Title
Approval of the DPU FY2026 Budget
Recommended Action
I move that the Board of Public Utilities approve the Fiscal Year 2026 budget as presented and forward to Council for adoption. I further move that the Board of Public Utilities approve the FY2026 budget option as presented and forward to Council for approval.
Utility Manager's Recommendation
The Utility Manager recommends that the Board approve the budget and budget option as presented.
Body
Attached is the proposed budget for FY2026 in the amount of $107,289,835 for total Joint Utilities Fund expenditures. Changes from the preliminary presentation in February are summarized on the table "Changes to Budget since February BPU Meeting" as Attachment A. The budget option is in the amount of $1,450,000 for the Trinity Drive Gas Line and Water Line replacement projects in conjunction with Public Works road project.
Rate Changes
The revenues proposed for FY2026 include assumptions of rate increases which have either previously been adopted by BPU and County Council or have ordinances being introduced tonight.
Electric Distribution 9.0% (ordinance introduced 3/19/25, effective 7/1/25)
Gas 5.5% (previously adopted)
Water Distribution 6.0% (previously adopted)
Sewer 7.0% (ordinance introduced 3/19/25, effective 7/1/25)
The combined impact on a residential customer is approximately $15.17 per month or 5.75% net increase.
Staffing Changes
The proposed budget does not include any changes to total Department FTEs. The FY26 budget continues to include 3 FTEs in Administration for overfill. Overfills will be used for backup due to eligible retirements, loss of employees, etc.
Per County Budget Office guidance, salary adjustments for the coming year are estimated at a 5% increase (3% structure and 2% merit) and a 5% increase in benefit costs to the County. These increases are for employees outside of the collective bargaining agreements with DPU. Salary increases negotiated in existing union agreements with the United Association of Plumbers and Pipefitters and the International Brotherhood of Electrical Workers have also been included in both proposed and projected labor costs. County Budget Office guidance also included a 1% overall increase in labor related to a program for recognition of certain certificates. The program is still being developed. The 1% is in the Administration budget for oversight purposes.
Budget Packet Report Descriptions
• Financial Statement Fundflows (building budget from ground up; revenues, operating expenses, capital expenditures & other financing and expenditures by type)
• Employee (FTE) Count
• 10 -Year CIP & 5 - Year Budget Option Projects (capital projects by Utility and year; includes planned loan/grant/bond funding)
• 10-Year Forecast Graphs for Revenue, Expense and Cash
• Typical Monthly Bill (Historical and Projected Monthly Bill for Residential Customers)
• 10-Year Financial Forecast (load forecast, rate forecast, cash-inflows, cash-outflows, net cash, projected reserve balances and reserve targets)
• Debt Coverage Ratio Projection (demonstrate compliance with Strategic 2.3 debt coverage ratio of 1.3 or greater)
• Schedule of Funds (schedule required by Charter and Ordinance, details cash and reserve projections, approved by County CFO)
Alternatives
The Board could make changes to the recommended total budget which would be included for consideration at the Council deliberation.
Fiscal and Staff Impact/Planned Item
Details attached
Attachments
A - Changes to Budget Since February BPU Meeting
B - DPU FY2026 Budget Packet
C - DPU Budget Option FY2026