Grant PUD starts budget talks
EPHRATA — A 4 percent rate increase, more below-average water and a possible customer surcharge are issues surrounding Grant County PUD’s proposed $494 million budget for 2011.
EPHRATA - A 4 percent rate increase, more below-average water and a possible customer surcharge are issues surrounding Grant County PUD's proposed $494 million budget for 2011.
As part of the budget talks, General Manager Tim Culbertson said staff was returning to the commissioners next week with a proposal for a temporary customer surcharge and to discuss rate structures.
At last week's commission meeting, figures of 7 percent and 20 percent were mentioned as surcharge possibilities, but no action was taken.
The proposal was made because reserves dipped below the amount required to get the PUD through another below-average water year.
The district's revenues were reduced by almost $80 million because of the effects of the past two below average water years. As a result, the PUD spent some of its reserves.
Aging equipment at the PUD's Columbia River dams, license requirements, and capital projects for system growth and reliability are other budget factors, according to the PUD.
Culbertson told commissioners the budget and forecast would maintain the reserve and contingency fund at $96 million, but not bring it to $120 million. He also said the budget wasn't a deficit budget.
Commissioner Terry Brewer said if the budget is adopted as it is, they'll be coming back.
Commissioner Tom Flint said times are challenging and they need to do everything they can to walk through this. They need to prioritize what they can and cannot do.
They have talked extensively and have been firm about doing work for the relicensing.
Commissioners have also asked staff about the minimum requirements and maximum requirements, but haven't received an answer, he claimed.
They need answers to include them in the context of the budget.
Commissioner Randy Allred said it has to come from the electric system.
He told commissioners to look at the operations and maintenance funds and to look at the capital.
"We don't want to increase this," he said. "We have to have fiber (and) transmission lines. We've got to have that substation and everyone has to have an increase in salaries and wages and gee, we have to cut the budget."
"The same commissioners are doing it," Allred continued. "If you want all these things, you better have an increase in there and not a decrease. It better be a surcharge for rates and a substantial one ... Get real, if we're going to spend money, collect the revenue."
Allred said if you looked at the audited books, the PUD is losing $6 million a year in fiber.
Allred claimed the PUD had been trying to kid the county about how much fiber cost and any resulting rate pressure.
Flint said he took exemption to Allred's comments, as fiber is treated like any capital expenditure and the fiber operations and maintenance is paying for itself.
Grant PUD senior analyst Bonnie Overfield said forecasted revenue is $206 million for 2010 and $211 million for 2011.
With a 3 percent increase, directors are being held accountable not to exceed allocated amounts for their divisions and each division was instructed to find efficiencies where they can, she said.
More talks about the budget and rates are planned for this fall.
Public hearings are set for the second week of December in Ephrata and Moses Lake.
Utility spokesperson Sarah Morford said commissioners won't act on the preliminary budget until Monday.
Commissioners and staff haven't reached a detailed level of the budget, so salary adjustments haven't been addressed.
The filed version of the budget includes high-level targets for staff to meet.
The district is entering into discussions for a new contract for union employees, she said.
Later this fall, the budget is available for public review at the PUD's local offices in Ephrata, Moses Lake, Grand Coulee, Royal City and Quincy.
For more information, visit www.gcpud.org.