Loading...
HomeMy WebLinkAboutMinutes 12/09/1991UTILITY ADVISORY COMMITTEE Port Angeles, Washington December 9, 1991 Call to Order: Councilman Hallett called the meeting to order at 4:35 p.m. II. Roll Call: Members Present: Jim Hallett, Richard Wight, Mike Lemon (arrived at 4:46 p.m.), Jeff Rosbach and Thomas Hunt. Members Absent: None Guests: Tom Gould, Economic and Engineering Services, Inc. Staff Present: B. Titus, C. Knutson, J. Pittis, B. Upton, K. Ridout, S. Kenyon, G. Leaf, R. Ellsworth, and B. Jones. III. Approval of Minutes: Jeff Rosbach moved to approve the minutes of the November 4, 1991, meeting as written. The motion was seconded by Thomas Hunt and carried unanimously. IV. Discussion Items: A. Water Utility - Cost of Service and Rate Study Public Works Director Pittis distributed a 1991 Water and Sewer Utility Rate Survey of 50 Puget Sound Area Utilities. He reported that a Cost of Service study was conducted in order to develop water rates which would fairly represent the cost of service to the customers while providing sufficient revenue for the City's water utility to continue future operations. The water rates have not been reviewed or adjusted since 1984. Tom Gould, Economic and Engineering Services, Inc., noted his role was one of overseeing the study with much of the work done by Director Pittis and Gary Leaf, City Light. The study was a three-step process which involved establishing the revenue requirements, the cost of service, and ultimately, a rate design. Mr. Gould noted the revenue requirement was based on 1990 expenses, escalated at 4% per year, to 1992 test period expenses. The assumed growth factor for residential and -1- Utility Advisory Committee December 9, 1991 commercial customers is 1.46%. The deficiency of funds equates to 12.45% or approximately $149,693. Mr. Gould indicated the depreciation expense should equal capital improvements for the test period. Discussion followed with a question about depreciation and capital improvements to which Director Pittis responded the City has been conservative in capital improvements. There are many unknown factors at this time which will drive the future course of capital improvements. In reviewing the summary of the Cost of Service Study and the possible rate classes, consideration was given to the category of Sales for Resale and PUD's anticipation of increased City rotes. Charges to the PUD have not been increased for several years, and it is appropriate to increase those charges to a more realistic level. Director Pittis noted the PUD has exceeded the contract amount on average, often times at the detriment of service to City residents. This issue will be addressed with the PUD. Mr. Gould addressed the policy issues and noted the City has followed the cost of service in the past. Jeff Rosbaeh moved to accept the methodology and results of the revenue requirement and cost of service study. The motion was seconded by Councilman Wight. Jeff Rosbach inquired as to previous funding from the General Fund in the area of fire protection, and Director Pittis indicated that was a practice from 1984. Because all residents benefit from fire protection, those costs were distributed throughout the rate classes. A vote was taken on the motion which carried unanimously. Jeff Rosbach moved to follow the cost of service, excluding the minimal decrease for the commercial rate class. The motion was seconded by Thoma~ Hunt. In the ensuing discussion, Councilman Wight offered a friendly amendment in that he suggested the commercial funds can be directed toward capitalization. The amendment was acceptable to Messrs. Rosbach and Hunt, and a vote was taken on the motion which carried unanimously. In considering the rate design issues, Director Pittis advised the UAC members that it may be appropriate to discontinue the summer discount on water rates. Further, consideration might be given to a municipal rate for City parks, and the same rate might also be applied to the golf course. After limited discussion, Jeff Rosbach moved that rate design be developed based on no summer discount program. The motion was seconded by Councilman Lemon and carried unanimously. Director Pittis indicated enough information has been gathered for the preparation of a traditional approach in establishing rate options which will be presented to the Utility Advisory Committee at its next meeting. -2- Utility Advisory Committee December 9, 1991 B. Senior Energy Discount City Light Director Titus presented for UAC review the different options available for the senior energy discount, based on previous input from the UAC members. He noted the options are consistent with what other utilities across the State are offering and are estimated to cost City Light no more than $50,000 annually. It is recommended that a requirement be established wherein all participants would be required to make payments under the budget billing program, with an effective date set at April 1, 1992. The April effective date is suggested to be consistent with the existing budget billing time cycle and would allow time to process applications and calculate discounts. In the ensuing discussion, consideration was given to the level of discount for those individuals already receiving subsidies elsewhere. It is recommended that subsidies received elsewhere cannot exceed the sum total of the annual utility bill. Councilman Wight moved to recommend that the City Council adopt Option 4 for the senior energy discount, incorporating the recommendations set forth in the December 9, 1991 memorandum submitted by City Light. The motion was seconded by Jeff Rosbach and carried unanhnously. The matter of a volunteer program to help low income individuals will be brought before the Utility Advisory Committee at a later date, to include a presentation in this regard from Community Action. C. Discussion on BPA Residential Conservation Agreement Director Titus explained the BPA Residential Conservation Agreement is a continuation of BPA's conservation efforts and can be considered a Super-Super Good Cents Program. He explained it also includes a hot water program, as well as efforts toward appliance and lighting efficiencies. It is desirable to offer these programs to City residents, which would require approval of the agreement. After limited discussion, Councilman Wight moved to forward this matter to the City Council with a recommendation from the Utility Advisory Committee that the agreement be approved. The motion was seconded by Jeff Rosbach and carried ummlmously. D. Sunday Landfill Closure Public Works Director Pittis indicated the benefits of Sunday closure of the Landfill are greater now than ever before. He reviewed the statistics pertinent to Sunday utilization of the Landfill, and noted there has been a noticeable decrease since the introduction of curbside recycling in the City. Solid Waste Superintendent Jones explained Sunday closure would allow better staffing patterns during the remainder of the week which -3- Utility Advisory Committee December 9, 1991 would result in the City not adding another staff member which might otherwise have been necessary. Beyond that, the tangible savings might approximate $4,000-$6,000. Director Pittis suggested the winter months might be the appropriate time to try a Sunday closure. However, Jeff Rosbach expressed concern that individuals who normally use the Landfill on Sundays might opt to dispose of their trash in outlying areas, thus creating another type of problem. Councilman Lemon suggested trying the Sunday closure at this time, while continually monitoring the impact to the public. Director Pittis indicated that, should this be approved, the effective date would be January 1, 1992, with the interim period being used to inform the public. Councilman Lemon moved to approve the Sunday Landf'fll closure and to forward this recommendation to the City Council for consideration. The motion was seconded by Councilman Wight and carried by a majority vote, with Jeff Rosbach voting in opposition. Congressman Al Sw~t's Proposed RCRA (Resource Conservation & Recovery Act) Legislation Director Pittis briefly reviewed proposed legislation as introduced by Congressman A1 Swift wherein mandatory recycling and a recycling facility with hand sorting would be required. It is proposed that the City correspond with Congressman Swift in order to express certain concerns, particularly with regard to impacts on smaller communities. There is no escape clause for smaller areas which would be required to sustain some rather significant costs. By consensus, the members of the Utility Advisory Committee agreed such a letter should be sent, with copies to be placed in the Information Packet for the City Council. F. Landfill Regulations (Information only) Information on Federal Subtitle D regulations for landfills was distributed to the Utility Advisory Committee for informational purposes. G. Cable Television Consultant Contract City Attorney Knutson reviewed the current agreement with 3-H Cable Communications Consultants which provides for payment to the consultant of ten percent of the franchise fee that the City receives from Northland Cable. 3-H was asked to consider some different options in charging for services, and it is staff's recommendation that the City continue the contractual arrangement at a reduced rate of five percent of the franchise fee. -4- Utility Advisory Committee December 9, 1991 Councilman Wight noted the need to continue the arrangement in that it is extremely important to receive the information concerning Federal legislation on the matter of rate regulation. In addition, Attorney Knutson reminded the group that 3-H performs a technical evaluation of the franchise on a yearly basis. Discussion was held concerning the possibility of City cable customers subsidizing the expansion of cable television into rural areas. It was determined appropriate that this question be posed to the franchise holder, as well as the question as to whether this is common practice for cable expansion. Also, Jeff Rosbach queried as to the rate of return the expansion is based on, another question which might be addressed to Northland Cable. After further discussion, Jeff Rosbach moved to reconunend to the City Council that the contract with 3-H Cable Communications Consultants be extended, based on the figure of five percent of the franchise fee. The motion was seconded by Thonms Hunt and carried unanimously. Attorney Knutson noted the contractual requirements concerning the education and government channel will be eliminated from the agreement. He indicated the School District may be asking to activate this channel in the near future. H. Consider By-Laws Change Regarding Meeting Date As a follow-up to comments made at the last UAC meeting, a proposed amendment to the By-Laws of the Utility Advisory Committee was considered which would change the regular meeting date from the second Monday of each month to the Monday after the first Tuesday of each month. This would result in UAC meetings always following the first Council meeting of the month. Councilman Wight moved to approve the amendment to the UAC By-Laws as presented. The motion was seconded by Councilman Lemon and carried unanhnously. I. Executive Session - Litigation At the suggestion of the UAC members, Attorney Knutson agreed the Executive Session matter could be addressed by the City Council during its Executive Session. Late Items: City Light Director Titus distributed an issue paper on alternative financing methods for the Bonneville Power Administration. This item will be placed on the agenda for -5- Utility Advisory Committee December 9, 1991 discussion at the next UAC meeting. VI. Next Meetine: The next meeting of the Utility Advisory Committee will be held on Monday, J~tnuary 13, 1992, 4:30 p.m. VII. Adjournment: The meeting was adjourned at 6:02 p.m. Chairman -6-