August 2021 Midyear Budget Committee Meeting




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“The Mission of the Springfield Utility Board is to provide safe, reliable, cost-effective utility-related services to the citizens and businesses of the Springfield community.”

To ensure safe public meetings, we continue to follow current and up-to-date COVID precautions.

August 11, 2021

Special Meeting With Springfield Utility Board Budget Committee – 5:00 PM

The purpose of this meeting is to give the Budget Committee a mid-year review of the budget and a prognosis of the 2022 budget year. The public is invited to attend this meeting.

Regular Board Meeting – 6:00 PM

The public is invited to attend this meeting and will commence at approximately 6:00 p.m., after the conclusion of the 5:00 p.m. Budget Committee meeting. The public also has the opportunity to submit public comment in advance, to be entered into the record, via our Contact Us form by Noon, August 11.

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Executive Session – approximately 7:30 p.m.

Pursuant to ORS 40.225 and ORS 192.660(2)(h); attorney-client privilege and to consult with counsel concerning legal rights and duties with regard to pending or potential litigation. The nonpublic executive session will commence following the conclusion of the Regular Board Meeting.

Special Meeting of SUB Board Mid-Year Budget Committee Update – 5:00 p.m.


I. Call to Order

  • A. Pledge of Allegiance

II. Comments from the Audience

III. Budget Committee Mid-Year Update – 45 min

  • A. Presentation on Reserve Methodology
  • B. Mid-year Financials for Water and Electric
  • C. Update on Water and Electric Capital Projects
  • D. Rate Increase Projections for 2022 through 2031
  • E. Review Projected Working Capital Reserves

Regular Board Meeting – 6:00 p.m.


I. Call to Order

  • A. Pledge of Allegiance

II. Business from the Audience

III. Business from the Board

  • A. Consent Agenda - Action – 10 min
    • 1. Approval of Minutes
    • 2. Award/Approve Bids/Proposals
      • a. BID 2021-27, Ductile Iron Pipe and Materials for Stock
      • b. SOQ 2021-28, Land Use Planning & Landscape Architecture - S. Hills 3rd Level Water Tanks c. SOQ 2021-29, Structural Engineering Services - S. Hills 3rd Level Water Tanks d. SOQ 2021-30, Civil Engineering Services - S. Hills 3rd Level Water Tanks
    • 3. Approval of Accounts Paid Listing
  • B. Recognition of the Retirement and Many Years of Public Service and Contributions of Past Board Member Pat Riggs-Henson – 15 min
  • C. Review of Process for Board Priority/Goal Setting – 10 min
  • D. Update on Rocks/Trucks for the Water Division – 10 min

IV. Business from the General Manager

  • A. Power Supply Update – 10 min
  • B. Cybersecurity Overview – 10 min
  • C. Cybersecurity Policy - Action – 10 min
  • D. Telecommunications Update 5 min E. Team Springfield Update – 5 min

V. Other Business from the Board

  • A. Board Member Updates – 10 min
  • B. Future Board Agenda Items – 5 min
  • C. Appointment to SUB Budget Committee - Action – 5 min
  • D. Administrative Appointments to SUB Retirement Advisory Committee - Action – 5 min

VI. Adjournment

Total Time: 110 min


Midyear Budget Committee Meeting – August 11, 2021


Board approved at September 8, 2021 Regular Board Meeting


Budget Committee

Board: Mike Eyster, Chair; Robert Scherer, ViceChair; David Willis; John DeWenter; Mark Molina.

Lay Members: Kris McAlister, Budget Committee Chair; Neal Forrester; Steve Moe; Terri Dillon; Kori Rodley.

Staff: Jeff Nelson; Cynthia Scoble; Sanjeev King; Greg Miller; Cindy Flaherty.

Others: Pat Riggs-Henson.

Call to Order

Budget Committee Chair McAlister called the Midyear Budget Committee Meeting to order at 5:02 p.m. and welcomed everyone to tonight’s meeting. Following the Pledge of Allegiance McAlister introduced General Manager Jeff Nelson to begin the midyear budget presentation.

Review of Budget

Jeff Nelson shared that the purpose of this presentation is to review the Budget process for SUB’s calendar year budget, provide a larger overview of the utility, and where SUB is at financially, and to allow the committee to give feedback on the 10-Year Plan.

Referring everyone to their mid-year budget binders containing the following materials for the meeting tonight: General Manager Nelson’s August 5, 2021 memo to the Budget Committee (Exhibit A), Mr. Nelson’s presentation Electric and Water Utility Major Capital Improvements and Ten Year Cash Flow 2021 Update (Exhibit B), SUB’s 20 Year Strategic Vision (Exhibit C), and SUB’s 2019 Utility Affordability Analysis Update (Exhibit D). Mr. Nelson then began his presentation and reviewed methodology SUB uses to establish working capital reserves as this provides an opportunity for the Budget Committee to potentially, modify the methodology. He also highlighted midyear financials for the Water and Electric Divisions, categories of capital projects, rate increase projections for 2022 through 2031, and projected working capital reserves. He shared that opportunities are provided for the Committee to review and update the cash flow models twice every year.

Springfield Utility Board (SUB)’s Water Utility had a budgeted operating loss of $728,151. This midyear update now projects an operating loss of $2,771,883 ($834,000 of this difference is not pandemic related; $1,209,732 is lost revenue due to projected suppressed sales). This midyear update assumes a 5.0% water rate increase on bills rendered on or after February 1, 2022.

The Electric Utility had a budgeted operating loss of $1,821,500. This midyear update now projects an operating loss of $1,351,631 (pandemic impact is blunted by anticipated proceeds from the sale of property). For 2021, it is projected to have lower sales than prior forecasts, resulting in a loss of $400,000 compared to prior forecasts. This midyear update assumes a 2.0% electric rate increase on bills rendered on or after May 1, 2022. He shared a brief update on the Telecommunication Utility, and noted that this midyear update assumes a 2.5% dark fiber rate increase on all bills rendered on or after May 1, 2022.

Notable midyear items in SUB’s 10 Year Plan include the Board’s approval to invest up to $1,900,000 in additional SUB owned telecommunication infrastructure; property purchases; property sale; water asset purchase; and In Lieu of Tax (ILOT) payments to the City are under discussion and the 10 Year Plan includes a modification to ILOT payments.

SUB’s 20 Year Strategic Vision was reviewed by the Board at its August 2, 2019 Retreat Work Session, and plans to do another strategic scan sometime in early 2022.

Sanjeev King provided an update on major capital projects for the Electric Utility. He shared that supply chain issues they are experiencing are price pressure and lead times on transformers as well as on vehicles. Prices and lead times have increased and in the 10 Year Plan, cost for materials have escalated 15% for 2022, and 10% for 2023.

Greg Miller for the Water Utility and offered further details on the Budget Committee’s questions. Mr. Miller also shared the Water Utility experienced some current situations with supply chain issues. One was with the chlorine supply-chain issue that SUB experienced, along with other utilities. Another issue is that it has become more difficult in finding contractors with availability for projects like street restoration. Inflation is also an issue - in some cases, they are seeing material costs with 30-40% increases.

The Budget Committee shared discussion on topics of capital reserves, longterm debt, additional borrowing scenarios, SUB Electric Vehicles (EV) and concerns related to protecting SUB’s EV charging grid, dark fiber rates, and City sewer/stormwater rates.

General Manager Nelson shared a brief review on the process for scheduling Budget Committee meetings for deliberations on SUB’s proposed 2022 operating budget.

Chair McAlister thanked everyone for participating in the meeting tonight.


The meeting was adjourned by consensus at 6:02 p.m.

Mike Eyster, Board Chair

Jeff Nelson, Board Secretary