PUD proposed budget up for discussion

EPHRATA — The Grant County Public Utility District begins a series of discussions today on the proposed 2006 budget in the library at Frontier Middle School starting at 7 p.m., and the board of commissioners will be there to receive public comment.

The financial condition of the PUD appears to be very good, said Larry Peterson, a commissioner of the Port of Moses Lake and member of the Grant County Economic Development Council.

Peterson said the PUD, after Nov. 1 of this year, supplies all of its load with project power and has shifted away from purchasing power from the Bonneville Power Administration.

At the annual budget discussions this year, and at today's meeting, the commissioners are likely to hear questions from ratepayers regarding proposed increases in the amount of money kept on hand in working capital and in the reserve and contingency fund.

Peterson, and GCEDC executive director Terry Brewer said the PUD is proposing to increase the working capital from $8 million to $35 million, or more.

Working capital is used to make sure there is cash on hand to pay bills, and a cash flow requirement of this kind should be enough money to last 90 days, Peterson said.

Brewer said he agrees that the level of cash available in working capital should be raised from the $8 million level, however, he says that $35 million is too much. "Maybe $17 million," he said.

The GCEDC and ratepayers are watching the PUD's reserves and contingency fund balance as well, which the district is proposing to increase from $17 million to $70 million, or more, Peterson said.

The reserve and contingency fund provides the PUD with security in critical water years, he said. Officials are prepared to begin growing the fund to levels adequate for two bad water years in a row. The PUD staff said they need between $30-35 million per year, if it doesn't have enough water available from the Columbia River to generate the electricity it needs for district ratepayers.

In addition to covering the PUD against two bad water years, the reserve and contingency fund pays for several other variables that the PUD staff is recommending taking a conservative position on.

"Not everyone agrees that you have to plan for two bad water years," Brewer said. "Taking it (reserve and contingency fund) up to the level they are is a bad idea."

A second issue PUD staff and commissioners are likely to be discussing at today's meeting is the projected retail revenue increase. Retail revenue is generated from power sold to customers in Grant County.

In the PUD's financial forecast, based on current conditions, they show a likely 6 percent increase in 2011 under projected retail revenue.

Last year's budget projections did not show an increase in projected retail revenue from 2004 through 2014, Brewer said.

Finally, some discussion is expected concerning growth in the number of PUD employees, specifically their full-time equivalents, or FTEs.

On July 15, 2004 the PUD was staffed at 476.6 FTEs and grew to 506.6 at the end of 2004. By September of 2005 the PUD had grown to 535.6 FTEs and the proposed 2006 budget shows a new total of 574.6.

The PUD will be holding budget discussions at the Ephrata Headquarters on Nov. 14 at 2 p.m., the Royal City High School Cafeteria on Nov. 15 at 7 p.m. and the Coulee City Grade School on Nov. 17 at 7 p.m.

Copies of the proposed budget are available at PUD local offices and on their Web site at www.gcpud.org.