PUD board works on budget, rate hikes

The Wahkiakum Public Utility District Board of Commissioners reviewed projected 2012 budgets and set rate hearings for water and electric customers at its meeting Tuesday.

The board intends to collect a 9 percent increase for the electric side of the utility and has yet to determine how much of an increase to charge water customers of either Puget Island Water System (PIWS) or the Western Wahkiakum Water System (WWWS) systems.

Preliminary budgets were based on the assumption of a 3 percent raise for union employees.

“The manager has not asked for an increase, based on the economic climate and the rate increases,” Commissioner Dennis Reid said.

The commissioners salaries are set by the legislature and increased in 2010, Auditor Erin Wilson said.

The board also reviewed a proposed job description for the general manager.

General Manager Dave Tramblie developed proposed budgets for 2012 that include a 9 percent increase to revenues of the electric budget, but asked the board to decide how they want to collect the funds.

“The increase could be based on kilowatt usage, which might promote conservation, or it could be added to the base rate,” Jungers said.

“The rational business model would be to have a cost of service analysis. I think our engineers… intimated that our rates are skewed from the actual cost of service. But I can’t remember whether they were skewed toward energy consumption or toward the account service ."

Commissioner Gene Healy asked if the engineers could provide that information, but Tramblie cautioned about incurring expense.

“They could tell you that about other PUDs,” Tramblie said.

“The basic charge is $12. Pacific County PUD’s basic charge is $18.” Tramblie said.

After discussion the board indicated that they like the idea of adding $5-6 dollars to the base rate.

Commissioner Dennis Reid said he favored collecting more of the increase in the basic charge, so that customers could know what to expect each month.

“That might make it more palatable,” Reid said.

Prospective commissioner Lee Tischer asked the commissioners to remember the 12 percent unemployment in the county when they discuss rate increases.

“Retired folks are having tough times,” he said, and asked that they consider drawing from reserves as the county and school district have.

The increase on the electric side is due to Bonneville Power Administration’s increase in power costs, the construction of a new substation and the loss of a $70,000 credit that the utility had been receiving from BPA, Tramblie said.

“If we didn’t need the substation, we wouldn’t be looking at as much of a rate increase,” Reid said.

The substation is under construction and is needed to maintain reliability on the 40 year-old Cathlamet substation, Tramblie said.

“When it’s 20 degrees outside and it fails, we’re looking for three days to get the spare transformer online,” he said.

Tramblie noted that the PUD is operating with two administrative staff rather than the three employed in the past. The last rate increase occurred in 2006, he said.

Commissioners reviewed details in the proposed budget, requesting that a year-end projection for 2011 be provided for budget discussions. The budget provided actuals from 2004 through 2010, but no year-end projections for 2011.

Wilson said the office was behind, but the information should be available for the next meeting.

Expenses included a 3 percent labor increase, pending negotiation of a labor contract.

“The district is self-insured through a risk pool, so health insurance costs can vary,” Wilson said.

Wilson said she was unable to provide the amount of the proposed 3 percent increase for labor built into the budget.

“We don’t know what it (the negotiated increase) will be,” Wilson said. She was unable to provide projected labor costs for 2011; indicating that year-to-date figures were unavailable.

The actual amount for labor operations for electric in 2010 was $311,003, according to the 2012 preliminary budget distributed. The proposed labor total for 2012 is $334,500.

Wilson said that to determine personnel costs for the 2012 budget, she used hourly wages, subtracting holidays and personal leave with some overtime included.

The commissioners are paid $104 per diem when they travel to meetings. The budget assumed 10 meetings per month between the three commissioners. Reid said, Wilson may have underestimated the number of meetings they are attending. Wilson agreed to review actual travel.

Water Rates to Increase

The Puget Island Water System shows a deficit of $23,302, and the Western Wahkiakum Water System shows a deficit of $15,537 for 2012.

“Water personnel costs are divided 50/50,” Wilson said. “It’s hard to guess where staff will be needed,” she said. Water staff also work on the electric side, she said in a subsequent interview.

Tramblie and the board agreed that the cost of comprehensive plans, like the one that was needed for the WWWS should be included in expenses, so that reserves aren’t hit hard. The PIWS will require a comprehensive plan in 2014.

Reserves required for the 530-meter PIWS are $60,000, and $40,000 for the 312- meter WWWS system, Wilson said.

After discussion Tramblie agreed to return to the board with a budget based on a three year prediction of the issues that need to be addressed in the WWWS, such as repair to the inlet and outlet of the Malone Creek Reservoir, which might cost $20,000, and the revenue required to return reserves to required levels.

The PUD is currently negotiating a contract for water with the Town of Cathlamet.

“The proposed rate is 10 cents higher than the current rate, which is one cent more than the district is currently charging customers,” Wilson said.

Wilson has requested additional documentation from the Town before the contract can be finalized, she said.

The board planned to have combined budget review and rate hearing public meetings, during their regular meeting on October 4 in Cathlamet, again in the evening on October 4 at 6 p.m. in Cathlamet, and on October 5 in the west end of the county with the place to be announced.

The board reviewed a job description Healy developed for the general manager. The job description is not intended to change the manager’s duties, Healy wrote in the document. “The business changes over time, so should the way we manage it,” he wrote.

Reid asked that the language from the RCW 54.16.100 relating to the utility district’s manager be included. Jungers asked for time to review the document and comment. The board will discuss it at its next meeting.

Auditor Erin Wilson said that programmers for the new billing software will make changes to the current program so that it can show past usage as a graph. The information is included on the current bill, but she has received requests from consumers for the old format.