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UTILITY BOARD MOVES TO HOLD THE LINE ON FISCAL YEAR 2011 BUDGET AND RATES

07/15/2010 ~ The Utility Board directed Keys Energy Services’ (KEYS) staff to eliminate a 1.5-percent base rate increase included in the proposed budget for Fiscal Year* 2011 that was presented to the Board during a Budget Workshop on July 14th.

In an effort to meet the goals set forth by the Utility Board during a recent Strategic Planning session, KEYS’ staff recently developed a budget that would have resulted in a 1.5-percent base-rate increase for customers during FY 2011. Board members expressed their concerns over the difficult economic times customers are facing and said they would not vote for a budget that increases the base rate for customers. In order to meet the Board’s directive, KEYS’ staff will have to reduce the Operating and Maintenance expenses by approximately $950,000 (or three-percent) from the current FY and reduce Capital expenditures by approximately $500,000. Over the Five-Year Financial Plan, a total of approximately $4,000,000 will be eliminated.

“With the understanding the Board expects a balanced budget with no rate increases for the upcoming FY, KEYS’ staff will review the budget in the coming weeks and identify projects which can be postponed or eliminated to cut approximately $1.5-million from the budget and offset the rate increase originally proposed,” said Lynne Tejeda, KEYS’ General Manager & CEO.

KEYS will present its proposed budget to the Key West Chamber of Commerce Economic Development Committee on Tuesday, July 27th, and the Board will hold its first public hearing for the budget on August 11th during a regular meeting.

“The proposed budget includes a three-percent increase for employees based upon our three-year Union contract which was ratified in 2010. Employees did not receive raises during FY 2010 but will receive a three-percent increase in FY 2011 if the June Consumer Price Index (CPI) is positive, if it is negative the raises will be removed from the budget,” added Tejeda. The June CPI is scheduled to be released at 8:30 a.m. on Friday, July 16th. Tejeda went on to say that, “KEYS’ payroll related expenses are on the decline because KEYS’ headcount has decreased through attrition from 157 to 148 in an effort to mitigate increases to customers.”

Future fluctuations in KEYS’ Power Cost Adjustment charge will still be passed along to customers as this charge is determined by the fluctuating cost of power.

*KEYS’ Fiscal Year runs from October 1st to September 30th.

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