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focus could be put on higher priority issues. A list of highlights, challenges, and results from the <br />2024 initiatives is attached. <br />Review of the 2024 Annual Business Plan: <br />The purpose of reviewing the 2024 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 2024 was positive in a year where usage was down due <br />to weather. Unaudited financials indicate that revenues were unfavorable to budget by 7% but <br />expenses were favorable to budget by 10% (mostly due to purchased power), for a 6% margin <br />overall. With capital projects, reserve uses, bonding, and depreciation, we outperformed <br />budgeted reserves contributions. <br />Overall water utility performance for 2024 was positive given the decreased usage due to the <br />weather. Unaudited financials indicate that revenues were unfavorable to budget by 6% and <br />expenses were favorable to budget by 4%, for a 0.4% margin overall. If you factor in additional <br />revenue that will get posted for water tower attachments, capital projects, reserve uses, <br />bonding, and depreciation, we outperformed budgeted reserves contributions. <br />An overview of 2024 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 2024 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 2024 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 2024 Strategic Plan Initiatives <br />• ERMU Summary Comparison 2024 Budget vs Actual (Unaudited) <br />Page 2 of 2 <br />93 <br />