Title
Approval of Budget Carryovers from FY2019 to FY2020
Recommended Action
I move that the Board of Public Utilities approve Budget Revision 2020-08 for carryovers from FY2019 to FY2020 and forward to Council with a recommendation for approval. I further move that the budget revision be included as an attachment in the minutes for the record.
Staff Recommendation
Staff recommends the Board of Public Utilities approve the budget carryovers as presented and forward to Council with recommendation for approval.
Body
Requirements for carryover of budget authority are as follows:
1. The project was budgeted in FY2019, was not completed, and the remaining budget in FY19 is carried over to continue the project in FY2020.
2. The project was not included in the FY2020 budget.
3. The project was not encumbered in FY2019.
All of these requirements have been met for each of the projects listed below. We are seeking Board approval to carry these funds over in anticipation of completing these projects in FY2020. Upon Board approval this $5,761,745 carryover will be presented by Finance Staff for Council approval.
Water Production budgeted, with revisions, $5,064,361 for the Otowi 2 Well House and equipment project, LA Reservoir Road stabilization, Pajartito Well #5 MCC replacement, and the Pajarito Well #4 motor replacement. This work has been started but hasn’t yet been completed. The budget has been only partially spent or encumbered, therefore $3,417,876 of the remaining budgeted funds needs to be carried forward into FY20.
In Electric Distribution, carryforward of unspent budgeted funds is requested for two projects, the Los Alamos Switchgear Substation (LASS) and the NM 502 project. In FY19, 1,340,817 was budgeted for URD replacements in Los Alamos and White Rock, however, due to the NM 502 project unexpected expenses were incurred ($184,033) and staff resources were pulled away from this project. DPU would like to re-appropriate $500,000 of the remaining funds to NM 502 and URD replacements. In FY19, $334,000 of capital project funds were carried over from FY18 to FY19 for the LASS substation. In FY19 $155,359 was expended or encumbered. This project has been delayed further due to LANL. DPU is requesting a carryover of the remaining unencumbered funds of $178,641 into FY20.
In FY19, $194,814 was budgeted under Water Distribution for new valve installs at DOE delivery locations. On this project $107,546.45 was expended in FY19. DPU is requesting a portion of the remaining funds, $25,000, to be carried forward into FY19.
In Wastewater, $43,800 was budgeted for GIS upgrades and maintenance in FY19, including another $1,300 carried forward from FY18. A total of $16,470 was expended in FY19. As such, DPU requests the remaining $27,330 of these funds be carried forward into FY20.
Also, in Wastewater, $493,397 was budgeted in FY19, including $81,397 in encumbrances from FY18, for computer system upgrades, blower install, compost pad expansion, and dechlor upgrades. Of these funds, $60,776 was expended or encumbered. As such, $320,000 of the remaining budgeted funds need to be carried over into FY20.
Water Production budgeted $27,000 in FY19 for tools, supplies, and equipment for storage tank improvements/upgrades and compliance upgrades. This work has not been completed yet. Of the $27,000 in budgeted funds, DPU requests to carry $27,000 into FY20.
Water Production planned SCADA (HSQ) programing in the Potable system by budgeting $92,500 in FY19. Those programing upgrades are not yet complete. Therefore, $90,929 in remaining budgeted funds needs to be carried forward into FY20.
Also, in Water Production, $173,955 was budgeted for five new effluent meters in the non-potable system, HSQ programing in the Non-Potable SCADA system, and storage tank upgrades, which includes $121,455 in budget revisions. Problems with the meters and delays from the manufacturer have required this project remain open in FY19. As such, $131,921 in remaining budgeted funds needs to be carried forward into FY20.
Funds for the AMI project were awarded in mid FY19, and the contract was awarded in the spring of 2019. Due to lack of staff resources, this project will continue into FY20. DPU is requesting carryover of unencumbered funds in Electric Distribution of $200,235, Gas of $171,341, and Water Distribution of $138,055. In addition to this, when the pervious revision was approved by BPU and Council, tax and contingency was not included in the revision. Additional funding is requested, to match funds to the contract amount for this project, including contingency and GRT, in Electric Distribution of $209,581, Gas of $179,338 and Water Distribution of $144,498. This is a total of $1,043,048. Work on this project is expected to begin in January, due to the Munis 2019.1 upgrade.
Please note: Budget carryovers for the White Rock Waste Water Treatment Plant was previously approved by BPU on July 17, 2019 and Council on July 30, 2019 in budget revision 2020-05.
Alternatives
If these funds, budgeted but not expended in FY2019, are not carried over the projects could be funded with FY2020 funds (requiring a FY2020 budget adjustment), postponed and re-budgeted in FY2021, or cancelled.
Fiscal and Staff Impact
$5,761,745 transfer of budget authority from FY2019 for expenditures in FY2020.
Attachments
A - Budget Revision 2020-08