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HomeMy WebLinkAboutMinutes 05/09/1995UTILITY ADVISORY COMMITTEE Port Angeles, Washington May 9, 199~,5~ L Call to Order: Councilman Beatm--called the meeting to order at 4:33 p.m. Roll Call: Members Present: Gary Braun, Cathleen McKeown, Joe Michalczik, and Bill Myers. Members Absent: Larry Schueler. Staff Present: C. Knutson, J. Pomeranz, K. Godbey, C. Hagar, J. Pittis, R. Ellsworth, G. Leaf, and D. Sawyer. I11. Approval of Minutes: Bill Myers moved to approve the minutes of the April 11, 1994, meeting as written. Councilmember McKeown seconded the motion, which carried unanimously. IV. Discussion Items: A. Water and Wastewater Cost of Service Rate Increase Finance Director Godbey explained that she is working on a bond issue to complete the financing for the secondary treatment plant. To date, the project cost is $24 million, and the plant construction has been financed with a combination of Public Works Trust Fund loans, State Revolving Fund loans, an EPA grant, other miscellaneous state grants, and cash reserves from the Water/Wastewater Fund. Currently, the Water/Wastewater Fund is in a position where it's borrowing money from other funds, hence the bond issue to replenish the cash reserves and finance the balance of the construction of the plant and to finance other capital projects for the Water/Wastewater Fund. Director Godbey informed the Committee that as part of the bond issue the City completed a cost of service study, as rates must be set to generate enough revenue to cover operating expenses as well as planned capital expenses for the future. Bond analysts also look at debt coverage, so net revenue must be enough to adequately satisfy bond holders as to the ability to repay debt. -1- Utility Advisory Committee May 8, 1995 explained that there were increased costs in other areas, plus fund reserves. Mr. Michalczik felt the City should not raise rates higher than Bonneville. Further discussion followed; however, action was deferred until after the presentation by Finance Director Godbey for administrative allocations. B. Water/Wastewater Rate Increases Finance Director Godbey reminded the Committee that last year, during discussion of water/wastewater rates, annual rate increases for 1995 through 1997 were anticipated. Gary Leaf of the Light Department reviewed water/wastewater cost of service, and based on current data, is recommending rate increases a little lower than predicted. It appears that average rate increases of 18% in water rates and 12% in wastewater rates will be necessary. This will amount to an average residential increase of $2.30 and $3.00 per month for water and wastewater respectively. Discussion followed regarding future rate increases for these utilities. Joe Michalczik asked about possible problems with the wastewater infrastructure, and Public Works Director Pittis explained what has been done to keep up with compliance issues and maintenance of existing facilities, as well as what work still needed to be done. He stated that the rates will take care of the projects anticipated within this time frame. Director Pittis reminded the Committee that, previous to last year's rate increase, water rates had not been raised since 1984. Gary Leaf stated that there had been a rate decrease during that time to allow for summer discounts. The reserves had been depleted and the current increases were inevitable. Discussion followed, and Joe Michalczik asked staff to look into alternatives which would lead to a smaller increase. Director Godbey and Gary Leaf will prepare the information requested by Mr. Michalczik, and this issue will be further discussed at the next UAC meeting. Director Pittis briefly discussed the Water Comp. Plan, and this will also be put on the next agenda. No action was taken. Proposed Change to City Light Service Policy - Service Extension for Landlocked Facilities Light Director Titus reminded the Committee that this item had been discussed at the March meeting. There is potential for a problem in areas where the City is initiating converting from overhead to underground. During discussions with the City Manager and the City Attorney concerns were raised. There is an RCW which allows the City to charge the customer for costs associated with this type of work. Seattle and Tacoma charge 100% to the customer and smaller cities such as Centralia and Ellensburg absorb -2- Utility Advisory Committee May 8, 1995 all the costs; however, they were unaware of the RCW which allows the City to charge for the work performed. Section 5.5 of Policy No. S--03B of Department Policy and Procedure deals with options available for landlocked facilities. Director Titus then reviewed the possible changes to the existing policy. Attorney Knutson explained that the statutes give the City the authority to require the customer to pay for the conversion. However, the City must give 90 days notice, and the customer has the ability to request a public hearing before the City Council, in which case the Council must determine whether switching to underground facilities is in the public benefit. Attorney Knutson then explained the situation that caused the utility to examine this policy. Discussion followed, and Director Titus stated that the issue must be acted on soon, as there was an area where a power pole was deteriorating and could go down in the next wind storm. Joe Michalczik felt that other rate payers should not have to help pay for landlocked conversions, as they receive no benefit from the action. He felt that those who benefit should pay the bill. Bill Myers stated that the landlocked areas were bad plats of a certain era which had been approved by the City. He did not feel that those who lived in such areas should be punished for a poor planning move, and that the City had a certain amount of responsibility to these people. Discussion followed, and Joe Michalczik suggested that the Policy be amended to read that the City would pay $1,000 towards underground extensions for landlocked facilities, and the customer would absorb the balance of the expense. Attorney Knutson suggested that customers be given a choice to either grant City Light a better easement for accessing overhead lines, or pay half the cost of an underground extension. Joe Michalczik asked to accompany Director Titus on an inspection of the area in question or bring photos back to the UAC, which was agreed to. Staff was directed to draft some alternative amendments to this policy, which will be discussed at the next meeting. No action was taken. VI. v. Late Items: None. Next Meeting: The next meeting of the Utility Advisory Committee will be held on Monday, June 12, 1995, at 4:30 p.m. -3- Utility Advisory Committee May 8, 1995 VII. Adjournment: The meeting adjourned at 3:00 p.m. Ch~rman ~ep~y City"'Clerk ' ~/ -4-