Budget for Uncertain Times, Big Projects Moving Ahead in 2021

Posted Wednesday, November 4, 2020

One year ago, Skagit PUD had just completed a cost-of-service analysis and water utility rate study, adopted a 10-year capital improvement plan (CIP) and financial plan, along with the budget for 2020.

The PUD started 2020 with positive financial growth until March when everything changed with the COVID-19 pandemic. Since then, the months have brought uncertainty, challenges, and change as the utility adapted to the pandemic’s impacts.

COVID-19 interrupted but didn’t stop all activity. The PUD continued to implement its strategic objectives and capital plan that were adopted last year. With over 650 miles of pipe in the ground, the PUD continues to expand programs that inspect and maintain valves, pumps, and hydrants throughout the water system. We’ve invested in leak detection equipment to help identify water loss. Skagit PUD promotes conservation measures to provide as much capacity as possible and to maximize our existing infrastructure, which enables the utility to delay costly expansion projects as long as feasible.

The proposed 2021 budget continues with high priority projects identified in the CIP and financial plan. The most considerable portion of next year’s budget is for major capital projects. The largest project is the Judy Reservoir to Mount Vernon transmission line, a multi-year project to replace over five miles of 36-inch pipe with a $16.2 million budget in 2021.

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 13.

During work sessions that follow the public hearing, Board members can direct further modifications to the budget. The Adopted Budget incorporates any changes and is binding at the onset of the 2021 calendar year.

To continue providing safe, reliable, and clean drinking water while maintaining and replacing the PUD’s existing assets, a rate increase of 5% or approximately $2.70 per month for the typical residential customer is proposed for 2021.