Your PUD News Release
PUD commissioners endorse steps toward financial stability
Chelan County PUD
News Release
6/21/2010
Saying they approve of recommendations for working toward a more stable financial future, Chelan County PUD commissioners unanimously passed a resolution Monday outlining new financial guidelines as part of strategic planning.
The four guidelines are intended to:
- Provide a sufficient rate of return for the PUD so assets can be replaced over time and there will be sufficient income to meet District obligations, even under unusual (low water/low price) conditions;
- Gradually reduce the debt ratio (percentage of utility assets financed by debt) from approximately 75 percent today to about 60 percent by 2015;
- Achieve an adequate debt-service coverage ratio to demonstrate that the PUD clearly has the resources to meet debt obligations, even under unusual conditions;
- Provide financial liquidity (cash reserves and other sources) to cover risks and provide additional financial stability.
Chief Finance Officer/Chief Risk Officer John Janney told the board the financial objectives are designed to put the District on a reliable, sustainable path over the next several years. These guidelines are also designed to serve as a solid foundation for the longer term. The goals of the plan are paying down debt, building reserves for a rainy day and avoiding large, sudden rate increases -- all things that public opinion research has shown most PUD customers strongly favor.
Consideration of these financial steps is part of the PUD’s work on revising its strategic plan to build a solid foundation for reliable, sustainable services for the long-term. Commissioners will consider other parts of the strategic plan in September.
Commissioner Norm Gutzwiler said the plan meets the needs of Chelan PUD for the near future as well as the long term.
General Manager Rich Riazzi is describing the PUD’s approach to strategic planning in letters to all customers in monthly utility bills in June, July and August. He is also scheduling appearances at service clubs and community groups to discuss the planning effort and hear people’s thoughts.
In other action:
- Commissioners voted to discontinue participation in the Washington Public Utility Districts Association at the end of 2010 because of uncertainty about the organization’s future and its effectiveness. Chelan PUD’s dues to the organization this year are $132,224 (which will continue to be paid in quarterly installments). A decision by June 30 on future participation was required by WPUDA bylaws, and commissioners debated whether they should wait to see if reorganization proposals are adopted in July. Despite a request from Commissioner Ann Congdon to see if a successful reorganization plan might be developed, a majority of commissioners decided not to risk another year’s dues, especially when another large participant has recently withdrawn and dues could increase for remaining members. Congdon voted against withdrawing from the association.
- Commissioners declared a special meeting at 1 p.m., Tuesday, June 29, at the PUD boardroom for the purpose of holding one of their periodic joint meetings with commissioners from Chelan County and from the Chelan County Port District.
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The regular commission meeting scheduled for June 28, 2010, has been canceled. The next regular meeting will be Tuesday, July 6, at 1 p.m. in the boardroom, delayed a day due to the Fourth of July holiday that Monday.
Most PUD commission meetings are recorded, and a link to the audio is available on the PUD’s home page at www.chelanpud.org.
Steve Lachowicz
Communications director
509-661-4639, direct line
509-679-0148, cell
steve.lachowicz@chelanpud.org