NPU proposes FY2020 budget with no rate increases

On Tuesday, March 26, Norwich Public Utilities (NPU) presented our Board of Commissioners with a draft budget for Fiscal Year 2020. The NPU Board will review our submission very closely and ask NPU staff for additional information in the weeks ahead.

NPU will provide the Norwich City Council with a budget overview on April 5 as part of the City’s budget development process; we expect the NPU Board to vote on the budget proposal during their April 16, 2019 meeting.

Below is a summary of the NPU budget that was submitted to the Board:

Rates:

NPU’s FY2020 proposes no rate increases in any of our utility services: natural gas, electric, water, or sewer.

Payment to the City’s General Fund:

NPU’s proposed FY2020 budget includes a payment to the City’s General Fund of $8,860,667, an increase of $385,095 over 2019.

• $738,388 per month sent from NPU to the City of Norwich
• $81.7 million sent by NPU to the City of Norwich over the past ten years

Revenues:
Total revenues are expected to increase by $2.2 million to approximately $101 million; total revenues of $97,375,874 plus Capital Tracker revenue of $3,545,775.

Revenues in NPU’s four operational divisions are budgeted to increase as follows:

Expenditures:

The budget proposed to the Public Utilities Board of Commissioners includes expenditure increases of $1.1 million to $93,717,237.

These expenditures reflect operational costs necessary continue to meet the following priorities:

• Proactive investment in aging infrastructure
• Meeting or exceeding local, state and federal regulatory requirements
• Exceeding customer expectations for customer service and reliability
• Continuing to support economic development in Norwich
• Deploying technology for the continued benefit of NPU and the City

Workforce:
Proposed workforce of 146, a reduction of 2.0% from last year and 3.3% from FY16, when we had 151 employees.

NPU sales outside of Norwich:
Less than $3 million of NPU’s annual sales (2.9%) in FY20 will be from outside of Norwich, resulting in payment to City of $295,000.

• Electric – minimal
• Wastewater –  less than 1% of revenues (North Franklin, Griswold, Sprague)
• Natural gas – approximately 1.2% of sales
  • $235,000 in NPU revenue ($23,500 to the City)
  • Preston is exclusive service area for NPU

• Water – approximately 25% of sales

• • $2.71 million in revenue ($271,000 to the City)
  • Service to Mohegan Sun
  • NPU is required to serve areas that were negotiated and assigned to us by the State Water Utility Coordinating Committees (WUCC) through a process that was initiated in 1999.  NPU’s Exclusive Service Area (ESA) includes all or portions of Sprague, Lebanon, Montville, Preston, Franklin, Lisbon, and Bozrah.