exactly ask H that's what I just and look who shows up 5:30 at the butt it's all about the entrance we'll call a electric Advertiser board meeting of March 4th 2024 to order at 5:30 uh Jesse if you pleas bless us tonight Lord we thank you for today we um just pray that we make wise decisions and that we can move forward to make our city better and do great things in Jesus name amen amen thank you very much pledge allegiance pledge allegiance to the flag of the United States of America and to the Republic for which it stands one nation under God indivisible with liberty and justice for all okay item two approval of minutes everybody had those sent to them earlier had a chance to go through them were there any changes if not I'll entertain a motion for approval motion appr discussion all in favor signify by say I I hi Mr Williams and uh going to run through the budget here today it should be mildly interesting but uh I thought first thing I thought I'd do is give you a little idea of the overall budgeting Pro process so in the State of Florida the budget process is kind of outlined by by timelines that are set by the state of Florida and it all starts on June or July one the process starts in April and all departments have to have their depart their uh budgets in the in the system and available to the city manager on April 1st and during April and May we run through all all the the various departments budgets trying to wean them down to something that's manageable and by the time they make it to the city commission for the those budget hearings we're probably about 80% finished a lot of the big stuff that where you don't have a lot of options that stuff's going to stay the same then the commission gets into a lot of the nitty-gritty hard hardcore stuff so but uh we have budget the as of July 1st the Lake County property appraiser gives us the information that we need on property values Etc to set up uh so that we know how much property tax we're going to get in ETC um so that starts July one starts the the formal budget cycle you've got so many days to do this and so many days to do that um we have our budget hearings with the uh workshops with the city commission during the month of July and that's where uh the budget is presented to them and Al does his budget presentations and discussion back and forth with the commission on what their priorities are and what they think you know their interests are and where they want the city to go and so that we have three or four meetings um by the end of the third meeting all the questions that have been asked as by the city commission or adjustments that they want made in the budget we usually have them made by uh the end of July uh so by by the last budget meeting in July budget workshop with the commission we come back with the the adjustments that they have requested and so then um so they were probably about 95% done at that point with the budget and then month of August is kind of a dead period um in September you have the the uh State mandated public hearings on the budget and any time required to receive our budget information but then um budget amendments are made throughout the year so uh those are all anytime we have a budget change a major change it's brought into the city commission for their approval so that and that that's an ongoing thing during the year as well so do you do a midyear budget adjustment or is it monthly we do it quarterly quarterly yeah so you know during during a quarter you might have big contracts that go out that weren't originally con contemplated city manager has some leeway on what he can approve or or not and anything that actually changes the dollar value of the budget itself it has to go through an amendment process which is simply a a y vote by the city commission and those are all published too as well we're required to publish any amendments out on the website as well so moving on to the electric budget I've got up here this is the current budget we're working on right now so um so this is a a recap a pictorial recap of of our budget expenses to see where we had all the costs that blew up during the Ukraine war and when the gas prices went nuts we were at over 70% that year and that was you know it was a shock to everybody's system but so we're coming back down where it needs to be 65 is pretty close this year we'll be uh by the end of this year I'm hoping we'll be better than the 65% Mark maybe 6 64 63 you it makes a big difference is actually dollar-wise just one percentage Point Capital we've got 3 million approximately in this budget which is way way less than we've had in the past uh primarily because we're we don't we're not as cash flush as we have been in the in the past and we really don't want to borrow any more money right now uh but we'll get into into what that capital projects are later uh depreciation or or use of those different U areas you said city manager costs that's for the services that the general city up supplies to the electric F that's City manager's cost Finance customer service is the largest one um HR it all those things are are they get uh Al and you know like it is based on the number of uh units computers and other other uh technological devices that they have so it's all they're all based on different criteria so if that makesense yes thank you the other thing included there there's $3 million in there for taxes uh that we collect on behalf of others and it's transferred out but some franchise fees and the sear charge Etc are also included in that allocated number uh the second item is trans or the next item down is transfers those are different transfers that's that's the transfer that's made to the general fund that's kind of like a dividend from from the utility um so that that's five million but 2 million there's two pieces to that there's a search charge which is on the utility bills 10% and then the other is the uh uh dividend so to speak transfer and we'll take a look at that as well later uh the operating expenses those last two two bubbles there the operating that can't read that from there 5 million and the Personnel another five million so you got about 10 million in general operating expenses that's for the Department to run we have 52 employees in the electric Department um so that's a huge cost as you might imagine and so that that includes all your you know your equipment office office stuff operating supplies for the trucks Etc gasoline you have any anybody have any more questions about about those like I said some of these we'll we'll take a little deeper look at so you have full-time Personnel that are specific to just the electrical department and then the allocations is like percentages of city employees yes other other City functions okay so you have like 11 almost 11 a half million in what would be people related payroll some sort yeah minus 3 million yeah yeah there's about 3 million in the allocations and three million in the in other things you taxes and for some reason an allocations they have like the money that's collected on behalf of Fruitland Park that goes to Fruitland Park okay is in that allocation so yeah there's of that 6 million3 million of it is taxes and stuff that doesn't belong to us and we have to transfer the franchise fees we pay this fruit and park uh to operate inside the fruit and Park City Limits and we charge the fruit and park residents for that we don't pay we don't our residents don't get charg as well as they have a s charge as well on theirs wellaware so yeah so those two items um okay there are over 3 million of that allocation number on Personnel in uh the electric Department are they unionized no no they actually tried to unionize and the city was supportive of it but they couldn't like break out to break that out as a separate Union they've actually tried twice and and in in the end the union decided that they were too small and they didn't want them okay okay so um I'm trying to get around and see how the alloc who who does the allocations and how it's done you is it a number they pick a number or is no it's there's a lot of there's logic to it like I said with the it you know it's based on the amount of it equipment they use okay and HR there they have a person assigned to to the utilities for HR and so they get a percentage of that person's time and perfect that's that's how it ises um so there is we have to justify that every year by the way and it does change every year as well it goes up and down for for different U the dollars don't usually go up and down but who gets who gets hit goes up and [Music] down so I think you saw this this slide last last time in Al's presentation um but you can see the cash in the green line up there at the top since he talked about the bpca which is the blue line I'm not going to talk about that but the green representative we we had a pretty substantial cash balances up until about four or five years ago when we started really putting a lot of money into the system and that's that's what happened and and you'll see those numbers here of coming up so kind of this is Al one out slide I think he gave this to you last time as well but you know some of the issues we're facing the green Indy debate and the war effort those things were are are big and ongoing reasons for the cost of fuel that goes into making electricity going way up uh inflation has has a major factor in our operating expenses uh the supply chain build up has been a real problem for everybody not just in our industry but in every industry you know trying to get the materials you need to to operate and so when during that time during this time overtime we build up our inventory probably larger than we we meant to but uh or should have but we got a lot of the stuff we need the biggest biggest issue biggest problem at this point is Transformers and getting the right size that you need particularly for residential development that's been a real issue for us uh and transforms like the big ones that we just put in over the last couple years it takes a couple years to get those and now they're they're wanting a lot of that money up front where they didn't before now they they they're it's it's really expensive uh and the other part is when you have this residential development you know you put if you have have you know a mediumsized development you're putting about $3 million in the ground and you don't get that money back until they start putting houses on them so there's a delay between the time you put the money in the ground and and and you're actually going to start getting revenue from in some places like The Villages you know it's quick in other places it's you know they don't it's not as fast but eventually you're going to get your money back so hopefully generally speaking we do but it takes a while so here here's a look at the transfers that we've been making and what I wanted you to see here is just the pattern that we have been slowly reducing by the way just a historical point in 2013 Al and I both started here in the same month so it's been 10 years that we've been here and so you can see the transfers at one time were actually above 10% that's going back a few more years but on this chart they're they're about 8 and a half% and we keep lowering it and lowering it and uh you can see now we're down about 5 and a half% so we've we've dropped it by about a third over a third so that's and we're doing that for two reasons or for several reasons one is the transfers we don't want to raise the rates unless we have we have to and and so getting that transfer smaller has has a big effect on on the rate and the other is there's a lot of pressure Statewide on on municipalities or utility providers that aren't aren't investor own to keep those transfers in intact you know and a reasonable spot and and I think we've always we've done that more so since Al and I have been here my my background is utilities by the way so just so you know but Al's Al's uh he's a stickler for the dollars and he makes the he's really got the utilities at the point where they you know he's a great believer in matching and trying to be competitive in everything we do and we are in fact we're uh we're more competitive in a lot of our utilities and we're now cap at 6% right par we're C we are now capped at 6% transfer and the reason we did that was because some of the pressures from the state and others uh to handicap Municipal Utilities U but the other is that's that's equivalent to a franchise fee and and most most franchise fees on electric are in the in the 6% range although fruit and park has 8% so did the state cap us or did the city cap the city commission put a charter M to cap ourselves but it done through the charter minut so the city commission can't change it perect and that's a recent development that's been about two years now give take that we've done that but I know get there but allocation that's one that the city can can play with like right Al been at least I dealt with him he was very protective of the utility and not pushing allocation but you could have a city manager who could I mean it's a made up formula yeah well it's not a madeup formula it's realistic but but you have room there could be like it could be you could have a city a different city manager come in or different Finance director and say I'm going to change it this this way absolutely that you could there there are ways to manipulate it if you want so I mean I think that's something like you really want to look out at each year making sure that it's consistent it's not you don't see a big jump there cuz that's where you can kind hide some money into the general fund if but the Auditors look at that too they want to see that there's a Nexus between what you're you're you're charging the other because that every Department pays that my department pays into the allocations say so um the big the big hit this year was insurance I that was that was a killer for everybody that's brutal out any questions on the trans one historical format it used to be the city commission treated these transfers like you know free money and so anytime they wanted to a project they just transfer more money out more money out and then they got themselves in a little bit of trouble doing that financially and they I mean I I I was in a meeting on when the one said well if we just need more money we'll just rais the rates I'm like uh no that's really not good and that has definitely ceased with Alin here I can guarantee you that um any other questions about transfer so I put this slide in here just to give you some idea um so our operating income before the transfer so we've got and and when I say operating income I'm I'm taking that a little bit farther that's our our operating our actual operating expense less the debt payment and then what you end up here is is the uh is the blue line and in the the red line there is the actual transfer so you can see we did pretty well there in those middle years uh but from 19 2019 down we kind of rapidly started to fall off and then in 2023 we actually our operating income was less than the transfer so you say how's that work well it doesn't work very well okay in fact we would be we would show the our audited statements aren't out yet but what what you would have seen would have been a loss in the electric department and the only thing that brought that up we're get to up around $500,000 to the good this year um but but what brought that back up was contributions from developers so uh that's the only reason we're not going that show a deficit this year and so that's not that's not a good Trend that's a trend that's going to have to change here in the in the near future why would that happen at all why wouldn't you reduce the transfer to reflect the reduction well we've been reducing it every year and we're going to reduce it again this year right but even so if your income is down why wouldn't you reduce your transfer to reflect that well because I mean that's basically what we are doing now and so we're going to reduce it again this year so that doesn't happen and we're reducing the other item is we're going to reduce our Capital cost as well and to be fair I would have sortly correct wrong my M you didn't budget a loss no you ended up having higher fuel expense that was expected and then ended up being so you are kind of running a little bit on W where you our fuel costs are going to be a little higher you know at the 65% Mark than than what we like and if we can keep bringing that down you know in Even in our best years when it was up around 14% we're only talking about uh a $2 million profit there so what's the timing of the transfers is it it is it like like throughout money's being trans it's pretty much monthly okay is there a pro for this next year coming up as far as I you said 65% as far as that's what we're projecting okay MH and what you going to run into like cuz the commission could cut transfer right during the year but because going to general fund that means they would have to cut a general fund expenditure and I'm not saying they shouldn't but you can see how politically right that gets into a that's why they don't because it means they have to cut something that they want and your net income is if you you have a developer that comes in and you put the infrastructure in not the villages but you know Drake point or down south you've got to carry that debt yeah so your net goes down so it's you know it's getting you know I think the the biggest thing in the operating expenses is just the sheer inflation you know not counting the fuel cost but everything else has just you know gone up sign significantly trucks tools employees payroll M you know we're yeah the truck the fleet cost we got to purchase a truck now one of those line trucks cost what 350 now 350,000 and that's and that they used to be just recently 100,000 less than that unbelievable yeah so talk about rates for so you can see here over from 10 to 13 or 15 the rates went up fairly quickly every year they went up in fact when Al and I started here there was two two out years that were still looking at a 5% rate increase each year and that that was not sustainable I mean we couldn't have rates that high we just couldn't it would been absurd compared to what the Electric market is out there so it was just non-competitive and that was because they were soaking to transfers basically so you can see starting in in 2014 and 15 we had four straight years that's over 12 over 1,000 kilowatt hours that's the rate for those and then the blue line is the the customer charge you can see in 2020 charge up significantly from 12 it was I think it was 1220 approximately up to $15 um the theory on utility rates has changed dramatically over about the last six seven years and now everybody's going and there's a reason for that and that's because fora Public Service Commission basically changed their methodology for looking rates electric rates in particular they used to be what they had called the aalum model which was um fairly standard industry practice for a long time and then all of a sudden it changed I can't imagine why but it did and I got a question about that yeah um last week it seems to me that Al said that the uh the average home uses uh 1300 KW hours why is that not the Baseline why is 1,000 kilowatt hours the Baseline and not the median household it's that's a it's just industry practice just the way U all utilities in the State of Florida but do we have is that something that we have the ability to change yeah but Okay the reason it's like that is for comparison I got you that's the that's the only reason yeah just so you can compare one rate to another a thousand 1200 and I will say and I never really entirely show but it is it's expensive to change your rates because you got to hire a consultant like your rate structure it's I think we did this once maybe commission yeah we did like staff can't just do it you got to like hire a consultant and have them like run all these nonsense things andal yeah to show why you can do it so not the same as you want I thought it was an incentive for people not to use electricity well I I look back at my electric bills and I have never used anywhere close to 1300 or 1,000 kilowatt hours and I don't have a big house I mean and I don't have a big family so it's I don't even know where he got the 1300 kilowatt hours from you mean you're higher than that yeah well you don't even want to see much yeah I went back after last after the last meeting I was like go see where I'm at you know now that I understand my bill a little bit better I'll tell you how I didn't want to talk about instinctively though bulk usually means less of a cost does it actually cost more to generate that additional 300 kilowatt hours and it does the first th kilowatt hours well in a sense it does why is that it doesn't really because you have to you have to plan for that highest rate you have to you have to have the electric available at that rate whether it's used or not you have to have that available and it cost a lot of money to have that well if you know that that's what people use then why would you not have it available well we do have it available okay you haven't run out yet no no no I mean okay that just kind of Mose that argument but everything in the electric industry now is is to try to bring the demand down a little bit so um would you say that's accurate I mean cly push I mean from from the federal government to to the Florida Public Service Commission you know they all want demand to to come down individually collectively it's going up we have like a big variance so like having the high peaks in the summer cost us Service Commission and FK they want you to always you're always planning right you never stop planning for for what's going to happen in the future because it's it takes time to get there you know you you got to get power plants cited you got to get them licensed that stuff takes time so you're you're planning for 15 years down the road 20 years and we saw in Texas last year what happens if it's not highly regulated yeah I mean Texas and California are two markets where the lack of Regulation is hurting them substantially the free market system doesn't work when you have monopolies basically and then and in Texas anybody can go in and sell electricity if you have it but for those so what's happened is you had these hedge funds go in and buy the plants and they sell them when the power costs the most and when the winter time come comes and they're not they don't they don't have have the same rules as planning out the future for those Peaks as we do in Florida in that sense you know we're a little more competent than they are I would say on that side of the business and and they actually don't pay that much their rates aren't really any significantly lower than anybody else's but the people that who are providing electricity you they're more concerned about the profit involved than they are in the stab ility of the system and that's a fact it's been proven back when they two years ago when they had that massive cold spell and then it happened again last summer when they had the mass hot hot long hot spell so it's really important the planning piece of it and that The Regulators are involved in making sure that that power is going to be available I mean it's a safety it's it's a life you know it's these are life's enhancing and life saving products that we sell and they tried to deregulate Florida a couple years ago Constitutional Amendment Y and it's even really crazy with Florida because we have so it's like almost all natural gas in Florida and there are three gas lines that go come into the State of Florida to supply all of the gas and part of that deregulation was utility companies couldn't own the gas lines so you're going to have three gas lines owned by three private companies that were basically going to they wanted to they and everyone was going to be beholden to those companies it worked out yeah so there you know people complain about regulation but if you know certain utilities aren't regulated you're going to get killed and you're not going to talk to me about my reliability is is number one literally you could uh so any other questions about rates where we're going so but let me assure you've got uh city manager that totally understands this and he understands the importance of the electric rates being competitive so here's the competitive position as of this as of February so these spurs at $127,000 so we're higher than Mount d higher than sual electric um about even with fpnl and way lower than Duke and so we expect we'll probably keep our rate at at at there until we get into the summertime and see where we're at uh we are U managing our bpca to the point where we hope that come summertime we might even be able to lower that a little bit in those those teque energy usage can't guarantee that at this point but we hope so and and the other Trend that I talking about one of the things in rate rate making that's changed is seeo now charges for the customer charge worth $15 right we went up three and a half bucks about 3 years ago seeo now charges a15 a day that's how so if you have a 28 day bill because not every bill cycle is exactly the same they usually go from 28 to 32 days um FP is going to a dollar something today they haven't yet but they're going to um mount doors at like the reason there's this so low they're like at 8 bucks and they haven't changed that rate in years uh so we're very very competitive I think at this point um and then on the the the blue box on the right side is the trend on what we're we're we're paying for energy and you can see you can see it's it was pretty low there for a while and then it went up drastically those two years and it's coming down now uh we're proly 95 and I'm hoping to get we're hoping to get down into the high 80s here in the next year so uh gas prices are down U so we we're we're hopeful well forgive my ignorance on this but so uh didn't Duke and seeo both have changes that went into effect much later than when our prices went up did they go up in January uh fpnl and Duke both went up in January now you're right they're lay CU they have to go to the they have to go through yeah so what what when you when you see them saying that they're lowering the rates in the next 6 to 12 months what they're actually doing is lowering a Sur charge that they had on their bill to make up for the okay but their rates are still going to be higher right you know the base rates the the kilowatt hour rate and the and the customer charge they and actually they're trying to get away from the customer charge I don't know what they're going to call it because the customer charge originally was just that it was a charge for managing a customer that's why they were so low was for your right for your customer service folks and to cover those bills you know printing bills and all that but now they're looking at it totally different and now in the customer charge they're putting a lot more of your fixed cost so some of the fixed cost of operating your system right are now in the customer charge instead and that's a big change from what it used to be the Ocala model for for whatever reason was thrown out by the Florida Public Service Commission a couple years ago so now there's a whole new basis for making rates and that's that's a big part of it right there thank you Capital spending so I don't did did Al show you this slide before I don't know if he did or not he just gave us a number yeah so there you can see in that we've been putting a lot of money into our infrastructure I mean we've gone this was probably a normal year or even high back up until then and then it just went up and up and up and we had some big projects that we had to do we had uh you know we we we borrowed $15 million in 2020 to to do those two those two big years of 12 million and 10 million we had the new Villages of St Catherine that was between 3 and 4 million in infrastructure we bought four uh substation Transformers and those were a million bucks a piece and then we had two big reconductoring lines that's where we're upgrading you know the actual physical wires and and one of them went down from Center Street sub down 27 and the other one came down 468 and went out west a little bit towards where uh those power lines are and kind of go down that right away area so those and that's all all that was is to make our system more redundant so when things happen the other prior years we did the north side of town we did fruit Park and we upgraded that line that goes out Miller Street y you probably you may remember those trucks being out there all all the time and one out picks the old way so those were two big projects where we upgraded the facilities and make more redone and if something happens in one of those one substation the power's going down you can switch them to another substation and and maintain the maintain the service to our customers so it's but we can't afford to do that now we we spent all our money and it's time to start building it back up and that's what we're going to do we also put a lot of money in in the inventory which uh we're going to have to eat into that inventory hopefully instead of going out and buying we're changing our a lot of our systems on the inventory side to to be a little more accurate in what we need but then the cost is just SC your cost of goods have probably gone up in what 15% 177% in two years oh it's gone off way high like we used to pay for you know the little square boxes that you see in the subdivisions those little trans yeah pad Mountain those was used to run about 2,000 bucks and now they're 5 to 6,000 and it takes forever to get them we've had we've gone out and um you know we do buy them from other utilities we've had to scrs just to get six you know transform pad mount transform we we had to beg people for them just it's it get crazy the timeline and what it takes to get those things so the capital spending we're only doing 2.8 million about 2.9 Million this year uh the part of it is in the system upgrades um we're not doing we haven't scheduled any for for developers this year um I don't know how that's going to work in the long run but you know they'll either have to a lot of the development in that we've annexed in is outside our territory so somebody else will be the electric provider there but for the ones in our territory it's going to be you know we I'm thinking we might be slowing some of them down in the actual development process because we can't get all the material we need it hasn't really happened yet to the point where we're just shutting people down but it it is definitely going to be a problem uh so the rest of it is for unplanned repairs um happens all the time tree falls down every lines you know somebody runs into a utility pole and you lose a pole Transformer and the wire you so and that happens all year long so that's not a lot of money to be run Electric system on right there that that that's a little scary to me so here's another slide uh you just trying to make a little correlation between the cash from operations and capital additions um usually the cash from operations has trended pretty well but you can see in the last couple years we've we've done more more Capital than we have uh replace the cash and 22 and 23 are anomalies because that was when the BCA cash you know all our cash went to buying fuel so we we really sucked it dry and then last year we replenished a big portion of it pretty much all of it last last year so it gives us back our we have on our bpca we have a $3 million threshold where we try to keep it that balance actual cash balance there somewhere around there give or take um and in the past we've been fairly good but when when we had the the the gas shortage we could it happened so fast it just kept happening it kept you know was one it was like a train wreck us one thing after another you know the car is falling off the track and we just every month something you know just kept going up and up and up and we kept raising our our our rate but we we we couldn't catch up so that was that was a killer what do you attribute that rather large net change from 22 to 23 well 22 is when we spent all the money buying fuel right because that's when the price went up to $14 a Decor but and then 202 actually you know there's a delay in where you get that money so we raised the bpc to 70 bucks that's how we got it back and everybody screamed and complained we had people here out in Hai all outside pitching moaning and who could blame it but we weren't alone there every single utility in the state was the same way across the country really anybody that used natural gas that was a that was a problem uh so then we get once we raise it that's how we got the cash back just out of curiosity um in your balance sheet or your your budgeting process the $3 billion is it shown set aside it's does the elect Department have a completely different budget than we well it's just another department of the city but that is a cash account that's hold separate cash comes in cash goes out every single month but it's totally separate from all the other City cash okay and that's the only thing it can be useful and the $3 million is shown on this as a yeah okay so yeah it's uh it's only for fuel purchases so let's see so these are the actual dollars that we budgeted for Capital um Transformers capacitors distribution lines reclosers I don't need to read all that out you can see what is this for replacement equipment or for new equipment well most of this will be what it be for whatever it's needed for what you know but when we go back to the one this is this is what we budgeted for system upgrades of a 1.4 million and the system repair for one and a half and that's the 2.9 Million so and this this is where that's just the breakout yeah that's just a break out of what we think we're going to use it for excuse me so debt so we have four debt issues out um right here this is our annual budget this is the budget for 2024 for debt 3.8 million approximately and we set aside 315,000 a month for the debt payment we make B most of them are twice a year debt payments every six months uh and and these are the items here we had uh 2007 B these are taxable bonds actually they go from 5.6 to 5.9% and they're they come doe in 2032 the 2 16 bonds and notes those are refunding to get the interest rates down um so you can see two 2.35% is excellent the two to 5% there's only one bond out there that's at the 5% level and I I have no idea how that how that ended up like that but there was one bond that was priced of 5% um and then uh the 2020 one is the 15 milon doll that we borrowed for the Transformers and the upgraded The Villages expansion and and those two reconduction projects so the annual debt on those four items is about 3.8 million and it's pretty all pretty much levelized debt so that's where it's going to be until we uh till we pay them off basically so when your consultant comes in to help your rate set or whatever will they look at that 5 .64 five through to 5.9 and say it's time to to call it in and reissue a bond well we can't we can't reissue the you can no there tax laws change the the taxable bonds we can't do anything with the other two uh the 2016 ones they've been refinanced at least twice they're done you can't there's a limit to how many times you can refine that stuff uh the good thing is is the the 2016 electric note and the 2020 uh system Revenue Note 2 you know you could we could refund those anytime because those are Bank notes of course 2.13% I don't think that's going to happen but uh probably not anytime soon for sure uh but we can refinance the the uh Bank notes anytime we want if if we wanted to well within the parameters of what the the note agreement says anyway any any other questions on this what need some of the bonds taxable and some of them non taxable I before you no that I can tell you exactly why because we had some people running the city they didn't they thought fund balance meant cash and so they just spent every dime that was in in the electric department for as a personal playground to build stuff that's why and so and so what happened was then all of a sudden we weren't in compliance with the bond covenants MH so they had to go out and borrow $1.7 million and stick it in there to get us so that we were compliant with our bond Covenants somebody that's kind of harsh but that's that is the truth terrible it is terrible but you're dealing with it oh yeah I mean you don't have a choice exactly yeah that's a problem Ison really probably wasn't spend on the Electric System it spend General funds up they need that's that's what I said they used to use it as their little piggy B and that that doesn't happen anymore any other questions on the debt so this is this is our plan keep the rates down keep them competitive keep the lights on work safe uh Chris and his staff are reviewing the operational standards uh the smart grid Sunset that's our our you know the the data that we acquire and store on electric to um you know we get we get 15 minute read is that right 15 minute reads on the meters every 15 minutes every meter sends us a read on where they're at so when you when a customer calls in and says well you know why is my bill so high we can look we can pull up and say well you know your consumption is doing this or that you know and we can do it by hour really for them tell them spiked here every day at this time you know your energy is really spiking or something looks off and you know they can sometimes they've got an electrical issue that can be identified even but the smart grid all that that's equipment and computerized the storage and all that is now with General Electric and that contract Runs Out in 2026 and we have to get something to replace it uh and we can probably do that about half of what we're paying now that was the Fiasco they did a few years back what when they brought the Consulting Group in had was General GE and they did the smart meters the same time they issued those 2007 bonds there you go I think that's what happen yeah it it didn't work out as planned we can say that the good point about it good part about it is that all that stuff is much more common across the board now there's more companies involved in doing that kind of stuff and so the prices have come down substantially um so we're we're hoping to get them we're already paying a lot less than the original contract CU that got renegotiated early yeah we knocked yeah GE realized they couldn't perform the way they were supposed to U we did get it quite I think it was over a half a million dollars off the ual contract uh but it was substantially less but the product was not you know they had these Grand Visions everybody could go in and and monitor themselves by the hour and see it on the screen in front of their computer and you know that's just and you're going to sign up and the city would just reduce your certain time there was demand components to that where you know we could go in and try and regulate their electricity during the highest usage times yeah and you know how many people want you turning their air down at 4:00 in the afternoon exactly just about nobody right uh so the whole idea of that kind of demand U control is it's just it's not going to work here I don't think so that was it was a bad idea that cost us a lot of money the good part about we can turn your electric off from from a desk so pay your B well it's good and bad depending on what side of that you're on help you with some outages right where you can more quickly identify yeah there's a lot there's a lot more to than that but uh we we want a system that's a little bit more uh collaborative right now we've kind of got different pieces fitting together they work but they don't work like they should as well as they could if it was planned out better and you know GE just they just don't care anymore I mean they really don't they're pretty much out of it already except for collecting the money um so in this budget that we're in right now there's a decrease of 8.4 million in purchase power uh their Administration division that includes the allocates allocations went way up uh and the biggest piece of that was insurance we did an insurance audit uh last year and realized we had three of our substations were insured and why three were and two weren't I have no idea why that was but we got them all insured now but that's a big dollar amount so U so the insurance went up substantially um and is that just like liability for the insurance property and casual okay they would have been covered for liability property and casually um so that's really the only part of the Electric System we have that's insured is the substations other than the fleet and the other buildings so we have reduc reduced labor costs from because of the reduced uh capital projects uh engineering costs are going up part of that is is we budget for some Consulting to on trying to replace the system GE system um depreciation expense just didn't budget some of that this year um and then the we dropped the capital projects by over $5 million so um that's pretty much the so here's um on the revenue side charges for services you can see that drop but that's because of the fuel cost that's really why that's down uh the other the other sources there are some transfers that were made out of there that that uh I figure what that was about oh that was the the the other source the 5 million last year was from our Reserve funds for for Capital other than that the the budget's pretty similar from year to year so the expense side the first two lines are for the purchase of Power Admin ation went up that's mostly from the insurance um distribution went way up now is that like the distribution going up is that because you're not allocating to Capital a lot of that is right yes so you've got when you have Capital you're actually taking people here all the time and allocating we're taking it out of operating and putting it on the capital side right but there people work here whether we're doing the or not yeah that's right but there's usually a lot more overtime too in that involved in that so that's you know that's pretty much yet any questions Mr Mr Williams good good presentation um ask uh Mr reesman over there uh at the [Music] computer uh Miss per if you can send send the presentation out to all the committee members I appreciate it that would be wonderful thank you of of all the pieces of the pie that you showed us what do you actually have any control over like it seems like there's a lot of what I would call fixed or expenses that are out of your control where is the movement in there um to help your general consumer there's not a lot of movement the the the movement is the ones we made we've cut we've cut the uh U transfer and we've cut uh capital capital expenditures that's pretty much you may disagree with me but I think one area You could argue that there is movement is in customer service like we offer a lot of customer service compared to what a Duke Oro would and we could cut that number aggressively but we've Tak the the city commission has taken the opposite ATT that's true with customer service in terms of complaint that they get we've tried a number of things and discussed a number of ways and when it comes to customer service um they want they want to be people on staff that can answer the calls and can be you know most places even a lot of the Municipal Utilities don't have you can't walk in you know take cash payments you can pay you can pay at a kiosk somewhere or you can pay at Circle K or you can do those those kind of things and if you customer service going to be a call center yeah yeah how many people we have in customer service to and we still have a surprisingly large number of people that walk in how many thought it was like a dozen and most of those are for the electric I mean some are do other things but that's well no that that's the other point it's not most of them are electric right we have 28,000 electric customers that's the largest but we have six utilities right it's not like it's just it's just electric got so there so there's a lot of moving Parts there people turn the service on people turn the service off um a lot of people people you know come in to set up their service we we fixed that so they don't have to but most of them do right even the village residents usually come in the new gas customers and you know before long uh gas is we're going to have more gas customers than we have have electric customers um I'm not knocking I mean my work I have to deal with a bunch of utilities and these utilities is by far the best one to deal with when I have a problem so I appreciate but it is 2.8 it's like a it's something you could actually move up and down with the recent changes that might that paying online and things like that might we do I mean we do all the everything you can pretty much do as far as making it easy on folks and a lot more people are taking care of since we reinstituted the the the charge for which started today as a matter of fact for uh credit cards you we reinstituted that fee um they said it's $400,000 was the number they gave us was it Mark that 400,000 bucks last year on credit card fees that we paid I'll get the points yeah I think they need to negotiate C [Music] company I don't think that's that happens so your bottom line then is that you're your proposing if you will a budget that will be $12 million less than the previous year that is that's what this is the budget we're working on today okay so it run it runs until September 30th the budget you know the budget process that we're starting okay basically now the budget we're in for the for the budget we're in right now is the one we milon less than the previous year before yeah okay and that's because of the fuel cost 8 million approximately in the fuel cost and what are you anticipating the next year uh I don't know yet so uh I'm hoping that we'll go from approximately $95 to 85 U over the next year and so I I do anticipate those fuel costs will be less that's a that's like $5 million yeah cost it'll be U s that 63% went 85 [Music] that's I don't it's proba that sounds pretty close we went from 107 to yeah it's probably that that ball park but that's that's all pass through that goes that's all going to go to the customer you know it doesn't it doesn't help the operations right because it's not supplying any money to the any funds any Revenue to the operations that just goes back to the customer which is great good any other questions again Mr Williams thank you very much thank you so much and U we appreciate it all right roll call we're going to start on the right leftand side Mr Robuck anything for the good of the order I just say I mean i' I've learned so much out of these after even after being on commission for eight years like I've learned more literally last meetings that I had did in eight years so um you know thank you to all all the staff it's been great Mr SCH nothing to add um nothing to add and nothing for myself and I'll accept a m motion to adjourn motion second we're done thank you you have a good evening