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HomeMy WebLinkAboutMinutes 06/08/1992UTILITY ADVISORY COMMITTEE Port Angeles, Washington June 8, 1992 Call to Order: Mayor Hallett called the meeting to order at 4:30 p.m. II. Roll Call: Members Present: Jim Hallett, Thomas Hunt, Gary Braun, Joe Michalczik, and Richard Wight. Members Absent: None Staff Present: B. Titus, C. Knutson, K. Ridout, B. Upton, and B. Jones III. Aot~rovai of Minutes: Thomas Hunt moved to approve the minutes of the May 11, 1992 meeting as written. The motion was seconded by Councilman Wight and carried unanimously. IV. Discussion Items: A. Review of BPA/City Light Billing Credits Contract City Light Director Titus reviewed information pertinent to the department's submittal of a Billing Credits proposal to BPA in response to a solicitation intended to acquire additional energy resources from regional customers, preferably in the area of conservation. City Light was requesting consideration in order to upgrade all of the distribution system to 12 kv which would involve reinsulating overhead lines and replacing transformers over a period of four to five years. The specific amount of the credit, including the savings realized because of reduced losses, should be in excess of $1,100,000. Director Titus requested that the Utility Advisory Committee approve the proposal in concept and forward the matter to the City Council, once approved by the City Attorney. Attorney Knutson indicated he had reviewed the contract which appears to be acceptable. In considering the proposal, a question was raised as to any negative aspect of the program, to which Director Titus responded that if the costs of future resources exceed the avoided costs number quoted, then there can be a negative billing credit. However, this would be a thirty year agreement and with the numbers City Light has now, there would only be a negative billing credit of approximately $4,000 for the last two years. The credit is received on the power bill -1- Utility Advisory Committee June 8, 1992 to theCity. Consideration was given to the underground lines which Director Titus indicated will also be insulated to 12 kv instead of 4 ky. Joe Michalczik stressed the importance of continuing with the placement of underground lines. After further discussion, Councilman Wight moved to recommend to the City Council that the contract be approved as presented and placed on the July 5 City Council agenda. Councilman Braun seconded the motion which carried unanhnously. Councilman Wight suggested Director Titus prepare for the Council a brief description of the 4 kv line locations with a discussion of what is intended for future reinsulation. B. Discussion on Interim Rate Increase Proposed for Late 1992 or Early 1993 Director Titus referenced the previous discussion of the Utility Advisory Committee, as well as the direction received from the City Council, as to proposed rate increases over the upcoming two years. Joe Michalczik, speaking on behalf of both mills, indicated there is opposition to the increases, particularly prior to any increases instituted by BPA. In addition, the mills might seek some type of relief from BPA similar to that of the aluminum industry. Director Titus reviewed the fact that City Light has purposely been operating at a loss as a means of reducing reserves. It is recommended that across-the-board increases be instituted at this time as opposed to cost of service. Director Titus indicated the BPA is currently anticipating an increase ranging from 17.8 - 19.2 %, and Joe Michalczik responded the mills have a strong feeling that to increase rates now would be an inappropriate capitulation before BPA's actual increase is known. Further, he urged sincere efforts in the area of conservation to help offset the increases. In considering the amount of the increase to be instituted this fall, the members of the UAC realized there are two issues: to obtain a positive cash flow now because of the anticipated bond issue, and to initiate a partial increase now in order to avoid a dramatic increase to the customers at one time. Councilman Braun moved to accept a cap of 9% for the first increase. The motion was seconded by Councilman Wight and carried by a majority vote, with Joe Michalczik voting in opposition. At this time, Mayor Hallett departed the meeting. Vice Chairman Hunt then presided over the deliberations. Lengthy discussion was held about the need to educate the public, as well as to receive input concerning the increase. Director Titus noted he would look for an interim increase for the mills in the spring of 1993 in order to give them ample time to allow for the increase in their budgets. Joe Michalczik indicated his support of addressing the negative cash flow to the level of cost of service, but does not support an increase solely in anticipation of BPA's increase. -2- Utility Advisory Committee June 8, 1992 Councilman Wight moved to recommend a rate increase which applies equally to all rate classes, with the exception of the industrial mills. Councilman Braun seconded the motion and offered a friendly amendment that an increase for the mills would be reviewed and anticipated for the spring of 1993. Councilman Wight accepted the amendment and a vote was taken on the motion which carried unanimously. In the ensuing discussion, by consensus, the UAC agreed the increase at this time would be across the board and not by cost of service. In addition, it was agreed the interim increase would be scheduled for October, 1992. Consideration was given to the various means by which the City could communicate this increase and the pertinent details to the public: news releases, the City newsletter, KONP talk show, UAC members speaking to various service groups, as well as the placement of block ads in the local newspapers. In addition, Attorney Knutson cautioned the members of the UAC that all action taken at this level is strictly in an advisory capacity; all final decisions rest with the City Council. Therefore, it was agreed Director Titus will prepare a summary document for presentation to the City Council in the information packet. C. Wholesale Water Agreement with PUD The members of the Utility Advisory Committee reviewed Draft #4 of the proposed wholesale water contract with the PUD. The PUD had countered with various revisions to the contract; however, Deputy Director of Public Works Ridout recommended passage as written indicating that the contract expired in April of 1993, and that the PUD has been put on notice that changes must be forthcoming concerning the sale of City water. Further, he advised the UAC members that a Water Comprehensive Plan is being formulated and once completed, the City will be in a better position to identify City needs. Lengthy discussion followed and Attorney Knutson noted the contract submitted to the PUD was in the City's best interest. Although the PUD is currently pursuing other options, nothing is in place at the moment. It would be helpful to know the reasons for the changes proposed. Joe Michalczik moved to have the City Attorney and the Director of Public Works meet with the PUD to determine if the various details of the contract can be worked out. The motion was seconded by Councilman Wight. Attorney Knutson suggested that, if the issues cannot be resolved at that level, then perhaps the PUD delegation could meet with the Utility Advisory Committee to address the issues. By consensus, the members of the Utility Advisory Committee agreed that a special meeting can be scheduled for this purpose if the issues are not resolved at the staff level. A vote was taken on the motion which carried unanimously. -3- Utility Advisory Committee June 8, 1992 D. Jefferson County Solid Waste Proposal Solid Waste Superintendent Jones reviewed a counter proposal submitted by Jefferson County whereby Jefferson County would accept a like amount of refuse from the City's waste stream once they have a system operational or when their emergency has subsided. The consideration at this point, however, relates to the City's transportation costs to get the refuse to Jefferson County. Further, the City is in no position to offer any hope until the time the new cell has been completed. Lengthy discussion followed and there was an expression of wishing to be a good neighbor. Accordingly, Councilman Wight moved to have Jefferson County address its own problem until the time the City's new cell is completed. If a problem still exists at that moment, then the City could again address the request. The motion was seconded by Councilman Braun. Councilman Wight expressed the hope there would be zero gain in the landfill. In the ensuing discussion, Joe Michalczik expressed the opinion the City should not be in the business of trash collection for the fastest growing county in the State. He was concerned that something may force Jefferson County's refuse into the Port Angeles landfill on a permanent basis, should something occur in the future with Jefferson County's disposal program. Further, it was noted the City's ordinance should be amended in order to allow the acceptance of refuse from outside the county. Attorney Knutson advised the group that, if Jefferson County could haul a reciprocal amount of refuse, then assurances must be obtained contractually in order to protect the City's interests. After further discussion, Councilman Wight opted to withdraw the motion; Councilman Braun withdrew the second. Councilman Wight then moved to recommend denial of the modified request and forward this recommendation to the City Council for final consideration. The motion was seconded by Councilman Braun and carried unanimously. Late Items: A. BPA Low-Flow Shower Head Program City Light Director Titus introduced for consideration the possibility of contracting shower head installations in the City, with the intent being to speed up the process of conservation. He explained that the City has been providing new shower heads to the public and, at the current participation level, it would take approximately nine years for every residence to have a shower head installed, assuming an optimistic 70 % participation rate. A contractor installing the shower heads on a door to door basis could increase the participation rate to 80% and finish in about sixteen weeks. City Light will receive approximately $170,000 from BPA for this program. If we hire a -4- Utility Advisory Committee June 8, 1992 contractor, this amount would be reduced significantly. Director Titus asked that the UAC support the solicitation of bids for a contractor to install the shower heads, so that the exact cost of such a program could be determined. By consensus, the UAC supported the proposal and authorized Director Titus to submit this recommendation to the City Council. VII. Next Meetine: The next meeting of the Utility Advisory Committee will be held on Monday, July 13, 1992, 4:30 p.m. VIII. Adjournment: The meeting was adjourned at 6:21 p.m. City Clerl40- 6/ -5-