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Financials

PUD 1 is very proud of our track record of fiscal responsibility, which allows us to keep our rates low and maximize the impact of every dollar we spend. Please read below for a press release regarding our last audit by the Washington State Auditor’s Office. You can review our last three years of audit reports in the Related Documents section.

PUD 1 Has Another Clean Audit

The Washington State Auditor’s Office presented their annual audit report for Mason County PUD No. 1 for the
year 2013. Results showed a clean audit report of the district’s financials with no findings or letters to
management. PUD commissioner Ron Gold attended the State Auditor’s exit conference and reported the
excellent news to the board at the December commissioner meeting. District auditor and director of
finance Greg Kester commended his team for their high level of accountability in financial practices and
reporting. PUD 1 preserves its status of never having received a negative finding from the State Auditor’s
Office in its history.

Commission Adopts 2015 Budget; Rate Increase for Water, Not Electric

In November, the commission held two budget workshops: one for water and one for electric. The workshops allowed the management team to sit and explain different budget scenarios that outlined the work that needed to be done and what system improvements needed to be made in 2015. Staff prioritized that list, mapped out what can realistically be accomplished in the next year, and presented budget scenarios to the commissioners, explaining how each scenario impacted debt structure, cash flow and rates. Both budgets were then presented for approval at the December 9th board meeting following a public hearing for the water rates.

The electric budget was approved without any rate increase for 2015. Bonneville Power Administration projected a 9% power cost increase for the PUD in October 2015 but the PUD’s auditor was confident that the District could absorb that rate increase for three months without raising customer rates until January 2016. Customer rates will be reevaluated through the budget process beginning in October 2015 after the auditor is able to determine what impact BPA rate increases have had to the District’s finances for the year and what the BPA rate projections are for 2016. The 2015 electric budget also added a full time employee to begin training for impending retirements, set aside funds to replace a 24 year old bucket truck, continued the vegetation management, and supported the electric’s capital work plan for line replacements and system improvements.

For the water department, the commission was presented with a plan to consolidate capital surcharges and also a plan to equalize rates. Since most of the District’s systems have a capital surcharge that is set to retire by 2022, management felt it was not fair to customers to consolidate those existing surcharges at this time. Management also recommended that future capital improvement financing of approximately $500,000 per year for the next five years be consolidated and evenly allocated amongst all residential water customers, which would be a net impact of approximately 4%, or $1.53/month per customer, and cap existing rates at a high of $75 over the next five years for systems that have already have high monthly rates. Each water system will eventually benefit from this process because regardless of the number of customers on the system, they will be able to have system improvements made. The water department also budgeted a one-time 6% increase in 2015 to fill a position that has been vacant following a retirement in 2012. The department currently has only two water technicians to maintain 36 water systems while trying to also accomplish in-house construction projects.

The final water budget resolution that was adopted after the rate hearing on December 9th included a one-time 10% increase in base service for 2015 to allow the water department to bring staffing levels back to par and pay for capital improvement funding, and a 4% increase for the following four years to pay specifically for capital improvement funding for all PUD systems.

The annual budget workshops are open to the public and the dates and times are listed on the PUD website. Customers are encouraged to attend to learn about the budgeting process. You can also read the minutes from those meetings on the PUD website on the “Meetings” page.