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focus could be put on higher priority issues. A list of highlights, challenges, and results from the <br />2023 initiatives is attached. <br />Review of the 2023 Annual Business Plan: <br />The purpose of reviewing the 2023 Annual Business Plan is to evaluate the budget itself as a risk <br />management tool in addition to a financial performance tool. By evaluating the budget as a risk <br />management tool, staff will be better able to provide monthly information and reports to help <br />the commission evaluate the organization's health, direction, and risks. <br />Overall electric utility performance for 2023 was positive. Unaudited financials indicate that <br />revenues were unfavorable to budget by 3% but expenses were favorable to budget by 4% <br />(mostly due to purchased power costs), for a 4% margin overall. With capital projects, reserve <br />uses, bonding, and depreciation, we outperformed budgeted reserves contributions. <br />Overall water utility performance for 2023 was very positive. Unaudited financials indicate that <br />revenues were favorable to budget by 10% and expenses were favorable to budget by 6%, for a <br />16% margin overall. With capital projects, reserve uses, bonding, and depreciation, we <br />outperformed budgeted reserves contributions. <br />An overview of 2023 budget versus actual (unaudited) for both electric and water is provided in <br />the attached summary. <br />Summary: <br />The results and progress from the organization's 2023 strategic and annual business plans were <br />very positive. While it is good to recognize our successes, the discussion should not end there. <br />These two plans also serve as tools for the Commission to use in providing governance, <br />establishing policy, and managing risk. They should evolve with the Commission's informational <br />needs to effectively evaluate and govern the organization. <br />DISCUSSION QUESTIONS: <br />Staff desires commission feedback regarding the results of our 2023 Strategic and Annual <br />Business Plans and the effectiveness of these tools in providing meaningful information. Are <br />these tools providing the information needed to effectively: <br />• Lead the organization toward our mission, vision, and goals? <br />• Evaluate the organization's health and take corrective action when needed? <br />• Manage the strategic and financial risks to the organization? <br />ATTACHMENTS: <br />• ERMU Mission/Vision/Fundamentals/Values/Themes <br />• Highlights, Challenges, and Results from the 2023 Strategic Plan Initiatives <br />• ERMU Summary Comparison 2023 Budget vs Actual (Unaudited) <br />Page 2of2 <br />121 <br />