2020 Budget and Rate Study Approved

Posted Wednesday, November 20, 2019

Skagit PUD's Board of Commissioners unanimously approved the 2020 Budget at its regular meeting on November 12. 

The Commission also approved a Rate Plan that includes 5% increases each of the next five years, which enables the PUD to properly fund its 10-year capital improvement program of $160 million in anticipated projects.

"I think this is a positive for us as we look into our capital program, and our rate stability, and our funding model, and everything else, " Board President Eron Berg said.

"Having a program in place that doesn't have us whipsawing every two years, this seems like we are on the right path. It's a long-term program. And it also gives our community some certainty on where costs are going in the future," Berg said.

This past year, Skagit PUD engaged the services of FCS Group to complete a cost-of-service analysis and water utility rate study. The study provides the PUD with a sustainable, multi-year financial management plan that meets the projected total financial needs of the utility.

Financial needs include expenses to operate and manage the water system, fund capital projects, pay new and existing debt obligations, and meet fiscal policy goals established by the Board.

The cost-of-service analysis establishes a basis for assigning costs and establishing “equity” for water system customers. This was accomplished with the development of a series of allocations, based on customer data and engineering/planning criteria, to assign utility cost recovery to customers in proportion to their estimated demands.

Approval Process

Skagit PUD’s budget process occurs in three stages: Proposed Budget, Work Sessions, and Adopted Budget. The Proposed Budget was submitted to the PUD’s Board of Commissioners at a public hearing on October 8.

During work sessions that follow the public hearing, Board members can direct further changes to the budget. The Adopted Budget incorporates any changes and is binding at the onset of the 2020 calendar year.

The 5% rate increase will go into effect for all bills generated January 1, 2020, and thereafter. Total rate revenue is projected to be $26.3 million in 2020.