Joint Special Meeting of The Common Council and Shawano Municipal Utility Commission

CITY OF SHAWANO JOINT SPECIAL MEETING OF THE COMMON COUNCIL AND SHAWANO MUNICIPAL UTILITY COMMISSION AGENDA WEDNESDAY, NOVEMBER 15, 2023 6:00 PM SHAWANO CITY HALL, 127 S. SAWYER STREET, SHAWANO https://us02web.zoom.us/j/84759822412pwd=dmwwTzdsOE5qMkdKZFpKSzIxa24vQT09 MEETING ID: 847 5982 2412 PASSCODE: 825830 - OPEN PUBLIC HEARING - 2024 CITY OF SHAWANO BUDGET 2024 SHAWANO MUNICIPAL UTILITIES BUDGET - CLOSE PUBLIC HEARING - MAYOR BRUCE MILAVITZ HAS CALLED A SPECIAL JOINT COMMON COUNCIL/SHAWANO MUNICIPAL UTILITY COMMISSION MEETING TO BE HELD WEDNESDAY NOVEMBER 15, 2023 TO IMMEDIATELY FOLLOW THE CLOSING OF THE PUBLIC HEARING. THE PURPOSE OF THE MEETING IS AS FOLLOWS: 1) JOINTLY CALL TO ORDER 2) SILENT PRAYER 3) PLEDGE OF ALLEGIANCE 4) JOINT ROLL CALL 5) REPORT OF CLERK FOR COMPLIANCE WITH OPEN MEETING LAW 6) APPROVAL OF AGENDA AND/OR OTHER MATTERS AUTHORIZED BY LAW 7) RESOLUTIONS/ORDINANCES A. Resolution No.119-23: Approve 2024 City of Shawano Budget B. Resolution No.120-23: Approve 2024 Shawano Municipal Utilities Commission Budget Page 1 of 12 8) ADJOURNMENT OF SMU COMMISSION 9) DISCUSSION AND POSSIBLE ACTION REGARDING MUEHL'S PROPERTY PROPOSAL 10) ADJOURNMENT OF COMMON COUNCIL DISABLED ACCESSIBLE (Contact City Clerk prior to meeting if require additional services.) It is possible that members of and possibly a quorum of members of other governmental bodies of the municipality may be in attendance at the above-stated meeting to gather information; no action will be taken by any governmental body at the above-stated meeting other than the governmental body specifically referred to above in this notice. Page 2 of 12  City of Shawano 127 S Sawyer Street, Shawano, WI 54166 (715) 526-6138 Fax: (715) 526-5751 RESOLUTION NO. 119-23 SPONSORED BY: Finance Committee INTRODUCED BY: SECONDED BY: WHEREAS, this Resolution appropriates the necessary funds for the operation and administration of the City of Shawano for the year 2024. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Shawano that: 1. There is hereby appropriated out of the receipts of the City of Shawano for the year 2023, including monies received from the general property tax levy to the various purposes set up on the budget approved by Council on November 15, 2023, and attached herewith the purpose therein stated. 2. There is hereby levied against all taxable property of the City of Shawano, Wisconsin, a total tax levy of $15,256,363. This is a direct tax for:  City of Shawano $5,822,729  Shawano School District $4,434,606  Northeast Wisconsin Technical College $399,167  Shawano County $2,564,274  The State of Wisconsin $0.00  Tax Increment Finance District #04 $427,217.74  Tax Increment Finance District #05 $128,746.72  Tax Increment Finance District #06 $218,967.77  Tax Increment Finance District #07 $1,197,244.11  Tax Increment Finance District #08 $44,363.42  Tax Increment Finance District #09 $19,047.24 3. The City Clerk and Finance Director are hereby authorized and directed to spread the said tax upon the current tax roll of the City of Shawano. Adopted: Signed: Bruce Milavitz, Mayor Signed: _ Lesley Nemetz, City Clerk Page 3 of 12 City of Shawano, 127 S Sawyer St, Shawano, WI Shawano Municipal Utilities, 122 N Sawyer St, Shawano, WI RESOLUTION NO. 120-23 SPONSORED BY: Utility Commission INTRODUCED BY: SECONDED BY: WHEREAS, the Shawano Municipal Utilities has established a budget for 2024; and WHEREAS, the Utility Commission has reviewed and recommends this budget to the Council for approval. NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of Shawano that the attached 2024 budget for the Shawano Municipal Utilities be approved. Adopted: Signed: Bruce Milavitz, Mayor Signed: Lesley Nemetz, City Clerk Page 4 of 12 Shawano Municipal Utilities 2024 Budget Page 5 of 12  Shawano Municipal Utilities 2024 Budget Table of Contents Page Operating Summaries: Rate of Return.................................................................................................... 1 SMU Operating Budget Summary...................................................................... 2 Electric Budget .............................................................................................. 3 - 4 Technology Budget ............................................................................................ 5 Construction Budget .......................................................................................... 6 Page 6 of 12  Shawano Municipal Utilities Rate of Return Electric - Excludes Contributed Estimated Prelim Budget Year Ended Year Ended Year Ended Year Ended Average Rate Base 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Add Average: Utility Plant in Service $ 26,657,504 $ 27,267,972 $ 28,234,296 $ 42,284,296 Material & Supplies 432,900 493,876 413,876 426,292 27,090,404 27,761,848 28,648,172 42,710,588 Less Average: Customer Advances Construction (82,153) (49,032) (75,032) (68,739) Regulatory Liability (48,751) (29,250) - - Reserve for Depreciation (13,162,340) (13,581,386) (14,518,098) (15,713,098) (13,293,244) (13,659,668) (14,593,130) (15,781,837) Average Net Rate Base 13,797,160 14,102,180 14,055,042 26,928,751 Net Operating Income (Loss) $ 514,799 $ 390,932 $ 248,930 $ (16,338) Rate of Return 3.73% 2.77% 1.77% -0.06% Operating Inc/Avg Net Rate Base Authorized Rate of Return 5.00% 5.00% 5.00% 5.00% Variance -1.27% -2.23% -3.23% -5.06% Page 1 Page 7 of 12  Shawano Municipal Utilities 2024 Operating Budget Summary Proposed 2021 2022 2023 2024 % Electric Department Actual Actual Budget Budget Change Operating Revenues $ 21,944,485 $ 23,691,182 $ 23,404,527 $ 25,710,632 9.9% Other Revenues 290,430 329,162 229,680 665,108 189.6% Total Revenues 22,234,915 24,020,344 23,634,207 26,375,740 11.6% Purchased Power 17,855,772 19,594,943 18,922,221 21,365,041 12.9% Operating & Maintenance Expenses 1,870,184 2,095,003 2,064,266 2,463,544 19.3% Depreciation & Amortization Expense 1,020,549 1,018,509 1,037,084 1,195,000 15.2% Taxes 801,330 712,931 838,866 858,178 2.3% Other Expenses 74,519 275,787 64,790 978,947 1411.0% Total Expenses 21,622,354 23,697,173 22,927,227 26,860,710 17.2% Net Income (Loss) $ 612,561 $ 323,171 $ 706,980 $ (484,970) -168.6% Technology Department Total Revenues $ 299,672 $ 324,779 $ 372,690 $ 416,211 11.7% Purchased Services 24,445 28,799 28,400 34,660 22.0% Operating & Maintenance Expenses 106,478 163,459 163,070 218,725 34.1% Depreciation & Amortization Expense 58,825 59,030 61,748 57,691 -6.6% Taxes - - - - 0.0% Total Expenses 189,748 251,288 253,218 311,076 22.8% Net Income (Loss) 109,924 73,491 119,472 105,135 -12.0% Appropriation to Municipality (108,000) (108,000) (108,000) (108,000) 0.0% Retained Earnings Increase (Decrease) $ 1,924 $ (34,509) $ 11,472 $ (2,865) -12.0% Total Utility Total Revenues $ 22,534,587 $ 24,345,123 $ 24,006,897 $ 26,791,951 11.6% Purchase Power & Service Expenses 17,880,217 19,623,742 18,950,621 21,399,701 12.9% Operating & Maintenance Expenses 1,976,662 2,258,462 2,227,336 2,682,269 20.4% Depreciation & Amortization Expense 1,079,374 1,077,539 1,098,832 1,252,691 14.0% Taxes 801,330 712,931 838,866 858,178 2.3% Other Expenses 74,519 275,787 64,790 978,947 1411.0% Total Expenses 21,812,102 23,948,461 23,180,445 27,171,786 17.2% Net Income (Loss) 722,485 396,662 826,452 (379,835) -146.0% Appropriation to Municipality (108,000) (108,000) (108,000) (108,000) 0.0% Retained Earnings Increase (Decrease) $ 614,485 $ 288,662 $ 718,452 $ (487,835) -167.9% Page 2 Page 8 of 12 Shawano Municipal Utilities Electric Budget 2024 - PRELIMINARY Actual Actual Budget Projected Budget % 2021 2022 2023 2023 Adjust 2024 Inc(Dec) Sales of Power Residential Revenues RG1, RG2 3,731,625 4,050,910 4,186,553 4,236,339 84,727 4,321,065 2.0% General Service Revenues GS1 1,238,087 1,274,372 1,213,643 1,329,778 26,596 1,356,374 2.0% Large General Service Revenues GS 1,712,613 1,719,761 1,815,223 1,786,598 35,732 1,822,330 2.0% Small Power CP1 813,857 888,343 845,418 923,810 18,476 942,286 2.0% Large Power CP2 2,804,909 2,886,946 2,914,356 3,043,991 60,880 3,104,871 2.0% Industrial Power TOD CP3 6,263,723 7,018,386 6,688,834 7,224,330 144,487 7,368,817 2.0% Large Industrial TOD CP4 5,099,348 5,569,942 5,448,768 6,375,953 127,519 6,503,472 2.0% Field Lighting Revenues FL1 56,236 59,371 58,933 60,041 1,201 61,242 2.0% Street Lighting Revenues MS1 224,087 223,151 232,799 225,663 4,513 230,177 2.0% Total Power Sales Revenue 21,944,485 23,691,182 23,404,527 25,206,502 504,130 25,710,632 2.0% Purchased Power Expense 17,855,772 19,594,943 18,922,221 20,946,108 418,932 21,365,041 2.0% GROSS PROFIT ON SALES 4,088,713 4,096,239 4,482,306 4,260,394 85,198 4,345,592 2.0% Other Operating Revenues Customer Discounts Forfeited 38,604 30,445 32,782 44,608 892 45,500 2.0% Rent Electric Property 58,148 73,601 61,670 89,596 1,792 91,387 2.0% Other Revenues 21,396 17,091 19,167 15,974 319 16,294 2.0% Total Other Operating Revenues 118,148 121,136 113,619 150,177 3,004 153,181 2.0% Other Operating & Maintenance Expenses Supervision Expense 64,283 67,509 73,322 69,483 9,631 79,114 13.9% Station Expense 59,686 69,091 60,064 67,749 1,489 69,238 2.2% Overhead Line Expense 169,043 169,513 156,206 158,763 31,075 189,838 19.6% Underground Line Expense 54,374 60,158 58,651 83,722 (6,633) 77,089 -7.9% Street Lighting 10,042 8,212 15,132 7,166 2,410 9,576 33.6% Meter Expense 25,843 67,186 29,286 68,324 (5,503) 62,821 -8.1% Customer Installations 2,245 329 1,913 1,257 268 1,526 21.4% Misc Distribution Expenses 135,609 263,040 182,744 293,419 (25,375) 268,044 -8.6% Rents 1,797 1,950 2,516 35,937 12,868 48,805 35.8% Distribution Operation Exp (580-58 522,921 706,989 579,834 785,819 20,231 806,050 2.6% Maintenance - Supervision & Engine 30,241 31,753 29,304 32,639 4,560 37,199 14.0% Maintenance - Station Equipment 1,167 861 997 14,868 (7,099) 7,768 -47.8% Maintenance - Overhead Lines 66,104 47,112 73,485 61,599 5,188 66,787 8.4% Maintenance - Underground Lines 28,296 24,450 35,129 32,339 618 32,957 1.9% Maintenance - Line Transf 4,552 12,297 11,112 14,232 (338) 13,894 -2.4% Maintenance - Street Lights 3,475 1,600 4,181 7,006 (2,726) 4,279 -38.9% Maintenance - Meters 2,004 125 956 147 2 149 1.6% Distribution Maintenance Exp (590 135,839 118,198 155,164 162,829 205 163,034 0.1% Total Distribution O&M Expense 658,760 825,187 734,998 948,649 20,435 969,084 2.2% Meter Reading Expenses 21,448 36,916 43,721 38,506 823 39,329 2.1% Billing Expenses 192,721 189,339 194,531 190,102 11,131 201,233 5.9% Uncollectible Accounts 2,596 5,028 4,020 3,203 240 3,443 7.5% Customer Accounts Expenses (90 216,766 231,283 242,272 231,812 12,194 244,005 5.3% Advertising 9,244 9,566 9,473 9,801 (301) 9,500 -3.1% Sales Expenses (911-916) 9,244 9,566 9,473 9,801 (301) 9,500 -3.1% Administrative & General Salaries 372,334 385,771 398,106 455,750 18,898 474,647 4.1% Office Supplies & Expenses 53,733 69,489 55,777 78,221 (8,061) 70,160 -10.3% Admin Expenses Transferred (159,952) (206,525) (169,789) (229,964) (15,762) (245,726) 6.9% Outside Services 35,770 35,919 46,804 94,626 (48,593) 46,033 -51.4% Insurance - Property 14,269 15,545 16,945 17,228 861 18,089 5.0% Insurance - Worker's Compensation 8,676 10,731 11,371 15,141 606 15,746 4.0% Insurance - Liability 28,032 30,903 31,830 31,879 956 32,836 3.0% Insurance - Medical 297,524 292,537 333,177 355,307 74,443 429,750 21.0% Pension 93,067 95,025 114,133 115,614 7,698 123,312 6.7% Insurance - Life 2,583 2,706 2,890 3,184 (157) 3,027 -4.9% School Expense 40,128 50,931 45,121 48,410 4,504 52,914 9.3% Miscellaneous Employee Benefit 21,882 20,570 15,290 59,941 (32,147) 27,793 -53.6% Page 3 Page 9 of 12 Shawano Municipal Utilities Electric Budget 2024 - PRELIMINARY Actual Actual Budget Projected Budget % 2021 2022 2023 2023 Adjust 2024 Inc(Dec) Regulatory Commission Expense 15,422 80,686 25,218 28,698 44,620 73,318 155.5% Miscellaneous General Expense 33,548 29,614 35,024 50,746 (10,207) 40,538 -20.1% Maintenance - General Plant 128,398 115,065 115,626 99,863 (21,346) 78,517 -21.4% Administrative & General Expense 985,414 1,028,966 1,077,523 1,224,642 16,314 1,240,955 1.3% - Total Admin & Sales Expenses 1,211,424 1,269,816 1,329,268 1,466,254 28,206 1,494,460 1.9% - Total Admin and Dist O&M Expens 1,870,184 2,095,003 2,064,266 2,414,902 48,641 2,463,544 2.0% Depreciation & Amortization (403-4 1,020,549 1,018,509 1,037,084 936,712 258,288 1,195,000 27.6% Taxes (408) 801,330 712,931 838,866 810,027 48,151 858,178 5.9% Total Operating Expenses 3,692,063 3,826,443 3,940,216 4,161,641 355,080 4,516,722 0 Net Operating Income (Loss) 514,798 390,933 655,709 248,930 (266,879) (17,949) (0) Non-Operating Income Non-Utility Operating 2,538 2,767 (1,871) 10,765 10,765 0.0% Jobbing Income 88,084 122,758 82,230 98,691 98,691 0.0% Misc Electric Contr Funds 6,680 55,452 - 21,162 (4,878) 16,284 -23.1% Misc Credits to Surplus 52,927 6,479 - - 0.0% Interest & Dividend Income 25,519 21,843 29,223 202,285 174,215 376,500 86.1% Change in value of investment (3,465) 5,206 9,686 9,686 0.0% Total Non-Operating Income 172,282 208,026 116,061 342,590 169,337 511,927 49.4% Non-Operating Expenses Contributed Plant Amortization (19,501) (19,501) (19,501) 19,501 - -100.0% Contributed Plant Deprec Exp 33,399 34,434 35,358 35,358 0.0% Lobbying Cost 4,397 4,459 4,500 4,512 4,512 0.0% Interest Revenue Bond 686 - 869,566 869,566 100.0% Bond Debt Expense 355,293 (355,293) - 100.0% Amort of Debt Premium (37) (880) (880) -100.0% Jobbing Expense 64,582 68,096 51,805 54,716 54,716 0.0% Misc Interest Expense (17,157) 263 450 4,140 4,140 0.0% Misc Debits Surplus 180,989 - - 0.0% Approp. of funds to Municipality 8,150 7,047 8,035 19,410 (7,874) 11,536 -40.6% Total Non-Operating Expense 74,519 275,787 64,790 453,928 525,020 978,947 115.7% NET INCOME / (LOSS) $ 612,561 $ 323,171 $ 706,980 $ 137,592 $ (622,562) $ (484,970) -452.5% Notes: Recorded Bond Expenses in Sept 2023 $355k. Includes Year 1 of Bond Interest $870k in 2024. Assumption 2% increase in revenues. Page 4 Page 10 of 12  Shawano Municipal Utilities 2024 Operating Budget - PRELIMINARY Technology Department Actual Actual Budget Projected Budget 2021 2022 2023 2023 Adjust 2024 Operating Revenues Fiber Optic Revenue 185,580 211,671 193,245 196,018 12,824 208,842 IT Services - Software & Licenses 20,512 25,281 24,721 24,722 11,124 35,846 IT Services - Hardware 39,019 40,674 44,494 45,868 1,918 47,786 IT Services - Services 49,402 40,022 103,000 103,000 12,500 115,500 IT Services - Network Hardware 5,159 7,131 7,230 7,230 1,007 8,237 Total Operating Revenues 299,671 324,779 372,690 376,838 39,373 416,211 Operating Expenses Purchased Internet Services 24,445 28,799 28,400 30,254 4,406 34,660 IT Purchases - Software & Licensin 23,663 27,823 24,500 45,696 (4,834) 40,862 IT Purchases - Hardware 31,487 23,044 25,000 30,607 9,593 40,200 IT Purchases - Network 1,315 2,987 2,650 5,716 164 5,880 IT Purchases - Support Services 64,741 68,000 74,384 616 75,000 Supervision Expense 40,252 - - Station Expense 303 (303) - Overhead Line Expense 195 1,547 475 142 142 Underground Line Expense 299 1,440 150 1,510 (430) 1,080 Misc Distribution Expenses 49 Rents 6,029 6,687 6,420 6,676 6,676 Administrative & General Salaries - - Office Supplies & Expense 431 1,236 600 921 15 936 Property Insurance 713 825 850 718 32 750 Fringe Benefit Expense 32,502 34,000 37,464 3,036 40,500 School Expense 5,000 5,000 Miscellaneous General Expense 542 211 350 1,419 (694) 725 Maintenance - General Plant 1,550 416 75 984 (9) 975 Total Operating Expenses 130,923 192,258 191,470 236,843 16,592 253,386 Depreciation & Amortization 58,826 59,030 61,748 58,479 (788) 57,691 Total Expenses 189,748 251,288 253,218 295,322 15,804 311,077 Net Operating Income 109,923 73,491 119,472 81,517 23,569 105,135 Other Expenses Appropriation of Income to Municip 108,000 108,000 108,000 108,000 108,000 Total Other Expenses 108,000 108,000 108,000 108,000 - 108,000 Net Income (Loss) $ 1,924 $ (34,509) $ 11,472 $ (26,484) $ 23,569 $ (2,865) Page 5 Page 11 of 12  SHAWANO MUNICIPAL UTILITIES 2024 CONSTRUCTION BUDGET BUDGET Electric Budget 2023 FINANCING SOURCE NO. PROJECT NAME Budget OPERATIONS OUTSIDE E-24-01 Tools & Safety $ 30,000 $ 30,000 E-24-02 Transformer Purchase 100,000 150,000 E-24-03 Work Orders: 1000, 1002, 1006, 1010, 1015 275,000 250,000 E-24-04 Electric Meter Purchase 40,000 20,000 E-24-05 Vehicle & Equipment Purchase 305,000 235,000 E-24-06 Substation Station House Upgrades 100,000 65,000 E-24-07 Pole Replacement 75,000 75,000 E-24-08 Aarrowcast Upgrades 100,000 E-24-09 Cutout Replacements 140,000 E-24-10 New Building Equipment 150,000 150,000 Sub-total $ 1,215,000 - Electric Sources and Uses of Funds Net Income (Add Back Bond Interest) $ 386,207 Bond Payments (877,858) Depreciation Expense 1,230,358 Less: 2024 Capital Projects (1,215,000) Total Sources Remaining $ (476,293) Carried Over from Previous Budgets Bucket Truck & Backyard Unit 535,000 9/30/2022 9/30/2023 Y/Y Difference Cash on Hand as of Sept 30 $ 4,583,782 $ 4,643,345 59,563 Technology Budget IT-24-01 Fiber Cable Replacements/Additions 30,000 $ 30,000 IT-24-02 Fiber Hub Upgrades 5,000 5,000 $ 35,000 Technology Sources and Uses of Funds Net Operating Income $ 105,135 Depreciation Expense 57,691 Less: 2024 Capital Projects (35,000) 2011 Bond Payments in 2024 (108,000) Cash Reserved for Funds (Soft, Hard, Network) (4,927) Total Sources Remaining $ 14,899 9/30/2022 9/30/2023 Y/Y Difference Cash on Hand as of Sept 30 $ 239,571 $ 231,561 (8,010) Non Reserve Cash on Hand as of Sept 30 $ 114,454 $ 111,951 (2,503) Page 6 Page 12 of 12