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KETCHIKAN PUBLIC UTILITIES 2016 ANNUAL BUDGET

TABLE OF CONTENTS BUDGET RESOLUTION Resolution No. 15‐2610 .......................................................................................................................... A‐1 TRANSMITTAL LETTER ......................................................................................................................................... B‐1 SUMMARIES Revenues and Appropriations Summary ............................................................................................... C‐1 Summary of Expenditures ‐ All Divisions ................................................................................................ C‐2 Number of Employees Comparative Schedule ...................................................................................... C‐3 Summary of Funding by Operating Utility .............................................................................................. C‐4 Compliance with Resolution No. 90‐1645 and KPU Bond Covenants .................................................. C‐5 Annual Debt Service by Utility ................................................................................................................ C‐6 Schedule of Current and Future Annual Debt Service ........................................................................... C‐7 REVENUE Electric Revenue Summary Report ........................................................................................................ D‐1 Telecommunications Revenue Summary Report .................................................................................. D‐2 Water Revenue Summary Report .......................................................................................................... D‐3 Other Revenue Summary Report ........................................................................................................... D‐4 Combined Revenue Summary Report .................................................................................................... D‐5 DIVISION APPROPRIATIONS AND PERSONNEL SCHEDULES General Manager Division Summary.......................................................................................................E‐1 General Manager Division Administration ............................................................................................E‐2 General Manager Division Capital ...........................................................................................................E‐7 Sales, Marketing & Customer Service Summary .................................................................................... F‐1 Sales, Marketing & Customer Service Operations .................................................................................. F‐2 Electric Division Summary ....................................................................................................................... G‐1 Electric Division Operations .................................................................................................................... G‐2 Electric Division Capital ......................................................................................................................... G‐14 Telecommunications Division Summary ................................................................................................ H‐1 Telecommunications Division Operations ............................................................................................. H‐2 Telecommunications Division Capital .................................................................................................. H‐14 Water Division Summary ..........................................................................................................................I‐1 Water Division Operations........................................................................................................................I‐2 Water Division Capital ............................................................................................................................ I‐11

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November 6, 2015 The Honorable Mayor Lew Williams III and Members of the City Council City of Ketchikan, Alaska 334 Front Street Ketchikan, Alaska 99901 Pursuant to Section 5‐2 of the Ketchikan City Charter, the proposed 2016 Operating and Capital Budget (the “2016 Budget”) for Ketchikan Public Utilities (KPU) is respectfully submitted. In accordance with Section 5‐4 of the Charter, the City Council must adopt a final spending plan no later than the third day before the beginning of the next fiscal year, which is December 29, 2015. At least one public hearing on the proposed budget is required prior to adoption of the final spending plan.

INTRODUCTION

The 2016 Budget attempts to reflect the ongoing efforts of the City Council to maintain and deliver cost effective electric, telecommunications and water utility services to the community of Ketchikan. Staff believes that the proposed spending plan for 2016 effectively balances the available financial resources of KPU against the utility service needs of the community. The programs and services contained within the proposed spending plan were developed by the KPU Division Managers and were subsequently reviewed and modified as necessary by the Office of the General Manager and the Finance Director. The operating goals and programs of the Electric, Telecommunications and Water Divisions were predicated on the continuation of basic service delivery and long‐range issues that manifested themselves over the course of the past year and during the development of the Capital Improvement Program. The economic issues facing the community of Ketchikan were considered during the preparation of the proposed spending plan for KPU. Although KPU is not supported by tax dollars, it does depend on its residential and commercial ratepayers to provide the resources

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necessary to finance its operations. The table below lists key operating statistics for KPU for the past five years.

2010 2011 2012 2013 2014Number of Electric Customers 7,418 7,443 7,518 7,514 7,606Energy Sales ‐ mWh 156,985 164,714 172,190 170,282 167,939Telecommunications Access Lines 7,103 7,057 6,434 6,083 5,863Water Customers 3,233 3,247 3,243 3,244 3,162

The number of electric and water customers have remained relatively flat since 2010. After declining slightly in 2009 and 2010, energy sales increased to a record 172,190 mWh in 2012 and leveled off in 2013. Warmer weather was the primary reason for the decrease in energy sales in 2014. The number of telecommunication access lines continues to decline although at a much slower pace. Competition from GCI and wireless phones has made significant inroads into the local market for telecommunication services

MAJOR BUDGET AND FISCAL ISSUES

During the course of preparing the proposed KPU budget for the next fiscal year, certain issues were identified that may affect the long‐term finances of KPU, its operations and the proposed spending plan for 2016. Staff believes that the City Council should be aware of these issues and may want to consider them during its budget deliberations. Each issue is outlined below along with recommendations from staff, if warranted. In most cases, staff has incorporated its recommendations into the proposed budget in order to show the effects of the recommendations on the draft spending plan. Staff recognizes that the final resolution of these issues will be determined by the City Council and that the proposed spending plan may be adjusted accordingly. Utility Rates: Management continues to express concerns about the adequacy of utility rates to finance the cost of operations, the capital cost of replacing or maintaining its utility systems, and the cost of complying with unfunded mandates imposed by federal and state regulatory bodies. These concerns can be best understood by reviewing the following table, which summarizes the audited operating results of KPU for the past five years.

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2010 2011 2012 2013 2014

Operating Revenues (000's):

Electric 15,953$ 16,687$ 17,232$ 19,346$ 16,617$

Telecommunications 14,446 14,501 14,587 15,242 16,161

Water 2,576 2,985 2,984 3,129 3,209

Total 32,975 34,173 34,803 37,717 35,987

Operating Expenses (000's):

Electric 15,557 15,705 16,441 19,051 16,667

Telecommunications 12,372 13,222 14,550 14,456 15,547

Water 2,667 3,061 3,287 3,870 3,758

Total 30,596 31,988 34,278 37,377 35,972

Non‐Operating Rev (Exp) (000's):

Electric (388) (323) (237) (556) (564)

Telecommunications 72 102 104 132 125

Water (164) (143) (253) (145) (114)

Total (480) (364) (386) (569) (553)

Payment In‐Lieu of Taxes (000's):

Electric 351 354 343 382 382

Telecommunications 194 191 192 206 206

Water 183 183 193 198 198

Total 728 728 728 786 786

Net Income (Loss) (000's):

Electric (343) 305 211 (643) (996)

Telecommunications 1,952 1,190 (51) 712 533

Water (438) (402) (749) (1,084) (861)

Total 1,171$ 1,093$ (589)$ (1,015)$ (1,324)$

Several observations can be made from reviewing the table:

Total operating expenses are rising at an annual rate of 4.13%.

The electric utility has incurred annual losses in three out of the last five years and the amounts of the annual losses are increasing.

The telecommunications utility can no longer be relied upon to subsidize the electric and water utilities. Its net income has declined significantly since 2010. What the telecommunications utility does earn should be reinvested in its own operations so that it may remain competitive.

The City Council’s decision to suspend or reduce an aggressive plan to raise water rates has resulted in a reversal of the progress that was being made to improve the financial position of the water utility. The amounts of the annual losses were trimmed from $1

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million annually to $402 thousand in 2011. Beginning in 2012, the losses began to increase again and reached $1.08 million in 2013.

The Summary of Funding by Operating Utility on page C‐4 illustrates another concern: the current rate structure is inadequate to support a reasonable level of capital spending. Of the $4.91 million capital budget proposed for 2016, 74.1%, or $3.64 million will be funded from reserves. This places more reliance on grants and bonds to finance KPU’s capital improvement program. Relying on grants could result in the deferral of important capital improvements if KPU is unsuccessful in securing the appropriate grants in a timely manner. Relying on debt to finance capital improvements will result in higher interest costs, which are ultimately passed on to the rate payer in the form of higher utility rates. To address these concerns, management is recommending the following utility rate increases:

A 5% increase in electric utility rates, effective April 1, 2016. The last time the electric rates were raised was in March 2008 when the Council approved a 1.65% rate increase. Since 2008, the Alaska CPI has increased 13.9%. The proposed 5% rate increase does not keep up with inflation. This increase will raise the rate for residential electric service from $.0958 per kWh to $.1006 per kWh. Assuming average consumption of 925 kWh per month, a residential customer’s electric bill will increase from $88.62 per month to $93.05 per month.

An 8% increase in water utility rates, effective April 1, 2016. The recommendation is partially consistent with the rate increases proposed in the cost of service and rate study prepared by FCS and restores the long‐term plan to improve the finances of the water utility that was approved by the City Council in 2009. This increase will raise the rate for residential water service from $48.19 per month to $52.05 per month.

Management is of the opinion that these utility rate increases will improve the overall finances of KPU and, most importantly, avoid the deferment of critical improvements to the utilities’ infrastructure and excessive future rate increases. Failure to raise utility rates in a timely and appropriate manner puts KPU and its rate payers at risk for “rate shock”. Whitman Lake Surcharge: In August 2014, the City Council approved a true‐up agreement for the Whitman Lake Hydroelectric Project. The agreement requires the City of Ketchikan dba Ketchikan Public Utilities to pay the Southeast Alaska Power Agency (SEAPA) 6.8 cents per kWh for spill from a SEAPA hydroelectric project that is caused by KPU’s operation of the Whitman Lake Hydroelectric Project. The payment that will be required under this agreement is difficult to project but management believes that the City should put into place a mechanism to provide for a funding source. Although not incorporated within the draft spending plan, management is recommending that the City Council consider a Whitman surcharge similar to the existing diesel surcharge.

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The conventional wisdom is that generation from the Whitman Lake Hydroelectric Project is cheaper than diesel generation. From the ratepayer’s perspective that is mostly true, but it is never true from the electric utility’s perspective. When KPU Electric operates its diesel generators, a diesel surcharge is assessed against its rate payers in an amount that reduces the effective cost of diesel generation to approximately $0.068 per kWh. The actual cost of diesel generation is currently $0.2213 per kWh but is expected to decrease to $0.1499 per kWh once KPU Electric burns through about 313,000 gallons of diesel fuel inventory. In 2015, it cost KPU Electric $0.1399 per kWh to operating the Whitman Lake Hydroelectric Project plus $0.068 per KWh for as required under the Whitman Lake true‐up agreement for a total cost of $0.2079. Management is suggesting a surcharge based on the annual payments required under the Whitman Lake true‐up agreement and recovered over a period of several months. If approved, this surcharge would reduce the effective cost of generation from the Whitman Lake Hydroelectric Project to $0.1399 per kWh. Absent such a surcharge, utility rates in general would eventually have to be raised to cover the cost of the true‐up agreement.

SIGNIFICANT BUDGET ASSUMPTIONS

In order to present a complete spending plan for 2016, it was necessary for management to make certain assumptions regarding the operations and finances of KPU. Management recognizes that some of the assumptions will require further direction from the City Council and that the direction provided may result in different assumptions, which could materially affect the proposed spending plan. The key assumptions used to compile the spending plan for 2016 are as follows:

Staffing level remains the same as 2015. Step increases have been programmed but no cost of living adjustment has been programmed. KPU is currently negotiating with the International Brotherhood of Electrical Workers Local No. 1547 to replace a collective bargaining agreement that expired on December 31, 2014. The fiscal impact of a new agreement cannot be determined at this time but KPU anticipates that some of the new terms will be applied retroactively to January 1, 2015.

Annual debt service will increase by $87,300 due the completion of the Jackson and Monroe Streets water main replacement project. Financing for this project was obtained through the Alaska Department of Environmental Conservation’s low interest Drinking Water Loan Program.

A 10 percent increase in health insurance has been programmed, effective July 1, 2016.

The 2016 KPU Budget is structured upon the assumption that a KPU branded or Verizon wireless voice offering will become available on or about January 1, 2016. As discussions

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are ongoing regarding a final determination, budget projections may need to be modified accordingly.

The cost of power purchased from the Southeast Alaska Power Agency has been programmed to remain at the current rate of 6.8 cents per kWh.

A purchased power rebate from the Southeast Alaska Power Agency in the amount of $450,000 has been programmed.

In 2015, the City Council scaled back KPU’s participation in the Community Grant Program. Prior to 2015, the cost of the program was shared equally between General Government and KPU. In 2015, the City Council reduced KPU’s support from $175,940 to $52,685 and limited participation to the Telecommunications Division. The 2016 Budget has been programmed in accordance with the City Council’s new policy.

Liability and property insurance premiums have been projected to remain stable in 2016. The divisions may experience some differences in their insurance accounts due to the fine tuning of the methodology used to allocate the cost of insurance. In addition, the requests for 2016 may be higher than the insurance cost estimates for 2015 because the City received a $97,000 rebate in 2015 that temporarily lowered the cost.

Electric and water utility rates have been programmed to increase by 5% and 8%, respectively, effective April 1, 2016.

The Proposed 2016 Budget is a working document intended to initiate discussion by the City Council and the public over next year’s spending plan. As the City Council and the public review and evaluate service delivery and long‐range issues, alternate concepts and additional concerns may materialize that will warrant consideration. It is staff’s desire that the final product which emerges from this process will be a spending plan for 2016 that is acceptable to the community at large and will allow KPU to continue to provide adequate and reliable electric, telecommunications and water services to its customers.

FINANCIAL OVERVIEW OF THE KETCHIKAN PUBLIC UTILITIES

2016 ANNUAL OPERATING AND CAPITAL BUDGET The 2016 Budget includes all operating and support divisions of KPU. The total amount requested for appropriations is $45.9 million, a decrease of $1 million from the amount appropriated with the adoption of the 2015 Budget. The key components of total appropriations for 2016 and a comparison with 2015 appropriations are as follows:

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2015 2015 2016

Budget Estimate Budget

Operating Expenditures 32,165,312$ 31,720,034$ 32,856,621$

Debt Service 3,278,880 3,278,880 3,366,176

Payment in Lieu of Taxes 786,000 786,000 786,000

Total Cost of Operations 36,230,192 35,784,914 37,008,797

Capital Expenditures 4,696,252 6,405,245 4,906,700

Total Expenditures 40,926,444 42,190,159 41,915,497

Appropriated Reserves 3,965,664 7,659,252 3,986,555

Total Appropriation 44,892,108$ 49,849,411$ 45,902,052$

Number of Employees 111.50 111.50 111.50

The balance of this overview will include a discussion and analysis of the following areas: (1) revenues; (2) expenditures; (3) personnel; (4) debt management; and (5) compliance with City Council mandated financial objectives. For additional summary information regarding the proposed spending plan for 2016, please refer to the “C” pages in the budget document.

REVENUES Operating revenues for utility services in the amount of $38.24 million have been programmed for 2016. The table below identifies the major revenue sources by operating utility.

Operating Expenditures

71.7%

Capital Expenditures

10.7%

Payment in Lieu of Taxes

1.7%

Debt7.3%

Appropriated Reserves8.6%

2016 Appropriations

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2014 2015 2015 2016

Actual Budget Estimate Budget

Electric 16,761,284$ 17,143,900$ 16,577,100$ 17,331,200$

Telecommunications 16,087,661 16,003,000 16,673,542 16,947,000

Water 3,206,470 3,568,300 3,589,200 3,824,600

Other 101,666 140,000 140,000 140,000

Total 36,157,081$ 36,855,200$ 36,979,842$ 38,242,800$

Electric Revenues: The projection for 2016 electric utility revenues is based on a two‐year average of energy sales and the current average electric revenues per kWh, adjusted for new loads and other trends such as conversions from heating fuel to electric heat and a 5% rate increase effective April 1, 2016. There are three variables that can significantly affect the revenue projections. The first is weather. Cold temperatures and high winds increase the demand for electric energy. Another variable is the general state of the economy. A strong economy usually generates a strong demand for energy. A weak economy has the opposite effect. A third variable is the price of heating oil, which has caused some residents to switch from heating their homes with fuel to electricity. The table below summarizes the major operating revenues of the Electric Division.

Electric45.3%

Telecom44.3%

Water10.0%

Other0.4%

2016 Revenues

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2014 2015 2015 2016


Residential $6,796,723 $6,950,200 $6,705,500 $6,999,900

Harbor 298,227 299,400 264,100 301,300

Business 6,690,774 6,681,400 6,559,900 6,784,600

Industrial 1,750,002 1,888,800 1,822,100 1,897,200

Yard Lights 49,172 49,100 49,900 51,800

Demand 514,972 513,300 509,400 533,200

Street Lights 127,692 126,600 128,400 128,100

Diesel Surcharge 96,283

Other 437,439 635,100 537,800 635,100

Total $16,761,284 $17,143,900 $16,577,100 $17,331,200

As was noted, electric revenues are difficult to project because of the many variables that can affect consumption. For example, energy sales increased from 157 MWh in 2010 to 172.2 MWh in 2012 and then decreased to 167.9 MWh in 2014. The estimate for 2015 is 166.6 MWh and the forecast for 2016 is 167.4 MWh. A slight increase in energy sales along with the proposed 5% rate increase is projected to increase revenues in 2016 by about $555,000 or $740,000 annually.

Telecommunications Revenues: The Telecommunications Division derives its revenues from three primary sources: regulated local phone services; regulated network access services; and non‐regulated services such as DSL, IPTV, payphones, wireless and sales of PBX systems. The table that follows summarizes the major operating revenues of the Telecommunications Division.

2014 2015 2015 2016


Local Network Services $2,032,109 $1,925,000 $2,019,000 $1,912,000

Network Access Services 9,259,709 8,634,000 8,953,000 8,623,000

IP Network ‐ DSL and IPTV 3,930,439 4,091,000 4,264,000 4,479,000

4G/LTE 360,170 873,000 950,000 1,454,000

Directory Revenue 328,528 284,000 298,000 283,000

Payphones 9,700 5,000 4,600 3,000

Miscellaneous 167,006 191,000 184,942 193,000

Total $16,087,661 $16,003,000 $16,673,542 $16,947,000

Revenues from local network services have been projected to decline as a result of continuing competition from GCI and wireless providers for local customers. Network access services, or separations revenues, are not expected to increase. The projection for network access services was derived from a proprietary separations model developed by a telecommunications cost study consultant. The model uses data from the proposed 2016 Telecommunications Division Budget and information about the Telecommunications Division’s investment in plant to project network access services revenue. Revenues from the IP Network have been projected to increase by 9.5%

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from the 2015 Budget due to a growing customer base. Third year operating revenues from 4G/LTE service have been projected to reach $1.45 million as efforts continue to rollout the service locally and expand into markets in other communities. Water Revenues: The operating revenues of the Water Division have been projected to increase because of a 4 percent rate increase that was approved for 2015 and a proposed 8% increase for 2016. The table that follows summarizes the major operating revenues of the Water Division.

2014 2015 2015 2016


Residential $1,377,255 $1,509,000 $1,515,300 $1,621,900

Apartment 294,082 315,000 327,800 350,900

Business 1,102,474 1,207,000 1,205,400 1,290,500

Industrial 79,182 79,000 83,600 89,400

Seafood 149,219 153,000 151,900 164,000

Port 172,688 172,000 162,600 172,000

Raw Fish Tax 100,000 100,000 100,000

Miscellaneous 31,570 33,300 42,600 35,900

Total $3,206,470 $3,568,300 $3,589,200 $3,824,600

Beginning in 2015, the City Council directed that a portion of the proceeds from the State of Alaska’s Raw Fish Tax Program be directed towards supporting the operations of the water utility and minimizing the losses that are occurring because the seafood processor water rates are heavily subsidized other customer rate classes. The revenue projection for 2016 assumes that this policy will continue. The proposed across the board rate increase of 8%, effective April 1, 2016 is projected to increase revenues for 2016 by $202,000, or $269,000 annually. For more information about KPU operating revenues, please see the “D” pages.

EXPENDITURES

Operating expenditures, including debt service and payments in lieu of taxes, in the amount of $37 million have been programmed for 2016, an increase of $779 thousand over the amount originally appropriated with the adoption of the 2015 Budget. The table below identifies the major operating expenses by division.

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2015 2015 2016


General Manager $385,857 $380,490 $393,786

Sales, Marketing & Customer Service 2,319,282 2,266,402 2,352,910

Electric 16,846,572 16,274,484 16,951,807

Telecommunications 13,510,194 13,910,892 14,109,246

Water 3,168,287 2,952,646 3,201,048

Total $36,230,192 $35,784,914 $37,008,797

The largest increase in operating expenses is occurring within the Telecommunications Division. Expenses are projected to increase from $13.5 million to $14.1 million, or $599,052. Approximately 75% of the increase in the Telecommunications Division is in the contract/purchased services category and is being driven by customer demand for services. For example, broadcast content fees have increased by $253,750, or 23.8%, to $1.32 million. The cost of operating the Telecommunications Division has been rising in recent years as a result of its efforts to stay competitive in a very competitive industry and a growing customer base. The Telecommunication Division’s profit margins have been tightening but it continues to generate a surplus. The division’s recent entrance into the wireless services market via Verizon has proven thus far to be a contributing factor to the division’s profitability. The following graph identifies operating expenses by operating utility. The cost of operating the General Manager and the Sales, Marketing and Customer Service Divisions have been allocated to the operating utilities in the same a manner as identified on page C‐2.

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The amount of capital appropriations requested for 2016 is $4.9 million. The table below identifies the major capital expenses by utility.

2015 2015 2016


Electric 2,135,490 1,797,500 3,175,600

Telecommunications 1,910,000 1,908,750 1,615,000

Water 650,765 2,698,995 116,100

Total $4,696,255 $6,405,245 $4,906,700

Funding for the proposed capital budget is as follows:

Electric47.99%

Telecom43.05%

Water8.96%

2016 Operating Expenses by Utility

Electric64.7%

Telecom32.9%Water

2.4%

2016 Capital Expenses by Utility

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Amount Percentage

Revenues from Operations 1,269,613 25.9%

Reserves 3,637,087 74.1%

$4,906,700 100.0%

Compared to 2015, the funding of KPU’s capital budget from revenues from operations has improved slightly. In 2015, approximately 21.7% of the capital budget was funded from revenues from operations. For 2016, the percentage of funding from revenues from operations has improved to 25.9%. If the proposed rate increases for the electric and water are not approved, the percentage of the capital budget funded from operations drops to 10.4%. Please see the proposed KPU 2016 ‐ 2020 Capital Improvement Program for information about the projects planned for 2016.

PERSONNEL The proposed 2016 KPU Budget requests funding for 111.50 full‐time equivalent (FTE) employees, net of Swan Lake personnel (4.0 FTE). This represents no change from 2015. Please see page C‐3 for a summary of personnel by division. The cost of personnel services includes salaries and wages for regular and temporary employees, overtime, and employee benefits. Employee benefits include health insurance, retirement, workers compensation, social security, unemployment and accrued leave. The table below identifies the major components of the cost of personnel services.

Revenues from

Operations25.9%

Reserves74.1%

Sources of Funding for 2016 Capital Expenses

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2015 2015 2016


Salaries and Wages ‐ Regular Employees 8,135,483 $7,930,800 8,216,553

Salaries and Wages ‐ Temporary Employees 92,800 88,600 132,500

Overtime 508,000 672,600 483,000

Payroll Taxes 668,300 649,450 675,700

Pension 1,532,000 1,410,000 1,552,200

Health and Life Insurance 2,194,400 2,109,800 2,257,900

Workers Compensation 268,600 257,300 264,100

Other Benefits 170,300 199,500 151,000

Allowances 47,330 43,930 46,140

Total $13,617,213 $13,361,980 $13,779,093

The total cost of personnel is project to increase by $161,880 to $13.78 million. Regular salaries and wages are projected to increase by $81,070 to $8,216,553 as a result of step increases for employees whose compensation is not tied to the journeyman lineman pay scale and a 1.6% cost of living adjustment for non‐represented employees that was approved in 2015. Nearly two‐thirds of total compensation is tied to the journeyman lineman pay scale. Health insurance costs are projected to increase by $63,500 due to rising health insurance premiums. No cost of living adjustments have been programmed in the 2016 Budget. As was previously discussed, the employees represented by the International Brotherhood of Electrical Workers

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0Number of FTE's by Division

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Local No. 1547 have been working without an agreement since December 31, 2014. KPU management is currently negotiating a new agreement. The cost of a 1% cost of living adjustment for this employee group is approximately $77,000. Depending on the final terms and conditions of the new agreement and whether or not it is retroactive to January, 1, 2015, the fiscal impact on the proposed budget for 2016 could be significant. For example, a retroactive 2% cost of living adjustment for 2015 and a second 2% cost of living adjustment for 2016 could potentially cost as much as $465,000. The cost of a 1% cost of living adjustment for KPU’s non‐represented employees is approximately $21,000. If a 2% cost of living adjustment was approved for this employee group, the cost of living adjustments for both employee groups for 2016 could total $507,000.

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DEBT In 2016, KPU will have outstanding nine revenue bond issues or loan agreements totaling $25,894,554. The table below summarizes KPU’s bond issues that will be outstanding in 2016. Balance

Outstanding Final 2015 2015 2016

Issue January 1, 2016 Maturity Type Budget Estimate BudgetSeries T 2,510,000$ 2017 Revenue 1,300,930$ 1,300,930$ 1,307,080$

Series V ‐ 2014 Revenue ‐

Series W ‐ CREB 560,000 2022 Revenue 84,800 84,800 84,200

ADEC 481021 1,560,534 2032 Revenue 107,117 107,117 107,118

ADEC 481061 1,109,181 2032 Revenue 70,543 70,543 70,544

ADEC 481051 3,223,632 2032 Revenue 205,022 205,022 205,022

ADEC 481091 97,954 2033 Revenue 6,230 6,230 6,230

ADEC 481121 309,462 2033 Revenue 18,779 18,779 18,779

ADEC 481141 2035 Revenue 81,544

Series X ‐Whitman 12,790,000 2032 Revenue 1,059,250 1,059,250 1,059,450

Interfund Loan 3,733,791 2019 Interfund 426,209 426,209 426,209

Total 25,894,554$ 3,278,880$ 3,278,880$ 3,366,176$

Debt Service

The graph below provides a ten‐year history of outstanding debt balances for KPU.

The increase in 2013 was caused by the issuance of the bond to finance the Whitman Lake Hydroelectric Project and the $4 million interfund loan from General Government.

Series T and X have been issued through the Alaska Municipal Bond Bank. The interest rates for

$‐

$5

$10

$15

$20

$25

$30

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Millions

Outstanding Debt Balances2006‐2015

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these bonds vary, but they are based on the Bond Bank’s AAA credit rating. Series W‐CREB has been issued through Bank of America as a clean renewable energy bond and qualified for a federally subsidized interest rate of .75 percent. The ADEC Series is a group of loans issued through the Alaska Department of Environmental Conservation’s Drinking Water Loan Program. KPU has acquired six loans through this program all with an attractive interest rate of 1.5 percent.

The $4 million interfund loan is a loan from three General Government funds. In 2013, the Port, Community Facilities Development, and Self‐Insurance Funds loaned the KPU Fund $2.7 million, $700,000 and $600,000, respectively, for the purpose of financing the construction of a wireless network and a microwave radio link. The loans will be repaid over a period not to exceed 12 years with interest at an annual rate of four percent. Principal payments began in 2015. Twelve annual installments of $426,209 will be required to retire this interfund loan. The final payment will be made in 2026.

KPU is currently required by its bond covenants to maintain debt service coverage of net revenues equal to 1.25 times annual debt service. Resolution No. 90‐1645 requires that KPU maintain a debt service coverage ratio of net revenues equal to no less than 1.5 times annual debt service and no more than 2.0 times annual debt service. The proposed spending plan will be in compliance with the debt service coverage requirements of Resolution No. 90‐1645 and KPU’s bond covenants. Please see page C‐5 for more information regarding KPU’s projected debt service coverage.

Total annual debt service in the amount of $3,366,176 has been programmed in the 2016 Budget. On January 1, 2016, the total debt service required to maturity, including interest of $9,876,596, will be $35,771,150. Please see pages C‐6 and C‐7 for more information regarding KPU debt.

COMPLIANCE WITH CITY COUNCIL MANDATED FINANCIAL OBJECTIVES Resolution No. 90‐1645, adopted by the City Council in 1990, established certain financial objectives for KPU. In 2013, the Council adopted a new fund balance policy that superseded the fund balance policy contained in Resolution No. 90‐1645. The new policy requires KPU to maintain a reserve requirement of no less than 25% of operating expenses. The schedule on page C‐5 documents compliance with the reserve requirement and shows that the proposed spending plan for 2016 is not in compliance. As discussed earlier, KPU is required to maintain a debt service coverage ratio of annual net revenues between 1.5 and 2.0 times annual debt service and the proposed spending plan for 2016 satisfies this requirement.

CONCLUSION The 2016 Budget allows for the continuation of basic utility services. Staff believes that this document provides the community and the City Council with the opportunity to begin the process of confronting the challenges that lie ahead for KPU in 2016. Over the next few weeks, staff looks forward to working with the City Council to develop a spending plan that moves the

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(Note: This transmittal letter does not reflect any subsequent action taken by the City Council during its budget deliberations to modify the spending plan proposed for 2016.)

KETCHIKAN PUBLIC UTILITIES

2016 Operating and Capital Budget

Revenues and Appropriation Summary

2016

Adopted Amended Estimate Budget

Funds Available, January 1 8,036,908 8,036,908 11,114,574 7,654,252

Revenues:

Electric 17,143,900 17,143,900 16,577,100 17,331,200


Water 3,568,300 5,323,295 5,344,195 3,824,600

Other 140,000 140,000 140,000 140,000

Total Revenues 36,855,200 38,610,195 38,734,837 38,242,800

Appropriations:

Administration 385,857 395,157 380,490 398,888

Sales, Marketing & Customer Service 2,319,282 2,319,282 2,266,402 2,356,403

Electric 18,982,062 19,499,182 18,076,984 20,138,093


Water 3,819,049 5,973,859 5,651,641 3,322,651

Total Appropriations 40,926,444 44,105,034 42,195,159 41,953,507

Funds Available, December 31 3,965,664 2,542,069 7,654,252 3,943,545

2015

C - 1


Summary of Expenditures ‐ All Divisions

Sales,

Marketing &

General Customer

Manager Service Electric Telecom Water Total

Operating Costs:

Personnel Services and Benefits 356,588 1,573,387 5,219,580 5,348,800 1,327,200 13,825,555

Supplies 5,525 103,550 6,732,400 1,062,900 290,850 8,195,225

Contract/Purchased Services 12,075 638,966 999,700 6,031,635 494,400 8,176,776

Minor Capital Outlay 21,000 26,000 81,000 19,600 1,000 148,600

Interdepartmental Charges 3,700 14,500 1,102,090 1,026,970 406,215 2,553,475

Operating Costs Before PILOT and Debt Service 398,888 2,356,403 14,134,770 13,489,905 2,519,665 32,899,631

Payment in Lieu of Taxes 381,993 206,358 197,649 786,000

Operating Costs Before Debt Service 398,888 2,356,403 14,516,763 13,696,263 2,717,314 33,685,631

Debt Service 2,450,730 426,209 489,237 3,366,176

Operating Costs Before Allocation of Overhead 398,888 2,356,403 16,967,493 14,122,472 3,206,551 37,051,807

Allocation of Overhead to Operating Utilities:General Manager (398,888) 199,444 179,500 19,944 ‐ Sales, Marketing & Customer Service (2,356,403) 612,665 1,649,482 94,256 ‐

Total Operating Costs ‐ ‐ 17,779,601 15,951,454 3,320,752 37,051,807

Major Capital Outlay 3,170,600 1,615,000 116,100 4,901,700

Total Expenditures ‐ ‐ 20,950,201 17,566,454 3,436,852 41,953,507


C - 2

2014 2015 2016 2015 Adopted/2016Division Actual Adopted Amended Estimate Budget Incr(Decr) %

5100 GENERAL MANAGER 2.50 2.50 2.50 2.50 2.50 ‐ 0.0%

5110 SALES, MARKETING & CUSTOMER SERVICE 17.00 17.00 17.00 17.00 17.00 ‐ 0.0%

5200 ELECTRICAdministrative 6.00 6.00 6.00 6.00 6.00 ‐ 0.0%Generation 7.00 7.00 7.00 7.00 7.00 ‐ 0.0%Transmission/Distribution 19.40 19.40 19.40 19.40 19.40 ‐ 0.0%Maintenance 7.00 7.00 7.00 7.00 7.00 ‐ 0.0%Swan Lake 4.00 4.00 4.00 4.00 4.00 ‐ 0.0%

TOTAL ELECTRIC 43.40 43.40 43.40 43.40 43.40Less Personnel Allocated to Swan Lake (4.00) (4.00) (4.00) (4.00) (4.00) ‐ 0.0%

NET ELECTRIC 39.40 39.40 39.40 39.40 39.40 ‐ 0.0%

5300 TELECOMMUNICATIONSAdministrative 6.00 6.00 6.00 6.00 6.00 ‐ 0.0%Engineering Operations 5.00 4.00 4.00 4.00 4.00 ‐ 0.0%Plant Specific Operations 26.00 26.00 26.00 26.00 26.00 ‐ 0.0%Plant Non‐Specific Operations 6.00 6.00 6.00 6.00 6.00 ‐ 0.0%Non‐Regulated Operations 0.00 0.00 0.00 0.00 0.00 ‐ 0.0%

TOTAL TELECOMMUNICATIONS 43.00 42.00 42.00 42.00 42.00 ‐ 0.0%

5400 WATER 10.60 10.60 10.60 10.60 10.60 ‐ 0.0%

TOTAL KPU EMPLOYEES 116.50 115.50 115.50 115.50 115.50 ‐ 0.0%Less Personnel Allocated to Swan Lake (4.00) (4.00) (4.00) (4.00) (4.00) ‐ 0.0%

NET KPU EMPLOYEES 112.50 111.50 111.50 111.50 111.50 ‐ 0.0%

KETCHIKAN PUBLIC UTILITIES2016 Operating and Capital BudgetNumber of Employees Comparative Schedule

C - 3



Summary of Funding by Operating Utility

Operating Bonds/

Total Revenues Grants Loans Other Reserves

Electric:

Operating Costs 14,946,879 14,946,879 ‐

Debt Service 2,450,730 2,384,321 66,409

Payment in Lieu of Taxes 381,993 381,993

Major Capital Outlay 3,170,600 70,000 3,100,600

Total 20,950,202 17,331,200 70,000 3,549,002

Telecommunications:

Operating Costs 15,318,887 15,318,887 ‐

Debt Service 426,209 426,209 ‐

Payment in Lieu of Taxes 206,358 206,358 ‐

Major Capital Outlay 1,615,000 995,546 70,000 549,454

Total 17,566,454 16,947,000 70,000 549,454

Water:

Operating Costs 2,633,866 2,633,866 ‐

Debt Service 489,237 489,237 ‐

Payment in Lieu of Taxes 197,649 197,649 ‐

Major Capital Outlay 116,100 116,100 ‐

Operating Surplus 387,748 (387,748)

Total 3,436,852 3,824,600 (387,748)

Total 41,953,507 38,102,800 140,000 3,710,708

C - 4


Compliance With Fund Balance Policy, Resolution No. 90‐1645 and KPU Bond Covenants

Amount

Operating Revenues:

Electric 17,331,200

Telecommunications 16,947,000

Water 3,824,600

Other 140,000

Total Operating Revenues 38,242,800

Operating Costs:

Personnel Services and Benefits 13,825,555

Supplies 8,195,225

Contract/Purchased Services 8,176,776

Minor Capital Outlay 148,600

Interdepartmental Charges 2,553,475

Payment in Lieu of Taxes 786,000

Total Operating Costs 33,685,631

Net Revenue 4,557,169

Add Back Payment in Lieu of Taxes 786,000

Net Revenue Available for Debt Service 5,343,169

A. Compliance with Fund Balance Policy:

Total Operating Costs 33,685,631

Reserve Requirement at 25 Percent of Total Operating Costs 8,421,408

Estimated Reserves, December 31, 2016 3,943,545

Over (Under) Reserve Requirement (4,477,863)

B. Compliance with the Debt Service Coverage Requirements of Resolution No. 90‐1645:


Debt Service 3,366,176

Debt Service Coverage (Required Debt Service Coverage: 1.25 ‐ 1.50) 1.59

C. Compliance with the Debt Service Coverage Requirements of KPU's Bond Covenants:


Debt Service 3,366,176

Less Debt Not Subject to Bond Covenants (915,446) 2,450,730

DebtService Coverage (Required Debt Service Coverage: 1.25) 2.18


Description

C - 5

KETCHIKAN PUBLIC UTILITIES2016 Operating and Capital BudgetAnnual Debt Service By Utility

Principal Interest Total Electric Electric Telecom Telecom Water Water Total TotalIssue Due Due Due Percent Amount Percent Amount Percent Amount Percent Amount

Revenue Bond Debt:Series T 1,230,000 77,080 1,307,080 100.00% 1,307,080 100.00% 1,307,080Series W ‐ CREBS 80,000 4,200 84,200 100.00% 84,200 100.00% 84,200 Series W ‐ ADEC #481021 84,023 23,095 107,118 100.00% 107,118 100.00% 107,118 Series W ‐ ADEC #481061 54,108 16,436 70,544 100.00% 70,544 100.00% 70,544 Series W ‐ ADEC #481051 157,255 47,767 205,022 100.00% 205,022 100.00% 205,022 Series W ‐ ADEC #481091 4,778 1,452 6,230 100.00% 6,230 100.00% 6,230 Series W ‐ ADEC #481121 14,404 4,375 18,779 100.00% 18,779 100.00% 18,779 Series W ‐ ADEC #481141 60,544 21,000 81,544 100.00% 81,544 100.00% 81,544 Series X ‐ Whitman 495,000 564,450 1,059,450 100.00% 1,059,450 1,059,450

2,180,112 759,855 2,939,967 2,450,730 ‐ 489,237 2,939,967

Other Debt: Advances from Other Funds 276,857 149,352 426,209 ‐ 100.00% 426,209 0.00% ‐ 100.00% 426,209

Total 2,456,969 909,207 3,366,176 2,450,730 426,209 489,237 3,366,176

C - 6


Schedule of Current and Future Annual Debt Service

Series Series W Series W Series W Series W Series W Series W Series W Series X InterfundYear T CREBS ADEC 481021 ADEC 481061 ADEC 481051 ADEC 481091 ADEC 481121 ADEC 481141 Whitman Loan Total

2016 1,307,080 84,200 107,118 70,544 205,022 6,230 18,779 81,544 1,059,450 426,209 3,366,176 2017 1,306,240 83,600 107,118 70,544 205,022 6,230 18,779 81,544 1,061,850 426,209 3,367,136 2018 83,000 107,118 70,544 205,022 6,230 18,779 81,544 1,061,325 426,209 2,059,771 2019 82,400 107,118 70,544 205,022 6,230 18,779 81,544 1,060,350 426,209 2,058,196 2020 81,800 107,118 70,544 205,022 6,230 18,779 81,544 1,061,050 426,209 2,058,296 2021 81,200 107,118 70,544 205,022 6,230 18,779 81,544 1,058,250 426,209 2,054,896 2022 80,600 107,118 70,544 205,022 6,230 18,779 81,544 1,059,550 426,209 2,055,596 2023 107,118 70,544 205,022 6,230 18,779 81,544 1,059,850 426,209 1,975,296 2024 107,118 70,544 205,022 6,230 18,779 81,544 1,060,750 426,209 1,976,196 2025 107,118 70,544 205,022 6,230 18,779 81,544 1,061,875 426,209 1,977,321 2026 107,118 70,544 205,022 6,230 18,779 81,544 1,061,250 426,209 1,976,696 2027 107,118 70,544 205,022 6,230 18,779 81,544 1,058,875 1,548,112 2028 107,118 70,544 205,022 6,230 18,779 81,544 1,059,625 1,548,862 2029 107,118 70,544 205,022 6,230 18,779 81,544 1,058,375 1,547,612 2030 107,118 70,544 205,022 6,230 18,779 81,544 1,060,000 1,549,237 2031 107,118 70,544 205,022 6,230 18,779 81,544 1,059,375 1,548,612 2032 53,563 70,544 205,022 6,230 18,779 81,544 1,061,375 1,497,057 2033 70,544 205,022 6,230 18,779 81,544 1,060,875 1,442,994 2034 81,544 81,544 2035 81,544 81,544

2,613,320 576,800 1,767,451 1,269,792 3,690,396 112,140 338,022 1,630,880 19,084,050 4,688,299 35,771,150


C - 7


2016 Operating and Capital BudgetRevenue Summary by Utility

2014 2015 2016 2015 Adopted/2016

Electric Revenues Actual Adopted Amended Estimate Budget Incr(Decr) %

Operating Revenue Residential 6,796,723 6,950,200 6,950,200 6,705,500 6,999,900 49,700 0.7% Harbor 298,227 299,400 299,400 264,100 301,300 1,900 0.6% Business 6,690,774 6,681,400 6,681,400 6,559,900 6,784,600 103,200 1.5% Industrial 1,750,002 1,888,800 1,888,800 1,822,100 1,897,200 8,400 0.4% Yard Lights 49,172 49,100 49,100 49,900 51,800 2,700 5.5% Large Commercial Demand 316,051 312,700 312,700 309,800 324,600 11,900 3.8% City Street Lights 127,692 126,600 126,600 128,400 128,100 1,500 1.2% Industrial Demand 198,921 200,600 200,600 199,600 208,600 8,000 4.0% Diesel Fuel Surcharge 96,283 ‐ ‐ ‐ ‐ NATotal Operating Revenue 16,323,845 16,508,800 16,508,800 16,039,300 16,696,100 187,300 1.1%

Other Operating Revenue Service Charges 110,175 120,000 120,000 120,000 120,000 ‐ 0.0% Penalty 25,819 100,000 100,000 78,000 100,000 ‐ 0.0% Pole Rentals ‐ External 66,254 66,100 66,100 66,100 66,100 ‐ 0.0%

Pole Rentals ‐ Interdepartmental 154,217 150,000 150,000 154,200 150,000 ‐ 0.0% Other Revenue 11,773 4,000 4,000 9,800 4,000 ‐ 0.0% Surveillance and Trouble Call Services 30,819 30,000 30,000 31,100 30,000 ‐ 0.0%

Reimbursable Projects 36,949 158,000 158,000 75,000 158,000 ‐ 0.0%Other Revenue 1,433 7,000 7,000 3,600 7,000 ‐ 0.0%

Total Other Operating Revenue 437,439 635,100 635,100 537,800 635,100 ‐ 0.0%

Total Operating Revenue 16,761,284 17,143,900 17,143,900 16,577,100 17,331,200 187,300 1.1%

Nonoperating RevenueGrants 2,500,000 ‐ NA

Total Nonoperating Revenue 2,500,000 ‐ ‐ ‐ ‐ ‐ NA

Total Electric Revenue 19,261,284 17,143,900 17,143,900 16,577,100 17,331,200 187,300 1.1%

D - 1



2014 2015 2016 2015 Adopted/2016Telecommunications Revenues Actual Adopted Amended Estimate Budget Incr(Decr) %

Local Network ServicesBusiness & Residential 834,687 812,000 812,000 836,401 795,000 (17,000) ‐2.1%Local Special Circuits 859,765 809,000 809,000 850,846 826,000 17,000 2.1%Other Local Revenue 337,657 304,000 304,000 332,110 291,000 (13,000) ‐4.3%

Total Local Revenue 2,032,109 1,925,000 1,925,000 2,019,357 1,912,000 (13,000) ‐0.7%

Network Access ServicesInterstate Flat Rate End User 886,051 935,000 935,000 1,052,688 1,042,000 107,000 11.4%Interstate Access Charges 5,215,493 4,617,000 4,617,000 4,600,718 3,954,000 (663,000) ‐14.4%Interstate Special Access Charges 1,586,174 1,529,000 1,529,000 1,771,781 2,140,000 611,000 40.0%Intrastate Access Charges 1,571,991 1,553,000 1,553,000 1,527,852 1,487,000 (66,000) ‐4.2%

Total Network Access Services Revenue 9,259,709 8,634,000 8,634,000 8,953,039 8,623,000 (11,000) ‐0.1%

MiscellaneousDirectory Revenue 328,528 284,000 284,000 297,826 283,000 (1,000) ‐0.4%Miscellaneous Revenue 52,484 75,000 75,000 64,851 91,000 16,000 21.3%

Total Miscellaneous Revenue 381,012 359,000 359,000 362,677 374,000 15,000 4.2%

Nonregulated & Other RevenueCustomer Premise Eq Sales/Service 18,057 19,000 19,000 21,476 21,000 2,000 10.5%Payphone Revenue 9,700 5,000 5,000 4,606 3,000 (2,000) ‐40.0%Long Distance Revenue 67,090 65,000 65,000 74,031 81,000 16,000 24.6%IP Network 3,930,439 4,091,000 4,091,000 4,264,002 4,479,000 388,000 9.5%4G LTE 360,170 873,000 873,000 950,000 1,454,000 581,000 66.6%Miscellaneous 29,375 32,000 32,000 24,354 (32,000) ‐100.0%

Total Nonregulated & Other Revenue 4,414,831 5,085,000 5,085,000 5,338,469 6,038,000 953,000 18.7%

Total Operating Revenues 16,087,661 16,003,000 16,003,000 16,673,542 16,947,000 944,000 5.9%

Total Telecommunications Revenue 16,087,661 16,003,000 16,003,000 16,673,542 16,947,000 944,000 5.9%

D - 2



2014 2015 2016 2015 Adopted/2016Water Revenues Actual Adopted Amended Estimate Budget Incr(Decr) %

Operating Revenue Residential 1,377,255 1,509,000 1,509,000 1,515,300 1,621,900 112,900 7.5% Apartment 294,082 315,000 315,000 327,800 350,900 35,900 11.4% Business 1,102,474 1,207,000 1,207,000 1,205,400 1,290,500 83,500 6.9% Industrial 79,182 79,000 79,000 83,600 89,400 10,400 13.2% Cannery 149,219 153,000 153,000 151,900 164,000 11,000 7.2%

Port 172,688 172,000 172,000 162,600 172,000 ‐ 0.0% Fire Hydrant 23,539 25,000 25,000 25,800 27,600 2,600 10.4%Total Operating Revenue 3,198,439 3,460,000 3,460,000 3,472,400 3,716,300 256,300 7.4%

Other Operating Revenue Penalty 4,504 8,000 8,000 16,000 8,000 ‐ 0.0% Other Revenue 3,527 300 300 800 300 ‐ 0.0%

Raw Fish Tax ‐ 100,000 100,000 100,000 100,000 ‐ 0.0%Total Other Operating Rev 8,031 108,300 108,300 116,800 108,300 ‐ 0.0%

Total Operating Revenue 3,206,470 3,568,300 3,568,300 3,589,200 3,824,600 256,300 7.2%

Water Nonoperating Revenue Bond Proceeds ‐ 1,754,995 1,754,995 ‐ ‐ NATotal Nonoperating Water Revenue ‐ ‐ 1,754,995 1,754,995 ‐ ‐ NA

Total Water Revenue 3,206,470 3,568,300 5,323,295 5,344,195 3,824,600 256,300 7.2%

D - 3



2014 2015 2016 2015 Adopted/2016Other Revenues Actual Adopted Amended Estimate Budget Incr(Decr) %

Operating Revenue Interest Income 11,666 50,000 50,000 50,000 50,000 ‐ 0.0%Gen Gov Billing and Collections 90,000 90,000 90,000 90,000 90,000 ‐ 0.0%

Total Operating Revenue 101,666 140,000 140,000 140,000 140,000 ‐ 0.0%

Nonoperating Revenues Bond Reserve Account Transfer ‐ ‐ ‐ ‐ ‐ ‐ 0.0%

Total Non‐operating Revenue ‐ ‐ ‐ ‐ ‐ ‐ 0.0%

Total Other Revenue 101,666 140,000 140,000 140,000 140,000 ‐ 0.0%

D - 4



2014 2015 2016 2015 Adopted/2016All KPU Revenues Actual Adopted Amended Estimate Budget Incr(Decr) %

Operating Revenues Electric 16,761,284 17,143,900 17,143,900 16,577,100 17,331,200 187,300 1.1%Telecommunications 16,087,661 16,003,000 16,003,000 16,673,542 16,947,000 944,000 5.9%Water 3,206,470 3,568,300 3,568,300 3,589,200 3,824,600 256,300 7.2%Other 101,666 140,000 140,000 140,000 140,000 ‐ 0.0%

36,157,081 36,855,200 36,855,200 36,979,842 38,242,800 1,387,600 3.8%

Nonoperating Revenues Electric 2,500,000 ‐ ‐ ‐ ‐ ‐ NATelecommunications ‐ ‐ ‐ ‐ ‐ ‐ NAWater ‐ ‐ 1,754,995 1,754,995 ‐ ‐ NAOther ‐ ‐ ‐ ‐ ‐ ‐ NA

2,500,000 ‐ 1,754,995 1,754,995 ‐ ‐ NA

Total Revenue ‐ All Divisions 38,657,081 36,855,200 38,610,195 38,734,837 38,242,800 1,387,600 3.8%

D - 5

CITY OF KETCHIKAN


General Manager Summary

2014 2015 2016 2015 Adopted/2016

Divisions/Cost Center/Programs Actual Adopted Amended Estimate Budget Incr(Decr) %

Operations 355,491 365,857 375,157 370,490 378,888 13,031 3.6%

Capital Improvement Program 7,415 20,000 20,000 10,000 20,000 ‐ 0.0%

Total 362,906 385,857 395,157 380,490 398,888 13,031 3.4%

2014 2015 2016 2015 Adopted/2016

Expenditures by Category Actual Adopted Amended Estimate Budget Incr(Decr) %

Personnel Services and Benefits 344,167 339,973 349,273 349,150 356,588 16,615 4.9%

Supplies 3,551 6,025 5,915 5,355 5,525 (500) ‐8.3%

Contract/Purchased Services 5,433 12,859 12,969 10,210 12,075 (784) ‐6.1%Minor Capital Outlay 1,023 2,500 2,500 2,175 1,000 (1,500) ‐60.0%

Interdept'l Charges/Reimbursable Credits 1,317 4,500 4,500 3,600 3,700 (800) ‐17.8%

Major Capital Outlay 7,415 20,000 20,000 10,000 20,000 ‐ 0.0%

Total 362,906 385,857 395,157 380,490 398,888 13,031 3.4%

2014 2015 2016 2015 Adopted/2016

Funding Source Actual Adopted Amended Estimate Budget Incr(Decr) %

KPU Enterprise Fund 362,906 385,857 395,157 380,490 398,888 13,031 3.4%

Total 362,906 385,857 395,157 380,490 398,888 13,031 3.4%

2014 2015 2016 2015 Adopted/2016

Personnel Actual Adopted Amended Budget Salary Incr(Decr) %

Administration 2.50 2.50 2.50 2.50 226,608 ‐ 0.0%

Total 2.50 2.50 2.50 2.50 226,608 ‐ 0.0%

DEPARTMENT EXECUTIVE SUMMARY

The General Manager's Office serves as the chief executive of Ketchikan Public Utilities. The office oversees the daily operation of four (4) divisions that have a combined budget of $42 million.

Administration

Sales, Marketing and Customer Service

Electric Telecommunications Water

The Ketchikan Public Utilities General Manager's Office is comprised of one operating division and oversees oneCapital Improvement Program.

E - 1

CITY OF KETCHIKAN


General Manager Administration 5100

MISSION STATEMENT

GOALS FOR 2016

The mission of Ketchikan Public Utilities is to provide quality municipal utility services as efficiently and effectively as possiblewithin guidelines established by federal and state law; the Charter of the City of Ketchikan; the Ketchikan Municipal Code;and the ratepayers of the Utility as represented by the City Council. The General Manager’s Office exercises line authorityover all Utility divisions with combined operating and capital improvement budgets in support of daily service delivery andfurtherance of long‐range goals. The General Manager’s Office ensures implementation, supervision and evaluation of allUtility activities, programs and facilities. This includes the normal range of programs and projects associated with all Utilitydivisions and special projects and/or tasks that do not fall within the scope of KPU’s traditional departmental structure. Themission of the Administration Division is to ensure that these responsibilities and duties are carried out in a timely andefficient manner that reflects positively on Ketchikan Public Utilities.

General Manager

Assistant General Manager

Executive Assistant Custodian

• Provide timely information and recommendations to the City Council.

• Coordinate and improve citizen participation and public information efforts.

• Coordinate and improve employee outreach and recognition programs.

• Strengthen employee focus on customer service and improvement of all municipal programs and services.

• Encourage team building among staff.

• Continue management oversight of General Government.

• Work with the division managers, in order to move forward with City Council approved Capital Improvement Programs.

• Work with Alaska Department of Environmental Conservation, in order to resolve ongoing issues associated with higherthan permitted disinfection byproducts and excessive coliforms in the raw water supply, including completion of thetwo‐point chlorination project.

• Continue to build upon the successful roll out of the new 4G/LTE service offering for the Telecommunications Division.

• Work with Southeast Alaska Power Agency, in order to dispatch the Whitman Lake Hydroelectric Project in as efficientand cost effective manner as possible.

E - 2

CITY OF KETCHIKAN



2014 2015 2016 2015 Adopted/2016



Supplies 3,551 6,025 5,915 5,355 5,525 (500) ‐8.3%

Contract/Purchased Services 5,433 12,859 12,969 10,210 12,075 (784) ‐6.1%

Minor Capital Outlay 1,023 2,500 2,500 2,175 1,000 (1,500) ‐60.0%

Interdept' Charges/Reimbursable Credits 1,317 4,500 4,500 3,600 3,700 (800) ‐17.8%

Total 355,491 365,857 375,157 370,490 378,888 13,031 3.6%

2014 2015 2016 2015 Adopted/2016


Ketchikan Enterprise Fund 355,491 365,857 375,157 370,490 378,888 13,031 3.6%

Total 355,491 365,857 375,157 370,490 378,888 13,031 3.6%

2014 2015 2016 2015 Adopted/2016


General Manager 0.50 0.50 0.50 0.50 98,306 ‐ 0.0%

Assistant General Manager 0.50 0.50 0.50 0.50 63,133 ‐ 0.0%

Executive Assistant 0.50 0.50 0.50 0.50 29,923 ‐ 0.0%

Custodian 1.00 1.00 1.00 1.00 35,246 ‐ 0.0%

Total 2.50 2.50 2.50 2.50 226,608 ‐ 0.0%

ACCOMPLISHMENTS FOR 2015

DIVISION SUMMARY

• Collaborate with the Southeast Alaska Power Agency, in order to commission new sources of power for the greaterKetchikan community.

• Work with Victor‐Four Labor Relations to negotiate a successor collective bargaining agreement with IBEW, Local 1547to replace the contract that expired December 31, 2014.

• Continued management and oversight of General Government.

• Submitted the draft 2015 Ketchikan Public Utilities Annual Budget and 2015‐2019 Capital Improvement Program to theCity Council for formal consideration and adoption.

• Completed construction of the Whitman Lake Hydroelectric Project.

• Completed the deployment of a 4G/LTE service offering for the greater Ketchikan community.

• Completed the construction of a redundant Telecommunications Division microwave radio circuit to Prince Rupert, BritishColumbia.

• Continued to participate as staff to the Ketchikan Gateway Borough/City of Ketchikan Cooperative Relations, LobbyingExecutive and Legislative Liaison Committees.

• Continued to update and keep current the General Government and Ketchikan Public Utilities’ website.

E - 3

CITY OF KETCHIKAN



2014 2015 Budget 2016 2015 Adopted/2016

Operating Expenditures Actual Adopted Amended Estimate Budget Incr(Decr) %

Personnel Services and Benefits

500 01 Regular Salaries and Wages 218,786 219,973 221,523 221,400 226,608 6,635 3.0%

501 01 Overtime Wages 2,000 1,000 1,000 2,000 ‐ 0.0%

502 01 Temporary Wages 3,776 2,000 1,500 1,500 2,000 ‐ 0.0%

505 00 Payroll Taxes 14,865 17,200 17,850 17,850 17,700 500 2.9%

506 00 Pension 49,068 47,000 46,100 46,100 48,960 1,960 4.2%

507 00 Insurance Benefits‐Health 45,068 45,500 47,700 47,700 51,700 6,200 13.6%

507 30 Insurance Benefits‐Workers Comp 2,540 3,400 3,400 3,400 3,230 (170) ‐5.0%

508 00 Other Benefits 9,729 2,600 9,900 9,900 4,090 1,490 57.3%

509 10 Allowances‐Add'l Life Benefit 335 300 300 300 300 ‐ 0.0%


Supplies

510 01 Office Supplies 1,223 2,000 1,935 1,500 1,500 (500) ‐25.0%

510 04 Janitorial Supplies 1,554 2,000 2,000 2,000 2,000 ‐ 0.0%

515 01 Vehicle Maintenance Materials 151 300 300 300 300 ‐ 0.0%

520 02 Postage 69 100 100 100 100 ‐ 0.0%

525 04 Motor Vehicle Fuel & Lubricants 395 625 625 500 625 ‐ 0.0%

535 02 Business and Meal Expenses 159 1,000 955 955 1,000 ‐ 0.0%

Supplies 3,551 6,025 5,915 5,355 5,525 (500) ‐8.3%

OPERATING BUDGET CHANGES FOR 2016

95.0%

1.5%3.2% 0.3%

2016 Expenditures by Type


Supplies

Contract/Purchased Services

Minor Capital Outlay

Changes between the adopted operating budget for 2015 and the proposed operating budget for 2016 that are greater than5% and $5,000 are discussed below:

• Personal Services and Benefits increased by $16,615, or by 4.9%, due to annual employee step increases; and a 1.6%cost of living adjustment and decreased employee health insurance co‐pays for non‐represented employees that becameeffective January 1, 2015. As a new collective bargaining agreement has yet to be reached, no cost of lising adjustmentshave been programmed for employees represented by IBEW, Local 1547 for either FY 2015 or FY 2016. A proposed 2.0%cost of living adjustment for non‐represented employees has been budgeted for 2016 as well as an increase incompensation for the General Manager.

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CITY OF KETCHIKAN



2014 2015 Budget 2016 2015 Adopted/2016



600 01 Travel‐Business 2,410 6,875 6,875 5,000 6,875 ‐ 0.0%

605 02 Advertising & Public Announcements 500 500 250 250 (250) ‐50.0%

615 02 Assn Membership Fees & Dues 165 800 865 865 900 100 12.5%

630 02 Vehicle Licenses 100 100 50 50 (50) ‐50.0%

630 03 Licenses and Fees Bank & Merchant 45 45 NA

635 07 Machinery & Equip Maint Services 1,900 1,900 1,900 1,900 ‐ 0.0%

635 12 Technical Services 100 100 100 100 ‐ 0.0%

650 01 Telecommunications 2,858 2,584 2,584 2,000 2,000 (584) ‐22.6%

Contract/Purchased Services 5,433 12,859 12,969 10,210 12,075 (784) ‐6.1%

Minor Capital

715 00 Furniture & Fixtures 233 1,500 1,500 1,500 1,000 (500) ‐33.3%

725 01 Computers, Printers & Copiers 790 1,000 1,000 675 (1,000) ‐100.0%

Minor Capital Outlay 1,023 2,500 2,500 2,175 1,000 (1,500) ‐60.0%

Interdepartmental Charges

825 01 Interdept'l Charges‐Insurance 1,317 4,500 4,500 3,600 3,700 (800) ‐17.8%

Interdepartmental Charges 1,317 4,500 4,500 3,600 3,700 (800) ‐17.8%

Total Expenditures by Type 355,491 365,857 375,157 370,490 378,888 13,031 3.6%

NARRATIVE

500‐01 Regular Salaries and Wages: $226,608 – This account provides for the cost of the annual salaries paid to theemployees of the General Manager’s Office.

501‐01 Overtime Wages: $2,000 – This account provides for the compensation paid to the Executive Assistant for hoursworked in excess of a regular working cycle. These excess hours typically occur during budget and legislative preparationperiods.

502‐01 Temporary Wages: $2,000 – This account provides for the compensation paid for temporary secretarial/clerical helpfor those occasions when the Executive Assistant is absent or for additional hours worked when workloads are unusuallyheavy.

505‐00 Payroll Taxes: $17,700 – This account provides for employer contributions to Social Security and Medicare and othersimilar payroll taxes.

506‐00 Pension: $48,960 – This account provides for employer contributions to retirement plans.

507‐00 Insurance Benefits‐Health: $51,700 – This account provides for employer contributions to employee health and lifeinsurance plans.

507‐30 Insurance Benefits‐Workers Compensation: $3,230 – This account provides for employer contributions to workerscompensation.

508‐00 Other Benefits: $4,090 – This account provides for expenditures for direct claims from former employees forunemployment benefits paid by the State of Alaska and accrued vacation and sick leave.

509‐10 Allowances‐Add'l Life Benefit: $300 ‐ This account provides for the reimbursement of life insurance premiums paidby the General Manager

E - 5

CITY OF KETCHIKAN



510‐01 Office Supplies: $1,500 – This account provides for expendable office supply items.

510‐04 Janitorial Supplies: $2,000 – This account provides for expenditures for cleaning and sanitation supplies used by in‐house janitors.

515‐01 Vehicle Maintenance Materials: $300 – This account provides for the cost associated with the materials to maintainthe department’s vehicle.

520‐02 Postage: $100 – This account provides for the cost for postal related services such as postage and mailing materials.

525‐04 Motor Vehicle Fuel & Lubricants: $625 – This account provides for expenditures that involve the purchase ofgasoline and other lubricants used for the operations of the division’s vehicle.

535‐02 Business and Meal Expenses: $1,000 ‐ This account provides for general expenses incurred by the GeneralManager’s staff during the course of the year.

600‐01 Travel‐Business: $6,875 – This account provides for the cost associated with the business travel by the GeneralManager and office staff.

605‐02 Advertising and Public Announcements: $250 – This account provides for public notice and classified advertisingexpenses.

615‐02 Assn. Membership Fees & Dues: $900 – This account provides for the cost of membership in the InternationalCity/County Management Association and the Alaska Municipal League.

630‐02 Vehicle Licenses: $50 – This account provides for expenditures for licensing City vehicles for operations on publichighways.

635‐07 Machinery & Equipment Maintenance Services: $1,900 – This account provides for routine and non‐routinemaintenance associated with equipment located in the 3rd and 4th floor copier rooms and KPU’s share of the City and KPU’santicipated website maintenance.

635‐12 Technical Services: $100 – This account provides for the cost of framing government awards and certificates.

650‐01 Telecommunications: $2,000 – This account provides for monthly charges, long‐distance services, long‐distancefacsimile transmission, line rentals and maintenance of the phone system in the General Manager Operations Division'sOffice.

715‐00 Furniture & Fixtures: $1,000 – This account provides for the cost of office equipment and furniture.

825‐01 Interdepartmental Charges‐Insurance: $3,700 – This account provides for the cost for risk management services.

E - 6

CITY OF KETCHIKAN


General Manager Capital Budget

2014 2015 Budget 2016 2015 Adopted/2016

Major Capital Projects Actual Adopted Amended Estimate Budget Incr(Decr) %

735‐00 Software 7,415 20,000 20,000 10,000 20,000 ‐ 0.0%

Total Major Capital Outlay 7,415 20,000 20,000 10,000 20,000 ‐ 0.0%

2016 Capital Improvement Projects

Funding Sources

Project # Project

KPU

Enterprise

Fund Total

735‐00 Software

Financial & Accounting Info System Replacement 20,000 ‐ ‐ 20,000

Total Machinery and Equipment 20,000 ‐ ‐ 20,000

Total 2016 Capital Budget 20,000 ‐ ‐ 20,000

100%

Expenditures by Type

Software

100%

Expenditures by Funding Source

KPU Enterprise Fund

E - 7



Sales, Marketing and Customer Service Summary

2014 2015 2016 2015 Adopted/2016


Operations 2,177,797 2,319,282 2,319,282 2,266,402 2,356,403 37,121 1.6%

Total 2,177,797 2,319,282 2,319,282 2,266,402 2,356,403 37,121 1.6%

2014 2015 2016 2015 Adopted/2016


Personnel Services and Benefits 1,453,235 1,531,362 1,531,362 1,499,200 1,573,387 42,025 2.7%

Supplies 104,056 114,950 107,950 99,250 103,550 (11,400) ‐9.9%

Contract/Purchased Services 596,510 635,570 642,570 634,052 638,966 3,396 0.5%

Minor Capital Outlay 23,996 20,000 20,000 20,000 26,000 6,000 30.0%

Interdepartmental Charges‐Insurance ‐ 17,400 17,400 13,900 14,500 (2,900) ‐16.7%

Total 2,177,797 2,319,282 2,319,282 2,266,402 2,356,403 37,121 1.6%

2014 2015 2016 2015 Adopted/2016


KPU Enterprise Fund 2,177,797 2,319,282 2,319,282 2,266,402 2,356,403 37,121 1.6%

Total 2,177,797 2,319,282 2,319,282 2,266,402 2,356,403 37,121 1.6%

2014 2015 2016 2015 Adopted/2016

Full‐time Equivalent Personnel Actual Adopted Amended Budget Salary Incr(Decr) %

Operations 17.00 17.00 17.00 17.00 869,677 ‐ 0.0%

Total 17.00 17.00 17.00 17.00 869,677 ‐ 0.0%


The Sales, Marketing and Customer Service Division is committed to providing quality and timely customer and billingservices to the ratepayers of Ketchikan Public Utilities.

Ketchikan Public Utilities

Sales, Marketing and Customer Service

KPU Sales, Marketing and Customer Service is comprised of one operating division.

F - 1

KETCHIKAN PUBLIC UTILITIES2016 Operating and Capital BudgetSales, Marketing and Customer Service Operations 5110

MISSION STATEMENT

GOALS FOR 2016

The Sales, Marketing & Customer Service Division is responsible for marketing and selling telecommunication services andproducts and serving and meeting the needs of all Utility customers.

General Manager

Sales, Marketing and Customer Service Division

Manager

Sales & Marketing

Manager (2.0)

IPTV Content Specialist

Customer Service Manager

Credit Coordinator

Billing System Analyst

Customer Service Rep

(10.0)

• Achieve continued positive growth in all key residential and business product categories.

• Emphasize KPU strengths in advertising: local support/management, exclusive and superior product, excellent customerservice, exclusive fiber optics, unlimited Internet, TV Everywhere and competitive new wireless products. Expand advertisingto include additional TV spots and target younger demographic with Web advertising. Rotate ideas/messages and ensurethat ideas stay fresh.

• Exploit KPU’s strong and successful business offerings by emphasizing professional business staff/products in media,marketing materials and on the website. Develop separate hosted business suite product campaign.

• Capitalize on phone switch upgrade/replacement to market new features and products to new and existing Hosted IPcustomers.

• Continue to build on KPUtv’s software strengths (multi‐stream recording, Whole Home, multi‐screen) to grow and captureIPTV customers. Challenge the Telecommunications Division to continue developing mobile OTT video options.

• Continue to revamp and re‐energize the KPU Telecommunications Division website through monthly updates and rotatingbanner ads.

• Continue enhancement of local TV content by utilizing new technologies to allow scheduling, streaming and to get all localcontent shows to automatically integrate into VOD when launched on‐air.

• Continue to freshen local content by rotating hosts and by reworking production of annual events so that the events appeardifferent year to year.

F - 2



• Expand VOD content to include series and shows from networks in addition to existing movie assortment.

• Continue to utilize social media as key marketing product; tie efforts to the website and Internet click through advertising asa unified digital marketing presence.

• Sustain sales culture in Customer Service Reps by preserving weekly “team huddle” meetings to review successes/misses inaddition to current call coaching. Utilize additional employee rewards such as personal notes and recognition in addition tosales incentives to keep staff motivated.

• Utilize consultants, Hiring Solutions and Measure X, to ensure staff is equipped with appropriate sales skills prior to hire/posthire.

• Continue to identify process improvements needed and technical issues in new electrical billing system so that work cancontinue to be streamlined to allow CSRs to focus on Telecommunications sales.

• Year to date 2015, KPU has achieved growth in the following categories; +3% in IPTV accounts, +6% in PVR/DVR sales and+3% in DSL service. Year over year KPU has achieved growth of +6% in IPTV, +9% in PVR/DVR and +3% in DSL service.Additionally, KPU successfully launched and sold Hospitality TV into the local hospitality market. These increases are directlyattributable to the Sales, Marketing & Customer Service Division’s redefined sales team culture: competitive location,compelling advertising, sales training, incentive plan and competitive products, which include superior business services,extensive TV offerings and exclusive locally produced content.

• Year to date 2015, the division has achieved +10% growth in Hosted VOIP phone system sales. Year over year, the Sales,Marketing & Customer Service Division achieved +14% growth in Hosted VOIP phone systems. KPU’s hosted phone system isa powerful, cutting edge phone system that can be deployed in very small to extraordinarily large businesses. Selling hostedphone systems is a key strategic initiative, ensuring long‐term retention of KPU’s critical business customers.

• KPU successfully launched and marketed Hosted Wi‐Fi services and a Hosted Data Center services to the business community.Like Hosted VOIP, this allows businesses to focus on running their business vs. managing their network. Customers have beenadded each month since launch.

• Marketing Managers continued to sign long term agreements with strategic business customers as well as small businessowners. This, combined with the division’s Hosted IP, dedicated business staff and business service offerings, has helped topreserve KPU’s business line penetration at more than 85% of the business market. The Marketing Managers coordinatedand managed more than 15 complex phone and local area circuit/network jobs for businesses in the community includingtwo emergency phone system installations. They were all completed timely and accurately, without disruption of business.

• KPU Marketing successfully responded to the 2015 KGB School District RFP for telecommunications services to winall phone services, Internet and LAN circuits for the School District. This proposal will secure this business for an additionalthree years.

• In late 2011, the Utility launched a very strong package of KPU branded long distance. This enhanced its ability to sell phoneservices and retain customers by offering consolidated billing. In the last 12 months the division has increased its longdistance subscribers by 26% and continues to add customers monthly. One of the new strengths of KPU's LD is its redundantpath off‐island that was created in 2015. If microwave connectivity fails, the path reverts to the fiber path.

• KPU Sales and Marketing launched the new Watch TV Everywhere service in 2014. It is included free to KPUtv customers,along with their standard TV service. Customers may stream live and new TV programming on computers, tablets andsmartphones using their KPUtv cable account. Additional channels were integrated in 2015. Now more than 60 channels areavailable on this platform, with kids and sports programming being the most popular.

l d k hl d h l h d l b k l

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• KPU Sales and Marketing continues monthly to update the re‐launched KPU Telecommunications website, www.kputel.comto keep the site fresh. The site was designed for easier navigation and to be more user friendly and intuitive. Pages weredesigned to be interactive, including a bandwidth use calculator, a “click” to ask a question/order a service, and links to theonline directory. Traffic to the site has increased from a few per day to hundreds of visits per day.

• The division continues to utilize CBS SE TV as a new ad medium. KPU created an additional TV spot. One features unlimitedinternet and one focuses on KPU's exclusive local content. The 30 second spots are targeted to run during prime time andsporting events. The ads are visible to GCI, satellite, and KPU customers.

• The Sales, Marketing and Customer Service Division actively recruited for any open positions, targeting individuals withexcellent customer service skills and sales mentality. Management utilized Hiring Solutions to test CSR candidates forinherent sales skills and/or attributes and combined that with team interviews to select the most qualified candidates.

• To retain its competitive advantage of excellent customer service skills, the Sales, Marketing & Customer Service Division hascontinued to contract with Measure‐X to assist with sales training, sales skill reviews and to conduct mystery shops with CSRsto test for product and process knowledge. Additionally, consolidation of the sales and marketing team with the CustomerService Division into one location has continued to allow easy one‐on‐one counseling, coaching and leading by example. Newadditions to training are recorded call review with CSRs and weekly sales meetings.

• The KPU Sales, Marketing & Customer Service Division once again was awarded first place for the KPU Yellow Pages Directoryby the Alaska Telephone Association. This win was for the 2014 directory competition. This was the sixth consecutive yearthat KPU took top honors in the ATA competition. The cover photo was of the Ketchikan waterfront, taken by localphotographer Carlos Rojas.

• KPUtv was awarded four top awards in three separate competitions for its local TV Content in 2015. In March, KPUtv wasawarded Best of the Northwest for Overall Excellence in Public/Educational/Government Programming, as well as Best of theNorthwest for Community Involvement. In April, KPUtv took top honors for Local Content from the NTCA‐The RuralBroadband Association for the category of Phone Company with 5,000 ‐ 10,000 access lines. In July, KPUtv won third place inthe NATOA Government Programming Award for the commercial "We Are Ketchikan." KPUtv also received honorablemention in March for three other entries at Best of the Northwest. In each instance KPUtv was selected for first place fromhundreds to thousands of entries. This is the sixth consecutive year in which KPU was recognized for its outstanding TVshows and documentaries. These awards bring recognition, not only to KPU but to the entire community, by highlighting thediverse events, activities, and colorful personalities found here.

• KPU Sales, Marketing & Customer Service successfully completed the transition to off‐island bill printing for bothTelecommunications and Electric. By moving off‐island, KPU will be able to produce PDF copies of the bills that will beaccessible to customers through an on‐line portal. The new bill is simpler to read, fewer pages and is delivered in a moretimely fashion.

• KPU Sales & Marketing managed the outreach effort for the conversion of KPUNET google mail to Zimbra through Neonova.Letters, emails, and personal calls were used and all residential and business customers were converted by the target cutdate without disruption.

• The Sales, Marketing & Customer Service Division has continued to utilize social media such as Facebook as a key tool forcommunicating with customers regarding KPU’s image, products, ‘presence’ and approachability. Staff maintains threespecific Facebook pages:

KPU/Live in Ketchikan: CommVision’s local TV programming and events.KPU Telecommunications: Promotes/advertises Telecom’s services and products.KPU Electric: To promote energy conservation, share energy news, and create an ‘approachable’ image.

Facebook allows staff to immediately reply to customers, post public information regarding outages, address service issues andintroduce/sell products. The regular use of this media has led to increased sales of services, winbacks from the competition, andsaved many potential lost customers.

F - 4


2014 2015 2016 2015 Adopted/2016



Supplies 104,056 114,950 107,950 99,250 103,550 (11,400) ‐9.9%



Interdepartmental Charges ‐ 17,400 17,400 13,900 14,500 (2,900) ‐16.7%

Total Expenditures 2,177,797 2,319,282 2,319,282 2,266,402 2,356,403 37,121 1.6%

2014 2015 2016 2015 Adopted/2016



Total Funding 2,177,797 2,319,282 2,319,282 2,266,402 2,356,403 37,121 1.6%

2014 2015 2016 2015 Adopted/2016


SM & CS Manager 1.00 1.00 1.00 1.00 94,736 ‐ 0.0%

Marketing Manager 2.00 2.00 2.00 2.00 126,677 ‐ 0.0%

Customer Service Manager 1.00 1.00 1.00 1.00 70,121 ‐ 0.0%

IPTV Content Specialist/Marketing Rep 1.00 1.00 1.00 1.00 57,316 ‐ 0.0%

Credit Coordinator 1.00 1.00 1.00 1.00 56,937 ‐ 0.0%

Billing System Analyst 1.00 1.00 1.00 1.00 49,444 ‐ 0.0%

Customer Sales Rep III 4.00 4.00 4.00 4.00 179,359 ‐ 0.0%

Customer Sales Rep II 4.00 5.00 5.00 5.00 198,818 ‐ 0.0%

Customer Sales Rep I 2.00 1.00 1.00 1.00 36,269 ‐ 0.0%

Total 17.00 17.00 17.00 17.00 869,677 ‐ 0.0%

DIVISION SUMMARY

66.32%

4.44%

27.42%

0.62%



Supplies



F - 5


2014 2015 2016 2015 Adopted/2016




501 01 Overtime Wages 43,353 15,000 23,100 23,100 15,000 ‐ 0.0%

502 01 Temporary Wages 13,417 6,300 11,000 11,000 11,000 4,700 74.6%

505 00 Payroll Taxes 65,236 66,900 66,787 65,500 68,530 1,630 2.4%

506 00 Pension 171,117 202,300 202,300 178,400 207,060 4,760 2.4%

507 00 Health and Life Insurance 310,255 333,800 333,800 332,200 350,800 17,000 5.1%

507 30 Workers Compensation 4,519 5,400 5,513 5,500 5,440 40 0.7%

508 00 Other Benefits 19,871 17,200 17,200 17,200 15,880 (1,320) ‐7.7%

509 08 Allowances‐Medical Expenses ‐ 900 900 ‐ ‐ (900) ‐100.0%

509 09 Incentive Pay 27,085 28,000 28,000 26,000 28,000 ‐ 0.0%

509 12 Allowances‐Vehicles ‐ 2,000 2,000 2,000 2,000 ‐ 0.0%



DIVISION OPERATING BUDGET DETAIL

Changes between the adopted operating budget for 2015 and the proposed operating budget for 2016 that are greater than 5% and $5,000 are discussed below.

• Personnel Services and Benefits increased by $42,025, or by 2.7%, due to annual employee step increases; and a 1.6% cost ofliving adjustment and decreased employee health insurance co‐pays for non‐represented employees that became effectiveJanuary 1, 2015. As a new collective bargaining agreement has yet to be reached, no cost of living adjustments have beenprogrammed for employees of IBEW, Local 1547 for either FY 2015 or FY 2016. A proposed 2.0% cost of living adjustment fornon‐represented employees has been budgeted for 2016.

• Office Supplies (Account No. 510‐01) decreased by $3,000, or by 16.7%, to cover additional advertising expenses. AccountNo. 605‐02 increased so overall the budget reflects a zero net change year over year for the accounts.

• Operating Supplies (Account No. 510‐02) decreased by $5,000, or by 38.5%, to cover additional advertising expenses. AccountNo. 605‐02 increased so overall the budget reflects a zero net change year over year for the accounts.

• Marketing (Account No. 605‐02) increased by $8,000, or by 4.1% to cover additional advertising expenses. Account Nos. 510‐01 and 510‐02 decreased the exact same amount for a zero net change year over year for the accounts.

• Bank and Merchant Charges (Account No. 630‐03) decreased by $6,000, or by 5.3%, to equal projected fees charged by WellsFargo for customer credit card use in 2015.

• Machinery & Equipment (Account No. 725‐00) increased by $8,500, or by 154.5%, due to the need to replace a failing cameraused for local content filming. Also included are replacement batteries and a case.

F - 6


2014 2015 2016 2015 Adopted/2016


Supplies

510 01 Office Supplies 14,234 18,000 15,000 15,000 15,000 (3,000) ‐16.7%

510 02 Operating Supplies 7,411 13,000 13,000 8,000 8,000 (5,000) ‐38.5%

510 03 Safety Program Supplies 160 200 200 200 200 ‐ 0.0%

510 04 Janitorial Supplies 766 1,200 1,200 1,200 1,200 ‐ 0.0%

510 07 Food & Catering 1,276 ‐ ‐ ‐ ‐ ‐ NA

515 01 Vehicle Maintenance Materials ‐ 1,300 1,300 1,000 1,000 (300) ‐23.1%

515 02 Bldg Machinery Equip Maintenance 633 ‐ ‐ NA

520 01 Express Postage 551 350 350 250 250 (100) ‐28.6%

520 02 Postage 3,366 3,000 3,000 1,500 3,000 ‐ 0.0%

520 03 Bulk Mailing 70,880 72,400 68,400 68,000 69,500 (2,900) ‐4.0%

525 04 Vehicle Motor Fuel & Lubricants 575 600 600 500 500 (100) ‐16.7%

530 02 Periodicals 298 300 300 300 300 ‐ 0.0%

530 03 Professional & Technical Publications 59 300 300 300 300 ‐ 0.0%

535 02 Allowances‐Business and Meal Expense 523 1,300 1,300 1,000 1,300 ‐ 0.0%

535 04 Allowances‐Uniforms/Clothing/Badges 3,324 3,000 3,000 2,000 3,000 ‐ 0.0%

Supplies 104,056 114,950 107,950 99,250 103,550 (11,400) ‐9.9%


600 01 Travel‐Business 5,958 10,450 10,450 10,200 13,450 3,000 28.7%

600 02 Travel‐Training 2,591 7,000 7,000 6,800 7,000 ‐ 0.0%

600 03 Travel‐Training and Education 14,872 15,000 15,000 15,000 15,000 ‐ 0.0%

605 01 Ads & Public Announcements 329 1,500 1,500 1,100 1,500 ‐ 0.0%

605 02 Marketing 202,807 195,000 208,000 208,000 203,000 8,000 4.1%

605 03 Printing and Binding 18,465 18,000 18,000 13,000 18,000 ‐ 0.0%

610 01 Community Promotion 6,299 6,000 6,000 6,000 6,000 ‐ 0.0%

615 02 Assn. Membership Dues & Fees 175 1,400 1,400 1,400 1,400 ‐ 0.0%

630 01 Building & Operating Permits 922 ‐ ‐ ‐ NA

630 02 Vehicle Licenses 20 20 20 20 20 ‐ 0.0%

630 03 Bank and Merchant Charges 106,112 114,000 108,000 108,000 108,000 (6,000) ‐5.3%

630 04 Broadcast Content Fees 2,000 2,000 2,300 2,230 2,400 400 20.0%

635 02 Janitorial & Cleaning Services 7,200 7,200 7,200 7,200 7,200 ‐ 0.0%

635 07 Machinery & Equipment Maint Services 3,322 5,000 4,700 3,500 3,500 (1,500) ‐30.0%

635 12 Technical Services 9,489 36,000 34,500 33,340 33,000 (3,000) ‐8.3%

635 14 Other Contractual Services 1,800 NA

640 04 Management & Consulting Services 93,192 95,000 95,000 95,000 95,000 ‐ 0.0%

645 01 Rents and Leases‐Land & Buildings 83,935 84,000 85,500 85,262 86,496 2,496 3.0%

645 02 Rents and Leases‐Machinery & Equip 1,777 2,000 2,000 2,000 2,000 ‐ 0.0%

650 01 Telecommunications 30,198 30,000 30,000 30,000 30,000 ‐ 0.0%

650 02 Electric, Water, Sewer & Solid Waste 5,047 6,000 6,000 6,000 6,000 ‐ 0.0%


Minor Capital

715 00 Furniture and Fixtures 969 5,000 5,000 5,000 1,000 (4,000) ‐80.0%

725 00 Machinery & Equipment 7,282 5,500 5,500 5,500 14,000 8,500 154.5%

725 01 Computers, Printers & Copiers 9,730 9,000 9,000 9,000 10,500 1,500 16.7%

735 00 Software 6,015 500 500 500 500 ‐ 0.0%


F - 7


2014 2015 2016 2015 Adopted/2016



825 01 Interdepartmental Charges‐Insurance ‐ 17,400 17,400 13,900 14,500 (2,900) ‐16.7%

Interdepartmental Charges ‐ 17,400 17,400 13,900 14,500 (2,900) ‐16.7%

Total Expenditures by Type 2,177,797 2,319,282 2,319,282 2,266,402 2,356,403 37,121 1.6%

NARRATIVE

500‐01 Regular Salaries and Wages: $869,677 – This account provides for compensation paid to all regular salaried and hourly employeesof the Sales, Marketing and Customer Service Division.

501‐01 Overtime Wages: $15,000 ‐ This account provides for compensation paid to all hourly employees for hours worked in excess of aregular working cycle or beyond the hours listed in the bargaining agreement.

502‐01 Temporary Wages: $11,000 – This account provides for the compensation paid to temporary, part‐time camera operators for thefilming of televised events when more than one camera is required or for when events to be filmed are scheduled to occur simultaneously.This has also contributed to a reduction in overtime wages paid to the full time cameraman.

505‐00 Payroll Taxes: $68,530 – This account provides for employer contributions for Social Security and Medicare and other similarpayroll related taxes.


507‐00 Health and Life Insurance: $350,800 – This account provides for employer contributions to employee health and life insuranceplans.

507‐30 Workers Compensation: $5,440 – This account provides for employer contributions to workers compensation.

508‐00 Other Benefits: $15,880 – This account provides for expenditures for direct claims from former employees for unemploymentbenefits paid by the State of Alaska and accrued vacation and sick leave.

509‐09 Allowances ‐ Incentive Pay: $28,000 ‐ This account provides for employee incentive and suggestion programs. Specifically thisrefers to the Upgrade Sales Incentive Program for CSRs I, II and III for add‐on sales. OSP Techs have also begun to upsell services when on‐site, making them also eligible for the program.

509‐12 Allowances – Vehicles: $2,000 – This account provides for an allowance for employees use of personal vehicles while on officialCity business. These benefits are taxable to employees. This was new for 2015 to allow for the retirement of two SM &CS vehicles that arenow inoperable. Rather than incur expense for replacement cars, employees can be reimbursed for use of a personal vehicle for KPUbusiness.

510‐01 Office Supplies: $15,000 ‐ This account provides for paper, pens, pencils, adding machine ribbons and tape, note pads, file folders,scotch tape, toner, ink cartridges, photocopy charges for leased copiers, small desk accessories and minor office equipment such as addingmachines, staplers, tape dispensers and paper shredders.

510‐02 Operating Supplies: $8,000 ‐ This account provides for supplies that are normally not of a maintenance nature and are required tosupport department operations. Included are supplies such as credit forms, letterhead, envelopes, adjustment forms, deposit slips, books,ink stamps, brochures, postage machinery, DVDs, terabytes, water, supplies for Celeb Chef, Outdoor Challenge, employee awards andrecognition pins.

510‐03 Safety Program Supplies: $200 ‐ This account provides for the City safety program. Included are safety information brochures andsafety training audio and video programs.

510‐04 Janitorial Supplies: $1,200 – This account provides for cleaning and sanitation supplies used by in‐house and contracted janitors.

F - 8


515‐01 Vehicle Maintenance Materials: $1,000 ‐ This account provides for the repair and maintenance of the vehicles used by the Sales,Marketing & Customer Service Division, which includes one SUV and a filming flatbed truck.

520‐01 Express Postage: $250 ‐ This account provides for express delivery postal services.

520‐02 Postage: $3,000 ‐ This account provides for postal related services such as incidental postage, mailing materials and postagemachine refill.

520‐03 Bulk Mailing: $69,500 ‐ This account provides for bulk mailing of monthly bills and invoices for City and KPU services, brochures,mass public notices and other similar types of mailings.

525‐04 Vehicle Motor Fuel and Lubricants: $500‐ This account provides for gasoline and lubricants used in the operations of Sales,Marketing and Customer Service Division vehicles.

530‐02 Periodicals: $300 ‐ This account provides for newspapers, magazines and trade journals. Specifically, this accounts for theKetchikan Daily News subscription.

530‐03 Professional and Technical Publications: $300 ‐ This account provides for professional and technical publications. Included areprofessional handbooks, print and electronic subscription services for Sales, Marketing & Customer Service.

535‐02 Business and Meals Expense: $1,300 – This provides for meal expense incurred with vendors, at trade shows, recruitment mealexpenses and employee award/recognition cakes, etc. It also provides for Chamber of Commerce monthly lunch tickets.

535‐04 Allowances‐Uniforms/Clothing/Badges: $3,000 ‐ This account provides for direct purchases of or reimbursements to employeesfor work related clothing required by department policies. Included are nameplates, name badges, KPU logowear for CSRs I, II and II. Alsoincludes logo embroidery for other items such as hats, aprons, etc.

600‐01 Travel‐Business: $13,450 – This account provides for transportation, lodging, meals, per diems and other incidental expensesassociated with travel for business, trade and board meetings. For 2016, several meeting have moved to the East Coast, which adds to theairfare and requires additional travel days.

600‐02 Travel‐Training: $7,000 ‐ This account provides for transportation, lodging, meals, per diems and other incidental expensesassociated with travel for CommSoft Annual training for the Billing Analyst and New World Annual Training for the Electric Billing CSR III.

600‐03 Training and Education: $15,000 – This account provides for registration fees, training fees, and training materials associated withtraining and educating employees; and on‐premises training programs provided by staff or a third‐parties, such as Measure X.

605‐01 Ads and Public Announcements: $1,500 ‐ This account provides for advertising and announcements in publications, newspapers,trade journals, and the Internet for recruitment.

605‐02 Marketing and Advertising: $203,000 ‐ This account provides for advertising, image building and promotion in publications,newspapers, Internet, radio and TV broadcasts. Included are promotional KPU logo products and media. Production and design costs forthe creation of ad and marketing materials are also included in this account.

605‐03 Printing and Binding: $18,000 – This account provides for job printing and binding services. Included are designing and printing offorms, posters, flyers, user manuals and channel guides for distribution in the Sales, Marketing & Customer Service Division.

610‐01 Community Promotion: $6,000 – This account provides for the promotion of community activities and programs. Included aredonations to civic organizations, sport teams and hosting or sponsoring community events.

615‐02 Assn. Membership Dues & Fees: $1,400 – This account provides for memberships in professional and trade associations, such asNational Association of Telecommunications Officers and Advisors, Alliance for Community Media, Progressive Business Publications andRotary.

630‐02 Vehicle License: $20 – This account provides for license fee for KPU vehicles.

630‐03 Bank and Merchant Charges: $108,000 – This account provides for monthly bank account service charges, merchant fees paid tobanks for customer use of credit and debit cards and other fees for banking services.

F - 9


630‐04 Broadcast Content Fee: $2,400 – This account provides for license fee for use of music database and covers use of copyrightedmusic. Included is Megatrax.

635‐02 Janitorial and Cleaning Services: $7,200 ‐ This account provides for services to clean facilities owned or leased by the Sales,Marketing and Customer Service. Included are janitorial and carpet cleaning services.

635‐07 Machinery and Equipment Maintenance Services: $3,500 ‐ This account provides contractual services for the repair andmaintenance of office equipment, machinery and other operating equipment used by the Sales, Marketing & Customer Service Division.This account includes contract labor and materials required to provide the service. It also includes maintenance service agreements fromNeopost, SE Business Machines and Tongass Business Center.

635‐12 Technical Services: $33,000 ‐ This account provides for services that are not regarded as professional but require technical orspecial knowledge. Included are CBC Innovis (credit reporting), Weather Central (weather channel server maintenance), PIVOTWebhosting, GoogleBiz Apps, Computer HQ and Advanced Communications.

640‐04 Management and Consulting Services: $95,000 ‐ This account provides for management and consulting services. This refers toPivot Group Quality Assurance, Hiring Solutions, independent film editors, and OSG Billing Services (bill print vendor.)

645‐01 Rents and Leases ‐ Land and Buildings: $86,496‐ This account provides for the lease of retail space at the Plaza Mall for the Sales,Marketing and Customer Service Division and for off‐site storage for file retention.

645‐02 Rents and Leases ‐ Machinery & Equipment: $2,000 ‐ This account provides for the rent and lease of machinery and equipment,sports filming lifts and incidental equipment needed for Expo and events.

650‐01 Telecommunications: $30,000 ‐ This account provides for telecommunication services. Included are charges for wired andwireless telecommunications services, cell phones, Internet, long distance and toll‐free numbers.

650‐02 Electric, Water, Sewer & Solid Waste: $6,000 ‐ This account provides for electric, water, sewer and solid waste utility services.

715‐00 Furniture & Fixtures: $1,000‐ This account provides for acquisition of furniture and fixtures. Included are desks, chairs, tables,workstations, file cabinets, storage cabinets and shelving. This is specifically for a hanging display for wireless products.

725‐00 Machinery & Equipment: $14,000 ‐ This account provides for the acquisition, repair and replacement filming equipment.

725‐01 Computers, Printers & Copiers: $10,500 ‐ This account provides for the acquisition of desktop, laptops, and computers, copiersand fax machines. This is specifically for the replacement of 5 CSR II computers and a copier for SM&CS Division.

735‐00 Software: $500 ‐ This account provides for acquisition of software systems and upgrades not covered by maintenance agreements.

825‐01 Interdepartmental Charges‐Insurance: $14,500 ‐ This account provides for the cost for risk management services.

F - 10

KETCHIKAN PUBLIC UTILITIES2016 Operating and Capital BudgetElectric Division Summary

2014 2015 2016 2015 Adopted/2016Divisions/Cost Center/Programs Actual Adopted Amended Estimate Budget Incr(Decr) %

Operations 15,997,011 16,846,572 16,904,103 16,274,484 16,967,493 120,921 0.7%

Capital Improvement Program 4,372,461 2,135,490 2,595,079 1,802,500 3,170,600 1,035,110 48.5%

Total 20,369,472 18,982,062 19,499,182 18,076,984 20,138,093 1,156,031 6.1%

2014 2015 2016 2015 Adopted/2016



Supplies 6,742,928 6,762,400 6,763,700 6,383,500 6,732,400 (30,000) ‐0.4%



Interdepartmental Charges 972,791 1,129,760 1,141,880 1,062,800 1,102,090 (27,670) ‐2.4%

Debt Service 2,170,496 2,444,980 2,444,980 2,444,980 2,450,730 5,750 0.2%

Other Costs 381,993 381,993 381,993 381,993 381,993 ‐ 0.0%

Major Capital Outlay 4,372,461 2,135,490 2,595,079 1,802,500 3,170,600 1,035,110 48.5%

Total 20,369,472 18,982,062 19,499,182 18,076,984 20,138,093 1,156,031 6.1%

2014 2015 2016 2015 Adopted/2016


KPU Enterprise Fund 17,869,472 18,982,062 19,499,182 18,076,984 20,138,093 1,156,031 6.1%

Grants 2,500,000 ‐ ‐ ‐ ‐ ‐ NA

Total 20,369,472 18,982,062 19,499,182 18,076,984 20,138,093 1,156,031 6.1%

2014 2015 2016 2015 Adopted/2016


Operations 39.40 39.40 39.40 39.40 3,128,290 ‐ 0.0%

Total 39.40 39.40 39.40 39.40 3,128,290 ‐ 0.0%


The Electric Division is one of three utilities operated by Ketchikan Public Utilities, a non‐regulated public utility owned by theCity of Ketchikan. The Electric Division operates four hydroelectric projects, three of which are owned by Ketchikan PublicUtilities and six diesel generating units. The Electric Division serves a community of nearly 14,000 and is capable of meeting anannual customer demand for energy in excess of 180,000,000 kWh.


Electric Division

The Electric Division is comprised of one operating division and oversees one Capital Improvement Program.

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KETCHIKAN PUBLIC UTILITIES2016 Operating and Capital BudgetElectric Division Operations 5200

MISSION STATEMENT

GOALS FOR 2016

The mission of the Electric Division is to provide safe, reliable electric service to meet the current and growing needs of thecommunity at the lowest practicable rates.

2015 Electric Division Statistics

Metered Customer Base Count: 7,591 System Transformer Count: 1,827Poles: 4,749 Fuses & Switches: 2,089Street Lights: 1,749 Substations: 13

Distribution Line: 97 miles of 12.47 kV Secondary Radial Line: 122 milesTransmission Line: 96 miles of 34.5 kV

Hydro Generators: 9 machines across 5 Lake Regulatory Compliance: FERC Dam Safety,Systems Part 12

Diesel Generators: 6 machines from 1.75MW to EPA/DEC Title 5 Air Quality10.5 MW DEC/USCG Spill Prevention SPCC

General Manager

Electric Division Manager

Generation Control

Chief Electric System

Dispatcher

Electric System Dispatcher (3.0)

Electric System Dispatcher Relief (1.0)

Swan Lake Operations and Maintenance

(4.0)

Senior Project Engineer

Electric Operations Manager

Mechanical Maintenance

Journeyman Powerplant Mechanic Foreman

Journeyman Powerplant

Mechanic (5.0)

Journeyman Powerplant

Mechanic Relief (1.0)

General Laborer

Engineering Tech (1.4)

Line Crew

Service Crew Foreman

Journeyman Lineman (2.0)

Journeyman Lineman Apprentice

Line Crew Foreman

Journeyman Lineman (3.0)

Warehouse Worker

Warehouse‐General Laborer

(.5)

Secretary II

Secretary I

Sr. Electric System Engineer

Electricians

Journeyman Meter Relay Control Foreman

Journeyman Meterman

Journeyman Wireman (4.0)

Meter ReaderWarehouse ‐

General Laborer (.5)

Sr. SCADA Tech (2.0)

Safety and Environmental:

o Continue to raise issues of concern, especially related to safety, at the weekly foremen’s meeting and during on‐the‐job tailboard sessions;

o Revise safety protocols as necessary;o Remain current on all regulatory agency required policies;o Continue safety surveillance and monitoring of the utility's dams; ando Keep current on HAZWOPER and SPCC training.

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Customer Service:

o Review outages to identify failure trends impacting reliability;o Improve the content and use of the Electric Division’s website, Facebook page, and FlashAlert to inform customers

and raise awareness during outages and, system events; ando Develop customer coordinated plans for new services.

• Generation:

o Continue to work with SEAPA staff and member communities to optimize resources;o Provide support in development of future generation projects; ando Explore electric rate options designed to promote electric energy conservation.

• Transmission and Distribution facilities:

o Continue with system wide pole replacements;o Continue to work with the Department of Transportation for opportunities to improve utilities;o Support the Department of Transportation’s Water Street utility relocation effort;o Continue to develop the Geographical Information System’s database for incorporation into day‐to‐day use;o Continue a LED street light replacement initiative; ando Develop sectionalizing capability to minimize outage impacts and ease cold load pick‐up.

• Safety and Environmental:

o Met DEC Title V air quality requirements for a renewed permit for Bailey diesels;o Filed an accepted USCG Spill Prevention & Counter Controls plan (SPCC);o Completed FERC requirements for Ketchikan and Whitman Dams;o Continued OSHA training requirements for employee safety compliance

o Greater than (>) 30,000 hours without a lost time injury;o Maintained DOT requirements for traffic control flagging; ando Updated Emergency Action Plans (EAP) for Ketchikan and Whitman

o Staged "super sack" barriers for future flood control.

• Customer Service:

o Installed/connected 41 new services;o Permanently disconnected/removed 32 services;o AMR/AMI implementation now at 4,819 out of 7,591 meters or 63% implemented; ando Supplied new metering systems for USCG, Federal Building, High School, Valley Park School, Tatsuda IGA, Copper Ridge

Mini Storage and others.

• Generation:

o Generated a record 89 GWhr of energy with KPU Hydro for FY2015;o Limited diesel generation to a record low of less than 1 GWhr;o Completed Beaver Falls No. 1 rewind;o Completed BAG No. 4 Turbocharger rebuild;o Completed Ketchikan No. 3 rewind;o Implemented bearing temperature monitor upgrades for Ketchikan No. 5; ando Upgraded mechanical speed switches to digital speed switches for Ketchikan Plant Generators Nos. 3, 4 and 5.

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2014 2015 2016 2015 Adopted/2016



Supplies 6,742,928 6,762,400 6,763,700 6,383,500 6,732,400 (30,000) ‐0.4%




Debt Service 2,170,496 2,444,980 2,444,980 2,444,980 2,450,730 5,750 0.2%

Payment in Lieu of Taxes 381,993 381,993 381,993 381,993 381,993 ‐ 0.0%


2014 2015 2016 2015 Adopted/2016



Total Funding 15,997,011 16,846,572 16,904,103 16,274,484 16,967,493 120,921 0.7%

2014 2015 2016 2015 Adopted/2016


Division Manager 1.00 1.00 1.00 1.00 141,457 ‐ 0.0%

Senior Project Engineer 1.00 1.00 1.00 1.00 107,810 ‐ 0.0%

Operations Manager 1.00 1.00 1.00 1.00 95,704 ‐ 0.0%

Senior System Engineer 1.00 1.00 1.00 1.00 107,810 ‐ 0.0%

Secretary II 1.00 1.00 1.00 1.00 46,625 ‐ 0.0%

Secretary I 1.00 1.00 1.00 1.00 37,375 ‐ 0.0%

GENERATION

Chief System Dispatcher 1.00 1.00 1.00 1.00 88,776 ‐ 0.0%

System Dispatcher 3.00 3.00 3.00 3.00 230,097 ‐ 0.0%

System Dispatcher‐Relief 1.00 1.00 1.00 1.00 76,699 ‐ 0.0%

SCADA

Senior SCADA Technician 2.00 2.00 2.00 2.00 156,286 ‐ 0.0%

LINE CREWS

Line Crew Foreman 1.00 1.00 1.00 1.00 101,348 ‐ 0.0%

Service Crew Foreman 1.00 1.00 1.00 1.00 101,348 ‐ 0.0%

Lineman 5.00 5.00 5.00 5.00 457,355 ‐ 0.0%

Lineman Apprentice 1.00 1.00 1.00 1.00 60,803 ‐ 0.0%

DIVISION SUMMARY

• Transmission and Distribution facilities:

o Updated/repaired dock float lighting and power meter pedestals;o Installed 232 LED street lights;o Exchanged 31 power poles;o Continued a LED street light replacement initiative; ando Updated/upgraded protective relays for the new 3rd Avenue underground transmission line.

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2014 2015 2016 2015 Adopted/2016


ELECTRICIANS

Meter Relay Control Foreman 1.00 1.00 1.00 1.00 86,776 ‐ 0.0%

Meterman 1.00 1.00 1.00 1.00 80,637 ‐ 0.0%

Wireman/Electrician 4.00 4.00 4.00 4.00 306,596 ‐ 0.0%

Meter Reader 1.00 1.00 1.00 1.00 48,943 ‐ 0.0%

Warehouse‐Relief Meter Reader 0.50 0.50 0.50 0.50 30,401 ‐ 0.0%

MAINTENANCE

Powerplant Mechanic Foreman 1.00 1.00 1.00 1.00 86,026 ‐ 0.0%

Powerplant Mechanic 5.00 5.00 5.00 5.00 380,745 ‐ 0.0%

Powerplant Mechanic‐Relief 1.00 1.00 1.00 1.00 76,149 ‐ 0.0%

SWAN LAKE

Foreman 1.00 1.00 1.00 1.00 86,526 ‐ 0.0%

Maintenance & Operations Person 3.00 3.00 3.00 3.00 229,947 ‐ 0.0%

OTHER

Warehouse Worker 1.00 1.00 1.00 1.00 68,257 ‐ 0.0%

Warehouse/General Laborer 0.50 0.50 0.50 0.50 30,401 ‐ 0.0%

Engineering Tech‐CADD & GIS 1.40 1.40 1.40 1.40 85,107 ‐ 0.0%

General Laborer 1.00 1.00 1.00 1.00 38,759 ‐ 0.0%

Subtotal 43.40 43.40 43.40 43.40 3,444,763 ‐ 0.0%

Less Personnel Allocated

Directly to Swan Lake:

Foreman (1.00) (1.00) (1.00) (1.00) (86,526) ‐ 0.0%

Maintenance & Operations Person (3.00) (3.00) (3.00) (3.00) (229,947) ‐ 0.0%

Total 39.40 39.40 39.40 39.40 3,128,290 ‐ 0.0%

39.15%

50.49%

7.50% 2.86%



Supplies



G - 5



Changes between the adopted operating budget for 2015 and the proposed operating budget for 2016 that are greater than 5%and $5,000 are discussed below.

• Personnel Services and Benefits increased by $62,841, or by 1.2%, due to annual employee step increases; and a 1.6% cost ofliving adjustment and decreased employee health insurance co‐pays for non‐represented employees that became effectiveJanuary 1, 2015. As a new collective bargaining agreement has yet to be reached, no cost of living adjustments have beenprogrammed for employees of IBEW, Local 1547 for either FY 2015 or FY 2016. A proposed 2.0% cost of living adjustment fornon‐represented employees has been budgeted for 2016.

• Small Tools and Equipment (Account No. 510‐05) decreased by $5,000, or by 12.5%, as many identified tools have beenpurchased for new vehicles and Whitman Powerhouse.

• Machinery & Equipment Maintenance Materials (Account No. 515‐04) decreased by $30,000, or by 37.5%, as repairs are notnecessarily required annually.

• Generation Oil Lubricants (Account No. 525‐02) increased by $25,000, or 294.1%, due to a proposed engine oil change forBailey Generator No. 4.

• Assn. Membership Dues & Fees (Account 615‐02) decreased by $5,000, or by 18.5%, due to decreased memberships.

• Building & Operating Permits (Account No. 630‐01) decreased by 15,000, or by 12.0%, as a result of fluctuating regulatoryagency fees.

• Software Maintenance Services (Account No. 635‐04) decreased by $12,000, or by 17.1%, due to a reduction in CAD and GISsupport services.

• Building & Grounds Maintenance Services (Account No. 635‐06) increased by $7,000, or by 100.0%, due to increasedmaintenance of grounds owned or leased by the City.

• Infrastructure Maintenance Services (Account No. 635‐08) increased by $10,000, or by 100%, due to upkeep of City owned orleased infrastructure.

• Disposal Fee (Account No. 635‐09) increased by $20,000, or by 400.0%, due to the proposed removal and disposal of a 20,000gallon fuel tank at the Bailey fuel farm.

• Other Contractual Services (Account No. 635‐14) increased by $13,000, or by 130%, due to anticipated concrete repairs.

• Engineering & Consulting Services (Account No. 640‐02) increased by $50,000, or by 100.0%, due FERC accelerated inspectionrequirements of the Whitman Lake Hydroelectric Project.

• Management & Consulting Services (Account No. 640‐04) increased by $25,000, or by 25%, due to identified services forcompliance permits and licenses such as FERC Part 12.

• Computers, Printers, and Copiers (Account No. 725‐01) increased by $15,000, or by 75%, to replace the office copy machine.

• Interdepartmental ‐ Finance (Account No. 802‐00) increased by $26,420, or by 6.2%, due to rising personnel costs caused bystep increases and cost of living adjusdtments.

• Interdepartmental ‐ Information Technology (Account No. 803‐01) decreased by $10,720, or by 4.9%, due to a reduction instaffing when a planned retirement occurs in April 2016.

G - 6


2014 2015 Budget 2016 2015 Adopted/2016



500 01 Regular Salaries and Wages 2,931,189 3,100,139 3,084,039 3,003,600 3,128,290 28,151 0.9%

501 01 Overtime Wages 248,124 200,000 216,100 213,300 200,000 ‐ 0.0%

502 01 Temporary Wages 55,948 70,000 70,000 62,900 70,000 ‐ 0.0%

505 00 Payroll Taxes 244,181 257,800 257,800 244,200 259,980 2,180 0.8%

506 00 Pension 481,373 540,500 518,653 491,000 545,850 5,350 1.0%

507 00 Insurance‐Health 698,016 766,000 766,000 734,600 806,200 40,200 5.2%

507 30 Insurance‐Workers Compensation 144,815 143,100 143,100 135,800 142,100 (1,000) ‐0.7%

508 00 Other Benefits 1,017 69,700 91,547 91,500 57,660 (12,040) ‐17.3%

509 04 Allowances‐KPU Clothing 5,426 9,000 9,000 9,000 9,000 ‐ 0.0%

509 08 Allowances‐Medical Expenses 150 500 500 500 500 ‐ 0.0%


Supplies

510 01 Office Supplies 12,338 14,500 14,500 14,500 14,500 ‐ 0.0%

510 02 Operating Supplies 6,962 5,500 7,000 7,000 7,000 1,500 27.3%

510 03 Safety Program Supplies 17,167 25,500 34,500 34,500 30,000 4,500 17.6%

510 04 Janitorial Supplies 112 500 500 500 500 ‐ 0.0%

510 05 Small Tools & Equipment 27,521 40,000 40,000 35,000 35,000 (5,000) ‐12.5%

515 01 Vehicle Maintenance Materials 74,202 70,000 79,600 79,600 70,000 ‐ 0.0%

515 02 Building & Grounds Maint Materials 17,461 32,000 32,000 30,000 30,000 (2,000) ‐6.3%

515 03 Furnitures & Fixtures Maint Materials ‐ 500 500 500 500 ‐ 0.0%

515 04 Machinery & Equip Maint Materials 28,143 80,000 60,200 50,000 50,000 (30,000) ‐37.5%

515 05 Infrastructure & Plant Maint Materials 360,986 350,000 350,000 350,000 350,000 ‐ 0.0%

520 02 Postage 906 1,000 1,000 1,000 1,000 ‐ 0.0%

520 04 Freight‐Materials & Supplies 24,026 18,000 18,000 18,000 18,000 ‐ 0.0%

525 01 Generation Diesel Fuel 423,560 334,900 334,900 334,900 334,900 ‐ 0.0%

525 02 Generation Oil Lubricants 7,559 8,500 8,500 8,500 33,500 25,000 294.1%

525 03 Heating Fuel 5,005 6,000 6,000 5,000 6,000 ‐ 0.0%

525 04 Vehicle Motor Fuel & Lubricants 55,410 55,000 55,000 55,000 55,000 ‐ 0.0%

525 05 Purchased Power 5,978,764 6,120,000 5,685,000 5,685,000 6,120,000 ‐ 0.0%

525 06 Purchased Power Rebate (462,411) (425,000) (425,000) (787,000) (450,000) (25,000) 5.9%

525 07 Machinery & Equip Fuel & Lubricants 1,291 3,000 3,000 3,000 3,000 ‐ 0.0%

525 10 Whitman Lake ‐ SEAPA True‐up 157,849 435,000 435,000 ‐ NA

530 02 Periodicals 447 1,000 1,000 1,000 1,000 ‐ 0.0%

530 03 Professional & Technical Publications 123 500 1,500 1,500 1,500 1,000 200.0%

535 01 Moving Expenses ‐ 15,000 15,000 15,000 15,000 ‐ 0.0%

535 02 Business and Meal Expenses 2,457 3,000 3,000 3,000 3,000 ‐ 0.0%

535 05 Special Protective Clothing 3,050 3,000 3,000 3,000 3,000 ‐ 0.0%

Supplies 6,742,928 6,762,400 6,763,700 6,383,500 6,732,400 (30,000) ‐0.4%


• Interdepartmental ‐ Insurance (Account No. 825‐01) decreased by $37,500, or by 18.4%, because excess marine liabilityinsurance premiums allocated to the Electric Division for the 2015 Budget were incorrect. The estimate for 2015 and theamount requested for 2016 reflects the proper allocation of the premiums for excess marine liability insurance. The decreasewas also due to a rebate from the insurance pool.

G - 7


2014 2015 Budget 2016 2015 Adopted/2016



600 01 Travel‐Business 1,615 9,000 9,000 9,000 9,000 ‐ 0.0%

600 02 Travel‐Training 3,361 20,000 20,000 20,000 20,000 ‐ 0.0%

600 03 Travel‐Training and Education 32,810 51,200 51,200 51,200 51,200 ‐ 0.0%

605 01 Ads & Public Announcements 16,650 15,000 14,000 14,000 14,000 (1,000) ‐6.7%

610 02 Community Grant Program 87,710 ‐ ‐ ‐ ‐ ‐ NA

615 01 Professional and Technical Licenses ‐ 4,000 4,000 4,000 4,000 ‐ 0.0%

615 02 Assn. Membership Dues & Fees 14,305 27,000 22,000 22,000 22,000 (5,000) ‐18.5%

630 01 Building & Operating Permits 82,211 125,000 110,000 110,000 110,000 (15,000) ‐12.0%

630 02 Vehicle Licenses 235 1,500 1,500 1,500 1,500 ‐ 0.0%

635 02 Janitorial and Cleaning Services 3,600 6,000 6,000 6,000 6,000 ‐ 0.0%

635 03 Vehicle Maintenance Services ‐ 5,000 25,411 25,411 5,000 ‐ 0.0%

635 04 Software Maintenance Services 41,507 70,000 58,000 58,000 58,000 (12,000) ‐17.1%

635 06 Bldg & Grounds Maintenance Services 130 7,000 7,000 7,000 7,000 New

635 07 Machinery & Equipment Maint Services 1,721 ‐ NA

635 08 Infrastructure Maintenance Services 23,754 10,000 10,000 10,000 10,000 New

635 09 Disposal Services ‐ 5,000 5,000 5,000 25,000 20,000 400.0%

635 12 Technical Services 205,247 205,000 205,000 205,000 208,000 3,000 1.5%

635 14 Other Contractual Services 12,298 10,000 24,400 24,400 23,000 13,000 130.0%

640 02 Engineering & Architectural Services 53,990 50,000 50,000 50,000 100,000 50,000 100.0%

640 04 Management & Consulting Services 101,210 100,000 125,000 125,000 125,000 25,000 25.0%

645 01 Rents & Leases‐Land & Buildings 23,572 25,000 25,300 25,300 25,000 ‐ 0.0%

645 02 Rents & Leases‐Machinery & Equip 2,203 2,000 2,000 2,000 2,000 ‐ 0.0%




Minor Capital

715 00 Furniture and Fixtures 10,236 15,000 15,000 15,000 15,000 ‐ 0.0%

725 01 Computers, Printers, and Copiers 13,186 20,000 20,000 20,000 35,000 15,000 75.0%

730 00 Infrastructure and Plant 7,500 7,500 7,500 7,500 ‐ 0.0%

735 00 Software 9,790 23,500 23,500 23,500 23,500 ‐ 0.0%



800 00 Interdept'l‐Administrative 186,123 205,870 205,870 199,200 201,050 (4,820) ‐2.3%

801 01 Interdept'l‐Human Resources 64,140 71,390 71,390 69,880 70,340 (1,050) ‐1.5%

802 00 Interdept'l‐Finance 406,207 428,760 428,760 412,010 455,180 26,420 6.2%

803 01 Interdept'l‐Information Tech 204,711 219,540 231,660 223,810 208,820 (10,720) ‐4.9%

825 01 Interdept'l‐Insurance 111,610 204,200 204,200 157,900 166,700 (37,500) ‐18.4%


Debt Service

931 01 Debt Service‐Principal 1,459,090 1,735,000 1,735,000 1,735,000 1,805,000 70,000 4.0%

932 01 Debt Service‐Interest 711,406 709,980 709,980 709,980 645,730 (64,250) ‐9.0%

Debt Service 2,170,496 2,444,980 2,444,980 2,444,980 2,450,730 5,750 0.2%

Other Costs

975 00 Payment in Lieu of Taxes 381,993 381,993 381,993 381,993 381,993 ‐ 0.0%

Other Costs 381,993 381,993 381,993 381,993 381,993 ‐ 0.0%


G - 8


NARRATIVE

500‐01 Regular Salaries and Wages: $3,128,290 – This account provides for compensation paid to all regular salaried and hourlyemployees of the Electric Division.

501‐01 Overtime Wages: $200,000 ‐ This account provides for compensation paid to all regular and temporary hourlyemployees for hours worked in excess of a regular working cycle.

502‐01 Temporary Wages: $70,000 ‐ This account provides for compensation paid to temporary salaried and hourly employeesof the Electric Division.

505‐00 Payroll Taxes: $259,980 – This account provides for employer contributions for Social Security and Medicare and othersimilar payroll related taxes.


507‐00 Health and Life Insurance: $806,200 – This account provides for employer contributions to employee health and lifeinsurance plans.

507‐30 Workers Compensation $142,100 – This account provides for employer contributions for workers compensation.

508‐00 Other Benefits: $57,660 – This account provides for expenditures for direct claims from former employees forunemployment benefits paid by the State of Alaska and accrued vacation and sick leave.

509‐04 Allowances‐KPU Clothing: $9,000 – This account provides for employer provided protective clothing and flame‐resistantprotective clothing allowances paid directly to represented employees of Ketchikan Public Utilities pursuant to collectivebargaining agreements or the Personnel Rules.

509‐08 Allowances‐ Medical Expenses: $500 ‐ This account provides for employee medical exams paid directly to employees.These benefits are taxable to the employees.

510‐01 Office Supplies: $14,500 ‐ This account provides for paper, pens, pencils, adding machine ribbons and tape, note pads,file folders, scotch tape, toner, ink cartridges, photocopy charges, small desk accessories and minor office equipment such asadding machines, staplers, comb binding machines and tape dispensers.

510‐02 Operating Supplies: $7,000 ‐ This account provides for supplies that are normally not of a maintenance nature and arerequired to support department operations. Included are supplies such as, medical supplies, general materials for publicprograms, and engineering materials.

510‐03 Safety Program Supplies: $30,000 ‐ This account provides for safety training audio and video programs, safetyequipment such as gloves, hard hats and hearing protection, OSHA medical exams, specialized hazardous materials handling anddisposal information, and specialized traffic control, and protective safety equipment and clothing.

510‐04 Janitorial Supplies: $500 – This account provides for cleaning and sanitation supplies used by in‐house and contractedjanitors.

510‐05 Small Tools and Equipment: $35,000 ‐ This account provides for minor tools, operating and office equipment with avalue of less than $1,000. Included are hand tools, chain saws, blow torches, hydraulic jacks, sump pumps, computer accessories,space heaters, kitchen and dining equipment, radios, calculators, file cabinets and similar types of minor tools and equipment.

515‐01 Vehicle Maintenance Materials: $70,000 ‐ This account provides for the repair and maintenance of vehicles owned orleased and operated by the division. Included are licensed and unlicensed rolling stock and boats.

515‐02 Building and Ground Maintenance Materials: $30,000 – This account provides for expenditures for the repair andmaintenance of buildings and upkeep of the grounds owned or leased and operated by the City.

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515‐03 Furniture & Fixtures Maint Materials: $500 ‐ This account provides expenditures for the repair and maintenance offurniture and building fixtures owned or leased and operated by the City.

515‐04 Machinery and Equipment Maintenance Materials: $50,000 – This account provides for the expenditures for the repairand maintenance of machinery and equipment owned or leased and operated by the City. Included are office equipment,operating equipment, computer networks, and computers.

515‐05 Infrastructure and Plant Maintenance Materials: $350,000 – This account provides for the expenditures for the repairand maintenance of infrastructure and plant owned or leased and operated by the division. Included are hydroelectric facilities,dams, electric substations, generators, fuel tank farms, overhead and underground electric and telecommunication facilities andtelecommunications.

520‐02 Postage: $1,000 ‐ This account provides for postal related services such as postage, express delivery, mailing materialsand the rent of post office boxes and postage machines.

520‐04 Freight – Materials and Supplies: $18,000 ‐ This account provides for shipping and transporting supplies and material toand from vendors.

525‐01 Generation Diesel Fuel: $334,900 ‐ This account provides for diesel fuel to operate the electric generators used toproduce electric energy for resale by Ketchikan Public Utilities.

525‐02 Generation Oil Lubricants: $33,500 ‐ This account provides for lubricants required for the operation of diesel generationequipment.

525‐03 Heating Fuel: $6,000 ‐ This account provides for heating fuel to heat facilities owned or leased and operated by thedivision.

525‐04 Vehicle Motor Fuel and Lubricants: $55,000 ‐ This account provides for gasoline, diesel fuel, propane and lubricantsused in the operations of the division’s vehicles and vessels.

525‐05 Purchased Power: $6,120,000 ‐ This account provides for electric energy purchased from SEAPA for resale by KetchikanPublic Utilities.

525‐06 Purchased Power Rebate: ($450,000) ‐ This account provides for the credits for electric energy purchased from a third‐party utility for resale by Ketchikan Public Utilities.

525‐07 Machinery and Equipment Fuel and Lubricants: $3,000 – This account provides for the expenditure for gasoline, dieselfuel, propane and lubricants used in the operations of City and Ketchikan Public Utilities machinery and equipment.

530‐02 Periodicals: $1,000 – This account provides for the expenditures for newspapers, magazines and trade journals.

530‐03 Professional and Technical Publications: $1,500 ‐ This account provides for professional and technical publications.Included are professional handbooks, print and electronic subscription services for management, electrical engineering, buildingcodes, professional standards and technical journals.

535‐01 Moving Expenses: $15,000 – This account provides for direct payments or reimbursements to employees forexpenditures incurred to relocate to Ketchikan.

535‐02 Business and Meal Expenses: $3,000 ‐ This account provides for reimbursements to employees for business and jobrelated meals and other business related expenses.

535‐05 Special Protective Clothing: $3,000 – This account provides for employer provided clothing purchased for use bydepartment or division personnel.

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600‐01 Travel‐Business: $9,000 – This account provides for transportation, lodging, meals, per diems and other incidentalexpenses associated with travel for business and trade meetings and recruitment efforts. Travel expenses incurred by candidatesduring recruitment searches are charged to this account.

600‐02 Travel‐Training: $20,000 ‐ This account provides for transportation, lodging, meals, per diems and other incidentalexpenses associated with travel for training.

600‐03 Training and Education: $51,200 – This account provides for registration fees, training fees, training materials, tuitionreimbursements and other incidental expenses associated with training and educating employees.

605‐01 Ads and Public Announcements: $14,000‐ This account provides for advertising and announcements in publications,newspapers, trade journals, Internet or broadcasts over radio and television. Included are legal notices, public serviceannouncements, community issues, recruiting, requests for proposals, contracts and sales of property and equipment.

615‐01 Professional and Technical Licenses: $4,000 – This account provides for expenditures for licensing professional,technical, and other employees requiring a license in order to perform their duties. Included are fees paid to license engineers,accountants, attorneys, commercial drivers: and fees paid for technical certifications required by medical technicians, notaries,surveyors, divers and operators of special equipment.

615‐02 Assn. Membership Dues & Fees: $22,000 – This account provides for memberships in professional and tradeassociations such as Northwest Public Power Association and Southeast Alaska Petroleum Resource Organization.

630‐01 Building and Operating Permits: $110,000 ‐ This account provides for permits required for construction, environmental,occupancy and operations required by the Federal Energy Regulatory Commission, Alaska Department of EnvironmentalConservation, and Department of Transportation for right‐of‐way and traffic control permits.

630‐02 Vehicle Licenses: $1,500 – This account provides for licensing the division’s vehicles for operations on public highways.

635‐02 Janitorial and Cleaning Services: $6,000 – This account provides for expenditures for services to clean facilities andequipment owned or leased by the City. Included are janitorial, carpet cleaning and laundry services.

635‐03 Vehicle Maintenance Services: $5,000 – This account provides for expenditure for the repair and maintenance of thedivision’s vehicles by third‐party providers. Included are licensed and unlicensed rolling stock and boats. This account includescontract labor and materials required to provide the service.

635‐04 Software and Equipment Maintenance Services: $58,000 ‐ This account provides for maintenance agreements tosupport licensed software systems and other technology based systems that include both software and hardware componentssuch as OSI for the SCADA system, Cannon for the automated meter reading system and AutoCAD for the computer aidedgeographic information system (GIS).

635‐06 Buildings and Grounds Maintenance Services: $7,000 ‐ This account provides for repair and maintenance of buildingsand the upkeep of grounds owned or leased by the City. This includes contract labor and materials required to provide theservice.

635‐08 Infrastructure and Plant Maintenance Services: $10,000 ‐ This account provides for repair and maintenance ofinfrastructure owned or leased by the city. This includes contract labor and materials required to provide the service.

635‐09 Disposal Services: $25,000 ‐ This account provides for the disposal of hazardous materials such as PCBs, asbestos andlead, transformers and other environmentally sensitive material.

635‐12 Technical Services: $208,000 ‐ This account provides for services that are not regarded as professional but requiretechnical or special knowledge. Included are tree pruning and substation vegetation control.

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635‐14 Other Contractual Services: $23,000 ‐ This account provides for contractual services not identified in the accountclassifications under contractual services such as oil and water analysis, abatement, and equipment and tool dielectric tests.

640‐02 Engineering and Architectural Services: $100,000 ‐ This account provides for engineering services for system protection,FERC required dam surveys and hydrology studies.

640‐04 Management and Consulting Services: $125,000 ‐ This account provides for management and consulting services.Included are project management, rate studies, management studies and other management and consulting engagementsrequiring persons or firms with specialized skills and knowledge such as OSHA and National Electric Safety Code.

645‐01 Rents and Leases ‐ Land and Buildings: $25,000 ‐ This account provides for the rent and lease of land and buildings forstorage yards and covered storage facilities.

645‐02 Rents and Leases ‐ Machinery & Equipment: $2,000 ‐ This account provides for the rent and lease of machinery andequipment. Both operating and capital leases are accounted for in this account.

650‐01 Telecommunications: $132,000 ‐ This account provides for wired and wireless telecommunication services. Included arelandline and cell phone services, network and data services, charges for wired and wireless telecommunications services,Internet, long distance and toll‐free numbers. Purchases of cell phones are also charged to this account.

650‐02 Electric, Water, Sewer & Solid Waste: $42,000 ‐ This account provides for electric, water, sewer and solid waste utilityservices.

715‐00 Furniture and Fixtures: $15,000 ‐ This account provides for acquisition of furniture and fixtures. Included are desks,chairs, tables, workstations, file cabinets, storage cabinets and building fixtures.

725‐01 Computers, Printers and Copiers $35,000 ‐ This account provides for expenditures for machinery and equipment usuallycomposed of a complex combination of parts. Included are office equipment and operating equipment required to provideservices or maintain capital assets.

730‐00 Infrastructure and Plant: $7,500 ‐ This account provides for the acquisition of large‐scaled capital assets other thanbuildings which are generally constructed and have estimated economic lives between 30 and 100 years. Included are,hydroelectric facilities, dams, electric substations, generators, fuel tank farms, line extensions and overhead and undergroundelectric infrastructure. Architectural, engineering and construction costs relating to infrastructure and plant would be charged tothis account instead of Contract/Purchased Services Accounts Nos. 600 through 650.

735‐00 Software: $23,500 ‐ This account provides for acquisition of software systems and upgrades not covered bymaintenance agreements.

800‐00 Interdepartmental Charges – Administrative: $201,050 ‐ This account provides for administrative and managementservices provided by the departments of the City Council, City Clerk and City Attorney and the administrative office of the CityManager.

801‐01 Interdepartmental Charges – Human Resources: $70,340 ‐ This account provides for human resource services providedby the Human Resources Division.

802‐00 Interdepartmental Charges ‐ Finance: $455,180 ‐ This account provides for financial, accounting, payroll, accountspayable, billing, customer service and budgeting services provided by the Finance Department.

803‐01 Interdepartmental Charges – Information Technology: $208,820 ‐ This account provides for information technologyservices provided by the Information Technology Department.

825‐01 Interdepartmental Charges – Insurance: $166,700 ‐ This account provides for risk management services and claims.

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931‐01 Debt Service‐Principal: $1,805,000 ‐ This account provides for principal on revenue bonds.

932‐01 Debt Service‐Interest: $645,730 ‐ This account provides for interest on revenue bonds.

975‐00 Payments in Lieu of Taxes: $381,993 ‐ This account provides for payments in lieu of taxes assessed against theenterprise funds of the City.

G - 13

KETCHIKAN PUBLIC UTILITIES2016 Operating and Capital BudgetElectric Division Capital Budget

2014 2015 Budget 2016 2015 Adopted/2016Major Capital Projects Actual Adopted Amended Estimate Budget Incr(Decr) %

720‐00 Vehicles and Moving Equipment 26,661 118,000 118,000 118,000 333,300 215,300 182.5%

725‐00 Machinery and Equipment 741,357 1,172,490 1,207,990 865,500 1,200,200 27,710 2.4%

730‐00 Infrastructure 3,604,443 845,000 1,269,089 819,000 1,637,100 792,100 93.7%

Total Major Capital Outlay 4,372,461 2,135,490 2,595,079 1,802,500 3,170,600 1,035,110 48.5%

2016 Capital Improvement Projects Funding Sources

Project # Project

KPU

Enterprise

Fund Grants Bonds Total720‐00 Vehicles and Moving Equipment

Vehicle and Moving Equipment 333,300 333,300 Total Vehicles and Moving Equipment 333,300 ‐ ‐ 333,300

725‐00 Machinery and Equipment

Generator Cleaning & Testing 180,000 180,000

Whitman Oil‐Water Separator 50,000 50,000

Whitman Lake Hydroelectric Project 260,000 260,000

Substation 34.5 kV Tie Breaker Spare 45,000 45,000 Substation Transformer Testing 75,700 75,700

AMI Meters & Meter Replacement Parts 150,000 150,000

Operating Equipment 279,500 279,500

Bailey Exhaust Stack Painting 160,000 160,000

Total Machinery and Equipment 1,200,200 ‐ ‐ 1,200,200

730‐00 Infrastructure

Transmission & Distribution Maintenance 350,000 350,000

Downtown Underground Upgrade 110,000 110,000

System Sectionalizing Fault Study 135,000 135,000

Transformer Purchase 150,000 150,000

Reimbursable Projects 87,600 87,600

Ward Cove Expansion 45,000 45,000

Pennock‐KIA Upgrade 50,000 50,000

North Tongass Highway Preliminary Design 50,000 50,000

Additional Projects 154,500 154,500

Beaver Falls Powerhouse Exterior 300,000 300,000

Electric Division Headquarters Exterior 125,000 125,000 Ketchikan Lakes Log Boom 80,000 80,000

Total Infrastructure 1,637,100 ‐ ‐ 1,637,100

Total 2016 Capital Budget 3,170,600 ‐ ‐ 3,170,600

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KETCHIKAN PUBLIC UTILITIES2016 Operating and Capital BudgetElectric Division Capital Budget

100%

2016 Expenditures by Funding Source

KPU Enterprise Fund

10.51%

37.85%

51.63%


Vehicles and Moving Equipment

Machinery and Equipment

Infrastructure

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Telecommunications Division Summary

2014 2015 Budget 2016 2015 Adopted/2016


Operations 12,097,217 13,510,194 14,008,804 13,910,892 14,122,472 612,278 4.5%

Capital Improvement Program 3,079,763 1,910,000 1,908,750 1,908,750 1,615,000 (295,000) ‐15.4%

Total 15,176,980 15,420,194 15,917,554 15,819,642 15,737,472 317,278 2.1%

2014 2015 Budget 2016 2015 Adopted/2016



Supplies 1,230,572 921,950 928,950 928,950 1,062,900 140,950 15.3%

Contract/Purchased Services 4,633,492 5,596,135 6,087,245 6,075,745 6,031,635 435,500 7.8%



Debt Service 165,323 426,209 426,209 426,209 426,209 ‐ 0.0%


Major Capital Outlay 3,079,763 1,910,000 1,908,750 1,908,750 1,615,000 (295,000) ‐15.4%

Total 15,176,980 15,420,194 15,917,554 15,819,642 15,737,472 317,278 2.1%

2014 2015 Budget 2016 2015 Adopted/2016



Interfund Loan 1,355,494 ‐ ‐ ‐ ‐ NA

Total 15,176,980 15,420,194 15,917,554 15,819,642 15,737,472 317,278 2.1%

2014 2015 Budget 2016 2015 Adopted/2016


Operations 43.00 42.00 42.00 42.00 3,261,940 ‐ 0.0%

Total 43.00 42.00 42.00 42.00 3,261,940 ‐ 0.0%


The Telecommunications Division is one of three utilities operated by Ketchikan Public Utilities and owned by the City ofKetchikan. Operations include both regulated and non‐regulated activity and provide service to approximately 6,600customers.


Telecommunications Division

KPU Telecommunications operates one division and oversees one Capital Improvement Program.

The Telecommunications Division is one of three utilities operated by Ketchikan Public Utilities and owned by the City ofKetchikan. Operations include both regulated and non‐regulated activity and provide service to approximately 6,600customers.


Telecommunications Division

The Telecommunications Division operates one division and oversees one Capital Improvement Program.

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Telecommunications Division Operations 5300

MISSION STATEMENT

GOALS FOR 2016

The Telecommunications Division is committed to providing high quality telecommunication products and services to residents andbusinesses of the City of Ketchikan and the Ketchikan Gateway Borough at competitive rates. Management and staff strive to maintainquality customer service and competitive pricing, while concurrently working to maximize the Utility’s value to its owner, the City ofKetchikan. The Telecommunications Division will continue to introduce new cost effective technologies that will aid in the community’seconomic revitalization. The division stands ready to assist its customers as efficiently and effectively as possible within guidelinesestablished by federal and state law, the Charter of the City of Ketchikan, the Ketchikan Municipal Code and the ratepayers of the Utilityas represented by the City Council.

The division’s 2016 capital budget goals are essentially divided between Revenue & Competitive Strategy, Efficiency & Quality ofService, and Ongoing Operations:

Revenue & Competitive Strategy: 2015 marked completion of the Microwave to Canada project. This project, in conjunction with theundersea fiber IRU, fiber to the home, new Hosted IP platform and Verizon 4G/LTE partnership, ensures that the TelecommunicationsDivision's network is well positioned to compete with other carriers. Going forward the division's capital requirements relative to revenueand competitive strategy are primarily focused on more routine network moves, additions and other changes with one notable exception.The 2016 budget includes $95,000 to add components to the microwave system, which will enable KPU Telecommunications to securecross‐border frequency for growth in capacity.

General Manager

Telecommunications Division Manager

Assistant Telephone & Regulatory Affairs

Manager

Warehouse

Person

Warehouse Worker/General

Laborer

Accounting Technician

Access Rate Specialist

Tariff Rate

Specialist

Administrative Assistant

Network Operations & Engineering Manager

Telephone

Engineer

Journeyman Central Office Network Technician (3)

Journeyman Central Office Network Technician (4)

Customer Support Specialist (3)

Outside Plant Manager

Plant Service Clerk (3)

Outside Plant Foreman

Journeyman Combination Person

(8)

Telecom

Apprentice (2)

Journeyman Cable Splicer (2)

Outside Plant Engineer Engineering Technician

Sales Marketing & Customer Service Division Manager

ISP Foreman (Business)

Journeyman Central Office Network

Technician (Business) (2)

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Efficiency: The 2016 budget includes replacement of a single vehicle, a division line truck ($300,000). This vehicle is necessary to supportdaily maintenance, repair and installation of the division's aerial cable plant. This vehicle is very near the end of its useful life and is thedivision's only line truck equipped with hydraulic and related built‐in tools necessary for construction of aerial cable plant.

Quality of Service/Ongoing Operations: The balance of the 2016 budget funds acquisition of material necessary to serve new customers(blade server, set top boxes) and the ongoing operations of the overall network.

The division’s 2016 operating budget is essentially ‘flat’ compared to 2015, with the exception of Contract/Purchased Services (anincrease of $435,500). The primary causes of the increase in this category include the addition of a redundant circuit in Skagway ($50,000in Account No. 645‐04); continued increases in network broadcast content fees and rates; customer growth ($253,750 in Account No.630‐04); and a projected increase in consulting services due to the complex nature of network rearrangement and related maintenanceactivity in 2016 ($66,450 in Account No. 640.02).

KPU completed construction of the Ketchikan – Prince Rupert Microwave project. This new microwave link establishes a terrestrial

redundant off‐island link to the mainland, providing the second of two off‐island network connections to the 4G/LTE core as well as

redundancy for the KPU network (should the submarine fiber fail).

KPU expanded its cellular serving area by deploying Ericsson Cellular Radios in Herring Cove, Beaver Falls and Skagway.

Very High Digital Subscriber Loop (VDSL) was deployed at several additional locations. VDSL allows KPU to “push” fiber closer to its

apartment dwelling customers while continuing to use the existing house wiring within the apartment complex. VDSL services

include enough bandwidth to allow High Definition TV services, fast Internet speeds and Personal Video Recording capabilities that

were limited prior to the VDSL deployment.

The division continued to make excellent progress on the structured cabling renovation project, which is necessary to create an

orderly and fail safe network cabling environment.

The division continued to support the Sales, Marketing & Customer Service Division’s successful sale of Hosted Business Telephone

Systems. Year‐to‐date, this strategically important product line has grown 21% in customers and lines served. The division’s

customer list has grown to include most of Ketchikan’s largest and most important businesses.

The division had an active year regarding personnel including one long‐term employee retiring, multiple internal promotions and

several new hires.

The division continued to actively cut over customers to fiber optic service. Over 1,600 customers are now served via fiber to the

home.

The division successfully completed the complex and time consuming Water Street Trestle project.

The division completed placing fiber optic cable throughout the downtown area to prepare for a fiber to the business upgrade

offering.

The division implemented battery replacement programs, to ensure that backup systems in KPU facilities, as well as in subscribers

premises, are in good working order.

Significant efficiencies have been gained via the division’s new managed‐dispatching effort.

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2014 2015 Budget 2016 2015 Adopted/2016



Supplies 1,230,572 921,950 928,950 928,950 1,062,900 140,950 15.3%




Debt Service 165,323 426,209 426,209 426,209 426,209 ‐ 0.0%



2014 2015 Budget 2016 2015 Adopted/2016



Total Funding 12,097,217 13,510,194 14,008,804 13,910,892 14,122,472 612,278 4.5%

2014 2015 Budget 2016 2015 Adopted/2016


EXECUTIVE & PLANNING

Division Manager 1.00 1.00 1.00 1.00 141,456 ‐ 0.0%

Administrative Assistant 1.00 1.00 1.00 1.00 43,362 ‐ 0.0%

GENERAL & ADMINISTRATIVE

Assistant Manager 1.00 1.00 1.00 1.00 113,269 ‐ 0.0%

Tariff Specialist 1.00 1.00 1.00 1.00 48,462 ‐ 0.0%

Access Rate Specialist 1.00 1.00 1.00 1.00 49,966 ‐ 0.0%

Accounting Technician 1.00 1.00 1.00 1.00 39,380 ‐ 0.0%

ENGINEERING SERVICES

Engineering Manager 1.00 1.00 1.00 1.00 121,978 ‐ 0.0%

Engineer 2.00 1.00 1.00 1.00 107,810 ‐ 0.0%

Outside Plant Engineer 1.00 1.00 1.00 1.00 90,664 ‐ 0.0%

Engineering Technician 1.00 1.00 1.00 1.00 50,716 ‐ 0.0%

DIVISION SUMMARY

The division began hosting its monthly safety meeting at the Ted Ferry Civic Center and hired ESCI to provide monthly safety

training. Safety meetings are now well attended and the division is on‐track with required federal, state and locally required safety

training.

The division plans to upgrade its 700mghz radio telephone and data service to Loring and Moser Bay in late 2015.

The division plans to deploy a submarine fiber optic cable upgrade to the Ketchikan International Airport in late 2015, providing a

redundant/back‐up to the existing under‐channel copper cable presently serving the airport area.

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2014 2015 Budget 2016 2015 Adopted/2016


PLANT SPECIFIC

Outside Plant Foreman 1.00 1.00 1.00 1.00 86,886 ‐ 0.0%

Journeyman Cable Splicer 2.00 2.00 2.00 2.00 161,878 ‐ 0.0%

Journeyman Combination Tech 9.00 9.00 9.00 8.00 615,288 (1.00) ‐11.1%

Apprentice‐Telecom 2.00 2.00 2.00 2.00 123,328 ‐ 0.0%

Inside Plant Foreman 1.00 1.00 1.00 1.00 96,945 ‐ 0.0%

Journeyman CO Network Tech 8.00 8.00 8.00 9.00 818,982 1.00 12.5%

Customer Support Specialist 3.00 3.00 3.00 3.00 139,417 ‐ 0.0%

PLANT NON‐SPECIFIC

Plant Manager 1.00 1.00 1.00 1.00 102,615 ‐ 0.0%

Plant Service Clerk 3.00 3.00 3.00 3.00 180,478 ‐ 0.0%

Warehouse Worker 1.00 1.00 1.00 1.00 68,257 ‐ 0.0%

Warehouse Worker/Laborer 1.00 1.00 1.00 1.00 60,803 ‐ 0.0%

Total 43.00 42.00 42.00 42.00 3,261,940 ‐ 0.0%


42.28%

8.40%

47.68%

1.63%



Supplies



Changes between the adopted operating budget for 2015 and the proposed operating budget for 2016 that are greater/lesser than 5%and $5,000 are discussed below

• Personnel Services and Benefits increased by $47,988, or by .9%, due to annual employee step increases; and a 1.6% cost of livingadjustment and decreased employee health insurance co‐pays for non‐represented employees that became effective January 1, 2015.As a new collective bargaining agreement has yet to be reached, no cost of living adjustments have been programmed for employeesof IBEW, Local 1547 for either FY 2015 or FY 2016. A proposed 2.0% cost of living adjustment for non‐represented employees has beenbudgeted for 2016.

• Infrastructure & Plant Maint Materials (Account No. 515‐05) increased by $138,600, or by 30.4% as the historical trending for thisaccount has increased in 2014 and 2015. Much of this expense is based on sales of equipment and installation services to customerssuch as Hosted PBX systems, which have been consistently increasing year over year. Additionally, the division has been adding newproducts such as managed router and Wi‐Fi services.

• Freight‐Materials & Supplies (Account No. 520‐04) increased by $10,000, or by 21.7%, as the historical trending for this account hasincreased in 2014 and 2015. The division had reduced the budget for this account by approximately the same amount in the 2015budget.

42.28%

8.40%

47.68%

1.63%



Supplies



H - 5




• Advertising and Publishing General (Account No. 605‐00) increased by $23,000, or by 100.00%, due to the reclassification of certainadvertising expenses from Account No. 605‐01 to Account No. 605‐00. Note that Account No. 605‐01 decreased by the same amountso overall the budget item for advertising is flat year over year.

• Ads & Public Announcements (Account No. 605‐01) decreased by $23,000, or by 29.7%, due to the reclassification of certainadvertising expenses from Account No. 605‐01 to Account No. 605‐00. Note that Account No. 605‐00 increased by the same amountso overall the budget item for advertising is flat year over year.

• Building & Operating Permits (Account No. 630‐01) increased by $59,300, or by 25.7%, primarily due to an increase in the amount ofFederal Universal Service Fund (USF) contributions that are required to be paid to the Universal Service Administrative Corporation.This contribution is mandated by the Federal Communications Commission.

• Broadcast Content Fees (Account No. 630‐04) increased by $253,750 or by 23.8%, due to customer growth in the division’s IPTVservice, as well as increases to annual programming costs from content providers. There are antiquated "Retransmission Consent"rules that the networks have been using to demand ever increasing content fees.

• Janitorial & Cleaning Services (Account No. 635‐02) increased by $9,000, or by 60%, due to hiring a professional cleaning service thatwill properly clean division facilities. KPU Telecom has had substandard service for the past few years which has been rectified withthe new vendor, albeit at a higher cost.

• Software & Equipment Maintenance Services (Account No. 635‐04) decreased by $114,000, or by 22.6%, due to reclassification ofcertain technical services from Account No. 635‐04 to Account No. 635‐12. Account No. 635‐12 increased the exact some amount fora zero net change year over year for the two accounts.

• Technical Service (Account No. 635‐12) increased by $114,000, or by 100.00%, due to the reclassification of certain technical servicesfrom Account No. 635‐04 to Account No. 635‐12. Account No. 635‐04 decreased the exact some amount for a zero net change yearover year for the two accounts.

• Engineering and Consulting Services (Account No. 640‐02) increased by $66,450, or by 41.9%, due to the need for increasedprofessional IP engineering services to enhance the division's core network, security and redundancy schemes.

• Management and Consulting Services (Account No. 640‐04) decreased by $10,000, or by 7.4%, due to increased reliance on industrytrade associations for advocacy instead of professional consulting services.

• Rents and Leases‐Land & Buildings (Account No. 645‐01) increased by $15,000, or by 9.4%, due to an upward trend in this accountfrom escalation clauses in lease contracts.

• Interdepartmental ‐ Finance (Account No. 802‐00) increased by $21,030, or by 6.2%, due to rising personnel costs caused by stepincreases and cost of living adjusdtments.

• Interdepartmental ‐ Information Technology (Account No. 803‐01) decreased by $18,270, or by 4.9%, due to a reduction in staffingwhen a planned retirement occurs in April 2016.

• Interdepartmental ‐ Insurance (Account No. 825‐01) decreased by $13,600, or by 15.1%, because excess marine liability insurance premiums allocated to the Telecommuknications Division for the 2015 Budget were incorrect. The esimate for 2015 and the amountrequested for 2016 reflects the proper allocation of the premiums for excess marine liability insurance. The decrease was also due to a rebate from the insurance pool.

H - 6




2014 2015 Budget 2016 2015 Adopted/2016



500 01 Regular Salaries and Wages 2,993,864 3,203,712 3,098,012 3,097,300 3,261,940 58,228 1.8%

501 01 Overtime Wages 239,633 216,000 375,864 375,000 216,000 ‐ 0.0%

502 01 Temporary Wages 8,148 14,500 14,500 13,200 14,500 ‐ 0.0%

505 00 Payroll Taxes 241,774 262,700 262,700 260,100 267,180 4,480 1.7%

506 00 Pension 533,148 591,900 571,736 552,300 605,110 13,210 2.2%

507 00 Health and Life Insurance 765,428 856,000 822,000 802,400 837,300 (18,700) ‐2.2%

507 30 Workers Compensation 58,641 86,600 86,500 82,800 83,210 (3,390) ‐3.9%

508 00 Other Benefits 49,322 65,200 65,300 65,300 59,860 (5,340) ‐8.2%

509 04 Allowances‐KPU Clothing 3,721 3,700 3,700 3,700 3,700 ‐ 0.0%

509 08 Allowances‐Medical Expenses 75 500 500 ‐ ‐ (500) ‐100.0%


Supplies

510 01 Office Supplies 13,715 16,900 16,900 16,900 16,900 ‐ 0.0%

510 02 Operating Supplies 14,554 15,000 15,000 15,000 15,000 ‐ 0.0%

510 03 Safety Program Supplies 11,999 10,000 17,000 17,000 14,000 4,000 40.0%

510 04 Janitorial Supplies 6,045 7,500 7,500 7,500 6,000 (1,500) ‐20.0%

510 05 Small Tools & Equipment 36,800 34,750 34,750 34,750 34,750 ‐ 0.0%

510 07 Food & Catering 225 ‐ ‐ ‐ 250 250 New

510 08 Inventory for Resale ‐ 220,000 220,000 220,000 220,000 ‐ 0.0%

515 01 Vehicle Maintenance Materials 27,626 30,000 30,000 30,000 28,000 (2,000) ‐6.7%

515 02 Building & Grounds Maint Materials 22,083 15,000 15,000 15,000 15,000 ‐ 0.0%

515 04 Machinery & Equipment Maint Materia 747 ‐ ‐ ‐ ‐ ‐ NA

515 05 Infrastructure & Plant Maint Materials 964,648 456,400 456,400 456,400 595,000 138,600 30.4%

520 02 Postage 883 2,500 2,500 2,500 1,500 (1,000) ‐40.0%

520 04 Freight‐Materials & Supplies 54,362 46,000 46,000 46,000 56,000 10,000 21.7%

525 03 Heating Fuel 5,135 9,000 9,000 9,000 9,000 ‐ 0.0%

525 04 Vehicle Motor Fuel & Lubricants 37,409 39,500 39,500 39,500 35,000 (4,500) ‐11.4%

530 02 Periodicals 298 ‐ ‐ ‐ ‐ ‐ NA

530 03 Professional & Technical Publications 769 1,900 1,900 1,900 1,000 (900) ‐47.4%

535 01 Moving Expenses‐Non Taxed 31,454 12,000 12,000 12,000 12,000 ‐ 0.0%

535 02 Business and Meal Expenses 1,081 3,500 3,500 3,500 2,000 (1,500) ‐42.9%

535 04 Uniforms/Badges/Clothing 739 2,000 2,000 2,000 1,500 (500) ‐25.0%

Supplies 1,230,572 921,950 928,950 928,950 1,062,900 140,950 15.3%


H - 7




2014 2015 Budget 2016 2015 Adopted/2016



600 01 Travel‐Business 56,680 42,500 42,500 42,500 45,000 2,500 5.9%

600 02 Travel‐Training 16,719 33,600 32,150 32,150 30,000 (3,600) ‐10.7%

600 03 Travel‐Training and Education 32,088 14,150 15,600 15,600 15,250 1,100 7.8%

605 00 Advertising and Publishing General 18,830 ‐ ‐ ‐ 23,000 23,000 New

605 01 Ads & Public Announcements 52,306 77,500 77,500 77,500 54,500 (23,000) ‐29.7%

610 01 Community Promotion 250 4,000 4,000 4,000 4,000 ‐ 0.0%

610 02 Community Grant Program 69,810 52,685 52,685 52,685 52,685 ‐ 0.0%

615 01 Professional Licenses & Cert 155 ‐ ‐ ‐ 250 250 New

615 02 Assn. Membership Dues & Fees 38,731 45,000 45,000 45,000 44,000 (1,000) ‐2.2%

630 01 Building & Operating Permits 181,012 230,700 280,000 280,000 290,000 59,300 25.7%

630 02 Vehicle Licenses 274 500 500 500 500 ‐ 0.0%

630 03 Bank & Merchant Fees 693 500 500 500 500 ‐ 0.0%

630 04 Broadcast Content Fees 1,056,395 1,064,000 1,255,000 1,255,000 1,317,750 253,750 23.8%

630 05 Software Licenses 375 ‐ ‐ ‐ 250 250 New

630 06 Service Charges and Fees 750 750 750 500 (250) ‐33.3%

635 02 Janitorial & Cleaning Services 16,491 15,000 15,000 15,000 24,000 9,000 60.0%

635 03 Vehicle Maintenance Services 8,610 12,000 12,000 10,000 10,000 (2,000) ‐16.7%

635 04 Software & Equip. Maint. Services 392,988 504,000 504,000 504,000 390,000 (114,000) ‐22.6%

635 06 Building and Grounds Maint. Svc 10,581 5,000 20,500 20,500 9,000 4,000 80.0%

635 07 Machinery & Equipment Maint. Svc 18,623 15,000 15,000 15,000 16,500 1,500 10.0%

635 08 Infrastructure Maint. Services 87,421 94,200 94,200 94,200 94,200 ‐ 0.0%

635 11 Subscription Services ‐ ‐ ‐ ‐ 250 250 New

635 12 Technical Services 358 ‐ 108,360 108,360 114,000 114,000 0.0%

635 13 Marketing Services 137 ‐ ‐ ‐ ‐ ‐ NA

635 14 Other Contractual Services 129,250 148,000 148,000 148,000 148,000 ‐ 0.0%

640 01 Legal and Accounting Services 95,425 67,500 117,500 117,500 67,500 ‐ 0.0%

640 02 Engineering & Architectural Services 217,581 158,550 221,000 221,000 225,000 66,450 41.9%

640 04 Management & Consulting Services 67,292 135,000 134,500 125,000 125,000 (10,000) ‐7.4%

645 01 Rents and Leases‐Land & Buildings 172,101 160,000 175,000 175,000 175,000 15,000 9.4%

645 02 Rents and Leases‐Machinery & Equip 2,142 ‐ ‐ ‐ ‐ ‐ NA

645 04 Rents and Leases‐Infrastructure 1,556,532 2,390,000 2,390,000 2,390,000 2,429,000 39,000 1.6%




Minor Capital

705 00 Buildings 22,316 ‐ ‐ ‐ ‐ ‐ NA

715 00 Furniture and Fixtures 4,988 6,000 6,000 ‐ 6,000 ‐ 0.0%

720 00 Vehicles and Moving Equipment ‐ ‐ ‐ ‐ 3,100 3,100 New

725 00 Machinery and Equipment 16,337 10,000 10,000 10,000 10,000 ‐ 0.0%

735 00 Software 329 500 500 500 500 0.0%



800 00 Interdept'l‐Administrative 148,125 163,850 163,850 158,550 160,020 (3,830) ‐2.3%

801 01 Interdept'l‐Human Resources 65,600 73,020 73,020 71,460 71,930 (1,090) ‐1.5%

802 00 Interdept'l‐Finance 323,314 341,260 333,760 327,930 362,290 21,030 6.2%

803 01 Interdept'l‐Information Tech 349,230 374,500 382,000 381,790 356,230 (18,270) ‐4.9%

825 01 Interdept'l‐Insurance 37,479 90,100 90,100 71,300 76,500 (13,600) ‐15.1%


H - 8




2014 2015 Budget 2016 2015 Adopted/2016


Debt Service

931 01 Debt Service‐Principal ‐ 266,209 266,209 266,209 276,857 10,648 4.0%

932 01 Debt Service‐Interest 165,323 160,000 160,000 160,000 149,352 (10,648) ‐6.7%

Debt Service 165,323 426,209 426,209 426,209 426,209 ‐ 0.0%

Other Costs


Other Costs 206,358 206,358 206,358 206,358 206,358 ‐ 0.0%


NARRATIVE

500‐01 Regular Salaries and Wages: $3,261,940 – This account provides for the cost of annual salaries and wages paid to the employeesof the Telecommunications Division.

501‐01 Overtime Wages: $216,000 ‐ This account provides for premium compensation paid to all non‐exempt regular and temporaryhourly employees for hours worked in excess of a regular working cycle. These excess hours typically occur because of callouts,emergencies arising from outages and equipment failure and spikes in the workload that is driven by customer demand.

502‐01 Temporary Wages: $14,500 ‐ This account provides for compensation paid to temporary salaried and hourly employees of theTelecommunications Division during peak workload conditions or to assist with special or temporary projects. These projects can includewarehouse projects, tree trimming, trouble desk call support, flagging, etc.

505‐00 Payroll Taxes: $267,180 – This account provides for employer contributions for Social Security and Medicare and other similarpayroll related taxes.

506‐00 Pension: $605,110 – This account provides for employer contributions to Alaska Public Employees Retirement System and theIBEW Alaska Health and Welfare Trust retirement plans.

507‐00 Health and Life Insurance: $837,300 – This account provides for employer contributions to employee health and life insuranceplans.

507‐30 Workers Compensation: $83,210 – This account provides for employer contributions to workers compensation insurance.

508‐00 Other Benefits: $59,860 – This account provides for expenditures for direct claims from former employees for unemploymentbenefits paid by the State of Alaska and accrued vacation and sick leave.

509‐04 Allowances‐KPU Clothing: $3,700 – This account provides for employer provided protective clothing allowances paid directly torepresented employees of the Telecommunications Division pursuant to collective bargaining agreements or the Personnel Rules.

510‐01 Office Supplies: $16,900 ‐ This account provides for paper, pens, pencils, adding machine ribbons and tape, note pads, file folders,scotch tape, toner, ink cartridges, photocopy charges, small desk accessories and minor office equipment such as adding machines,staplers, comb binding machines and tape dispensers.

510‐02 Operating Supplies: $15,000 ‐ This account provides for supplies that are normally not of a maintenance nature and are requiredto support department operations. Included are supplies such as engineering materials, signage, printed supplies, and other supplies thatdo not meet the criteria of office supplies.

510‐03 Safety Program Supplies: $14,000 ‐ This account provides for safety information brochures, safety training audio and videoprograms, safety equipment, OSHA required medical exams, specialized protective safety clothing and traffic control signage.

510‐04 Janitorial Supplies: $6,000 – This account provides for cleaning and sanitation supplies used by in‐house and contracted janitors.

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510‐05 Small Tools and Equipment: $34,750 ‐ This account provides for minor tools, operating and office equipment with a value of lessthan $1,000. Included are hand tools, chain saws, blow torches, hydraulic jacks, sump pumps, computer accessories, space heaters,kitchen and dining equipment, radios, calculators, file cabinets and similar types of minor tools and equipment.

510‐07 Food & Catering: $250 ‐ This account provides for a small budget item to purchase food and refreshments to recognize specialemployee milestones such as retirement or other special occasions.

510‐08 Inventory for Resale: $220,000 ‐ This account provides for inventory purchases that are to be resold or rented to end users.Included are 4G‐LTE devices that the Telecommunication Division will sell to end user customers.

515‐01 Vehicle Maintenance Materials: $28,000 ‐ This account provides for the repair and maintenance of vehicles used by theTelecommunications Division. Included are licensed and unlicensed rolling stock and our small boat.

515‐02 Building and Grounds Maintenance Materials: $15,000 – This account provides materials required for the repair andmaintenance of buildings and upkeep of the grounds owned or leased and operated by the Telecommunications Division.

515‐05 Infrastructure and Plant Maintenance Materials: $595,000 ‐ This account provides materials required for the repair andmaintenance of infrastructure and plant owned or leased by the division. Included are overhead and underground telecommunicationfacilities and telecommunications central and remote office facilities including DSL modems, hosted PBX systems, Internet maintenanceequipment and installation materials.

520‐02 Postage: 1,500 ‐ This account provides for postal related services such as postage, express delivery, mailing materials and the rentof post office boxes and postage machines.

520‐04 Freight – Materials and Supplies: $56,000 ‐ This account provides for shipping or transporting supplies and material to and fromvendors.

525‐03 Heating Fuel: $9,000 ‐ This account provides for heating fuel to heat facilities owned or leased and operated by the division.

525‐04 Vehicle Motor Fuel and Lubricants: $35,000 ‐ This account provides for gasoline, diesel fuel, propane and lubricants for vehiclesused by the division.

530‐03 Professional and Technical Publications: $1,000 ‐ This account provides professional handbooks, labor related publications,technical manuals, telecommunications code standards and industry related periodicals.

535‐01 Moving Expenses: $12,000 – This account provides for direct payments or reimbursements to employees for expendituresincurred to relocate to Ketchikan.

535‐02 Business and Meal Expenses: $2,000 ‐ This account provides for reimbursements to employees for business and job relatedmeals, mileage for use of personal vehicles and other business related expenses.

535‐04 Uniforms/Badges/Clothing: $1,500 ‐ This account provides for payment of all KPU logo clothing that may be needed for OutsidePlant employees, management, etc.

600‐01 Travel‐Business: $45,000 – This account provides for transportation, lodging, meals, per diems and other incidental expensesassociated with travel for business and trade meetings.

600‐02 Travel‐Training: $30,000 ‐ This account provides for transportation, lodging, meals, per diems and other incidental expensesassociated with travel for training.

600‐03 Training and Education: $15,250 – This account provides for registration fees, training fees, training materials, tuitionreimbursements and other incidental expenses associated with training and educating employees; and on‐premises training programsprovided by staff or third‐parties.

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605‐00 Advertising and Publishing General: $23,000 ‐ This account provides for advertising and announcements in publications,newspapers, trade journals, Internet or broadcasts over radio and television. Included are legal notices, public service announcements,community issues, recruiting, requests for proposals, contracts, directory yellow page advertising and advertisements for sales of propertyand equipment.

605‐01 Ads and Public Announcements: $54,500 ‐ This account provides for advertising and announcements in publications,newspapers, trade journals, Internet or broadcasts over radio and television. Included are legal notices, public service announcements,community issues, recruiting, requests for proposals, contracts, directory yellow page advertising and advertisements for sales of propertyand equipment.

610‐01 Community Promotion: $4,000 – This account provides for the promotion of community activities and programs. Included arescholarships benefitting local high school students and donations to civic organizations, sport teams and hosting or sponsoring communityevents.

610‐02 Community Agency Grants: $52,685 – This account provides for KPU’s share of the City’s Community Grant Program.

615‐01 Professional Licenses & Certification: $250 ‐ This account provides for any professional licenses or certifications that thecompany may want to acquire or keep.

615‐02 Assn. Membership Dues & Fees: $44,000 – This account provides for memberships in professional and trade associations such asthe National Telecommunications Cooperative Association, Alaska Telecommunications Association, and Western TelecommunicationsAssociation. These industry organizations pool resources to influence regulations and coordinate legislative action plans. Additionalmemberships include the National Cable Television Cooperative, which provides the Telecommunications Division with much of itstelevision content.

630‐01 Building and Operating Permits: $290,000 ‐ This account provides for permits for construction, right‐of‐ways, and easements andregulatory fees for operations. Included in this account are USAC USF contributions in the amount of $180,000, Interstate TRS for hearingimpaired fees and caller ID data dip fees.

630‐02 Vehicle Licenses: $500 – This account provides for licensing the division’s vehicles for operations on public highways.

630‐03 Bank & Merchant Fees: $500 – This account provides for expenditures for monthly bank account service charges, merchant feesfor use of credit and debit cards, wire transfer fees and other fees for banking services.

630‐04 Broadcast Content Fees: $1,317,750 – This account provides for the right to broadcast copyrighted intellectual property over theTelecommunications IPTV network. Fees are generally paid on a per customer basis. Customer demand for existing services and theaddition of new services and customer demand for the new services determine what the Telecommunication Division must pay for itstelevision content.

630‐05 Software Licenses: $250 ‐ This account provides for miscellaneous software licenses that are not part of the IT departmentsnormal suite of software licenses.

630‐06 Service Charges and Fees: $500 – This account provides for expenditures for miscellaneous service charges and fees. Included arefiling fees, recording fees and fees not accounted for in other accounts.

635‐02 Janitorial & Cleaning Services: $24,000 ‐ This account provides for services to clean facilities and equipment owned or leased bythe division. Included are janitorial, carpet cleaning and laundry services.

635‐03 Vehicle Maintenance Services: $10,000 – This account provides for expenditures for the repair and maintenance of KPU vehiclesby outside maintenance facilities. This account includes contract labor and materials required to provide the service.

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635‐04 Software and Equipment Maintenance Services: $390,000 ‐ This account provides for maintenance agreements to supportlicensed software and equipment systems. All of the primary equipment platforms the Telecommunications Division utilizes in providingservices to customers such as its access and switching platforms require specialized software and maintenance support agreements so thatstaff can keep current versions of software and have access to their support services for outages or other technical difficulties. Alsoincluded are software services to support the division's automated provisioning and end user and carrier billing systems.

635‐06 Building and Grounds Maintenance Services: $9,000 ‐ This account provides for expenditure for the repair and maintenance ofbuildings and the upkeep of grounds owned or leased by the City/KPU. This account includes contract labor and materials required toprovide the service.

635‐07 Machinery & Equipment Maintenance Services: $16,500 ‐ This account provides for expenditures for the repair and maintenanceof office equipment, machinery and other operating equipment owned or leased by the City/KPU. This account includes contract laborand materials required to provide the service. It also includes service maintenance agreements for equipment that does not requiresoftware support and are paid on either a fixed fee or fee based on usage.

635‐08 Infrastructure and Plant Maintenance Services: $94,200 ‐ This account provides contractual services for the repair andmaintenance of infrastructure owned or leased by the division. This account includes contract labor and materials required to provide theservice. Included are overhead and underground telecommunication facilities and telecommunications central office.

635‐11 Subscription Services: $250 ‐ This account provides for newspaper and magazine subscriptions that are necessary to monitor forcompetitive situations and to keep current on industry activity and trends.

635‐12 Technical Services: $114,000 ‐ This account provides for the cost of the division's 24/7 trouble desk support. It is critical to KPUcustomers that they have access to after hours support to resolve service problem issues. This also covers the cost of after hours networkmonitoring so that KPU may be notified of any larger outages and respond promptly.

635‐14 Other Contractual Services: $148,000 ‐ This account provides for contractual services not identified in the account classificationsunder contractual services such as Signaling System 7 links and database charges, AECA tariff management, engineering design servicesand customer helpdesk services.

640‐01 Legal and Accounting Services: $67,500 ‐ This account provides for legal and accounting services. Included are contract attorneyservices, audit services, accounting and financial services, arbitration services, specialized legal services for complex issues that cannot beaddressed by the City’s legal department and other legal services.

640‐02 Engineering & Architectural Services: $225,000 ‐ This account provides for engineering and consulting services such as contract engineering services and other specialized services that fall outside the scope of current division capabilities.

640‐04 Management and Consulting Services: $125,000 ‐ This account provides for management and consulting services. Included areproject management, cost studies, rate studies, management studies and other management and consulting engagement requiringpersons or firms with specialized skills and knowledge.

645‐01 Rents and Leases ‐ Land and Buildings: $175,000 ‐ This account provides for the rent and lease of land and buildings. Included areoffices, housing for temporary employees, and space rental for events, storage yards and covered storage facilities. Both operating andcapital leases are accounted for in this account.

645‐04 Rents and Leases – Infrastructure: $2,429,000 ‐ This account provides for the rent and lease of telecommunications facilities.Included would be the tower and transport leases for the division's 4G/LTE and microwave systems, charges related to providing Internetconnectivity, NECA charges for DSL services, electric pole attachments, and wholesale long distance minutes.

650‐01 Telecommunications: $145,500 ‐ This account provides for telecommunication services. Included are charges for wired andwireless telecommunications services, cell phones, Internet, long distance and toll‐free numbers.

650‐02 Electric, Water, Sewer & Solid Waste: $180,500 ‐ This account provides for electric, water, sewer and solid waste utility services.

715‐00 Furniture and Fixtures: $6,000 ‐ This account provides for acquisition of furniture and fixtures. Included are desks, chairs, tables,workstations, file cabinets, storage cabinets and building fixtures.

H - 12




720‐00 Vehicles and Moving Equipment: $3,100 ‐ This account provides for acquisition of a transport trailer for the Kubota miniexcavators. The cost of the trailer will be shared equally by the three utilities operated by KPU

725‐00 Machinery and Equipment: $10,000 ‐ This account provides for the acquisition of machinery and equipment usually composed ofa complex combination of parts. Included are office equipment, computer equipment and operating equipment required to provideservices or maintain capital assets.

735‐00 Software: $500 ‐ This account provides for any specialized software required for the division to effectively and efficiently managethe business.

800‐00 Interdepartmental Charges – Administrative: $160,020 ‐ This account provides for administrative and management servicesprovided by the departments of the City Council, City Clerk and City Attorney and the administrative office of the City Manager.

801‐01 Interdepartmental Charges – Human Resources: $71,930 ‐ This account provides for human resource services provided by theHuman Resources Division.

802‐00 Interdepartmental Charges ‐ Finance: $362,290 ‐ This account provides for financial, accounting, payroll, accounts payable,billing, customer service and budgeting services provided by the Finance Department.

803‐01 Interdepartmental Charges – Information Technology: $356,230 ‐ This account provides for information technology servicesprovided by the Information Technology Department.


931‐01 Debt Service‐Principal: $276,857 ‐ This account provides for principal on bonds, loans, capital leases and other financingarrangements.

932‐01 Debt Service‐Interest: $149,352 ‐ This account provides for interest on bonds, loans, capital leases and other financingarrangements.

975‐00 Payments in Lieu of Taxes: $206,358 ‐ This account provides for payments in lieu of taxes assessed against the enterprise funds ofthe City.

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Telecommunications Division Capital Budget

2014 2015 Budget 2016 2015 Adopted/2016


705‐00 Buildings ‐ 40,000 40,000 40,000 40,000 ‐ 0.0%

720‐00 Vehicles & Moving Equipment 220,015 50,000 50,000 50,000 ‐ (50,000) ‐100.0%

725‐00 Machinery and Equipment 35,399 45,000 45,000 45,000 45,000 ‐ 0.0%

730‐00 Infrastructure 2,824,349 1,775,000 1,773,750 1,773,750 1,530,000 (245,000) ‐13.8%

Total Major Capital Outlay 3,079,763 1,910,000 1,908,750 1,908,750 1,615,000 (295,000) ‐15.4%


Project # Project

KPU

Enterprise

Fund Grants Bonds Total

705‐00 Buildings

Regulated

Normal Growth and Repair ‐ Buildings 40,000 ‐ ‐ 40,000

Total Buildings 40,000 ‐ ‐ 40,000

725‐00 Machinery and Equipment

Regulated

PC Hardware & Software 20,000 ‐ ‐ 20,000

Operating Equipment 25,000 ‐ ‐ 25,000

Total Machinery and Equipment 45,000 ‐ ‐ 45,000


Regulated

Normal Growth and Repair‐CO Switching 150,000 ‐ ‐ 150,000

Normal Growth and Repair‐Copper Cable 20,000 ‐ ‐ 20,000

Normal Growth and Repair‐Fiber Cable 175,000 ‐ ‐ 175,000

Normal Growth and Repair‐CO Transmissions 300,000 ‐ ‐ 300,000

Normal Growth and Repair‐Expansion 25,000 25,000

Normal Growth and Repair‐Provisioning 25,000 ‐ ‐ 25,000

Fiber to the Home 40,000 ‐ ‐ 40,000

Remote Cabinets for Advanced Services 40,000 ‐ ‐ 40,000

Core Network Upgrade 125,000 ‐ ‐ 125,000

Blade Server 25,000 ‐ ‐ 25,000

Multi‐Dwelling Unit Project 100,000 ‐ ‐ 100,000

Power 25,000 ‐ ‐ 25,000

LiveWire Replacement/Design 25,000 ‐ ‐ 25,000

Network Monitoring 40,000 ‐ ‐ 40,000

H - 14



Telecommunications Division Capital Budget

2016 Capital Improvement Projects (continued) Funding Sources

Project # Project

KPU

Enterprise


730‐00 Infrastructure (continued)

Non‐Regulated

Headend Expansion 85,000 ‐ ‐ 85,000

Internet Expansion 10,000 ‐ ‐ 10,000

Video Set Top Boxes 125,000 ‐ ‐ 125,000

4G LTE 75,000 ‐ ‐ 75,000

Microwave 95,000 ‐ ‐ 95,000

Wi‐Fi 25,000 ‐ ‐ 25,000

Total Infrastructure 1,530,000 ‐ ‐ 1,530,000

Total 2016 Capital Budget 1,615,000 ‐ ‐ 1,615,000

2.48%

2.79%

94.74%


Buildings

Machinery and Equipment

Infrastructure

100%


KPU Enterprise Fund

H - 15



Water Division Summary

2014 2015 2016 2015 Adopted/2016


Operations 3,234,248 3,168,287 3,190,197 2,952,646 3,206,551 38,264 1.2%

Capital Improvement Program 278,479 650,762 2,783,662 2,698,995 116,100 (534,662) ‐82.2%

Total 3,512,727 3,819,049 5,973,859 5,651,641 3,322,651 (496,398) ‐13.0%

2014 2015 2016 2015 Adopted/2016



Supplies 296,531 301,450 300,749 266,360 290,850 (10,600) ‐3.5%

Contract/Purchased Services 387,989 551,050 573,560 407,360 494,400 (56,650) ‐10.3%

Minor Capital Outlay 241 15,500 16,201 16,201 1,000 (14,500) ‐93.5%


Debt Service 796,448 407,691 407,691 407,691 489,237 81,546 20.0%Other Costs 197,649 197,649 197,649 197,649 197,649 ‐ 0.0%

Major Capital Outlay 278,479 650,762 2,783,662 2,698,995 116,100 (534,662) ‐82.2%

Total 3,512,727 3,819,049 5,973,859 5,651,641 3,322,651 (496,398) ‐13.0%

2014 2015 2016 2015 Adopted/2016


KPU Enterprise Fund 3,512,727 3,819,049 4,218,864 3,896,646 3,322,651 (496,398) ‐13.0%

Bonds ‐ ‐ 1,754,995 1,754,995 ‐ ‐ NA

Total 3,512,727 3,819,049 5,973,859 5,651,641 3,322,651 (496,398) ‐13.0%

2014 2015 2016 2015 Adopted/2016Personnel Actual Adopted Amended Budget Salary Incr(Decr) %

Operations 10.60 10.60 10.60 10.60 764,950 ‐ 0.0%

Total 10.60 10.60 10.60 10.60 764,950 ‐ 0.0%


The Water Division is one of three utilities operated by Ketchikan Public Utilities, a non‐regulated public utility ownedby the City of Ketchikan. The Water Division serves approximately 3,330 customers.


Water Division

The Water Division operates one division and oversees one Capital Improvement Program.

I - 1

KETCHIKAN PUBLIC UTILITIES2016 Operating and Capital BudgetWater Division Operations 5400

MISSION STATEMENT

GOALS FOR 2016


The Water Division is committed to providing residents and businesses of Ketchikan with pure and safe potable water as may berequired for residential, commercial and industrial purposes. In order to achieve this goal, the division is responsible for themaintenance and operation of more than 33 miles of distribution system within the municipality, several reservoirs and associatedpump stations. Daily tasks of the Water Division include continuous monitoring and chemical testing to ensure water purity andquality at all times. The Water Division stands ready to assist its customers as efficiently and effectively as possible within guidelinesestablished by federal and state law, the Charter of the City of Ketchikan, the Ketchikan Municipal Code and the ratepayers of theUtility as represented by the City Council.

General Manager

Water Division Manager

Engineering Tech/CADD & GIS

(.60)

Water Division Foreman

Journeyman Waterman

(6.0)

Secretary IIUtilities Inspector

• Demonstrate to the satisfaction of customers and regulatory agencies that the UV Disinfection and Chloramination Facility hasachieved all of its objectives and is delivering pure, safe potable water to the ratepayers. This includes enforcement of theUtility’s cross‐connection program and requiring backflow preventers wherever the possibility of contamination exists.

• In conjunction with the Public Works Department, continue with designs for the future water and sewer replacement projectsthat are identified in both the General Government and KPU five‐year Capital Improvement Programs.

• Continue to address the issue of cast‐iron water mains throughout the community.

• Identify source leaks and reduce the waste of water wherever possible.

• Continue to provide continuing education classes necessary for division employees to maintain their required certifications.

• Continue to take whatever actions are necessary for Ketchikan to comply with the latest amendments to the Safe Water DrinkingAct while continuing to meet the requirements of the EPA’s Administrative Order that allows Ketchikan to remain as an unfilteredsystem.

Ensured compliance with EPA’s Administrative Order (AO) that allows Ketchikan’s municipal water system to remain unfiltered aslong as the division can continue to meet all applicable criteria. Although Ketchikan has been able to meet all of the AO’srequirements for the past 23 years, a new regulation adopted in 2005 has proven difficult to meet. Even though chloramination thatbegan April 8, 2014 has reduced the amount of haloacetic acids being created by about half, it is still not enough for Ketchikan to beremain consistently below the 60 parts per billion (ppb) level. Further work is necessary and the City Council on December 4, 2014approved ADEC's Compliance Order By Consent (COBC).

I - 2


2014 2015 2016 2015 Adopted/2016



Supplies 296,531 301,450 300,749 266,360 290,850 (10,600) ‐3.5%




Debt Service 796,448 407,691 407,691 407,691 489,237 81,546 20.0%



DIVISION SUMMARY

This document identifies Ketchikan’s exceedance of the EPA’s Stage 2 Disinfection Byproducts Rules (DBPR) and the methods bywhich Ketchikan intends to return to compliance. Although Ketchikan is in violation of the Stage 2 DBPR, such violations are also onthe path to compliance (i.e., incorporated into a formal enforcement action by the COBC). Ketchikan’s progress will continue to bemonitored closely by both the State and the EPA until compliance is achieved.

Since September 2013, KPU and CH2M Hill have run a series of full‐scale tests using a temporary secondary chlorination point locateddownstream of the UV reactors and prior to the point where ammonium hydroxide is added before entering the Bear ValleyReservoir. The results have shown that the amount of haloacetic acids created can be reduced even further by lowering the amountof chlorine added at the Chlorination Plant while adding the remainder needed for chloramine disinfection downstream of the UVDisinfection Facility. The City Council at their meeting of January 8, 2015 approved Change Order No. 1 amending Contract No. 14‐33,a professional services agreement with CH2M Hill to complete the design and to provide construction phase services for the Two‐Point Chlorination Facility.

The plans were submitted well ahead of schedule on March 27th to ADEC for the agency's review and comment and at the CityCouncil Meeting of April 2nd, Contract No. 15‐08, Pre‐Engineered Metal Building for the Two‐Point Chlorination Facility, was awardedto Dawson Construction, Inc. In comparison to the typical construction contract, this contract was different in that DawsonConstruction was only procuring the unassembled metal building and delivering it to the UV Disinfection Facility project site locatedon Schoenbar Road. The purpose of this contract was to have all the metal building components on‐site and available for erectiononce the construction contract for the entire facility was awarded. At the City Council meeting of June 18th, assignment of ContractNo. 15‐08 was made from Dawson Construction, Inc. to BAM LLC followed by award of Contract No. 15‐21, Two‐Point ChlorinationFacility, to BAM LLC. Construction is now in progress and weather permitting, this Facility should be complete and fully operationalby June 2016 and will meet the specific dates that are stipulated by the COBC.

Another item in the COBC testing requirements is 24‐months of cryptosporidium testing of the community's raw water. Samples arenow being collected monthly from the Ketchikan Lakes watershed that includes source water originating from the Granite Basinportion and are being analyzed by an independent lab for both the presence of cryptosporidia as well as giardia. Since beginningtesting this past January, only two giardia cysts with either no internal or just an amorphous internal structure have been found.Through the month of July, no cryptosporidium oocysts have been found. However, as has been seen since 2011, once warm weatherbegins and the raw water temperature rises, increased total and fecal coliform colonies will occur. Consequently, it may also beexpected that these cryptosporidium oocysts will increase.

The division complied with EPA regulations requiring all community water systems to annually prepare a Consumer ConfidenceReport. These reports must contain information on the quality of the water delivered by the Utility’s water system and characterizeany risks from exposure to contaminants in an accurate and understandable manner. All other potable water analyses made oneither a daily, weekly, monthly, quarterly or annual basis have also been completed and the analytical reports delivered to theregulatory agencies on time.

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2014 2015 2016 2015 Adopted/2016



Total Funding 3,234,248 3,168,287 3,190,197 2,952,646 3,206,551 38,264 1.2%

2014 2015 2016 2015 Adopted/2016


Water Division Manager 1.00 1.00 1.00 1.00 116,111 ‐ 0.0%

Foreman 1.00 1.00 1.00 1.00 77,172 ‐ 0.0%

Journeyman Waterman 6.00 6.00 6.00 6.00 421,686 ‐ 0.0%

Utility Inspector 1.00 1.00 1.00 1.00 67,902 ‐ 0.0%

Eng Tech/KPU‐CADD & GIS 0.60 0.60 0.60 0.60 35,454 ‐ 0.0%

Secretary II 1.00 1.00 1.00 1.00 46,625 ‐ 0.0%

Total 10.60 10.60 10.60 10.60 764,950 ‐ 0.0%


41.39%

9.07%15.42%

0.03%

12.67%

15.26%

6.16%


Personnel Services and BenefitsSuppliesContract/Purchased ServicesInterdepartmental ChargesDebt Service

Changes between the adopted operating budget for 2015 and the proposed operating budget for 2016 that are greater than 5% and$5,000 are discussed below.

• Personnel Services and Benefits increased by $38,873, or by 3.0%, due to addition of a temporary employee, an increase ininsurance costs and a 2% cost of living adjustment for non‐represented employees, effective January 1, 2016.

• Chemicals (Account No. 501‐06) decreased by $5,000, or by 5%. Each tote load of potable water grade ammonium hydroxidecosts about $1700 including the round‐trip shipping. Now that the system has over a year's worth of operational experience, aslight reduction in the amount of potable water grade ammonium hydroxide can be made.

• Travel ‐ Training and Education (Account No. 600‐03) decreased by $7,700, or by 39.1%. Although the State mandates that allwater purveyors have an effective cross‐connection control program, it doesn't provide the opportunity to attend training classesor even licensing for backflow assembly testing. Instead, every 3 years KPU brings to Ketchikan qualified instructors licensed inthe State of Oregon along with specialized test equipment borrowed from Sitka to conduct a backflow assembly and cross‐connection control recertification class for all employees. Last conducted in 2015, this class will not be held again until 2018.

• Advertising and Publishing Marketing (Account No. 605‐02) decreased by $6,000, or by 75%. Now that the transition tochloramination disinfection has been successfully made, there is no longer a need to continue the extensive public informationprogram.

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2014 2015 Budget 2016 2015 Adopted/2016




501 01 Overtime Wages 73,985 75,000 62,283 60,200 50,000 (25,000) ‐33.3%

502 01 Temporary Wages 1,139 ‐ ‐ ‐ 35,000 35,000 New

505 00 Payroll Taxes 61,187 63,700 63,700 61,800 64,970 1,270 2.0%

506 00 Pension 137,532 150,300 150,300 142,200 152,900 2,600 1.7%

507 00 Insurance‐Health 180,340 193,100 193,100 192,900 211,900 18,800 9.7%

507 30 Insurance‐Workers Compensation 27,580 30,100 30,100 29,800 30,710 610 2.0%

508 00 Other Benefits (11,017) 15,600 15,600 15,600 14,130 (1,470) ‐9.4%

509 04 Allowances‐KPU Clothing 1,743 1,680 1,680 1,680 1,890 210 12.5%

509 08 Allowances‐Medical Expenses 75 750 750 750 750 ‐ 0.0%


Supplies

510 01 Office Supplies 3,418 4,000 4,000 3,200 4,000 ‐ 0.0%

510 02 Operating Supplies 31,389 15,000 14,900 12,500 15,000 ‐ 0.0%

510 03 Safety Program Supplies 3,597 3,500 3,600 3,600 3,500 ‐ 0.0%

510 04 Janitorial Supplies 72 750 750 400 750 ‐ 0.0%

510 05 Small Tools & Equipment 6,769 5,000 5,000 4,700 5,000 ‐ 0.0%

510 06 Chemicals 78,335 100,000 100,000 88,000 95,000 (5,000) ‐5.0%

515 01 Vehicle Maintenance Materials 7,192 17,600 17,600 17,000 17,000 (600) ‐3.4%

515 02 Building & Grounds Maint Materials 3,687 5,000 8,700 8,700 5,000 ‐ 100.0%

515 04 Machinery & Equip Maint Materials 49,008 50,000 45,439 44,000 50,000 ‐ 100.0%

515 05 Infrastrcture & Plant Maint Materials 85,839 65,000 65,000 55,000 65,000 ‐ 0.0%

520 02 Postage 2,844 3,500 3,500 3,500 2,500 (1,000) ‐28.6%

520 03 Bulk Mailing 3,177 6,000 5,300 2,300 3,000 (3,000) ‐50.0%

520 04 Freight‐Materials & Supplies 1,527 2,000 2,700 2,700 3,000 1,000 50.0%

525 04 Vehicle Motor Fuel & Lubricants 18,611 22,000 22,000 19,000 20,000 (2,000) ‐9.1%

530 03 Professional & Technical Publications 784 1,600 1,760 1,760 1,600 ‐ 0.0%

535 02 Business and Meal Expenses 282 500 500 ‐ 500 ‐ 0.0%

Supplies 296,531 301,450 300,749 266,360 290,850 (10,600) ‐3.5%


• Engineering and Architectural Services (Account No. 640‐02) decreased by $25,000, or by 20%. This account will provide thefunding for continued work with ADEC to obtain the final permit for UV disinfection (KPU only has an interim permit). Also in 2016,continued work will be necessary to address ADEC’s concerns expressed in the state's Compliance Order by Consent (COBC) aboutthe number of total coliform colonies that are periodically present in Ketchikan’s raw water source.

• Electric, Water, Sewer & Solid Waste Services (Account No. 650‐02) decreased by $11,000, or by 6.3%, despite anticipating a 5%Electric utility rate increase in 2016. Electricity is the major portion of this budget item and is predicated by the costs associatedwith the operation of the UV Disinfection Facility. By itself, it generally consumes between $4,000 to $5,000 of electricity everymonth.

• Machinery & Equipment (Account No. 725‐00) decreased by $11,000, or by 100%, due to a copier having been purchased in 2015.No equipment purchases are planned for 2016.

• Interdepartmental ‐ Finance (Account No. 802‐00) increased by $6,470, or by 6.2%, due to rising personnel costs caused by stepincreases and cost of living adjusdtments.

• Interdepartmental ‐ Insurance (Account No. 825‐01) decreased by $6,600, or by 19.1%, because excess marine liability insurancepremiums allocated to the Water Division for the 2015 Budget were incorrect. The esimate for 2015 and the amount requested for2016 reflects the proper allocation of the premiums for excess marine liability insurance. The decrease was also due to a rebatefrom the insurance pool.

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2014 2015 Budget 2016 2015 Adopted/2016



600 02 Travel‐Training 872 3,500 3,500 2,000 3,000 (500) ‐14.3%

600 03 Travel‐Training and Education 8,448 19,700 19,700 18,300 12,000 (7,700) ‐39.1%

605 01 Advertising and Public Announcements 10,127 1,875 1,850 1,000 1,000 New

605 02 Advertising and Publishing Marketing 12,738 8,000 6,725 2,100 2,000 (6,000) ‐75.0%

610 02 Community Grant Program 21,480 ‐ ‐ ‐ ‐ ‐ 0.0%

615 01 Professional Licenses & Fees 539 600 600 250 250 (350) ‐58.3%

615 02 Assn. Membership Dues & Fees 645 800 800 800 2,000 1,200 150.0%

630 01 Building & Operating Permits 199 3,000 3,000 2,500 3,000 ‐ 0.0%

630 02 Vehicle Licenses 44 500 500 150 150 (350) ‐70.0%

635 04 Software Maintenance Services 6,356 14,000 14,000 9,200 10,000 (4,000) ‐28.6%

635 06 Bldg & Grounds Maintenance Services 3,725 5,000 5,000 4,300 5,000 ‐ 0.0%

635 07 Machinery & Equipment Maint Services 776 28,000 28,000 25,000 28,000 ‐ 0.0%

635 08 Infrastructure Maintenance Services 18,525 40,000 40,000 23,000 40,000 ‐ 0.0%

635 12 Technical Services 68,851 85,000 85,000 65,000 85,000 ‐ 0.0%

640 02 Engineering & Architectural Services 49,869 125,000 146,910 56,910 100,000 (25,000) ‐20.0%

645 02 Rents and Leases‐Machinery & Equip ‐ 3,450 3,450 3,000 3,000 (450) ‐13.0%

650 01 Telecommunications 30,908 38,500 38,500 33,000 35,000 (3,500) ‐9.1%

650 02 Electric, Water, Sewer & Solid Waste 153,887 176,000 176,000 160,000 165,000 (11,000) ‐6.3%


Minor Capital

715 00 Furniture and Fixtures ‐ 1,000 1,300 1,300 1,000 ‐ 0.0%

725 00 Machinery and Equipment ‐ 11,000 11,001 11,001 ‐ (11,000) ‐100.0%

725 01 Computers, Printers and Copiers 241 3,500 3,900 3,900 ‐ (3,500) ‐100.0%



800 00 Interdepartmental‐Administrative 45,571 50,420 50,420 48,790 49,240 (1,180) ‐2.3%

801 01 Interdepartmental‐Human Resources 16,035 17,850 17,850 17,470 17,590 (260) ‐1.5%

802 00 Interdepartmental‐Finance 99,473 105,010 105,010 100,900 111,480 6,470 6.2%

803 01 Interdepartmental‐Information Tech 48,173 51,650 51,650 52,670 49,140 (2,510) ‐4.9%

804 01 Interdepartment‐Engineering 92,427 119,510 119,510 108,000 124,000 4,490 3.8%

825 01 Interdepartmental‐Insurance 19,205 34,600 34,600 27,720 28,000 (6,600) ‐19.1%

850 04 Interdepartmental‐Bldg Rent 23,579 27,580 27,580 26,705 26,765 (815) ‐3.0%


Debt Service

931 01 Debt Service‐Principal 645,694 309,901 309,901 309,901 375,112 65,211 21.0%

932 01 Debt Service‐Interest 150,754 97,790 97,790 97,790 114,125 16,335 16.7%

Debt Service 796,448 407,691 407,691 407,691 489,237 81,546 20.0%

Other Costs


Other Costs 197,649 197,649 197,649 197,649 197,649 ‐ 0.0%


NARRATIVE

500‐01 Regular Salaries and Wages: $764,950 ‐ This account provides for the cost of the annual wages of the employees of theWater Division.

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501‐01 Overtime Wages: $50,000 ‐ This account provides for the cost of overtime incurred by employees of the Water Divisionduring the course of the year.

502‐01 Temporary Wages: $35,000 ‐ This account provides for the cost to salaried and hourly employee for temporary employeesof the Water Division during the course of the year.

505‐00 Payroll Taxes: $64,970 ‐ This account provides for employer contributions for Social Security, Medicare, and other similarpayroll related taxes.

506‐00 Pension: $152,900 ‐ This account provides for employer contributions to retirement plans.

507‐00 Health and Life Insurance: $211,900 ‐ This account provides for employer contributions to employee health and lifeinsurance plans.

507‐30 Workers Compensation: $30,710 ‐ This account provides for employer contributions to workers compensation.

508‐00 Other Benefits: $14,130 ‐ This account provides for expenditures for direct claims from former employees forunemployment benefits paid by the State of Alaska and accrued vacation and sick leave.

509‐04 Allowances‐KPU Clothing: $1,890 ‐ This account provides for employer provided protective clothing allowances paiddirectly to represented employees of Ketchikan Public Utilities pursuant to collective bargaining agreements or the Personnel Rules.

509‐08 Allowances‐ Medical Expenses: $750 ‐ This account provides for employee medical exams paid directly to employees.These benefits are taxable to the employees.

510‐01 Office Supplies: $4,000 ‐ This account provides for the purchase of expendable office supplies used by the division duringthe course of a year. Included are supplies such as copy and large format plotter paper, toner, ink and fax cartridges, staples, etc.

510‐02 Operating Supplies: $15,000 ‐ This account provides for supplies that are normally not of a maintenance nature and arerequired to support department operations. Included are supplies such as laboratory supplies, chemical test equipment, andengineering materials.

510‐03 Safety Program Supplies: $3,500 ‐ This account provides for the purchase of materials and supplies required to conduct anongoing safety program for the Water Division.

510‐04 Janitorial Supplies: $750 ‐ This account provides for the cost of janitorial supplies utilized by the Water Division during thecourse of the year.

510‐05 Small Tools and Equipment: $5,000 ‐ This account provides for the purchase and/or replacement of small tools andequipment used by the division.

510‐06 Chemicals: $95,000 ‐ This account provides for the purchase of the various chemicals including salt, soda ash, phosphoricacid, and ammonium hydroxide that are used for water disinfection and treatment.

515‐01 Vehicle Maintenance Materials: $17,000 ‐ This account provides for the cost of the division to maintain its vehicles andoperating equipment and its share of operating the Electric Division’s vehicle maintenance facility.

515‐02 Building & Grounds Maintenance Materials: $5,000 ‐ This account provides for the cost of materials used by staff for therepair and maintenance of the division’s buildings. The buildings operated by the division include the Water Warehouse, the UVDisinfection Facility, the Chlorination Plant, the Ammonia Addition Building and the four water pump station structures includingtheir six associated reservoirs.

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515‐04 Machinery & Equipment Maintenance Materials: $50,000 ‐ This account provides for the cost of materials for the repairand maintenance of the division’s machinery and other operating equipment. Examples include such items as rebuild kits forspecialized chemical feed pumps, the bearings, seals, couplings, and other parts used in rebuilding large pumps, and theconsumable parts and lamps used in the UV disinfection equipment, associated operating equipment and the storage tanksinstalled at the three disinfection facilities.

515‐05 Infrastructure Maintenance Materials: $65,000 ‐ This account provides materials required for the repair and maintenanceof infrastructure and plant owned by KPU. Included are the three disinfection and chemical addition facilities, all of the water mainslocated throughout the community, the four pump stations and their six associated reservoirs and the Carlanna Lake Dam.

520‐02 Postage: $2,500 ‐ This account provides for the cost of mailing division correspondence, water samples for analysis byindependent labs and the cost of mailing the annual Consumer Confidence Report.

520‐03 Bulk Mailing: $3,000 ‐ This account provides for bulk mailings to KPU ratepayers. Specific notifications will includeproviding relevant water quality information to ratepayers as required by EPA regulations.

520‐04 Freight‐Materials & Supplies: $3,000 ‐ This account provides for freight expenses incurred with inventory purchases.

525‐04 Vehicle Motor Fuel and Lubricants: $20,000 ‐ This account provides for the purchase of fuel and lubricants used for theoperations of the division’s vehicles.

530‐03 Professional and Technical Publications: $1,600 ‐ This account provides for the purchase of professional and technicalpublications. Included are engineering journals, textbooks and relevant water technical standards.

535‐02 Business and Meal Expenses: $500 ‐ This account provides for reimbursements to employees for business related mealexpenses.

600‐02 Travel‐Training: $3,000 ‐ This account provides for the cost associated with business travel incurred by the division.

600‐03 Training and Education: $12,000 – This account provides for the annual cost of EPA required training of Water Divisionpersonnel. Regulations mandate that the operating staff maintain their current distribution and treatment certifications throughannual continuing education credits. Rather than send those employees outside, it is much more cost effective for the division tobring a qualified instructor to Ketchikan and conduct the classes here. The only exception would be for those employees whoseeducational needs are best met by attendance at a specific technical class being held within the Pacific Northwest metropolitanarea.

605‐01 Ads and Public Announcements: $1,000 ‐ This account provides for advertising and announcements in publications,newspapers, trade journals, Internet or broadcasts over radio and television.

605‐02 Advertising and Marketing: $2,000 ‐ This account provides for the cost of all division related advertising andcommunications with the Utility’s customers including funding for radio spots and newspaper ads to inform ratepayers of importantnews of changed conditions or public health implications. Other expenditures include the monthly charges for the telephonedirectory, street closures due to water main repairs and the advertising of contracts for bid.

615‐01 Professional Licenses and Technical Certifications: $250 – This account provides for the renewal cost of the Statedistribution and treatment certifications as required by EPA regulations for each of the division’s operating employees in theperformance of his or her duties.

615‐02 Assn. Membership Dues & Fees: $2,000 – This account provides for division memberships in the American Water WorksAssociation, its associated Alaska counterpart and the Alaska Rural Water Association.

630‐01 Building and Operating Permits: $3,000 ‐ This account provides for permits required for ADEC regulatory functionsincluding plan review, certificates to operate new construction, annual fees for Ketchikan and Carlanna Lakes water rights and theState’s annual filtration avoidance inspection.

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p

630‐02 Vehicle Licenses: $150 – This account provides for licensing KPU vehicles for operation on public highways.

635‐04 Software Maintenance Services: $10,000 – This account provides for acquisition of software systems and upgrades coveredby maintenance agreements.

635‐06 Buildings and Grounds Maintenance Services: $5,000 ‐ This account provides contractual services including labor andmaterials required for the repair and maintenance of buildings and the upkeep of grounds used by the division. The buildingsoperated by the division include the Water Warehouse, the UV Disinfection Facility, the Chlorination Plant, the Ammonia AdditionBuilding and the four water pump station structures including their six associated reservoirs.

635‐07 Machinery and Equipment Maintenance Services: $28,000 ‐ This account provides contractual services including labor andmaterials for the repair and maintenance of the division’s machinery and other operating equipment and maintenance serviceagreements. Included are hydraulic breakers and gasoline powered tools, specialized chemical feed pumps, the pumps, motors, andswitch gear installed in each pump station, operating equipment and storage tanks installed at the three disinfection facilities andthe recalibration of hazardous gas monitors.

635‐08 Infrastructure Maintenance Services: $40,000 ‐ This account provides contractual services including labor and materialsrequired for the repair and maintenance of the division’s infrastructure. Contractual repair items include pavement and sidewalkrestoration after water main or hydrant repairs are completed, chain‐link security fencing and emergency standby generatorsrepair.

635‐12 Technical Services: $85,000 ‐ This account provides for services that are not regarded as professional but require technicalor specialized knowledge. Included is the extensive certified and independent laboratory water testing as required throughout theyear. Other items include repair or replacement of specialized operating equipment and its control instrumentation.

640‐02 Engineering and Architectural Services: $100,000 ‐ This account provides for engineering and architectural services. Thepresent ADEC permit to operate the UV Disinfection Facility is only an interim permit that expires on December 31, 2016. Beforethat date it will be necessary to negotiate a final operating permit with ADEC, which will likely have increased requirements. Inaddition, ADEC's Compliance Order by Consent (COBC) also concerns Ketchikan Lakes’ raw water quality issues. These might beresolved after KPU's completion of 24‐months of additional sampling to determine the quantity of cryptosporidia oocysts actuallypresent in the raw water source. Sampling began in January 2015 and depending on the quantity found, the EPA’s Long Term 2Enhanced Surface Water Treatment Rule may only require 2‐log (99%) inactivation disinfection rather than the 3‐log (99.9%) thanKPU is presently applying. If so and ADEC approves, the increased amount of UV disinfection that KPU is already providingcontinuously might be used as an off‐setting credit against the higher than permissible number of total coliform colonies thatperiodically appear in the raw water source. This will be presented in a Limited Alternative to Filtration (LAF) proposal for ADEC’sreview and approval to be submitted by the end of 2015. After reading the LAF, and particularly since the COBC’s 24‐monthcryptosporidia sampling requirement continues throughout all of 2016, ADEC will likely require additional information or studiesduring 2016 before even agreeing to consider the LAF.

645‐02 Rents and Leases ‐ Machinery & Equipment: $3,000 ‐ This account provides for the rent and lease of machinery andequipment. This account provides funds to rent certain heavy construction items that are not cost‐effective to purchase. Ratherthan purchase seldom used equipment needed in water main reconstruction projects, it is more cost‐effective to rent.

650‐01 Telecommunications: $35,000 ‐ This account provides for telecommunication services. In addition to telecommunicationsused by the division’s staff, telephone lines are used to provide direct instrument communication links between the division’s pumpstations and their associated reservoirs including operational alarms that report through the SCADA system located at the BaileyPower House. Additionally, operational fiber optic links are now providing direct communication and control between the UVDisinfection Facility, the Ammonia Addition Facility and the Chlorination Plant. The equipment and instrumentation installed withineach facility is also being continuously monitored through KPU’s SCADA system.

650‐02 Electric, Water, Sewer & Solid Waste: $165,000 ‐ This account provides for electric, water, sewer and solid waste utilityservices used by the division.

715‐00 Furniture and Fixtures: $1,000 ‐ This account provides for acquisition of office furniture and fixtures.

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800‐00 Interdepartmental Charges – Administrative: $49,240 ‐ This account provides for administrative and management servicesprovided by the departments of the City Council, City Clerk and City Attorney and the administrative office of the City Manager.

801‐01 Interdepartmental Charges – Human Resources: $17,590 ‐ This account provides for human resource services provided bythe Human Resources Division.

802‐00 Interdepartmental Charges ‐ Finance: $111,480 ‐ This account provides for financial, accounting, payroll, accounts payable,billing, customer service and budgeting services provided by the Finance Department.

803‐01 Interdepartmental Charges – Information Technology: $49,140 ‐ This account provides for information technology servicesprovided by the Information Technology Department.

804‐01 Interdepartmental Charges – Engineering: $124,000 ‐ This account provides for engineering services provided by the PublicWorks Department‐Engineering Division.


850‐04 Interdepartmental Charges ‐ Building Rent: $26,765 ‐ This account provides for the cost of office space at the KPUAdministration Building.

931‐01 Debt Service‐Principal: $375,112 ‐ This account provides for principal on revenue bonds and ADEC drinking water loans.

932‐01 Debt Service‐Interest: $114,125 ‐ This account provides for interest on revenue bonds and ADEC drinking water loans.

975‐00 Payments in Lieu of Taxes: $197,649 ‐ This account provides for payments in lieu of taxes assessed against the enterprisefunds of the City.

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Water Division Capital Budget

2014 2015 Budget 2016 2015 Adopted/2016


720‐00 Vehicles and Moving Equipment 3,100 3,100 New

730‐00 Infrastructure 278,479 650,762 2,783,662 2,698,995 113,000 (537,762) ‐82.6%

Total Major Capital Outlay 278,479 650,762 2,783,662 2,698,995 116,100 (534,662) ‐82.2%


Project # Project

KPU

Enterprise


720‐00 Vehicles and Moving Equipment

KPU Jointly Owned Transport Trailer 3,100 3,100

Total Vehicles and Moving Equipment 3,100 ‐ ‐ 3,100


Water Distribution Grid Improvements 30,000 ‐ ‐ 30,000

Additional Projects 30,000 ‐ ‐ 30,000

Water Service Upgrade 15,000 ‐ ‐ 15,000

Backflow Prevention Program 3,000 ‐ ‐ 3,000

West Fairy Chasm Water Improvements 35,000 35,000

Total Infrastructure 113,000 ‐ ‐ 113,000

Total 2016 Capital Budget 116,100 ‐ ‐ 116,100

3%

97%


Vehicles and MovingEquipmentInfrastructure 100%


KPU Enterprise Fund

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ketchikan public utilities 2016 annual budget table of ... › media › 16 › media ›...

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