Preliminary 2021 Budget

2021 is approaching fast, and in the coming months the PUD will be finalizing and approving both a new budget and rate study. Progress on the 2021 budget to date has been smooth. General Manager Kevin Streett began the process earlier in the summer by asking each PUD department to provide a list of projects and expenses for the upcoming year. Finance Director Mike Bailey then compiled the lists and entered them into a database along with other anticipated revenues and expenses.

Many items get cut early, others are vetted by the board in successive meetings. Vehicle and truck requests never seem to make it through fully intact, nor do requests for every additional staffer. Some budget items, like tree trimming and low income support are expected to increase in 2021. Broadband infrastructure funding, which was increased mid-year in 2020, will increase again in 2021. General Manager Kevin Streett has proposed dedicating the nearly $500K in property taxes collected by the PUD to broadband expansion. No tax rate increases have been proposed.

The $42M+ 2021 budget assumes a growth in revenues of less than 1% while overall expenses are anticipated to rise 1.25% based on the Consumer Price Index. While COVID-19 has not to date had a significant impact on the PUD’s finances, Streett acknowledged that previously anticipated rate increases could be delayed until 2022. No rate increases were factored into the current budget.

Despite a recent headline in the local paper declaring the PUD losing a million dollars in 2021 (since retracted) the PUD shows $884K+ to the positive in net operating margins in 2021. On the balance sheet, $6.8M will be spent on capital projects, with over $9M projected remaining in unrestricted reserves at the end of 2021.

While the budget is only for a single year, the rate study looks at projected revenues and expenses over a period of 10 years. The PUD selected utility consultant FCS group of Redmond to perform the study. In their 2nd presentation to the PUD, FCS explained that without rate increases the PUD’s water department expenses will exceed income in 2021. The electric division’s balances are projected to remain in the positive until 2023. FCS will next present the BOC multiple options for rate adjustments.

Budget 20200901

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