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HomeMy WebLinkAboutMinutes 06/19/1993UTILITY ADVISORY COMMITTEE Port Angeles, Washington July 19, 1993 Call to Order: Mayor Hallett called the meeting to order at 4:35 p.m. II. Roll Call: Members Present: Jim Hallett, Gary Braun (arrived 4:55 p.m.), Joe Michalczik, and Richard Wight. Members Absent: Thomas Hunt Staff Present: J. Pomeranz, C. Knutson, C. Hagar, B. Titus, G. Leaf, S. Hursh, J. Pittis, K. Ridout, B. Jones and S. Kenyon. III. Approval of Minutes: IV. Councilman Wight moved to approve the minutes of the June 14, 1993, meeting as written. The motion was seconded by Joe Michalczik and carried unanimously. Councilman Wight moved to approve the minutes of the June 28, 1993, meeting as written. The motion was seconded by Joe Michalczik and carried unanimously. Councilman Braun will be arriving late to this meeting, as he had to attend the Clallam Transit Board meeting this afternoon. Due to the nature of tonight's discussion items, it was decided to change the agenda so that Councilman Braun could participate in the discussion and decision making process regarding utility rates and annexation policy. The agenda was changed to the following order: A, B, E, Late Item A, D, and C. Discussion Items: A. Environmental Waste Systems Contract This item is being deferred to a future meeting, as there are some issues with EWS which must be resolved first. -1- Utility Advisory Committee July 19, 1993 B. Solid Waste Advisory Committee Status Solid Waste Superintendent Jones advised the UAC that the Clallam County Solid Waste Advisory Committee has been reinstated. Both he and Councilman Schueler are members. At the first meeting of the SWAC, Parametrix presented information on its accomplishments in researching alternatives should the landfill be closed due to the FAA restrictions. There are four alternatives being investigated: 1) waste export; 2) incineration; 3) new landfill; and 4) materials recovery facility. The first technical memo on waste export has already been done. Board members are to reply to the memos within one week. Parametrix will compile all the information it receives into a final report, which will be presented at the next SWAC meeting to be held on August 17, 1993. This information will help the Committee in its decision-making process. C. Low-Income Utility Assistance Program Mayor Hallett reviewed the information provided by the Finance Department. Customer Service Manager Kenyon informed the Committee that other utilities have implemented this program with great success. The local PUD is also gearing up to begin a voluntary contribution program. Councilman Wight suggested a small box to be checked on the utility bill where residents may indicate if they wish to contribute to the program. Manager Kenyon advised the UAC that, with the new computer system, the City was in a position to do this. A discussion followed. Mayor Hallett inquired as to why there must be two separate programs for Senior Citizen discount and low-income utility assistance. Attorney Knutson explained that the State Legislature passed a statute that gives the City authority to directly subsidize this type of program for senior low-income families. Councilman Wight moved to adopt a voluntary contribution program, and refer to the City Council for approval of a request for proposals. Joe Michalczik seconded the motion. A brief discussion followed regarding possible administrators for the fund. A vote was taken on the motion, which carried unanimously. Late Item A. Rogerson Hiller- Past Due Bill Customer Service Manager Kenyon advised the UAC that Rogerson-Hiller has a utility account with the City in the amount of approximately $26,000. Of this amount, approximately $22,000 is more than 30 days past due. Hiller has promised to pay $13,000 on their account this Friday, with the balance to be paid within the next 30 days. Upon discussing this problem with the Hiller accounts payable clerk, he was informed -2- Utility Advisory Committee July 19, 1993 that Rogerson Hiller did not have any money, but there is money for Aero Composite. Staff is asking for direction from the UAC in handling this account in the event payment is not forthcoming. Manager Kenyon explained that the usual protocol is to turn off the power, however, this would involve putting between 50 and 65 people out of work. Does the City want to do this? Manager Kenyon went on to explain that part of the problem is that this company may not exist 30 days from now. Seafirst Bank and the Port are in the process of foreclosing on the buildings. Manager Kenyon informed the Committee that Hiller has eight buildings. A possible option to get their attention with the least damage would be to shut off water to the buildings one at a time. This would let them know that the City is sincere in its collection efforts. Councilman Wight suggested that the accounts be changed to the name of Aero Composite being they are in good financial shape. However, City Light Director Titus pointed out that changing the name doesn't transfer the indebtedness. Hiller would then have no reason to pay the outstanding balance. Attorney Knutson proposed that, if the City were to allow the structured payment schedule, the City should get an agreement with Hiller stating that in exchange for allowing thepayment plan, Hiller will transfer the obligation to Aero Composite. Further discussion followed. Councilman Wight advised Customer Service to work out a strategy to aid in the collection process, and inform Council of the plan when it's ready. Manager Kenyon informed the Committee that he told Hiller if payment was not received on Friday, they would be closed down. Hiller would be advised of the day of turn off so that steps could be taken to eliminate any danger caused by power outage. The Committee felt that if this was standard procedure for other customers, it should be the same for industry. Joe Michaiczik expressed his discomfort with just shutting off power to an industry and putting people out of work. IV. Discussion Items Continued D. City Light Rate Increase City Light Director Titus distributed an information packet relative to the rate increases. Kudos to Gary Leaf for the excellent job he did in compiling this information for the UAC in such a short period of time. Director Titus explained how the new rates were arrived at and the percentage of rate increase for the difference rate classes. The new rate schedule begins October, 1993 and -3- Utility Advisory Committee July 19, 1993 ends September, 1995. The increase will be 13.50% for residential, 14.99% for IT, with a system total average of 14.39%. The 13.5% will be for each of the two years in this period. This is less than the Bonneville increase, which will be 15.9% to the City. The City will use coincidental billing for the mills, which will save the mills money also. Discussion followed. Mayor Hallett asked if the proposal would look the same if the economy was in better condition, assuming the BPA increase was the same. Director Titus did not feel the numbers would be markedly different. If times weren't bad, the City might have held the line on more items in negotiating allocations between the rate classes. More costs would have gone to industrial and less to residential. City Manager Pomeranz stated that the economic times do have an effect. The mills scrutinized this rate study to an extent that they had not done in the past. This was due because of the economic times. There were things in the past that weren't an issue, for instance street lighting. Several years ago 50% of street lighting for the City was passed on to the mills and the mills accepted it. Times have changed. The mills now have a problem with some of these costs and studies found it would be fair to reduce the impact. Further discussion followed on the street lighting issues and the fairness of the new rate schedule. Committee agreed the new rate schedule was probably as fair as it is reasonably possible to be. Councilman Wight inquired as to the status of the plan for distribution of reserve funds. Director Titus responded that this would be presented to Council at a later date, as it cannot be resolved between now and the next Council meeting. Councilinan Braun moved to recommend the rate schedule to Council at the regular meeting on August 3, 1993. Councilman Wight seconded the motion. A vote was taken on the motion, which carried unanimously. E. City Annexations - Utility Policy (Lappier Annexation) Mayor Hallett reviewed the information supplied by the Light Department. Director Titus explained that there are two separate issues involved: 1) costs involved with utility facility acquisition; and 2) cost associated with processing annexation applications. Staff felt that there should be a sizeable up-front fee regardless of the size of the annexation, as the amount of work involved is the same for one acre as it is for 50 acres. An acreage fee should be charged on top of the up-front fee for the larger annexations. Suggested fees are $500 plus $25/acre or fraction of an acre of the proposed annexation area. Staff recommended that an ordinance be drafted to take to Council on these fees. Councilman Braun moved to have staff draft an ordinance, as proposed, for Council consideration. Joe Michalczik seconded the motion, which carried unanlmonsly. -4- Utility Advisory Committee July 19, 1993 The Committee continued its discussion on the costs involved with acquisition of utility facilities for the Lappier Annexation. City Light Director Titus distributed an information sheet showing the cost of facility acquisition and allowable service credit for this annexation. The final cost to each property owner is $1,528.87. Staff has come up with two payment plan options. A property owner can pay the $1,528.87 up-front prior to annexation, or a $12.74 per month surcharge can be added to their utility bill over a ten year period. Mayor Hallett felt there should be interest added to the monthly surcharge. Councilman Braun agreed with this. Councilman Wight suggested that if a rate payor has chosen option two, terminates service and sells the property the remaining indebtedness must be resolved. The indebtedness goes with the property and a lien should be placed on the property that must be satisfied at time of sale. Attorney Knutson pointed out that administratively this would be a headache, trying to keep track of when property transactions occur. Public Works Director Pittis pointed out that this surcharge only takes care of electrical facilities. Water facility issues still need to be worked out with PUD. Staff is hoping to be able to do the same type of thing for water. The Water Comprehensive Plan should help to solve some of these problems within the next year. Councilman Wight moved to adopt and recommend to Council the recommendations of the Light Department adding interest to option two. Joe Michalczik seconded the motion, which carried unanimously. Next Meeting: The next meeting of the Utility Advisory Committee will be held on Monday, August 9, 1993, at 4:30 p.m. VI. Adjournment: The meeting was adjourned at 6:15 p.m. Deputy City Clerk -5-