because NCPA has greater flexibility in investment earnings. The funds count toward the City's fund balance reserve regardless of where it is held. Mr. Keys further explained the reserves belong to the City, but NCPA has a better performance record. Staff is looking into whether or not the City can increase its earnings without negatively exposing itself, but until then he recommended the funds remain with NCPA from a yield and diversification standpoint. Mr. Keys added that NCPA's earnings are substantially greater than what the City can earn and he believes it is best to leave the funds until staff completes its review. Council Member Mounce stated she does not trust NCPA and would prefer the City handle its own investments. Electric Utility Director Elizabeth Kirkley provided information regarding EU activities. In response to Mayor Pro Tempore Nakanishi, Ms. Kirkley stated the loss of General Mills resulted in a deficit of kilowatt sales and revenue, but new development is making up the difference. Ms. Price added that General Mills' closure happened at the same time new development came on line, which mitigated roughly 60 percent of the load lost from General Mills. She predicted the remaining lost load and revenue will be captured with the new developments about to come on line. In response to Mayor Kuehne, Ms. Kirkley stated that, with regard to AB 100 that increases the renewable energy requirement to 100 percent by 2045, the hope is that legislators will allow non - greenhouse -gas emitting generation. She stated she believes it will be allowed; however, the Bill is still being debated. B-1 Receive Presentation Regarding Fiscal Year 2017/18 Budget (CM) Deputy City Manager Andrew Keys provided a PowerPoint presentation regarding the Fiscal Year 2017/18 budget. Specific topics of discussion included overview of utility funds Electric Utility overview, revenue, expenses, capital projects, and reserves; Water Utility overview, revenues, expenses, capital projects, and reserves; and Wastewater Utility overview, revenues, expenses, capital projects, and reserves. In response to Council Member Mounce, Mr. Keys stated that the category "Work for Others" includes work that Electric Utility Department performs for internal departments. Council Member Mounce stated that the Northern California Power Agency (NCPA) general operating reserve (GOR) is twice as high as it needs to be and questioned why the larger amount 2 is not included in the budget for Electric Utility reserves. Rates & Resources Manager Melissa Price stated that the $11 million GOR is included in the estimated Fiscal Year 2017/18 reserve amount of $21 million. She further explained that the amounts in the "Target" column in the PowerPoint reflect actual targets of what NCPA expects, while the "Estimated" row is what staff anticipates having in reserve, which includes the full GOR amount. Mr. Schwabauer added that the table lays out the target and explained that not all of the funds are held locally. Council Member Mounce stressed her preference to return the money held in the NCPA GOR back to the City's accounts because she is uncomfortable with NCPA handling it. Mr. Keys reiterated that the City's best interest at this time is to keep the GOR at the current level because NCPA earns additional money with no risk to the City. Council Member Johnson questioned how the delay of the 230 kV interconnection project will be handled and how much money will be set aside for it. Electric Utility Director Elizabeth Kirkley stated this is a pay-as-you-go project and, to date, funds have been spent on consultants to work with the California Independent System Operator, PG&E, and interested parties and that the cost to build the project and expand the intertie will most likely be bond financed. Council Member Johnson expressed concern about the interested parties who are worried about this project because he does not want those select few to hinder a project that will benefit the entire community. Ms. Kirkley stated she believes the aesthetics of the project will not be as bad as they anticipate and that staff and consultants are working with them to help them better understand the project as a whole. In response to Mayor Pro Tempore Nakanishi, Public Works Director Charlie Swimley stated that revenues and service charges have decreased in the water fund due to citizens' conservation efforts, which was one of the arguments for requesting the latest water rate increase. He stated that citizens continue to conserve water and that staff has reflected that practice in the budget because it will continue to have an impact. In response to Mayor Kuehne, Mr. Schwabauer stated that septic disposal charges are paid by those who bring septic tanks into the City, which is decreasing because fewer people are doing so. Management Analyst Rebecca Areida-Yadav stated the septic disposal charge estimate is based on last year's actual revenue. Council Member Mounce stated it is difficult to understand septic tank revenue trends without a multiple -year comparison and asked staff to e-mail Council a 10 -year chart of septic revenue. In response to Mayor Pro Tempore Nakanishi regarding water and wastewater trends, Mr. Swimley stated that wastewater revenue has been trending downward as a result of the recession and that not all of the revenue is directly related to water usage because some customer wastewater charges are still based on sewage service units and not meters. Council Member Mounce stated she believes it is more accurate to have a line item in the budget for identified future projects, rather than including the amount in the reserve fund. Mr. Keys stated he agrees with the concept, but pointed out it is difficult at the staff level to present the information in that manner because ultimately it is a Council designation; however, the CIP can identify the capital needs and present a bigger picture with a separate list of projects. In response to Council Member Johnson, Mr. Swimley stated the lagoon cleaning project is at White Slough and involves a process to separate solids from liquids with specialized equipment to dewater the less -concentrated sludge. The Ham Lane and Century Boulevard rehabilitation project is to repair a large pipeline domestic trunk outfall that will connect to new development west of Lower Sacramento Road. C. Comments by Public on Non -Agenda Items None. D. Adjournment 3 No action was taken by the City Council. The meeting was adjourned at 8:10 a.m. ATTEST: Jennifer M. Ferraiolo City Clerk TM CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM AGENDA TITLE: Receive Presentation Regarding Fiscal Year 2017/18 Budget MEETING DATE: May 23, 2017 PREPARED BY: Deputy City Manager RECOMMENDED ACTION: Receive presentation regarding Fiscal Year 2016/17 budget. BACKGROUND INFORMATION: The Fiscal Year (FY) 2017/18 budget is built on a number of basic economic assumptions. The budget was released for public review last week. Council will be presented with an opportunity to adopt the budget at the June 7, 2017, regular meeting. This is the third presentation to Council and the public on the basic foundation of the budget. Previous Shirtsleeve sessions focused on the General Fund for FY 2017/18, the subsequent five-year General Fund financial forecast, and on special revenue funds. Today's discussion will focus on the City's three utility funds for electricity, water and wastewater. FISCAL IMPACT: Revenues, expenses and increases/decreases to reserves are as noted below: Fund Revenues Expenses Increase/(Decrease) FY 16/17 FY 16/17 to Reserves Electric 79,996,630 74,874,690 (788,060) Water 14,722,520 11,629,010 3,093,510 Wastewater 18,950,180 17,294,260 1,655,920 Andrew Keys Deputy City Manager lty-Manager Fiscal Year 2017/18 Budget Presentation Presented by: Andrew Keys, Deputy City Manager Overview • Utility Funds — Electric — Water — Wastewater Electric Utility Overview Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2018 With Audited Actuals for FY 2014-15 and FY 2015-16 and Comparative Budget FY 2016-17 Electric Utility Enterprise Fund Cash Balance Beginning Cash Balance 15,384,014 16,582,191 14,929,950 23,068,203 22,327,219 Audited Audited 2014-15 2015-16 Actuals Actuals 2016-17 Budget Estimated 2016-17 Actuals 2017-18 Budget Revenues 70,972,285 73,732,212 80,766,347 82,893,660 73,996,630 Expenditures 70,518,796 67,246,200 84,366,744 83,634,644 74,784,690 Net Difference (Revenues Less Expenditures) 453,489 6,486,012 (3,600,397) (740,984) (788,060) Cash Balance Ending Cash Balance 16,582,191 23,068,203 11,329,553 22,327,219 21,539,159 Fund Balance as a percentage of expenses: 24% 34% 13% 27% 29% Electric Utility • Revenues $1,715,390 higher than FY 2016/17 budget* — Customer charges - $1.35m higher — Work for Others - $224k higher — Greenhouse gas - $96k higher *when internal capital transfer is removed Electric Utility • Expenses are $1.1m lower than FY 2016/17* — Salary & benefits - $332k higher — Service/Materials/Supplies - $1.3m higher — Capital projects and equipment — $2.7m lower *when internal capital transfer is removed Electric Utility Capital Projects • Vehicles - $191,000 • Underground System Improvements - $1,100,000 • Distribution Capacity Program - $700,000 • Smart Meter Pilot/MDSD - $300,000 • Overhead System Improvements - $300,000 • Killelea Bank 1 Replacement - $200,000 • MSC Security Improvements - $200,000 • Streetlight Repairs/Maintenance - $180,000 • LED Streetlight Retrofit - $90,000 • 230 kV Interconnection Project - $60,000 Electric Utility Reserves Purpose Basis 2017/18 Target Operating Reserve 90 days cash $17,866,000 Capital Reserve Largest distribution system contingency $1,000,000 NCPA General Operating Reserve NCPA identified Items $4,435,000 Total Target $23,301,000 Estimated FY 2017/18 Reserve $21,539,000 Water Utility Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2018 With Audited Actuals for FY 2014-15 and FY 2015-16 and Comparative Budget FY 2016-17 Water Utility Enterprise Fund Cash Balance Beginning Cash Balance 7,027,567 6,755,522 6,755,522 6,270,786 3,732,376 Audited Audited 2014-15 2015-16 Actuals Actuals 2016-17 Budget Estimated 2016-17 Actuals 2017-18 Budget Revenues 15,464,665 14,149,204 19,690,210 19,477,800 14,722,520 Expenditures 15,736,710 14,633,940 22,174,866 22,016,210 16,612,210 Net Difference (Revenues Less Expenditures) (272,045) (484,736) (2,484,656) (2,538,410) (1,889,690) Cash Balance Ending Cash Balance 6,755,522 6,270,786 4,270,866 3,732,376 1,842,686 Fund Balance as a percentage of expenses: 43% 43% 19% 17% 11% Water Utility • Revenues $218k higher than FY 2016/17 budget* — Service Charges - $72k lower — Development Fees - $217k higher — BABS Subsidy - $45k higher *when internal capital transfer is removed Water Utility • Expenses are $376k lower than FY 2016/17* — Salary and benefits - $6k lower — Service/Materials/Supplies - $78k lower — Capital projects - $300k lower *when internal capital transfer is removed Water Utility Capital Projects • Water Meter Phase 7 - $5m • Granulated Activated Carbon - $300,000 • Water Meter Shop - $250,000 • Phase 7 Water Mater Program - $200,000 • Water Taps/Misc Water Mains - $125,000 • MSC Security Improvements - $25,000 • PCE/TCE Oversight - $125,000 Water Utility Reserves • Target is 25% of operating expenses • Target for FY 2017/18 equals $2,907,000 • FY 2017/18 Estimated Reserve is $1,843,000 Wastewater Utility Estimated Changes in Fund Balance For the Fiscal Year Ended June 30, 2018 With Audited Actuals for FY 2014-15 and FY 2015-16 and Comparative Budget FY 2016-17 Wastewater Utility Enterprise Fund Cash Balance Beginning Cash Balance 14,249,392 13,853,935 13,853,935 10,675,185 8,577,775 Audited Audited 2014-15 2015-16 Actuals Actuals 2016-17 Budget Estimated 2016-17 Actuals 2017-18 Budget Revenues 15,796,825 16,426,930 19,016,955 18,867,980 18,950,180 Expenditures 16,192,282 19,605,680 22,263,515 20,965,390 17,294,260 Net Difference (Revenues Less Expenditures) (395,457) (3,178,750) (3,246,560) (2,097,410) 1,655,920 Cash Balance Ending Cash Balance 13,853,935 10,675,185 10,607,375 8,577,775 10,233,695 Fund Balance as a percentage of expenses: 86% 54% 48% 41% 59% Wastewater Utility • Revenues $66,775 lower than FY 2016/17 — Service Charges - $109k higher — Miscellaneous Revenue - $105k lower — Septic Disposal Charge - $70k lower Wastewater Utility • Expenses $5m lower than FY 2016/17 — Salaries & benefits — $404k higher — Service/Materials/Supplies — $440k lower — Debt Service — $342k higher — Capital projects/equipment — $5.3m lower Wastewater Capital Projects • Pond improvements - $1.5m • Irrigation improvements - $600k • Lagoon Cleaning - $150k • Field #5 Catwalk Repair - $120k • Ham/Century Rehabilitation - $2m • Vinewood Storm Pumps - $200k • Wastewater Taps/Relocations - $75k • Equipment/vehicle replacement - $805k Wastewater Utility Reserves • Target is 25% of operating expenses • Target for FY 2017/18 equals $4,324,000 • FY 2017/18 Estimated Reserve is $10,234,000 Questions? TM CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM B-2 AGENDA TITLE: Third Quarter Fiscal Year 2016/17 Water, Wastewater and Electric Utility Department Financial Reports MEETING DATE: May 23, 2017 PREPARED BY: Deputy City Manager RECOMMENDED ACTION: Receive utility financial reports for the third quarter of Fiscal Year 2016/17. BACKGROUND INFORMATION: In accordance with the Lodi Municipal Code, quarterly financial reports are to be prepared for the Water, Wastewater, and Electric Utilities. Highlights of the operations and financial performance of each utility will be presented at the meeting of May 23, 2017. FISCAL IMPACT: None directly related to the preparation of the report. However, the presentation is intended to keep the Council apprised of the financial conditions of the major municipal utilities. FUNDING AVAILABLE: Not applicable. Andrew Keys Deputy City Manager APPROVED: ephen Sc auer, City Manager Public Works Department Water/Wastewater FY 17 Quarterly Update (Ending March 31, 2017) City Council Shirtsleeve Session May 23, 2017 1 Wastewater Fund Cash Flow Summary (Ending March 31, 2017) 2 Budget Actuals % of Budget Revenue Sales 15,428,650 11,203,523 73% Development Impact Mitigation Fees (wastewater & storm) 827,570 459,593 56% Other (interest, septic, misc.) 2,760,735 846,069 31 Total Revenues 19,016,955 12,509,185 66% Expenses Operating 7,574,616 5,686,217 75% Capital 10,464,469 2,899,090 28% Debt Service 3,122,930 2,681,028 86% Cost of Services Payment To General Fund 1,068,000 801,000 75% Total Expenses 22,230,015 12,067,335 54% Beginning Cash (Operations Only) 11,726,026 Ending Cash (Operations Only) 12,598,683 Days Cash (Excluding Capital) 371 % of Target 412% 2 Wastewater Operating Results (Ending March 31, 2017) 3 Budget Actuals % of Budget Personnel $ 3,173,900 $ 2,884,596 91% Supplies, Materials, Services $ 2,634,150 $ 1,612,595 61% Equipment, Land, Structures $ 525,000 $ 122,945 23% Other Payments $ 512,856 $ 429,271 84% Utilities $ 700,400 $ 616,809 88% Work for Others $ 28,310 $ 20,000 71% Total Operating Expenses $ 7,574,616 $ 5,686,217 75% 3 Wastewater Funds Cash Balances (Ending March 31, 2017) 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Actual Reserves vs. Target 326% 206% 122% 412 lU1 13/14 14/15 15/16 16/17 Target Actual Amounts above reserve target are held for scheduled capital maintenance 4 Operating (530) 12,598,683 Utility Capital / Infrastructure Replacement (531) 1,693,775 Capital Reserve (532) (Fund used to pay White Slough COP Debt Service) (1,525,798) Wastewater IMF (533) 613,759 Rate Stabilization Reserve (534) 500,000 Storm Drain IMF (535) 925,215 Total 14,805,634 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000 0 Actual Reserves vs. Target 326% 206% 122% 412 lU1 13/14 14/15 15/16 16/17 Target Actual Amounts above reserve target are held for scheduled capital maintenance 4 Water Fund Cash Flow Summary (Ending March 31, 2017) 5 Budget Actuals % of Budget Revenue Sales 13,236,620 9,300,111 70% Development Impact Mitigation Fees 303,940 148,749 49% Other (interest, tap fees, water meters, misc.) 963,550 724,328 75% Total Revenues 14,504,110 10,173,188 70% Expenses Operating 6,892,636 5,009,689 73% Capital 6,312,530 4,279,473 68% Debt Service 2,970,100 859,547 29% Cost of Services Payment To General Fund 780,000 585,000 75% Total Expenses 16,955,266 10,733,709 63% Beginning Cash (Operations Only) 3,012,868 Ending Cash (Operations Only) 3,864,861 Days Cash (Excluding Capital) 162 of Target 180% 5 Water Operating Results (Ending March 31, 2017) 6 Budget Actuals % of Budget Personnel $ 2,859,290 $ 2,075,827 73% Supplies, Materials, Services $ 1,557,480 $ 940,231 60% Equipment, Land, Structures $ 110,000 $ 58,596 53% Other Payments $ 1,676,916 $ 1,573,828 94% Utilities $ 588,950 $ 361,207 61% Work for Others $ 100,000 $ - 0% Total Operating Expenses $ 6,892,636 $ 5,009,689 73% 6 Water Funds Cash Balances (Ending March 31, 2017) 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Actual Reserves vs. Target 277% 264% 238% 180% AA 13/14 14/15 15/16 16117 Target Actual Amounts above reserve target are held for scheduled capital maintenance 7 Operating (560) 3,864,861 Utility Capital / Infrastructure Replacement (561) 654,232 IMF (562) 589,563 PCE/TCE Settlements 9,824,862 PCE/TCE Rates (565) 4,092,264 Total 19, 025, 782 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Actual Reserves vs. Target 277% 264% 238% 180% AA 13/14 14/15 15/16 16117 Target Actual Amounts above reserve target are held for scheduled capital maintenance 7 Water / Wastewater Utility Activities Operational • Water Distribution • Water Production • Collection System • Wastewater Treatment Regulatory • SSO's • Discharge Violations • Monitoring and Reporting 8 Electric Utility Department FY 17 Quarterly Update (Ending March 31, 2017) City Council Shirtsleeve Session May 23, 2017 1 Electric Utility Fund Cash Flow Summary (Ending March 31, 2017) Net Increase (Decrease) Beginning Local Cash Balance Budget Actuals % of Budget Revenue 17,471,649 GOR Balance Sales Revenues 68,526,450 52,391,691 76% Development Impact Fees 111,980 50,507 45% Other Revenues (interest, misc) 3,642,810 2,629,848 72% Total Revenues 72,281,240 55,072,046 76% Expenses Purchase Power 40,434,980 29,688,059 73% Non Power 14,316,044 8,724,422 61% Capital Projects 6,116,763 2,307,749 38% Debt Service 5,528,520 5,526,791 100% Cost of Service/Capital Xfer 2,354,000 1,765,500 75% In -lieu Transfer to General Fund 7,131,330 5,348,497 75% Total Expenses 75,881,637 53,361,018 70% Net Chg in Bal Sheet Accts (378,774) Net Increase (Decrease) Beginning Local Cash Balance (3,600,397) 16,139,395 1,711,028 16,139,395 Ending Local Cash Balance 12,538,998 17,471,649 GOR Balance 11,662,473 Total Reserve Balance 29,134,122 Reserve Policy Target 22,776,000 % of Target 128% 2 Electric Utility Reserve Policy (Ending March 31, 2017) Purpose Basis Target Actual Operating Reserve 90 Days Cash $ 17,350,000 $ 17,034,149 Capital Reserve Largest Distribution System Contingency $ 1,000,000 $ 437,500 NCPA General Operating Reserve NCPA Identified Items $ 4,426,000 $ 8,695,137 NCPA MPP/GPP Balance MPP/GPP Security Commitments $ 2,967,336 Total Target $ 22,776,000 $ 29,134,122 $35,000 $30,000 $25,000 - $20,000 2 $15,000 to $10,000 $5,000 $- Actual Reserves vs. Target 1 16% 128% FY 12/13 FY 13/14 FY 14/15 FY 15/16 FY 16/17 ❑ Actual ❑ Target Cash balances support Council approved reserve requirements and provide funds for pay as you go capital improvement projects 3 Electric Utility Funds Cash Balances (Ending March 31, 2017) 4 Operating (500) $ 6,887,618 Utility Outlay Reserve Fund (501) $ 437,500 Public Benefits Fund (504) $ 1,676,948 IMF EU Substation and Transmission (505) $ 963,667 Solar Surcharge Fund (506) $ 370,490 Environmental Compliance (508) $ 7,135,426 NCPA— General Operating Reserve (GOR) $ 11,662,473 Total $ 29,134,122 4 Power Sales (Ending March 31, 2017) Power Sales (kWh) Customer Class Budget Actual Residential 151,108,765 116,240,886 Small Commercial 165,114,668 120,354,094 Large Commercial/Small Industrial 48,152,911 33,338,881 Industrial 64,722,006 56,821,399 TOTAL 429,098,350 326,755,260 Revenue ($) Customer Class Budget Actual Average Rate Residential $ 27,621,347 $ 20,955,418 $ 0.1803 Small Commercial $ 27,986,175 $ 20,378,898 $ 0.1693 Large Commercial/Small Industrial $ 6,674,998 $ 5,023,936 $ 0.1507 Industrial $ 6,243,930 $ 6,033,439 $ 0.1062 TOTAL $ 68,526,450 $ 52,391,691 $0.1603 5 ECA Revenue (Ending March 31, 2017) Customer Class Q1 Q2 Q3 Total Residential $ (402,398) $ 667,741 $ (135,785) $ 129,558 Small Commercial $ (390,564) $ 726,745 $ 757,034 $ 1,093,215 Large Commercial / Small Industrial $ (115,376) $ 243,816 $ 180,647 $ 309,087 Industrial $ ( 68,739) $ 267,865 $ 254,998 $ 454,124 Total ECA Revenue $ (977,077) $ 1,906,167 $ 1,056,894 $ 1,985,984 6 Electric Utility Fund Operating Results (Ending March 31, 2017) *Includes LEU contribution to PERS Stabilization Fund 7 FY17 Budget FY17 Actual % of Budget Personnel $ 8,576,220 $ 5,691,103 66% Supplies, Materials, Services $ 3,423,710 $ 1,536,696 45% Equipment, Land, Structures $ 5,000 $ 837 17% Other Payments* $ 2,234,814 $ 1,450,181 65% Utilities $ 76,300 $ 45,605 60% Total Operating Expenses $ 14,316,044 $ 8,724,422 61% *Includes LEU contribution to PERS Stabilization Fund 7 Power Supply Costs (Ending March 31, 2017) 8 Budgeted Year to Date % of Budget Generation $ 29,873,610 $ 22,494,218 75% Transmission $ 9,125,930 $ 6,086,251 67% Management Services $ 1,435,440 $ 1,107,590 77% Total Power Supply Costs $ 40,434,980 $ 29,688,059 73% 8 Load Coverage 140,000 120,000 100,000 -c 80,000 2 60,000 40,000 20,000 o r IN - Q3 -2017 Q4-2017 Q1-2018 Q2-2018 Coverage Target Load 9 MWh Load ROC Matrix Target Load Coverage (Including Purchases) Q3 — 2017 132,804 85% 85% Q4 — 2017 103,739 73% 76% Q1 — 2018 100,235 63% 62% Q2 — 2018 109,621 70% 70% 140,000 120,000 100,000 -c 80,000 2 60,000 40,000 20,000 o r IN - Q3 -2017 Q4-2017 Q1-2018 Q2-2018 Coverage Target Load 9 Electric Utility Activities • Safety • Staffing • Reliability • Capital Improvement Program • New Development • Legislative & Regulatory • Fiscal Health • Customer Programs