Cheney budget moves to final hearing
Cheney Light revenue and expenses grow while rising power costs shrink annual net income
The Cheney City Council wrapped up its hearings on the 2013 budget with Nov. 13 presentations from officials in the Light, Public Works and Administration departments.
Light Department revenue and expenses will grow by 4.83 percent to $8,061,300 in 2013. Much of the revenue – just over $7.31 million, up 2.2 percent from 2012 – comes from charges for service, with the increase reflecting growth in the residential sector, Light director Joe Noland said.
Forty-two percent, $3.392 million, stems from residential use, with Eastern Washington University next at 22 percent, $1.75 million. Commercial customers using under 50 kilowatts, i.e. small business and retail, were losing ground with users above 50KW remaining flat while industrial users actually showed signs of an upswing in consumption, increasing each year since a dip in 2008 when Wilcox Farms ceased operations.
The department also enters 2013 with a larger amount of beginning cash, $491,600, compared to 2012’s $225,500.
On the expenses side Noland budgeted a 3.52 percent increase in power purchases, $4.558 million – the largest expense – mainly due to increases in wholesale power costs from Bonneville Power Administration. Capital expenses increase $309,710 to $877,000 while salaries and benefits in the nine-person department rose 1.76 percent –$1,009,800 – and maintenance and operations expenses drop 6.51 percent to $1,587,300.
Cheney’s October-September power bills have increased steadily each year under the tiered system imposed in 2008, with the most significant jump of just over 10 percent taking place between 2011-2012. Conversely the department’s annual net income over the same period has decreased from a high of $1.2 million in 2009 to just over $400,000 in 2012.
“This trend is important to watch because we see our margin shrinking,” Noland told the council.
The department has accomplished a number of capital projects in 2012 such as replacing 30 older power poles in the system with new ones, installing 150 new electrical meters, replacing several transformers and primary and secondary residential feeders and installing new service to the Maverick convenience store and the new Cheney Middle School.
Projects for 2013 in the $877,000 budget item include another underground secondary in the Caldwell addition, a re-conductor feeder – $325,000 – and a potential remodel of the city council and mayor’s conference rooms, something Noland believes will bring some energy savings to the city if approved.
Revenues and expenses for the Public Works Department are budgeted at $6,838,000 in 2013; a reduction of about $1 million department director Todd Ableman said resulted from the completion of several capital projects, including the extension of Simpson Parkway now known as Mike McKeehan Way.
Most of the department’s revenues will come from wastewater, 39 percent, with transportation at 22 percent, solid waste 19 percent and water 17 percent. Fifty-five percent of revenue is derived from rate charges, with 17 percent in beginning cash, 9 percent in taxes and 6 percent in miscellaneous fees.
As for expenses, 44 percent go to operation and maintenance with 29 percent in salaries and benefits, 15 percent capital and 12 percent debt service.
Individually the transportation division budgeted revenues and expenses at $898,600, water at $1,167,300, solid waste at $1,305,600, wastewater $2,995,200 with the shop budget at $105,200 and the department administration expenditures at $366,100, about 78 percent of which is salaries and benefits. Funded capital requests were continuation of the residential street preservation project, a water main project using Community Development Block Grant funds and eight projects at the wastewater treatment plant including a biosludge conveyor belt replacement, replacing the HVAC system in the operations building and preliminary engineering for replacing the plant’s headworks building.
Finally the city’s Administration Division budgeted an increase of $2,000 over 2012, up from $860,500 to $862,500. Increases totaling $16,200 in LEOFF employee long term care costs – up from $116,00 to $124,600 – and public defender and conflict cases – up from $46,400 to $54,000 – offset cuts in the Mayor’s Office, $409,000 from $416,000 and the council’s legislative budget, $82,200 from $86,300 in 2012.
Some of the public defender costs have been offset by receipt of a $15,000 grant. City Administrator Arlene Fisher noted library maintenance was trimmed from $7,000 to $3,000 mainly because some major maintenance work has already been done and only $1,200 had been spent so far this year.
Fisher said the city would be challenged in 2013 with providing the level of service expected by its citizens while seeing less money from the state as a result of such things as the privatization of liquor sales.
“Convenience may be good for some,” she said. “For us it’s a significant loss of revenue for the services we provide.”
The council conducted a second reading only of the budget ordinance, deferring final passage of the $23,229,000 2013 budget until after a final public hearing at its next council meeting, Nov. 27.
John McCallum can be reached at firstname.lastname@example.org.