PUD approves $33.8 million budget
District focuses on cost savings as it hovers at $8.25 million cash reserves
Columbia River Peoples Utility District approved a $33.8 million budget Tuesday, Dec. 15. The publicly owned electric provider expects to keep $8.25 million in cash reserves, while investing $2.5 million in capital projects such as a new transformer at the Rosehill substation in St. Helens.
While the PUD continues to invest heavily on its infrastructure, the focus of the 2016 Budget will also be on cost managementstriving to manage and reduce the PUDs daily operating expenses, the PUDs budget document states.
Cash reserves were drawn down by nearly $2 million in 2015, but the district projects adding about $7,600 to the reserves in 2016.
In previous years, the PUD has borrowed from its cash reserves to subsidize the cost of rate increases for ratepayers. This year, the PUD board of directors approved rate increases on all customer classes as a means to offset revenue losses and an increase in wholesale power prices.
Over the past year, the district has taken steps to reduce its long-term costs. Directors voted to refinance the PUDs 2006 bonds, which will save the district about $353,000 over the next five years. The PUD will also begin 2016 with less staff. Five managers have left the PUD since September, four of whom were terminated. The anticipated savings was nearly $450,000. Four more employees are expected to be hired in 2016, however.
The 2016 spending plan includes the assumption of a 2.5 percent cost of living adjustment for all non-union employees. The wage increase is scheduled to be voted on in January.
Even with the cost savings, the districts outstanding legal and insurance fees remain a budget wild card. The estimated $8.25 million in cash reserves reflects the low end of the target reserve amount. If the PUD incurs non-budgeted expenses such as it did in 2015, it could see its cash reserves fall below the target amount.
Currently, the district is being sued for $7 million in a wrongful employment practices lawsuit. Theres also a $25,000 lawsuit outstanding, for which the PUD has filed a countersuit.
The PUD budgeted $110,000 for legal fees in 2016 $40,000 more than the 2015 budgetbut so far, the district has exceeded its 2015 legal expenses budget by more than $290,000.
Insurance costs could also affect the budget.
The district will likely pay more for liability insurance coverage this year than it has in the past after having to switch providers. PUD officials have yet to select a new liability insurance provider, but they must do so before Jan. 1.
Despite Tuesdays budget vote, district residents in attendance appeared hyper-focused on politics and employee morale.
After John Nguyen, the districts interim general manager, thanked PUD staff for the time they put in to crafting the 2016 budget, Nguyens comments were met with applause.
Audience members, including a current and past employee, spoke in support of PUD Directors Jake Carter, Harry Price and Craig Melton, along with Nguyen. Controversial management decisions made during the past year have put increased focus on the directors. Critics have pointed to instability in the districts staffing and operations, coupled with costly legal battles. A recall effort is currently underway to remove Melton from the board. Others insist the PUD is better in the wake of drastic staffing changes, predominately citing an improved work climate within the PUD.JW_DISQUS_ADD_A_COMMENT