1 2 3 4 5 6 7 8  JOINT MEETING OF THE BOUNTIFUL CITY POWER COMMISSION AND THE BOUNTIFUL CITY COUNCIL April 10, 2018-8 8:00 a.m. Those in Attendance  9 Power Commission I0 John Cushing, Chairman 11 Susan Becker 12 Dan Bell 13 David Irvine 15 Jed Pitcher 16 Paul Summers 17 18 City Officials 19 Richard Higginson, Councilman 20 Gary Hill, City Manager 21 Galen Rasmussen, Assistant City Manager  Power Department Allen Johnson, Director Jay Christensen Alan Farnes Dave Farnes Jess Pearce Luke Veigel  14 John Mark Knight, City Council Rep.  Recording Secretary Nancy Lawrence  22 23 Visitor 24 Ron Mortensen 25 26 Excused 27 Mayor Randy Lewis 28 29 WELCOME 30 32 34  Chairman Cushing called the meeting to order at 8:05 a.m. and welcomed those in  31 attendance. Commissioner Becker offered the invocation. 33 PROPOSED FISCAL YEAR 2018-2019 BUDGET REVIEW  Mr. Christensen presented the Proposed Fiscal Year 2018-2019 Budget (FY2019), noting  35 that the goals ofthe City and Department are: first, Safety, then highly reliable electrical service, 36 then being a low-cost provider and excellent customer service. The budget goals oft the Power 37 Department are to properly function as an enterprise fund with revenues covering all expenses;  38 and that those expenses be equitably distributed among customer classes.  39 40  Thej proposed budget for FY2019 has revenues and expenses balanced at $34,638,387, up  41 $138,181 from FY2018. Operating revenue is] proposed at $28,233,300, up by $716,346, which 42 includes Contribution in Aid to Construction at $518,500, up $306,000. No changes are 43 anticipated for Air Products Income and Electric Metered Sales. A new: revenue account is being  44 proposed, Street Light System Income, budgeted at $405,600.  45 46  Personnel Services are budgeted at $4,484,878, up $159,878. This includes: a 10%  47 increase in benefits (medical insurance), up $33,770; eleven employees will receive merit 48 increases; and all employees will receive a proposed 3.0% cost of living adjustment. Mr. Hill  Page 1 of4    (PC, minutes April 10, 2018)  noted that our budget for personnel is similar to other Davis County cities.  2 3  Budgeted Operating and Maintenance Expenses are proposed at $19,605,513, down  4 $443,225 from the current year. Plant Equipment and Generation is set at $559,990 (up 5 $378,090); Power Purchase UAMPS is proposed at $7,325,789, up $193,216 to cover a $198,826 6 decrease inj power purchased from San Juan. Transmission is budgeted at $100,000 down 7 $825,000 with postponed projects to replace transmission poles due to the 138 KV substation 8 upgrade, which is partially offset by pole testing and reinforcement of selected poles. 9 Distribution expenses are proposed at $1,287,620, up $212,454 with 15 projects to upgrade 10 primary wire and $160,000 for pole testing. Mr. Pearce led a discussion focused on the pole 11 testing program which will be contracted to Osmose. He showed slides ofweak and damaged 12 poles which need tol be replaced and explained how poles can be can be reinforced to extend the 13 life oft the pole beyond 10 years - and in some instances permanently. Mr. Pearce noted that 14 1,364 power poles have been replaced (out ofapproximately 4,000 poles) since 2000. He also 15 used slides to show the need for maintenance on underground systems and meter pedestals. 18 budget is Street Light System Income, which is proposed at $405,600. Street light costs have 19 previously been absorbed within the Power Department's operating expense budget, without a 20 revenue source, and this new account represents a 1.6% increase ini revenue to the Power 21 Department and is based on ai monthly charge of $2.00 per meter. Discussion focused on1 the 22 justification for this account and Mr. Christensen pointed out that street lighting is an on-going 23 service and, inasmuch as the Power Department is an enterprise fund (self-funding), this expense 24 (street lighting) should have ai revenue source. He further explained that one-time expenses, such 25 as the capital projects, can be funded from the fund balance. He cited concerns that the street 26 light system was originally installed cheaply and improperly and underground wires are failing.  16 17  Mr. Christensen explained that ai new account which will bei included in the FY2019  27 Commissioner Becker was excused at this time (9:40a.m.)  28 29  Street Light projects included in the FY 2019 budget were identified and it was noted that  30 each light that is replaced will cost approximately $10,000 (which includes asphalt, cutting 31 expenses, trenching, compaction or flowable. fill, wire, and the street light fixture). The new wire 32 will bei installed in conduit, which will lengthen the life oft the wire, as well as making 33 maintenance easier. Councilman Higginson suggested that the City should look at the feasibility 34 ofusing solar-powered street lights; however, it was noted that this would currently be cost-  35 prohibitive due to the high cost of battery storage.  36 37 39 40  Non-Operating Revenues and Expenses (bond payments) are at ai net expense of Capital Expenditures proposed for the FY2019 budget are at $6,640,500, up $398,500,  38 $662,851, down $114,622.  41 which includes: Buildings ($430,000); the distribution system ($200,000) which includes 42 beginning ai meter collection system pilot program; Distribution Street Lights at $602,000 (up 43 $500,000 for the Stoker Plaza lighting system, and $102,000 to replace 34 steel light poles along 44 400 North to Centerville. Echo upgrade is proposed at $500,000; vehicles at $240,000 to replace 45 five vehicles; the 138 KV transmission substation is budgeted at $3,000,000 to upgrade the 46 second halfo oft the substation. A PowerPoint presentation was used to show the work which has  Page 2 of4    (PC minutes. April 10, 2018)  been completed and will continue during the FY 2019 budget year.  2 3  Other Capital projects include the Distribution System Feeder #575 upgrade ($450,000);  4 installation oft the distribution system for the Keller Property ($170,000) to be funded by the 5 developer, ai new distribution system feeder ($250,000) to tie ai new city water system pump, and 6 well ($57,500) to the Northeast Substation; Hannah Holbrook Pump distribution system 7 ($61,000) and new: feeder from thel NE Substation ($60,000); and an inter-tie on the distribution  8 system between Feeders #673 and #271, $510,000.  9 10  Mr. Christensen reviewed Operating Transfers In (Out) and summarized the Cash Flow  11 position as of March 31, 2018. It was noted that the ten-year capital projects plan totals 12 $61,321,500, which can't be sustained at the current rate of operation. Key to cash flowi is the 13 necessity to maintain the minimum cash required for an AA-1 bond rating of $16,000,000.  14 15  Discussion focused onl how revenue can be increased to meet the demands of the 10-year  16 plan and how Bountiful's: rates compare tol Rocky Mountain. Mr. Johnson noted that the 10-year 17 plan supposes ai rate increase of2 percent per year. (This was not included in this year's budget 18 because last year the rates were increased 4%). It was also pointed out that the Power 19 Department makes a contribution to the City's general fund, thereby reducing the need to 20 increase property taxes the direct benefit ofa a municipal power system. Commissioner Pitcher 21 requested that the staff prepare a. 3to 5 year budget plan to be presented at the next Power  22 Commission meeting.  23 24  After continued discussion, Commissioner Irvine made ai motion to approve the $2/meter  '25 street light system fee, and the proposed FY 2019 budget, with the stipulation that a 3-5 year 26 budget plan be prepared for presentation at the next Power Commission meeting. Commissioner 27 Bell seconded the motion which carried unanimously. Commissioners Cushing, Bell, Irvine,  28 Pitcher, Summers, and Councilman Knight voted "aye".  29 30 33 34  Councilman Higginson motioned to approve the proposed FY 2019 Budget, as presented.  31 Councilman Knight seconded the motion. Voting was unanimous with Counci/persons  32 Higginson and Knight voting "aye".  Commissioner Cushing called for a vote on the minutes of the regular Power  35 Commission meeting held March 27, 2018. Commissioner Summers voted to approve the 36 minutes as written. Commissioner Irvine seconded the motion and voting was unanimous with 37 Commissioners Cushing, Bell, Irvine, Pitcher and Summers, and Councilman Knight voting  38 "aye". 39 40 42 43 44 45 46  The following Agenda items were included in the packet, but not discussed in the Budget Report for the Year-To-Date 9 Month Period Ended 31 March 2018.  41 meeting (other than was included with the budget presentation):  138 Substation Project Update CFPP Update  Page 3 of4    (PC minutes. April 10, 2018)  1 2 3 4 5  The meeting officially adjourned at 10:42 a.m.  plm John Cushing, CHAIRMAN  lush  Page 4 of4