Staff warns of near‑term cash pinch as rate case timing, refunds and FEMA timing converge

Renee, the utility’s finance presenter, told trustees the department has prepared an amended 2026 budget to reflect updated expenses and capital needs and highlighted several items that affect near‑term liquidity: a negotiated 3.5% union wage increase (year 2 of the contract), rising audit costs driven by a one‑time NRECA 401(k) audit and higher legal expenses tied to multiple rate‑case activities.

On legal and audit costs, Renee said, “Our actual cost for legal fees last year in 2025 was $8,900,” and explained she budgeted higher fees for 2026 related to active and pending rate filings. Staff and trustees discussed the status of a pending PUC matter and the plan to file a second rate case in August; Scott described the earlier PUC timeline as unusually long (more than a year) and trustees said the 45‑day rule after a refund decision could create a concentrated billing‑cycle cash impact. Trustees asked staff to produce a standalone cash‑flow forecast for the remainder of 2026 showing scenarios by timing of FEMA obligations and rate refunds and clarifying remaining borrowing capacity under the line of credit.