Facilities Project Presentation Sept 18, 2019 Budget Hearing Oct 1
Jefferson County PUD staff shared a first draft of its proposed 2019 Budget with its Board of Commissioners on August 20, 2018. On Monday October 1st, staff will present the budget again during a Public Hearing held in the Jefferson County Transit Center Conference Room at 5pm.
The PUD’s 2019 budget estimates $39.1 million in operating revenue and $38.6 million in operating expenses, with the single largest expense for the PUD coming from the purchase of electricity from the Bonneville Power Administration, accounting for 46% of the total budget. Taxes, debt financing and depreciation account for 29% of the budget, with staffing and operations taking the smallest share at 25%.
According to PUD General Manager Larry Dunbar, 2019’s operations budget is largely status quo from 2018, with increases in both revenues and expenses roughly equal to standard cost of living adjustments. Dunbar, however, sought to bring a new approach to the allocation of the PUD’s cash reserves and capital expenditures.
Beginning the process not long after his arrival at Jefferson PUD, Dunbar, in consultation with commissioners and staff, identified about a dozen of what he called “strategic objectives,” that formed the basis for 2019 spending discussions. Dunbar designated nearly half of the PUD’s $17.7 million in cash reserves between these objectives, retaining another $8.75 million to cover 90 days operating expenses, as legally required, and $1.1 million as an undesignated cushion.
$9.5 million dollars is to be split between projects, studies, equipment, and maintenance: $4M for facility remodeling and additions, $750K for tree trimming, $500K for a planned community solar project, $300K for comprehensive planning projects, $135K for expanded safety and training investments, and another $600K for vehicles and equipment.
“My guiding principles were to deliver a revenue positive budget and maintain our key financial ratios without any rate increases,” said Dunbar, “and that’s what we have done. I also wanted to craft a budget that showed a renewed commitment to customer service, safety, reliability, and planning. I think we’ve done that too.”
About the largest designated capital expenditure, a proposed $4 million facility consolidation and expansion project, Dunbar said: “It was clear to me coming in, and even clearer after just a few months on the job, that the PUD has to do something about its facilities. We are in a situation right now where we don’t have enough space for our employees to work, and the spaces we do have are either spread out across the county or substandard or both.”
“The board and I are planning to consolidate all of our staff onto our Four Corners property through a combination of remodel and new construction. Our plan is to fund the project out of cash reserves. We would begin building in early 2019 and finish in 2020.” The PUD is currently working with TCF Architects on the design, a draft of which Dunbar will present to the commissioners at their regular board meeting on Tuesday, September 18th.
On October 1st, Dunbar will present the budget to the board at a special public hearing held at 5pm on a Monday at the Jefferson Transit Center. If the board has no questions or changes, they can vote to adopt the budget that night. Dunbar stated that the board was receptive to the first draft, and not much will change before October 1st.
Dunbar did wish to note that while he didn’t propose any utility rate increases in 2019, some PUD fees will increase. Currently the PUD only charges about half of the cost to install new electrical service to customers. Dunbar would like to see the PUD recover all its costs and will be proposing a two-year phase in of fee increases to achieve this, with 75% cost recovery proposed in 2019.
“Industry standard is generally 100% recovery” said Dunbar. “We charge 100% on the water side already, which is financially sustainable, fairer and more equitable to all ratepayers,”
Regarding questions about the PUD’s smart meter initiative, Dunbar clarified that no funding was included for system-wide meter replacement in 2019. “We need to replace our electrical metering system, and soon, but next year we’ve chosen to focus on customer service, safety, reliability, planning, and the facility consolidation and expansion project. We will have to address metering in future years, but not 2019.”