you move Lake [Music] all Bruce days after I I'll you and first or actually want us to give them that piece proper made it was faeder goes up and and it's rpz kind of upside down steps if you will and so the way they have designed P they gotow I heard I did of course that was was from my desk [Music] to get radar okay everyone we're going to go ahead and call this meeting to order it's Monday June 3rd 5:30 and I ask for mercy and Grace amen with that being said um can I ask for Jack to give the invocation dear heavenly father we thank you for the ability to be here this afternoon on this beautiful day we pray that you give us wisdom and knowledge to and guidance uh through uh the issues that are discussed today in Jesus name amen all right let's go ahead and do the Pledge of Allegiance I pledge allegiance to the flag of the United States of America and to the Republic for which it stands one nation under God individual with liberty and justice for all all righty so the first thing we're going to be rolling into is to review the proposed budget for 2025 with our city manager Al Min there you go so first out of the gate I have to give a whole bunch of exceptions and I get the right to change numbers and maneuver long ago when the city was putting together the electric Advisory Board the purpose behind it was to show the state legislature that the city of leeburg is moving more into an authority type model in operating our Municipal electric utility which has both corporate and unincorporated electric customers um this is a model that more recently the state legislature wants to see as a lot lot of the the legislation the past two sessions has dealt with taking away Authority from Municipal Electric utilities making it penal based on whether you have an authority so on and so forth and Mark in his application I'm going to share this conversation ask is this going to be a real committee that actually has Authority or you all just wasting your time so today is you all are a real committee and that is one of the reason why I'm putting these caveats out because yall are new to the budget process and typically the information that I am sharing with you this evening has 30 more days to cook but because you guys meet the first Monday of the month and we're trying to get a budget review past you which goes and and talks about rates it's not done and it's a long way from being done but we've got like to 90 days really before things need to get solidified so out of the gate I'm going to hit you with the bottom lines that this thing ain't done and these are all my concerns the city commission please forgive me has not heard this so you're the first to hear it so Mark you guys are a real committee you're the first to hear it electric Department hasn't even heard it yet they got a lot of influence in this but basically the only three people who know about what's going to be shared is myself Brandy and Jim Williams and I even have a couple more gray hairs over it if you believe it believe it or not so with that said we are working on the fiscal year 25 budget is what you all are going to be reviewing these are my overall concerns that I don't have answers for you this evening and I was slightly hesitant in sharing this but because Mark wanted to ensure that this was a real committee I'm throwing it at you so these are my concerns no matter how horrible it makes us sound or unprepared or whatever I'll argue the opposite but here are my concerns there is a significant concern I have with how we've been doing our budget forecasting and typically what we do is we take total revenues divide it by our wholesale purchases we come up with a percentage and we want our a percentage to be around 62% so 62% of wholesale purchases are of are part of our Revenue we've used that model for a long time a couple of years we've gotten a little bit wonky with it but right now I'm questioning that model because the numbers aren't stacking up I'll get into that in detail if you want so um one of the examples is that is the current budget that you looked that has a um a total budget of 48 8.5 million in sales um and 74 and 78 million in Revenue well in all honesty we've never seen $78 million in Revenue boring when the the power cost adjustment went way crazy high so on a surface level the per percentages might be right but on an actual match level we're getting data from two different sources one is Doug Hanley our consultant and the other is just Williams um and our our FMP numbers fmpa numbers and they're significantly different that's giving me cause that makes me wonder if that contribute that number is correct if that number is incorrect then we've got a a deficit even though what you looked at is a balanced budget I think all that makes sense to me I tried to explain it as simply as I can to you next thing I'm worried about is the contribution and Aid agreements we've tipped you off a little bit about what the contribution and AIDS Agreements are there's a policy that comes through that says if you develop we're going to Roi in four years these are things that the city will pay for these are things that developers will pay for the same kind of hole in the bucket is potentially in those developer contributions so if we're underestimating not just material costs if that number's not right but if we're also having a leak in our Revenue numbers on what houses are using these days then our Roi numers wrong so if our Roi num is wrong then we're not asking for enough contribution from developers so we've kind of tackled here recently the the operations a Transformers X bucks now we're charging X bucks now we're going to start writing that there's a Delta even if that number's off in the developer contribution age but if our Revenue numbers are off that's another potential leak because our Roi numbers are off so we need to look at that why I am why I'm concerned about that I got a chart to show you so these are all my concerns all the data I'm going to throw at you at the end to back up my concerns we really haven't seen fullscale growth in the electric Department I know that may sound foreign to you because if you listen to the meetings you hear all the Pu puds that get approved and we got 43,000 lots and traffic is crazy and bl blah blah I'm going to tell you what you hear from the public and their perceptions about lesburg growth is not reality where we have sustained growth for the past couple of years is the villages when the villages growth goes away you will see our numbers click back to traditional growth numbers 3% 2% 4% if you listened to Dan Miller's presentation at the last meeting about the comp plan he talked about those numbers he estimated that growth over lesburg is 4% well guess what those numbers don't include the villages so we've seen significant growth our initial number back from uh the the Appraiser's office June 1 is 38% growth all of that 90% of that is all Villages it's ad adval y it's the advm number so that so that also now has an impact into the in the electric fund so that's actually seven concerns um because that's going well it's it's number six all all that growth stuff in the general fund side of the house equals transfer numbers so that's the sixth concern with these concerns do we need to look at a rate increase for this year our last rate increase was um fiscal year 22 which would have been October 1 is about a 5% increase or do need to just kind of batten down the hatches watch some of our expenses let some of these blips of growth now now I go back to growth right I'm not but this is not leberg growth this is electric territory growth which most of it we're seeing in Fruitland Park before we're seeing it here so those growth issues have an impact we can talk about that so potential rate increase versus do we need to just kind of pump the brakes so now you're going to say well men electric Department Department was screaming about needing a Transformer at North sub that's cost a million dollars I going to tell you here on this one once versus needs you're going to hear the electric Department say we got to have that Transformer you're going to hear me say that's a want not a need and I'm going to tell you that because we got different ways we can feed the system what the electric department is telling you is we got to have it this is optimal but optimal in the electric department is not practical sometimes and if we go with what's optimal then that will lead to rate increase and it's not my decision or the electric department where you want to set the rate that's your decision and that's the city commission's decision and we need to balance out these competing demands rates versus what's optimal and what's not so that's what I mean by comparative cips so we need to go back and we need to look at that some more for fiscal year 25 operational issues really The Lion Share of the electric fund is one thing power cost Supply which goes to the number one concern that's why I started out there once you get past operation then or or paying the power bill then your next thing is you got to pay debt those are fixed costs we we fix our costs with generation and and power supply through our fmpa contracts and and we fix our debt because that's our credit card and we have to pay that where we can trim is operational savings and there's really only going to be three potential areas in operational savings big expense is our tree trimming so we're going to look at probably bringing some of that internal so that we need to slim back on the Lewis contract so you'll see this in the contractual line and we need to probably trim back on some of our expenses we've been doing with Team FAL so if we do internal stuff to fix the system or Aids and contribution we're using team FAL to work with us so we can spread our Manpower anywhere I'm I'm going to say we need to pull that back a little bit and we need to have our crew start doing some of this other work to save some money and meanwhile that also is going to affect overtime we're spending too much on overtime we got to trim some of that back those are my costs that's the bottom these six bullet points are the areas that in the next 30 days are going to get the significant comb so with that being said the everything else I'm about to show you is still under review for the next 30 days and you'll probably get a second swipe at this depending on how the July meeting Falls versus the budget workshops if you all want another second second view in July okay so now I'm going to start showing you a series of the graphs and and charts that set up the concerns that I just mentioned this is the electric fund Reserve cash this is the this is what I call the good chart I'm going to show you another chart that Brandy likes that's the bad chart so you guys are getting it all here you're getting my opinions and you're getting staff opinions you're getting the total whole Monty here not boiled down by the city manager okay so this I call the good chart what I'm going to say is bad about this chart is from March 21 where weting around $22 million in the bank now we only have call that about 10 and a half million so there's A10 million bleed where did that money go I'm G tell you it went to a bunch of different spots one in that time frame was paying the power bill when gas went wonky two it went to Capital Improvement projects and two can be broke down into Capital Improvement projects of fixing the system or Capital Improvement projects in a contribution expanding the system based on developer requests I don't think I put that chart in there tonight developer requests but in short we've got about2 and A5 million dollar that's hanging out that's not spending any meters one of them is the what's Silver Lake called Silver Lake Silver Lake Point is a new residential subdivision we put about a million dollars into it's not spinning it's 300 some on houses it's not spinning any meters yet I'm going to tell you in a brief overall why because they got into trouble with Duke and moving a pole a transmission pole which affected their Ingress egress Duke said yeah we'll move the poll but it'll cost $8 million was that the right number chris8 million dollars the developer said I guess we're not moving that poll so when you drive down 44 and you see those big giant poles that are like 60 feet tall I think they're metal right or cast ir and you know this wide Duke will move it for you but cost $8 million so that's a real number when you move transmission polls it's super expensive so now I'm going to digress if you ever thought about underg granding the transmission line on 27 to make our 27 quarter look more like winter park you're never going to do it because there's probably 20 transmission poles from the North of city limit at Walmart to where that transmission line turns at 48 is or Dixie turns in there at you can just count 8 million right under so yeah we're not doing that project okay so I I digress a little bit what what I like about this chart is it it it shows where we're at in reference to how much cash we have 10 million bucks this line is how much cash we're supposed to have about 9 million right when I say supposed to have that means what the gfo recommendation is but in electric fund it's what the gfo recommendation is and what we say it's going to be and then our bond creditors remember got A+ Bond rating they want to make sure that we have that minimum amount of cash because that affects our bond rating so that's significant when this number starts leaking below the the minimum requirement that's a problem so what this number shows though is this blue line recommends the bcpa what the V How much money is in the bcpa remember our goal is we want this blue line to be straight at 3 million bucks and it typically and it typically does that but like for example let me just go to March 20 we had about 5 million in the bcpa account and we had $20 million total cash okay bry's going to tell you no we only had $15 million cash for electric operations because 5 million of that is the bcpa but I wanted to put this number in here because not only do we need to watch the cash number we need to watch for the bcpa and what those those General Reserve numbers are so here when it was high I'll show you another correspondent Court saying well we lowered the bcpa and we gave money back to the customers and then even though this looks like a little Shortline you know for for from 20 to about for a good year we held it almost at 3 million bucks until the gas Le you see the corresponding decrease so when it hit about here that's when I screamed and said oh we really got to collect money quick question for those watching and for myself as well can you uh explain what bcpa is the bcpa is the bulk power cost adjustment the buk power cost adjustment is a flat charge per kilowatt that is on your bill that we collect that goes up and down elastically based on what the cost of electricity is and that's over a th no that's per kilowatt okay so right now it's 1 cent per kilowatt so if you have a th000 kilowatt Bill your power cost adjustment portion is 10 bucks so kind of getting to I I think I understand the difference in Viewpoint from you and Brandy with the the 5 million like not we shouldn't count it right which would would would imply that we have like $3 million of cash or whatever um I kind of get that but how so how much cash above required reserves are in like gas and general fund roughly roughly mean more than $5 million four oh man I don't do you want me to do you want me to have gases for you I mean I'm because I'm just wondering like I'm just thinking like okay if you're going to play it the way you are which I tend to agree with given that you have a lever in the bpca to to fix this right if it becomes an issue probably just needs to happen faster than last time and it would given that we have less cash so you can't shut down like in an emergency you just loan money from the gas fund if you need a month or two to float because something crazy happens with your cash due to fuel cost yes we've thought about that I mean ideally wouldn't but so we've thought about that so so Dan's saying we can borrow from other funds to float stuff and then kick it back to make the books look good and yes we could do that rough numbers like the general fund right now sitting on 15 million above Reserve 11 above Reserve so there's some money over there in the general fund gas is only building yeah g and gas took a little hit because of the lawsuit and the expansions with the villages so we're waiting on those to come back water and sewer probably sitting at maybe four or 5 million above the reserve each these are super rough numbers and after uh airport fund they they're sitting on four million cash so in every fund too like 4 million cash above Reserve in the airport man that's a boatload of change yeah 4 million above the reserve fund and electric is not where I think this number needs to hang out we don't need to have 20 but we need to you know I think we prop 10 to 15 is where this needs to hang out constant and that make that makes and I'm not suggesting that you actually do that but like in a worst case scenario like there's some sort of crazy fuel Spike again although FMP is now hedged further so you'd have more time to react and yep and and why the 10 to 15 because if you have a crazy storm that bunch of trees come and you got to spend a bunch on getting debris out you're probably going to need $ to $5 million to clean up a storm before you start getting your FEMA reimbursement so that's kind of like cash on hand for a crazy contingency and then everything the electric department does is in the millions so you can have plus or minus swings so that account sitting at 10 or 15 million bucks honestly makes me sleep at night so what is the chart look so now you're looking well Al is sitting at 10 right look we got that's where you want it no take out the bcpa fund so we're sitting at five and a half so that's the difference so this shows you the exact number that we have this shows you what we have with bcpa so so Brad will come in and say well Al I'm sitting on he'll use my chart against me he'll say I'm sitting on 10 million bucks I'm going to say 10 million minus 5 that's that's what you're sitting on so kind of the difference in in look so this one so this one's alarming because as of March 24 were actually below what the reserve requirement is by about 2 million bucks is that how they calculate yes they be in credit ratings yes yes so that does need to come up that does need to come up okay so that's cash so cash has got me a little wigged out let's talk about historic sales I didn't put in fiscal year 24 on this but this breaks down sales October through November each color represents a different fiscal year look at that number 2.1% growth it hasn't changed I put two more years on that it's still about 2% growth so when I told you the other the other meeting that weather still outpaces our growth you see that constant two fiscal years ago we sold 527 million kilowatt hours this year with growth we're only estimating 519 million kilowatts so that's where the weather can change us quicker than growth so when we do these budget estimates for revenues and Wholesales we really got to tie it back I think to the historical Trend what this year's budget does is I think it projected us at about 530 million kilowatts in sales we've never done that never ever even a and our customer base has only gone up from and I I don't think I put this number in the chart um but our customer base in 2013 was 25,000 customers our customer base today is 27,900 so subtract that that's 2700 divid it by 10 divided by that number and that growth rate it's relatively small and if you look at the customer base like for example in Brad's chart on Aiden contributions where he's got a million in this project a million in this project that's only 300 customers so we've got a million dollars out for a potential return of four customers was our a and contribution numbers correct so those those things we need to beat up and my guess is we've been kind of just dealing on historic data so even though the math is right we're using older data and the phenomena that's going on in the electric industry is even though you have more stuff in your house all the stuff in your house is more efficient your air condition's more efficient your computer's more efficient your TV is more efficient your lights are LED so even though you're running more stuff you're you using less electricity so when 15 years ago remember we so we plan power resources out 20 years in advance so back in in 2000 when we were planning for 24 we saw 3% growth but we're not getting 3% growth and what's that has done I think in the marketplace is it's made the investor own utilities who are fighting the same fights that we are and probably even worse cuz now they have the solar issue on top of it yeah so they're holding the buckets even more so what's that done to the investor own utility specifically FPL that's charged them up to go look for more market share so they go off and see their local state representatives and say they're not getting their fair share of the pie or these evil Municipal Utilities who transfer money haphazardly into their General funds it's taxation without representation you got to stop them and that's so that they can take mun pieces of the pie which are all fixed because the every square inch of the state's got a territorial agreement so and what have we've seen FPL do we saw FPL take Northwest Electric whatever that thing with Golf electric or whatever we saw them try we saw them try to take over ja we saw them take over Vero we so that fight even though some of those stories I'm telling you are two or three years old in the electric industry those fights still burn in Tallahassee and as the trends continue to not go match through resources the investor own utilities get mad and they may be reasonably as they should force munies to tighten up their numbers as a result we've tightened up our numbers and what we've tried to do is decrease our rate and decrease our transfer so that our utility looks more like an investor own utility and our general fund looks more like a municipal corporation that doesn't have a utility okay so now let's talk about the power cost adjustment because there was lots of screaming hey one thing just to add there because I think it's also important and something I was considering after the last meeting is that it's not just the growth the problem is the like the actual dollars it's the only thing that it's less when you started 1000 KW bill was like 138 in leberg rate was like 138 138 going to 142 145 142 and now it's like 20 it's 11794 I mean of course there are ups and downs but but overall your electric bill on a per kilowatt hour is the same or lower than it was 10 years ago so having and I think that's screwing up your revenue and you talk about these Roi calculations your materials have gone up your Labor's gone up but that 2.7 is maybe even wiped out I don't know if you want me to say this but you put that out there so with what all Dan said that might mean there's room for a $10 increase in the base fees the customer charge so and we might need to look at that for fiscal year 25 $15 charge yes that might need to go to 25 it m I'm not saying we're doing this it's okay but I'm saying we need to look at it and maybe we need maybe we Kick the Can for a year maybe we twep it I don't know but that's next 30 days we're going to be looking at that that because the we'll show you the next chart so we'll come to that so so Dan so I want to talk about bcpa now another piece of the puzzle bcpa the bcpa is only recovering what we need pursuant to the relationship of our power supply costs that's what this chart is showing you so if you're ever ask well the city keeps raising and keeps playing with the bcpa yeah we do we're not making any money on the bcpa the bcpa is a pass through based on sales based on our numbers we get so this is a historic chart this goes all the way back to October 15 the the orange line is in millions so in October of 15 we had almost $10 million in the power cost adjustment fund dude that is way too much remember 3 million is our rule of thumb we want to keep that line at 3 million and we did it a couple times so if it's above three we got to give money back and we got to lower the bcpa so that's what this the Blue Line represents what the power cost adjustment church so when we were sitting on 10 million in cash in the bcpa the power cost adjustment was about 13 1.3 cents or 13 bucks per thousand so we said you know what we need to give it back so we dropped it to zero and bled it down to about 3 million and then we put it back up up to about where we started about 15 cents there was a little hiccup there but we held it pretty steady we saw we grown we dropped it again and then we dropped it again when to keep it around three million now we then when we got back to 3 million we go back up and then this is this this time frame in here um January 21 that that you that that time frame was when gas started going crazy so we we're down here 10 million in the hole so we go we go 10 million in the hole so we go back up to the crazy power cost adjustment fee to 7 cents a kilowatt or 70 bucks per thousand we held that steady while we were recouping our money and then as soon as we got to where we thought we needed to be we knocked it down not once twice three times so now we're back to now we're back to a penny of KW and our long range recommendation because of things that Dan just talked about fnp's hedging our power cost and what you'll see here is this chart correlates totally to the bcpa Chart so when you see this number crazy this is what we were paying for power $0 and $97 a megawatt so once fmpa got that under control the trend for this year is $79 to finish off this fiscal year and the next year our projection is 81 so these numbers numbers are pretty close so look at our and so you see our history so we know we used to hang out around I guess that would average out at 75 then we got those two wax and now so we're now we're kind of adjusted we're probably going to hang out around 80 around 80 85 moving forward this price is pretty much fixed I want to say through the middle of 25 and then you know in the next actually now over at fmpa they're talking about how we move out to the next chunk blocks but our anticipation is we're probably we're going to hang out around here for a little while and I just point out because historically you notice that 2024 Trend $79 is higher than the you know 20121 back but yet our electric rate is lower and that's because the electric fund is not subsidizing the general fund anymore as much as much yeah so we used to have have power call so this chart it goes to the electric transfer you know percentage percentage versus dollars and so what we see is we've lowered the percentage so when we started actually when I started in 13 we're transferring 5 million and that was about 8 and a half% that we were kicking in the policy at that time said 10% mind you in 22 or 21 right before Dan got off the city Commission we passed the the referendums the two referendum questions which were designed to do two things one it was designed to to recognize we want the general fund to operate as a municipal Corporation without a significant transfer 6% so what 6% represents is if you are a municipal Corporation you have a franchise fee with your utility provider pursuant to State statutes which G gives other non-municipal electric other I should say other utilities because other utilities who provide electric service in a municipal Corporation it provides the franchise right and the right to use the right of waste in short that number across the state is 6% why is it 6% have no idea because when cities started giving their rights to investor owned utilities to sell Electric instead of them they made long-term agreements that said 6% and that's that's the number we've copied for fiscal year 25 because of the legislation that's happened the last two years I actually am trying to recommend to this body as well as the city that we lower it from 6% to closer to 3% why because if one day we're forced to operate totally like a municipal Corporation we can't be taking any money from unincorporated customers and putting it into the general fund now we don't have to do that yet so this is kind of I'm being drinian here in this recommendation okay I think that day is coming I think that legislation is going to be passed sooner rather than later so what does that mean that means 60% of our customers are outside the city limits and unincorporated or Incorporated Lake County they're in Fruitland Park or they're in unincorporated Lake that's Tim he's not here okay but our sales are the inverse 60% of our sales are in the city limits so we need to take 6% of our sales which equals about 3% transfer that's where we're trying to go if we can get there I don't know we try to this year because we say the $1.6 million transfer so we we actually we are attempting to do that this year and we're we're attempting to do that this year other stuff in here here's your electric debt so you know that there's your principal balance payments that's what we got to pay that's what we've got hanging out that doesn't that doesn't um do just tell you the balances it doesn't tell you what the payment is what debt is around 3.7 so 3.7 million bucks total which is paying all those bills I mean it's not crazy no but you ought to be able to kick something back to the general fund just like Duke kicks a dividend back to its shareholders can we pontificate about that later yeah I mean there should be a number maybe it's not six so long so here's where we're at this is our initial swag at the budget electric Department says 78 million plus miscellaneous stuff for a total operating budget of 79.8 79.9 million this is the number that is under my microscope as we speak I think this number is $10 million inflated based on revenues why I do that is because if you go back to you think it's 78 or the 88 I think it's 68 this number is way inflated 23 24 is going to be I think 20 I think 20 23 24 you should should have a pretty good idea right now I think 23 24 is going to be about 74 mil no no yeah you did say 74 Brandy for actual but remember that still has a little bit of high power cost adjustment in there yeah so that so that's not a good number what I understand the numbers that we're looking at we we're looking at to sell this year 511 million kilowatt hours the trend is 519 but hold on if you do 74 and 62% of it or whatever it is is power cost is wholesale power so you roughly eight or n million is that going to leave you like a$ four or5 million ho yes what's the answer to your $5 million whole reduce the transfer but that's this year that's not next year that's like that's 23 24 and we stopped transferring so we got some money going back in so that's helping some of that we had bacon SE that's so I don't have you don't know how you're going to fix this year I don't know how I'm going to fix the whole this year we're trying this stock slow down okay that's in the next chart okay so those are the numbers we need to tighten up on and just for for comparison purposes 1% growth on our total sales is 519 million kilowatts we did that number back in 19 and so the corresponding numbers you know we we can kind of draw some comparisons there so look all bets are off right now we got some homework it's relatively minuscule but what are the miscellaneous and the other and why are they up so much interest is the miscellaneous interest earnings a lot the miscellaneous and then interest is miscellaneous yes interest on the cash on hand yes okay and then the contributions are in the other sources and that would be developer the c i as you call it paybacks thank you okay so then we break it down into expenses so this one shows these two are the power numbers St Lucy plus all requirements project then all the You Know M miscellaneous stuff um so where we're at this is where we're at for Capital so this is kind of where the rubber's hitting the road and this is kind of where we're squeezing down we explained the three-legged stool and capital system expansion forced by development Things That Go Bump in the night this stool number one storm comes transformer blows out we got to replace the Transformer and then system improvements that we want the M what this basically represents this Capital plan is it's a preparation for pretty much Things That Go Bump in the night and nothing else because the plan is trying to build our cash and address the $5 million hold so why why can't we just go Kings X nor more Capital because we have totally spent and we have made significant Capital Improvements since 2018 what what do all those numbers add up to a lot so this is another example of when I say well Brad's going to tell you we need a Transformer I'm gonna say we've put what you say 50 million we've put 50 million into the system what else do we need to do it's like that's the pump the brakes let's figure out where we're at you know so and I'm going to repeat this again and again the difference between the city manager and the department head is the city manager's charged with giving you a recommendation on where you make risk the department head is not okay that's not demeaning you don't pay Brad to say let's cut that you pay Brad to say this is what we need and that goes for every department head we now pay josi to say how many police officers you want you have the city manager to interpret that for you and remind you well if you do what the department head wants then taxes will have to go up or this fee will have to change or that has to be so every year we have to collectively decide what we're going to mitigate that's the difference between the department recommendation and the manager recommendation a lot of times they're spoton this year I'm going to suggest to you that we're going to vary significantly in the electric phone so when Brad says I need a Transformer I'm going say dude we just spent 50 million you got to chill so that's the end of the presentation I don't think it's as Bleak as it sounds um there's some there's some areas in there that I think we have a bead on that we need to go back and look on and in July we'll be closer any questions can you talk a little bit more about the villages Factor how long is it going to be a factor for two years three years five years what's your estimate okay that question takes us out of the electric Advisory Board is my preface because everything the village is doing we've already accomplished in the electric side in fact that was part of one of the reasons for the debt issue was to expand to them Roi it build the system which is actually in dister County which is the Villages of Catherine so as you put it every every potential meter is now spinning every potential Villages meter that is in the city of leesburg's electric territory Fruitland Park and Sumpter County is spinning but I would say the flip side is that 38% growth we got a couple more years of that and that ad vorum helps the transfer not it yes that's the other side so that comes forever so on the electric side of the house we're done pretty much with the I can say this with the electric side of the house we will never spend another Village's electric meter Never Say Never right we'll never spend another electric meter because their territor their The Village's territory roughly 44 to Center Hill Lake Sumter 301 that box that they own the only portions of that box that are in our electric territory are The Villages of Catherine and Fruitland Park even the city of leeburg property that's in that box and the property secret promises denim Village and the and the and the little spots in Lake County because now they have in Lake County in the Box they have Villages of Fruitland Park Villages of West Lake secret promise what you to be Renaissance trails and then the end of our isba territory and then they have mascot property below Bridges Road so they have a big swath still in Lake County but all of that I will go out on a limb and say it's either Duke territory or SEO territory so we will not spend a single Village's meter in Lake County or Sumpter County in the future unless we come up with the greatest brainstorm that encourages a territorial swap which I don't think is happening so that's the electric answer the general fund answer is every bit of growth that we saw last year or I'll say 95% of growth that we saw last year our number was 23% this year we saw 38% that's a total increase in taxable base of about 890 million we're going to get what we're not what the little piece that we're missing is is about 500 houses more to go in The Villages of West Lake so it's the villages it's 500 time 299 199 that's the average that we've been getting it's that which is 50 million so we'll get maybe 50 million more in taxable value for next year this year's taxable value is January 1 2023 isn't it no it's like 723 million no but it's January 1 2023 is the numbers you're seeing this year everything sold to December 31st 23 okay it's December 31st 23 that's you the wrong dat wrong year right day yeah January so there's still 500 more so we'll see that next year but we've got the Lion Share so when the villages is all said and done probably upwards of just south of a billion dollars a new investment oh by the way that performer was overperforming we thought we I think when we did the presentation the commission we thought like it's 750 million in new taxable value when we sold them the property so that performance over performing and then now you're going to see secret promises so you'll see more Villages stuff in the future but my guess is is you probably won't see Villages investment back in Lake County until they build in the block from 4 470 up to 44 you know that all that b property and you were they're masquerading now by the school so all that's going to get filled in at the clip of you know 270 houses a month so that's I don't know how many houses a year 3500 4,000 and so that will fill in and then they'll jump back over if that if that pace continues there's no reason to think at this stage it won't continue but I think in the general fund we have to deal with what we've got until The Villages movement starts again I had a quick question um so regarding um what is going to be coming up in the future as far as voting on this or going over this further um we're all suffering from inflation all of us here are business owners or people who run businesses um so when when is the call going to be made as far as optimization versus rate increase because I feel like the problem that happened in 2022 is that people weren't informed and so I know that we've decided to be better about communicating that but I'm just curious to see what kind of um Headway or warning is going to be given to people who are going to have that rate increase if there's a rate increase if that's significant acknowled Absol if there's a rate increase there rate increase then I would say it would be approved by the commission sometime in a August giving customers about 60 days notice okay and in reality I mean your July budget the any rate increase would be effective October 1 which would come on so that's why I went back to this side because we slipped over it pretty quick this this is the chart so do we have space in the rate these are these are as of May right now leberg is the lowest cost provider in the region when compared to Duke SEO FPL Mount Dora these numbers are going to change um look for them to start changing when fmpa gets up to date with the newest rates but this is so so my inclination what's that number going to look like probably I if it's probably if it would be 127 okay still would be below Duke still would be below SEO still would be above M door so even with 10 bucks added on there understand everything you just said the trouble times inflation yada yada y got it I hear you that's why I'm not standing here saying we need to increase rates right because we understand that so when Brad comes in here and tells you I need a new Transformer you guys got to tell Brad you need to chill slap that hand yes he'll figure out how to keep the lights on that's his job has uh has Kat responded about their unneeded Transformer not yet not yet not yet so there and there's another problem we haven't talked about is katr too on the electric side of the house I don't know how big of an impact that has I'm on to I'm not even going to guess we sell them about a million bucks of electricity every year so again it's in that in that shade window but we don't make a ton of money on it we don't make a ton of money on it and I think it's pretty much a pass through and it's really complicated with how they have a charge for when they generate when they don't generate really again this is a I'm going to caveat this with we're not doing done our homework we got notice a week ago that katr was closing by the news paper the same way everybody else did um and so there's two parts of that component there's the gas side which is a little more easy to understand because it was a transportation rate so yeah we got half a million dollars flap in there Katy didn't notice us pursuant to the agreement so we need to square up with that but we also think that there's ways to get out of that Transportation agreement where will probably be held whole um because they're going down in a time where the investor on utilities remember 99.9% of the gas that comes through the big transmission lines isn't going to katrol it isn't going to ldcs local distribution co-ops to to make your your ovens and your ranges go or your hot water it's going to make turban spin all that other stuff is is you know the the the stuff that Bob does in the in the in theame gas fund it's a relatively small part so if we got to sell I can't remember how many thms it was if we got to sell you know a couple of million therms capacity on fgts line in the summertime most likely somebody's going to buy that because they need that capacity for Generation purposes so that's good but where we but we were charging them for that service which was gravy and I hate to say that so bluntly but it was so that's about 150 Gra so Bob's budget we probably need to go back and click 150 grand out of it right now so his black number of surplus is going to be zero because he's going to need to adjust his revenues down to so that's the gas side of the house the electric side of the house is a lot more complicated my knee-jerk reaction and again and I had this conversation with Jim today Jim's our Jim's our contract Zar so he's been charged with pulling the contracts dusting them out figuring out how they affect us probably at the end of the day I think we probably need to push trolley into just a general service demand customer or maybe an even general service customer on a commercial rate because their inclination of what they told us they were going to serve is security lights and AC and so on a commercial side that could just be a a gs1 customer versus even a general service one demand customer we'll look into that the impact that it has on this that number I'll probably willing to say it's not worth counting for now does your bulk cost have to be is there anything that mandates that it has to be an even number 10 20 30 40 up to 70 can it be a variable in between could it be 11 like 0.11 you about customer charge no no no the bpca the bpca there is a Formula that is there is there is a Formula that guides what the bcpa is it's totally formulaic it's based on kilowatt sales versus cash on hand versus I I think we shared that chart I I didn't have it with you me uh it's not in this you say it's 70 is it 70.0 or is it something different what right now it's 1 cent right so it's got up to seven cents at one point it got up to seven but so that was based on what we estimated we were going to sell minus our losses what we over under collect what I'm asking is could it could it in theory be one and a half cents yes it could so it could be oh yeah it's been that way so why would you entertain the possibility of increasing the customer rate which is a flat fee regardless of how much you're using instead of adjusting a variable rate which would be more reflective of how much energy you're using okay because the power so that's a good question the power cost adjustment the power cost adjustment is solely related formul matically to what we under or over recover in relation to how much we buy Power for the only the power cost adjustment doesn't pay Personnel the power cost adjustment doesn't pay debt the power cost adjustment doesn't pay operations the power cost adjustment pays power cost only it's tied to the cost of your power or the consumption or the or how much power you're you're buying all of that okay the power cost adjustment is is go to how much we buy and how much we buy it for relative to how much we have on hand so you talked about efficiency and how efficiency is making generally speaking homes more efficient they should be using less power yes why is is the is the amount of power being purchased by by leberg dropping accordingly it's I'm going to tell you it's steady now so I get there's growth growth is going to offset the reduction in the household usage but I keep going back to my my my college supply and demand courses and I'm trying to figure out if the demand because of efficiency is starting to drop the including new homes which should be even more efficient so over since fiscal year 16 we sold 474 million kilowatt okay this year we look to sell 511 kilowatts so minus those two and then divide it by the other and so the numbers go I'm just going to give you it in in in millions but in hundreds so 16 17 18 19 20 okay these are actual numbers we sold 474 461 465 519 505 514 527 518 511 that jumps probably basically fr the park uh no I'm want to tell you that jump in 27 was a peak demand and heat related weather related so it's about a 38 million 38 million spread between hold on second Mark so so when we saw 518 that's that was fiscal year 23 last summer okay where we saw the highest peaks where we broke our PE we broke our pee to what yeah okay sorry 128 from we're already in the '90s so remember so remember you got two you got you got how much you're using and how much you're using and how much you need at once so if it's in if it's in if it's in water it's how many gallons you're taking out of the pipe and then how many pressure to push the water to you so that's Peak so we pay for both of those charges so you can take less water out but at any one specific time if you need a bunch at once then PSI goes way up to get that water to you so it's the same on the electric side of the house you might use and consume a lot of kws during a hot time and then we and then we've got to prepare to get you 110 megawatts at once but then you're going to back down so when you step back from that year and like in that in that month um so so in August 23 we saw a peak a usage in August of 60 million kilowatts but over the year the use wasn't down so that's those IBS and the yangs so that's why it's that's why these numbers are goofy and it's there your question supply and demand it's because it's constantly changing and it's based on multiple factors weather Peak consumption average usage and we remember we live our our wholesale contract is demand related so the best we do is when we use lots of energy but at one steady rate we don't do that we Peak our our and and so and and the more you Peak the more expensive our bill becomes because you have to be prepared to provide you 120 megaw worth of energy but you might only use it for one hour out of 365 days a year so based on your explanation about how the money is used is it theoretically possible that the bpca could drop but the customer service charge could go up yes because your demands are are are different because they're not they're not related so but all but all the consumer all the homeowner cares about is the bottom line of their utility bill correct so is it possible to offset one charge by lowering the other you've already said it's possible I we've done that we've done that in the past we we've said hey your rates going down because yes okay yes is the answer our operational cost may be going up but our cost of purchasing electri could be going down yes okay but we can't plan on that understood to but to Mark's point about this idea that if rates going up people use more should pay more do and given that we're you know I don't know was that like 30 some odd percent below Duke which seems that's not one of those numbers doesn't make sense do we need to be looking at a new rate study maybe like with the inflation because then a new rate study would allow you to do what you're talking about where the more you if we come up with a higher rate it's based on usage not an arbitrary fix but that require rate study yes and yes and it's going to bring you back to the same answer that you don't want to hear rates need to go up but if they going up Fair Way in a way that's more controllable by the customer right and and everybody's rate structure is kind of different and and so it goes to that article that you s me the other day so Mark sent me an article the other day about the things that OU is doing so OU is looking at increasing base rates OU is looking at changing the solar credit OU is looking at um doing a kind of demand residential rate so if you at you know if you're residential customer you're going to pay more for getting AC at 3 pm in the afternoon than you are 900 P PM in the evening so all th those are expensive things to do we tried to do it here we weren't successful at it um with smart grid but so that doesn't mean we don't do that again which I think it kind of does just because we're going to have different with de different demographics than OU so I think the the time that we put into trying to get that isn't going to get us to where we want to go I lost my train of thought there a little bit so at the end of the what what we're seeing the industry do is try to recoup maximum back and so when you're fighting all these different issues solar demand what we're seeing the investor own utilities do put it in a base charge or base charge customer charge same get guarantee yourself that upfront we know we're going to get that per month they're probably doing that because the solar I think both more solar than anything yeah sorry I was just I was thinking on that whole vein you know this is when when we raise when we raise prices it can be counterproductive I mean I think about it in my industry every industry everything that I've learned um about business and I think about when when the base rate went up to 7% and I can speak for myself you know s cents seven cents okay um you know I think about the demographic and I haven't done a full Market study but I would guess that uh most of Leb 's utility Market is median to low income or fixed income retirees with pensions whatever um you take a hit like that s cents unexpected or expected or not a lot of people are going to start conserving energy they're not as free with running the the air conditioner at 75 they bumped it up to 77 they've gotten good over the past year about turning lights off and things like that I know at Turner's I mean that's what I did I mean I'm like shut this off shut this off we don't need this where in the past it was like wide open let's just you know uh everything's good because I was I was comfortable in a rate and a payment every month and then it went up to where I was uncomfortable both at home and at at business and now what's happened is I've gotten different habits on how I use electricity and I don't think that raising the rates I think if it's a base rate um uh or the the customer charge then it's a onetime hit it's like dang my my electric bill went up 10 bucks a month you know and then I can go about my life and I can manage my utilities without that going up or down and that's kind of the same whereas if you start raising the rates people are going to squeeze a little bit more more you know or think about saying when when it's not as expensive people are like well you know I can afford they'll use more you can win in volume or you can win in the ticket price you know I think about I ran a restaurant in The Villages in 2009 and I grew that restaurant the volume of that restaurant to 900,000 to 4.4 million in the two years between 2008 and 2010 but what we did did was just the opposite of what everybody else was doing was I lowered my price increased the quality and made it so attractive that people really didn't couldn't afford to spend their money anywhere else and he just went in volume you know and I would submit that it may be worth thinking about before we raise rates or talk you know I know there potential when we're not talking about raising rates right now but think about the fact that I'm start personally I'm starting to get a little bit more comfortable where the electric rates are now I'm I'm comfortable cranking the air conditioner down a little bit lower I'm not freaking out when this Set of Lights is is left on just eating up so I'm starting to get comfortable where you st to see usage go back up I would imagine that I'm not the only person that's that's like that I mean so that's just my two cents if that makes any sense at all it does and and we do and you and we do see that when rate when utility rates are higher we consume less and that's actually a good thing for us especially on the electric side because if our rates are higher we're earning more and then we're actually going to Peak lower because you're not going to turn your AC up down to 72 at 3 pm you're G to say I'm just going to keep it at 78 so then so then the system doesn't Peak as high so then we actually you know we actually so I'm arguing the opposite of what you're saying it actually makes us earn more money we increase R you use less and you worth less and one I mean one thing that I mean I I took away and this goes against like how I would personally run it but it was a takeaway from the blowback that we we had with with the $70 bpca is that the only one that really got brought up over and over again was our comparison to Duke because that's the one that's around here so everyone bring up a Duke bill and of course now that Duke's higher nobody comes in and says thank you your rat's lower um which leads me to say even this is not how I would run it is like is do we need to be thinking about not sh R be Dukes the 156 I'm not suggesting that but should our structure follow more of Dukes where it's doesn't where it's more in the the middle and so it doesn't get as low or as high because that was I I mean I I think you pass on as what it is but and then that gets into really super technical questions about rate structure so if you go to some investor own utilities the industrial customer isn't paying their proportionate share because they're subsidizing it with residential rates where our utility we spread out the cost evenly so if we were going to if we were going to okay we're going to take it easier on the residential customer then the industrial customer is going to go up or flip-flop then we would have to increase R so all those are part of the performa that public Ser the Public Service Commission reviews when they look at investor owned rates we don't look at that structure as much because ours is a everybody pays their their share um and we and back to Jack's question too we we we see that on the water side too you see the inverse structure on the the more you use the more you pay is designed exactly to keep you from using water over a certain amount right I mean that is exact so I so I would argue back to you that is exactly why we want to increase rates to prevent you from using electricity and my thinking is just with the limited with the limited uh the knowledge that I have um is that you know if you can't sell something at x amount of money except one or two it's not creating the revenue that's needed to fuel the machine then you got to think about you know and I can only think in in terms of my business but you know if if I have a hamburger at $25 and only one or two people are buying it every day but I need you know $300 a day for lunch to pay the staff and keep the lights on uh if I lower the price of my hamburger to you know $15 and sell 30 of them you know then I'm I'm reaching my goals I'm having to work a little bit harder for it but at least I'm not $5 million of budget deficit at the end of the year I think one of the big variables and what you're describing I understand where you're going with this one of the big variables is that Leesburg electric has no competition they have you have no other choice right you can't choose your hamburger versus somebody else's hamburger so either you stop eating hamburgers right well what I can do what I can choose is the amount of of exactly that iume yeah exactly which is and that's what what is and if that's small potatoes that's small potatoes it may be not even worth having the discussion about it like say that it won't matter you know if if you know half of leeburg is using a core 25 % less power every year I don't know if that would make it would it would matter probably help yeah and so like how perverse this is like I get like from a business standpoint it makes no sense the city in fact they got in trouble for it and had to stop but but this right before you where they installed generators at like Walmart and public no that was during me okay and at Peak demand the stores would switch off of the city of leeburg and run their own power because it lowered the City's electric bill substantially because we shaved that Peak demand off now of course the other people buy Power withth got pissed off cuz it was at their expense but it actually saved a lot of money for people to not buy our biggest users to not buy from us and so that goes to the demand side of of what was happening so the all requirements pool the other 13 cities had calcul I'm going to just throw a number out so it makes sense they threw out a number that during peak time there the all requirements project need 15,000 megaw of power for 5 hours of the year so when we were encouraging Walmart's times 1 Publix times three we were saving 2 million bucks and our demand cost but the pool still had that $2 million cost to generate 15,000 megaw at 3 P.M and so we were cheating the system because we were able to get out our demand meter went down they didn't collect any money so that two million bucks got squished over to everybody else to pay so that's the that's the two-part component of demand demand use and energy use and so that's where the pool said leberg you can't do that and that was in the contract okay I do think whether it's this year or next year orever that it would make sense to do a rate study like now that we have a board that spends a lot of time cuz I know we did one while I was in commission but we didn't discuss it other than briefly if we did one I thought we did one I don't think we did we did a we did a water and SE one that never saw the light of the commission okay maybe we budget I was just about to ask any like general idea on what a a rate that study would cost what we put in there around 100 grand okay okay so any other questions so we'll have more data and information for you come July that's the workshops are the 9 11 when's the next when's the first Monday of 1 July 1 is this was the last one that we had July so the first budget Workshop is July two so they get so we're going to have a lot of meetings that week so you it's also a holiday week so we probably take that into consideration I'm not I was about to say I probably won't be here are you guys not going to be here July on vation we cancel July 4 yeah can we move it can we can we move it after the workshop so we have a better sense as to what comes out work before the workshop um that's everybody El last Monday I would rather until we have like that you want do the last Monday the 8th I'll be gone the first okay wouldn't it be better to meet after you guys have had your workshops just so we have more information guess it depends on whether we want to make a recommendation to the commission or not y Bingo okay 10 20 we could do the 25th that's a Tuesday the commission meets 10:24 Okay so would be Tuesday the 25th of June yes or give me a couple extra days and make it the 27th Thursday what you guys like 25 or 27 25 I was just about to say I think 25 would work out final answer sir 25 so we'll go 25 at 5:30 will you get that out Andy so we'll cancel July 1 and we'll do 25 at 5:30 okay okay and again forgive me um so I guess right now we do roll call yes okay Dan nothing tonight Mark I I do want to just quickly take a moment um if you did not hear our effort to uh create that waiver for the teachers did pass the commission um and I did want to take a moment to thank Al for doing a great job of taking sort of our little nugget and fine-tuning it into what it needed to be to pass their commission uh without any issue so wonderful and Jack okay uh meeting adjourned all right all right it pass unanimously uh it was on the consent agenda with I'm the only one that teach