Loading...
HomeMy WebLinkAboutMinutes 05/09/1994UTILITY ADVISORY COMMITTEE Port Angeles, Washington May 9, 1994 L Call to Order: Councilman Braun 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. Godbeyl C. Hagar, J. Pittis, R. Ellsworth, G. Leaf, and D. Sawyer. IlL 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 9, 1994 Director Godbey then introduced Mr. Tom Gould, of EES, who assists the City with utility matters; and Gary Leaf of the Light Department who developed the cost of service study. Public Works Director Pittis introduced Ralph Ellsworth, Water Superintendent, and Dave Peterson of CH2M Hill, who is assisting with the Water Comprehensive Plan. Mr. Ellsworth and Mr. Peterson were available to answer questions. Mr. Gould distributed a document to the UAC entitled "Presentation to the City of Port Angeles Utility Advisory Committee" and reviewed the same. Review of the document included the overview and purpose of the meeting; overview of a rate study; overview of financial planning and rate setting criteria; cash basis revenue requirements; overview of the City's revenue requirements; different scenarios regarding Water and Wastewater revenue requirements; and a summary and conclusion regarding the cost of service analysis. Discussion followed. It was decided that EES will work on option two for the wastewater rate to eliminate the 1996 rate deficiency. City Manager Pomeranz requested that the public be made aware of the upcoming rate increase. Bill Myers moved to reconunend the adoption of Option 2 for both water and wastewater rate adjustments, which would entail a step increase over the next three years, and with the understanding that EES will work on the wastewater rate to eliminate the 6% deficiency for 1996. Councilmember McKeown seconded the motion, which carried unanimously. Mr. Gould then explained the Cost of Service Study results, which were also contained in the document he had distributed. EES will come back to the City with information on two options for rate designs for residential rates to make them more equitable, but felt that the current non- residential rates had no need for structural changes. The next meeting of the UAC will be held June 6, 1994, to give the UAC time to review the final recommendations which will be presented by EES, and make a recommendation to the Council. City Manager Pomeranz asked if the UAC wanted the City Council to hold a public hearing. In the past, the citizens have always been allowed the opportunity to give public comment on utility rate increases. Joe Michalczik felt that the City had an obligation to inform the public as to why the rates are being increased. Attorney Knutson stated that there was no legal requirement for notice on this type of public hearing. Public Works Director Pittis pointed out that the new rates will not have been established before the next scheduled Council meeting; therefore, it is not feasible to have a public hearing at that time. City Manager Pomeranz felt the easiest way to get the word to the public would be to have an article in the next issue of the City newsletter. City Manager Pomeranz suggested the matter be placed on the next Council agenda to determine the intent of the Council, send a letter to all citizens stating there would be an increase and the rationale for that increase, ask for public comment, and inform the public that the increase would be considered by the Council at the regular Council meeting of June 21, 1994. -2- Utility Advisory Committee May 9, 1994 V. Late Items: None. VI. Next Meeting: The next meeting of the Utility Advisory Committee will be held on Monday, June 6, 1994, at 4:30 p.m. VII. Adjournment: The meeting adjourned at 6:35 p.m. Chairm'a~ -3-