2025 06 09 Work Session Packet 1

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Executive Summary 
 
 
As a staff we have produced a five-year budget plan for almost a decade.  Our objective is to 
provide a detailed budget document for the immediate fiscal year (FY) with conservative 
projections for the next four years in order to provide the board and our organization a long-
term vision and plan for the future.   
 
In lieu of a detailed executive summary, each division has a detailed “Year-One” budget and 
five-year projection summaries included within the appropriate sections of the report.   The 
“Year-One” budget ultimately serves as the upcoming fiscal year budget for the utility, in this 
case for the FY beginning July 1, 2025, and ending June 30, 2026. 
 
As always, the conclusions herein are qualified by the fact that all estimates are subject to 
variables outside the Athens Utilities Board’s (AUB) control.  Weather and economic 
pressures are two examples of factors beyond our control that directly affect our business.  
Inflationary pressures on all fronts continue to weigh heavily on net revenues for the utility 
overall. These pressures have resulted in recent local rate increases in the Power division, and a 
Natural Gas rate increase will be implemented in FY 2026.  Weather influences the 
performance and sales of all four divisions (Power, Water, Natural Gas, and Wastewater), but 
is a primary and powerful driver of the power and gas division finances.  
 
The power division continues to struggle with increased costs and stagnant to lower net 
revenues.  From a capital investment standpoint, we will need to issue debt to address the 
construction of the Englewood substation this year.  In April 2024, we passed a 2.9% rate 
increase due to continuing inflation and decreasing revenues.  This action has stabilized our 
finances for the short term, and we will not need an increase in power rates for this fiscal year 
budget.    
 
Water net revenues remain an area of concern for the management staff.   In fact, record wet 
weather over the past eight years has been detrimental to the water division in terms of unit 
sales.  All though it is too early to make annual predictions, 2025 has started with above 
average rainfall and, as of May, we continue to be in wet weather pattern.  Our plans include a 
large capital investment project to be started this year.   This project, a $6.5 million dollar 
water reservoir and pump station, will address ongoing issues with fire protection and water 
supply to our industrial park and northwestern service area.   We plan on funding this project 
through a combination of grants and debt. We do not anticipate a rate increase in water rates 
this year. 
 
The state comptroller’s office now has regulatory authority to review and set municipal rates 
for natural gas, as well as water and sewer.  We have completed a cost-of-service study for gas 
and have presented the results to the board.  Staff will develop rate resolutions for board 
approval, and we will implement rate actions in July of this year.  The second phase of the rate 
increase will be effective July 1
st, 2026.  These rate actions, consistent with the 
recommendations from our rate consultant, should provide adequate revenues to address the 
concerns of the comptroller’s office. 
 
 
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