Chapman has issues with LMUD’s 2026-2027 budget up for approval tomorrow night

The Lassen Municipal Utility District Board of Directors is expected to approve a $30.2 million budget at their meeting held at 5:30 p.m. tomorrow, Tuesday, June 23 at the LMUD District Office, 65 S. Roop St.

Susanville resident and LMUD customer Jim Chapman expressed concerns about the assumptions and the numbers behind that budget at a June 3 special meeting and budget workshop. The workshop was information only, and the board took no action.

Chapman said he learned after attending LMUD meetings for the past year that the budgetary and rate structure decisions for last year were made last May and June during last year’s budget workshop.

Chapman praised LMUD General Manager Nick Dominguez’s leadership of the publicly owned utility district and his ambition, but he said the board should understand it needs to “balance what the organizational structure is asking for versus what the community can afford to pay.

“It’s not like the community is giving LMUD a blank check” to do whatever it wants to do, Chapman said.

While LMUD is setting aside funds for infrastructure improvements such as aging power poles that need to be replaced,Chapman agreed replacing aging infrastructure and reducing liability is important, but he said the board also needs to consider affordability for its customers.

Chapman questioned the need for three new management level positions “that don’t look like they’re going to be cheap.” He said he wanted to the know the annual cost of each of those positions including benefits and retirements, and not just for one year but for 20 or 30 years just as the district is doing for the depreciation of the new Skedaddle Substation that comes on line around the first of the year.

Chapman asked if that $40 million in depreciation was “just going to be absorbed in the budget” or will it be saved into a depreciation account where it will continue to grow and be available at the end of Skedaddle’s usefulness.

“Those questions all need to be addressed rather than just assumed,” Chapman said, because “the money just disappears in the budget … I’m in favor of depreciation if the money’s going to be there.”

Chapman noted the Skedaddle project has been discussed for something like 20 years, and the ratepayers have been paying an additional rate of a penny a month per kilowatt hour for that project. By Chapman’s estimate, the ratepayers have already paid between $12 and $15 million for the Skedaddle Substation “on top of the money that was borrowed and brought to bear. We’re used to paying for it in advance, but at least we were told what we were paying for,”

According to the information presented during the budget workshop, the ratepayers will see a significant increase in transmission costs from NV Energy once the new substation comes on line.

But part of that cost reported by LMUD as transmission charges is actually part of the way LMUD of paying the for the NV Energy Substation next door to Skedaddle. Part of that transmission charge is more like a mortgage payment to NV. Energy.

“That was not something that was widely put out to the public,” Chapman said, and it should have been.

Chapman also alleges the district has collected more than 4.7 million in excess revenue between July 1, 2025 and April 30, 2026 to fund $3.3 million for newly created accounts, “So just by that nature alone, we have an overfunding of LMUD through our rates,” Chapman said. “We’ve already paid for this next year of capital improvements. And you’re building that into your rate structure now, so at some point I think the ratepayers need to be given some consideration and some relief.”

“I still hold that you guys are overfunded,” Chapman continued. “I think these new positions are going to have long-term costs … Last year you projected $16 million for purchased power,” and you’re going to wind up somewhere around $12 or $13 million and the 1 cent rate increase scheduled for next year “should be scrubbed.”

Board President and Ward 3 Director Jess Urionaguena, said the two of positions Chapman mentioned were open due to retirements and the third was due to complexity of purchasing power LMUD will face in the near future as Skedaddle comes on line — the district needs someone to take charge of that responsibility.

Chapman said he didn’t think that had been demonstrated, and he thought LMUD was trying to be a junior version of SMUD or PG&E “which is bureaucracy based and bureaucracy built. LMUD was formed on the basis of being something other than an agency like that … We have way too much overhead expense and that winds up working to the distress of the ratepayer. If you’re going give me three new positions, show me the two you’re actually eliminating … I think your administrative costs are definitely increased under this budget, and that’s the reality. It doesn’t matter if it’s one position or 100 positions, administrative costs have shot up significantly with this proposed budget, and that needs to be, I think, seriously dialed back in.”

The new positions are expected to eliminate the need for consultants, and employees will better serve the district’s needs than any consultant ever could.