November 2020 1st Budget Committee Meeting

Date

Time

Minutes

1st Budget Committee Meeting 2021 Proposed Budget – November 9, 2020

Minutes

Board approved at its February 10, 2021, Regular Board Meeting.

Attendance

Budget Committee:

Board Members: John DeWenter, Chair; Mike Eyster, Vice-Chair; Pat Riggs-Henson; David Willis; Robert Scherer.

Lay Members: Kris McAlister, Budget Committee Chair; Neal Forrester; Terri Dillon; Michael Guidero; Kori Rodley; Steve Moe – excused absence; Bobbie Adams – excused absence.

Staff: Jeff Nelson; Bob Fondren; Sanjeev King; Greg Miller; Janis Brew; Cindy Flaherty.

Others: None.

Call to Order

Budget Committee Chair Kris McAlister called the meeting to order at 5:02 p.m. and welcomed everyone. He then led everyone in the Pledge of Allegiance.

Election of Chair for 2021 Budget Committee

Kris McAlister, the 2020 Budget Committee Chair, called for nominations for a 2021 Budget Committee Chair.

* Pat Riggs-Henson motioned, and John DeWenter seconded, to reappoint Kris McAlister to serve as Chair of the 2021 Budget Committee. This motion carried unanimously with a Board vote of 5-0.

Update on Reappointment of Budget Committee Members

Jeff Nelson noted that the reappointment of the Budget Committee members whom are not Board members is a function of the Board. The Board may consider a motion with a Board vote at this time.

Board Chair DeWenter noted that three members of the Budget Committee have terms that will be expiring at the end of 2020. The following members were contacted: Kris McAlister, Kori Rodley, and Michael Guidero. All expressed an interest to be reappointed.

* Chair DeWenter motioned, and Pat Riggs-Henson seconded, to reappoint Kris McAlister, Kori Rodley, and Michael Guidero to a 3-year term that will expire on December 31, 2023. This motion carried unanimously with a Board vote of 5-0.

Chair McAlister asked Jeff Nelson to begin his review of the proposed utility operating budget for 2021.

Review of Proposed 2021 Utility Budget 

Jeff Nelson noted two memos were distributed for the Committee’s review prior to tonight’s meeting: Brenda Slaughter’s memo on Evictions, Squatters or Unauthorized Occupant Situation (Exhibit A) and Sanjeev King’s memo on Substation Battery Banks (Exhibit B). These memos were provided as follow-up on questions that arose from the August 12, 2020 Midyear Budget Committee meeting. There will be time to explore any further questions the Committee may have following his presentation on the proposed 2021 utility operating budget.

The impact of the response to the pandemic made forecasting more of a challenge this year, compared to prior years due to the recovery of usage still being an unknown. The utility typically sees a rise of water usage for public irrigation during the early summer months, however, this year because a number of facilities being closed, public irrigation demand for water usage was exceptionally low. This, combined with some modifications that were seen with some of the commercial and industrial customer usage, water consumption and usage was down, even though we saw a recovery in the later summer months. The utility is assuming that in 2021, the usage profile for water will return to normal.

Similarly, on the electric side, there was a significant drop in electric consumption relative to forecast starting in April and appeared to be returning to levels closer to forecast.

The more recent year-to-year numbers may result in a modification to year-end numbers, depending on what is seen in the next few weeks. He also noted that there is some uncertainty with usage patterns, going forward.

Mr. Nelson shared a PowerPoint presentation with the Committee on the 2021 Proposed Budget (Exhibit C) that included an overview of SUB’s process planned for the budget and rates for 2021, highlights of Springfield Utility Board (SUB)’s 10-Year Plan, discussed reserve levels and debt schedule, and shared details on assumed rate increases for electric, water, and dark fiber. The Budget Committee has also reviewed the budget materials for tonight’s 2021 Proposed Budget via binders distributed prior to tonight’s meeting. A complete set of these materials are available on SUB’s website.

Mr. Nelson offered a detailed review of the proposed budget, including his Budget Message; budget comparative summaries for the Electric Utility, Water Utility, and Telecom Utility; budget details by division and department, with management staff noting any significant changes; supplementary data; and the 2021 Budget Detail Report.

SUB has a contract with Bonneville that goes through 2027, noted Mr. Nelson, and SUB is currently under contract to purchase power from them. Bonneville does rate adjustments every two years and includes a reserve recovery component that included a modest surcharge that is applied to all of Bonneville’s preference customers. Bonneville eliminated that surcharge in response during the pandemic.

Chair McAlister thanked everyone for engaging in a robust discussion on the proposed budget, reserves, and Project Share funding. The Budget Committee consensus was to cancel its November 16 meeting that was scheduled for a second meeting, but to meet again on December 1 to complete its deliberations and to make a final recommendation to the Board on the proposed 2021 Budget.

The Committee then made the following motion:

* Michael Guidero motioned, and Neal Forrester seconded, to approve delay of a recommendation on the 2021 budget until after the November 18 public hearing, and to meet again on December 1, at 5:00 p.m. for further deliberations, discuss rates, and to make a final recommendation on the 2021 budget. This motion carried unanimously.

Adjournment

Being no other business the meeting was adjourned by consensus at 7:57 p.m.

Mike Eyster, Board Chair

Jeff Nelson, Board Secretary