1992-05-28 - Laserfiche WebLink

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140 President NOTICE OF SPECIAL MEETING A SPECIAL MEETING OF THE COUNCIL WILL BE HELD ON Thursday, May 28, 1992 AT 7:30 p.m. IN THE Basement Conference Room. THE PROPOSED AGENDA IS AS FOLLOWS: Work Session: Utility Rates Work Session: Water Street Parking Garage Executive session to discuss personnel matters as exempted by Section 2.1-344(a)(1) of the Virginia Freedom of Information Act. BY ORDER OF THE MAYOR BY Jeanne Cox (signed) BASEMENT CONFERENCE ROOM - May 28, 1992 Council met in special session on this date with the following members present: Rev. Edwards, Ms. Slaughter, Mr. Toscano, Mr. Vandever, Ms. Waters. WORK SESSION: UTILITY RATES Ms. Rita Scott, Director of Finance, discussed the basic premises of the City's utilities: self supporting; no general fund subsidy; water and sewer services only in City; gas services in City and County; cost components include cost of purchased service, cost of operation, and capital costs; estimated usage; total cost divided by estimated usage equals rate; rates are designed to break even over time. Water rates are expected to increase an average of 1.3% and sewer rates are expected to increase just under 1%. Ms. Scott presented three options for determining gas rates: maintain the status quo; use bond financing to accelerate reconstruction of old gas lines in the City; and build a profit into the rates. Ms. Scott explained that wholesale gas prices are down~ no working capital reduction is proposed, a small increase in operating costs is anticipated, and base rates are expected to decrease by 3.8%. Ms. Scott stated that bond financing would allow safety issues to be addressed by accelerating the 65 miles of gas lines which are known to need replacing; would allow level funding of the reconstruction; would provide the potential for a marketing effort to attract new gas customers; and could level out gas rates. Ms. Scott explained that acceleration to a seven year replacement schedule would require additional safety inspectors and crew and would cost $13 million, financed with three bond issues, over seven years. Ms. Scott stated that a 2% profit built into the gas rates would return approximately $272,000. Responding to a question from Mr. Toscano about achieved efficiencies over the past year, Ms. ScOtt stated that staff had shopped for gas as much as possible,' staff had been reduced, and capital items had been postponed. Responding to a question from Mr. Toscano, Ms. Judith Mueller, Director of Public Works, stated that the schools have come back as non-interruptible customers. Ms. Mueller stated that staff will be looking at major gas purchasing changes in the next year since the contract is due to expire with Columbia Gas.