Chelan PUD Preliminary Budget Shows Difficult Year Expected Again
If water runoff and power prices turn out to be close to normal, Chelan County PUD would nevertheless hold spending for 2010 within 1 percent of its heavily scaled back 2009 budget, PUD commissioners were told in October.

The first public hearing on the 2010 preliminary budget showed the PUD continuing in “preservation mode,” which includes reduced capital spending, the lowest staff numbers in the past five years and an increase in maintenance and operations spending of only about 5 percent.

After it became apparent this year that low water runoff and heavily discounted power prices on the surplus market were going to eat a big chunk out of the PUD’s 2009 budget, actions were taken that trimmed about $27 million from the spending plan for the year, still leaving an estimated deficit at the end of the year of $18 million to $20 million in Utility Services net assets.

The range of possibilities for 2010, depending on water runoff and power prices, is estimated at a high point of $10 million in the black to a low of $27 million in the red. The middle range would be an estimated loss of about $8 million.

Included in the assumptions for the budget year are a continuing freeze on top executive salaries until 2011 and a delay in anticipated merit raises of 3 percent for other salaried workers until August 2010. That’s when a new wage adjustment would also be negotiated for the bargaining unit members.

Human Resources Director LaDawn Ostmann reviewed the PUD’s compensation philosophy for the board and explained how salaries are continually evaluated against the broader job market in order to keep the PUD in a competitive position to attract skilled workers. The number of PUD staff is 58 below what it was three years ago, and 43 employees left the District this year for a variety of reasons. Only one out of every two vacated positions has been refilled.

Capital spending is reduced by 20 percent for 2010 compared to this year, reflecting delayed projects that will have to be restored once the economy improves. It is still too early to determine whether a surcharge will be needed for 2010. The existing 9-percent electric surcharge is expected to stay in effect through April. Then a redesigned rate schedule will take place in May that encourages conservation and is expected to increase overall PUD revenue by about 2.5 percent compared to previous retail income.

Combining both the capital and maintenance and operations budgets shows anticipated PUD spending at about $309 million for 2010, compared with $308 million for the reduced contingency budget this year.

The final budget hearing will be November 30, with board action expected the following week to adopt the final version.

Return to November 2009 Western Energy News

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