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HomeMy WebLinkAboutMinutes 06/09/1997UTILITY ADVISORY COMMITTEE Port Angeles, Washington June 9, 1997 /. Call to Order: Chairman Braun called the meeting to order at 3:00 p.m. Roll Call: Members Present: III. Members Absent: StaffPresent: Guests Present: Approval of Minutes: Chairman Braun, Councilmembers Campbell and Doyle, Joe Michalczik, and Bill Myers. None J. Pittis, C. Knutson, B. Collins, K. Godbey, B. Titus, K Ridout, B. Upton, S. Kenyon, S. Coyle, S. Hursh, R. Ellsworth, and G. Lea£ Jim Hopper, Welcome Inn Trailer Park Councilman Campbell moved to approve the minutes ofthe May 12, 1997, meeting. The motion was seconded by Councilman Doyle and carried unanimously. IV. Discussion Items: A. Electrical Service to Welcome Inn Trailer Park Chairman Braun reviewed the information provided on the matter of transferring the Welcome Inn Trailer Park from PUD electrical service to the City's electrical service. Mr. Hopper advised the members of the Utility Advisory Committee that he could not agree with the provisions having to do with his responsibility for the payment of utility bills lett unpaid by his tenants. This liability could accrue to $1,000 - $2,000 per month, and Mr. Hopper felt this to be intolerable in view of the fact he would also have to maintain the meter poles. It was his previous understanding that he would be "grandfathered" on the issue of pole maintenance. Mr. Hopper indicated that approximately one-third of his tenants fail to pay their bills at the present time. He felt his option at this time would be to close the park or double the rent. Joe Michalczik asked staffto summarize the agreement between the PUD and the City, the amount of money spent on this project to date, and the policy differences between the PUD and the City. Deputy Utilities Director Titus provided this summary, noting the main difference had to do with the City's lien rights and the fact that the City does not maintain the meter poles. Lengthy discussion followed, and Deputy Director Titus indicated there are approximately 35 Utility Advisory Committee June 9, 1997 meter poles for about 55 services. Further, the PUD surveyed the poles about a year ago and replaced or stubbed some of the rotten poles. At that time, it was their intention to return in 5 to 10 years to recheck the poles when they might need further maintenance. Councilman Campbell inquired as to the level of financial loss incurred by the PUD by servicing the Welcome Inn Trailer Park. Mr. Hopper responded the unpaid bills approximate $1,000 on a monthly basis. Factoring in the cost of pole maintenance, he calculates his loss to be about $2,000 per month for a total of 140 hook-ups. Further, he noted he loses about $2,000 per month in unpaid rent. Discussion followed, and Mr. Hopper was advised that the City has been much more aggressive in its collection efforts. As a consequence, the City does not incur the level of bad debt that one might assume. Joe Michalczik posed a question with regard to the difference in electric rates being paid, and it was concluded that customers pay approximately 10% less by being serviced by the City. Therefore, Mr. Michalczik felt this fact must be made a part of the consideration. Mr. Hopper responded to a question by informing the UAC members that water and wastewater costs are factored into the rental rates at the park. Chairman Braun informed Mr. Hopper that the Utility Advisory Committee could not arrive at a resolution to this problem today; he suggested that staff contact the PUD for further discussion on the matter to determine the best method for resolution. Deputy Director Titus was asked what the expectations might be for the City to commence providing the service, and he responded that the City had an obligation to provide these services in a 3-year period -- that time has now arrived. Also, the City has already paid $56,000 to purchase the facilities to the trailer park, with an additional expenditure of $19,000 for a tie to the trailer park. The property in question was annexed into the City approximately 20 years ago. In the ensuing discussion, Mr. Hopper was informed that the City has a landlord notification program. Notices are sent out once a delinquency reaches 31 days, and it is at that time that the landlord also receives the same notification. Chairman Braun concluded the discussion by advising Mr. Hopper that the City will be in contact with him after staffhas further pursued the matter. Mr. Hopper departed from the meeting, after which brief discussion involved staffs desire to obtain hard data from the PUD as to their actual financial losses on the trailer park. This matter will be returned to the UAC at its next meeting. B. Discussion of Water Rate Increase Finance Director Godbey informed the members of the Utility Advisory Committee that a cost of service study pertinent to water rates had been completed in 1994. At that time, it was agreed that water rates would need to increase in 1995, 1996, and 1997. With an updated cost of service study, it is staffs recommendation that an average water increase of 5% be initiated, with no increase recommended for wastewater rates. In that water rates had previously been increased as 2 Utility Advisory Committee June 9, 1997 part of a two-year rate ordinance, Director Godbey recommended that a similar ordinance be considered for 1997 and 1998. Councilman Campbell asked when this rate increase would go into effect, and Director Godbey responded it would become effective as of July 1. The average increase would be $.93 per month per 1000 cubic feet consumed. Gary Leaf, Financial Analyst, noted that the next cost of service study will be done in two years, at which time it should be anticipated that a recommendation for a wastewater rate increase will be forthcoming. Councilman Campbell queried as to the possibility of having some of the reserves allocated to reduce the projected rate increase. However, Director Godbey emphasized the importance of retaining that reserve in order to meet the required debt coverage of 150% of the debt. This is a requirement of the bond issue, and the City cannot deviate from its present practices pertinent to that reserve. Public Works Director Pittis apprised the Utility Advisory Committee that, with regard to wastewater rates, the City is attempting to hold the line for now. The City is presently negotiating for a permit for the treatment plant. There are some capital costs associated with the permit that, if approved, could be subject to a similar type of analysis. If not approved, the City would need to return to the UAC for further direction. Discussion followed with attention directed to the PUD's possible involvement in the costs associated with the southeast reservoir. Planning Director Collins felt that another element to the discussion might be the outcome of the annexation study that is forthcoming. The likelihood ora PUD system development charge was suggested. Consideration was given to where the rate increase should be applied, and Gary Leaf noted that most of the costs being incurred relate to the fixed costs, which are reflected in the base rate. After further discussion, ,Joe Michalezik moved to accept the cost of service study as presented, to recommend that the City Council adopt a two-year rate ordinance for 1997 and 1998, incorporating the 5*/0 increase as reflected in the cost of service study, and further, to apply the increase to the base water rate. The motion was seconded by Councilman Campbell and carried unanimously. At this time, Councilman Doyle excused himself from the meeting. Request from Dry Creek for Wholesale Water Director Pittis explained that the Dry Creek Water Association has water wells located on private property, and there is current litigation taking place which places in question the future of Dry Creek's water supply. Therefore, Dry Creek has approached the City in the interest of determining if the City would enter into a wholesale water agreement. Director Pittis noted that the City has been talking to Dry Creek, as part of the Elwha Dam issue, and is considering the possibility of putting in another ranney well, for a total of two, which could service the City and Utility Advisory Committee June 9, 1997 Dry Creek. It is essential that the City obtain further information before discussions can proceed, such as the point of delivery, equipment changes needed, and the like. Having additional merit is that this potential endeavor may prove to be an opportunity for the City to improve its own water system in conjunction with the Safe Drinking Water Act. Another consideration is the fact that the City's cooperation might reflect well on future water rights. Dry Creek has expressed a willingness to pay the cost of having an engineering study conducted. Discussion followed, and the question was raised as to whether Dry Creek could assign its water rights to the City. Director Pittis felt this may be a possibility. Discussion centered around the fact that Dry Creek's service area is outside the current Urban Growth Area, and Director Collins felt the City may be precluded from providing water service because of that fact. The City could, however, argue that the UGA could be expanded at some future date, and Director Pittis noted that the City has always felt that it would provide services to those areas located between Morse Creek and the Elwha River. Attorney Knutson felt the City may wish to seek input from the Department of Ecology, particularly because they are an authority on water rights. This involvement on the part of DOE should probably be made a part of the Scope of Work for the engineering study to be conducted. After further discussion, Councilman Campbell moved to recommend to the City Council that Public Works enter into an agreement for a technical study to develop information needed for consideration of supplying water to the Dry Creek Water District, with the understanding that such an agreement would in no way commit the City to the provision of the water. The motion was seconded by Bill Myers and carried unanimously. Response to Solid IVaste Advisory Committee Request for Participation in Comprehensive Plan Director Pittis summarized the issues pertinent to the City being asked to participate in funding an update of the Clallam County Solid Waste Management Plan, which is due in April, 1998. The City would prefer that such an update be offset because of recent rate changes for private haulers and because of the pending status of the bird/wildlife study which will more than likely result in the need for a hazard mitigation plan. At this point in time, the City does not feel a sense of urgency in updating the plan, because there is so much information that is as yet unavailable. There is also a need to determine that status of the permit application before the plan can be updated. Councilman Campbell, as a member of the SWAC, offered his insight on the matter. He felt that the plan could be updated in-house, thereby negating the need to hire a consultant and incur the associated costs. Further, he felt staffwould have more of an opportunity for input to the update if it were accomplished in-house. Councilman Campbell referred to the two draft response letters in the packet and expressed his support for the content of the letters. Discussion followed, and it 4 Utility Advisory Committee June 9, 1997 was suggested that the two letters be merged into one. Also, it was pointed out that the City does have the option of writing its own solid waste plan. One of the key factors in determining the future of the landfill will be the hazard mitigation issue. After further discussion, it was agreed by consensus that the two letters would be merged and sent to the County Solid Waste Advisory Committee, and that the City would support an update of the plan by in-house staff, with the assistance of the DOE. It was agreed that a copy of the letter sent could be included in the City Council's information packet. E. New Business Deputy Utilities Director Titus distributed copies of a document -- "What Does the Future Look Like - PUD Evaluation", which he obtained at a recent meeting. This document was generated by the Washington State PUD Association, and it is written from a perspective of deregulation and what steps must be taken for PUDs to remain competitive. Deputy Director Titus was present at a meeting in Portland, Oregon, which was attended by the Congressional Deletion. He noted that, at the federal level, deregulation has been moved to the back burner in the interest of not repeating past mistakes made on deregulating telecommunications. E Information Items A. Issue Paper on Retail Wheeling: For information only. VI. Late Items: None. VII. Next Meeting: The next meeting of the Utility Advisory'Committee will be held on Monday, July 7, 1997, at 3:00 p.m. VIII. Adjournment: The meeting adjourned at 4:55 p.m. /lffalrmafir ~ C~ty Clerk ?~/] /- f d~