By VERNON ROBISON
Moapa Valley Progress
The Overton Power District may be running up against a budgetary dilemma in the coming months. In the next eighteen months a number of impending capital improvement projects might overrun the district’s budget in that category, by nearly $1 million.
In a presentation to the OPD Board of Trustees last week, General Manager Mendis Cooper said that the item was not yet being put up as an action item on the meeting agenda. But it may be coming up soon, he warned.
“I wanted to present these things well in advance to the board,” Cooper said. “That way you, and the public, will have ample time to have a discussion about them before a decision has to be made in the budget process. Right now it’s just information that might help us down the road.”
Cooper explained that the 2014 budget amount for capital projects was projected at about $1.4 million. But the amount which will actually be spent, according to current estimates, is around $1.1 million. That will give the district a 2014 surplus of about $300,000, Cooper said.
But the 2015 Capital Improvement budget projections are coming in significantly higher than were budgeted for 2014, Cooper said. He went through a long list of improvements that would be necessary within the next year and a half. Several large budget items were included on the list.
The first of these was the completion of a 138 kV transmission line which would connect the Falcon Ridge substation on the western edge of Mesquite to the Dinosaur Substation near the Mesquite Sports Complex. The cost of completion is projected at $825,000, Cooper said.
“That (project) will complete the loop so that we have redundancy in Mesquite, so that if we have a problem with the line somewhere that we can still feed Mesquite without an outage,” Cooper said.
Mesquite board member James Pugh felt that this project should be a “number one priority” on the list.
“If we do start lacking funding, I think that one should stay as one of the most important ones,” Pugh said.
Another high cost item on the list was infrastructure expansion to the Dinosaur substation in Mesquite. The cost to the district was estimated at $200,000.
Cooper explained that the district has part of the infrastructure in place already. But he said that the district still needs to finish the steelwork and purchase other equipment to complete the expansion that will allow for planned development in the area.
“The developer is responsible for some of that,” Cooper said. “But the rest we are going to pay to use in surrounding projects.”
Cooper estimated that the expansion would be needed within about a year and a half. “If not, then eventually we are going to have to say that you have reached the limited capacity that you have paid for,” he said.
System improvements and replacements was the next big ticket item on the list. Cooper explained that this item included improvements to the system that are required in the course of the year as developers hook into the system and upgrades are needed. Historical data for this category indicated that the projected spending would be around $660,000, he said.
In addition, the district would need to provide infrastructure to the proposed new I-15 exit 118 in Mesquite, Cooper said. Bringing electrical service to that area would cost the district around $100,000, and would also be needed within the next two years, Cooper said.
The OPD has also been looking into entering into a solar garden project. In this project, the district would pay the upfront costs of installing the infrastructure and then be reimbursed for those costs as participants enrolled in the solar garden paid a premium on their power bill. The cost of installing the solar garden was estimated at $150,000, Cooper said.
Some replacements are needed to several vehicles in the OPD fleet, Cooper said. These included a new Digger Derrick truck ($275,000), a crew truck ($45,000) and a new pickup truck ($34,000).
Other items on the list included emergency generators to keep essential OPD systems online during a power outage ($60,000), installation of new security systems at various substations ($35,000), Computers, telephone system and software upgrades ($25,000) and backup server systems ($20,000).
Pugh asked if the district might tap some of its cash reserve to pay for some of these projected expenses. But other board members were hesitant to consider that.
“In the past, we have seen that cash disappear pretty fast,” said Board member Gary Leavitt of Moapa. “It may not be a good idea to try to do that.”
Board chairman Larry Moses suggested that some of the items be split up over a two year period in order to meet the budget. Cooper said that this was possible. But he was concerned about carrying too much of the expenses forward into another year when additional needs would be popping up.
“I think we need to tackle as much of this as we can now because we have other things on the horizon that will be affected,” Cooper said. “We don’t want to delay too much.”
Cooper said that he would be bringing the issue forward in the next board meeting to discuss further as the next year’s budget starts to be placed before the board.
In another agenda item, the board discussed the idea of creating a new position for a government and public relations specialist at the district, and of restructuring the OPD organizational chart to accomodate that position. Cooper explained that the new position would be responsible for dealing with the media, writing press releases for both print and online media and tracking legislation that might be pertinent to the district.
“With the new issues with the BLM, with the EPA rule, with the legislature, we need to have someone to search out and track what’s happening,” Cooper said.
Pugh, who lost his bid for re-election to his seat in the election earlier this month, said that this was a decision that ought to be made by the new board which will be seated next month. At that time, four of the seven seats on the board will have new trustees.
Pugh felt that more details about the position ought to be provided to the board before the decision is made. He stated that a precise description of duties and the benefits of such a position ought to be made more clear to the board.
Pugh made a motion that the item be postponed to the next board meeting. The motion was approved by a 6-1 vote, with Moses opposed.
In other actions at the meeting, the board repriced a portion of its National Rural Utilities Cooperative Finance Corporation (CFC) debt into a fixed 3.5 percent instrument. Pugh also suggested that the board invest $50,000 of its cash reserve into a CFC capital term certificate with a 5 percent interest that would earn $2,500.
