1998-06-17 - Laserfiche WebLink

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231 WORK SESSION: UTILITY RATES Ms. Rita Scott, Director of Finance, reviewed the proposed utility rates and major capital costs, including replacement lines, gas feeder lines, automated meter reading (AMR) and meter replacement. Responding to questions submitted by Councilors prior to the meeting, the following information was provided by Ms. Scott and Ms. Judy Mueller, Director of Public Works. There are 86 employees in the Utility Division and 17 in Utility Billing. Some Utility employees do other non-utility functions, including snow removal, answering of emergency calls, administration of the drug program, and overall Public Works Safety Training. No General Fund dollars are used to compensate Utility employees. There are currently six meter readers and if the City does not move toward automated meter reading, one additional meter reader will need to be added; with AMR, the number of meter readers could be reduced to two. An increase in revenue is projected for replacing water meters because these meters slow down over time. It is expected to take a year to replace 8,500 water meters, 1,100 gas meters and to retrofit others with the AMR device. The Albemarle County Service Authority is currently using a wand system for meter reading which requires that they pass the wand over the meter. They are exploring the AMR system and it is possible for the City to do something in conjunction with them. The contract with the University of Virginia was discussed. Ms. Richards noted that costs are increasing, including capital costs, but the University does not pay the same increases as other customers. Mr. Tom Haden, City Comptroller, replied that the University maintains their own water lines and has their own central system. Mr. Cox said there appears to be no incentive for the University to do water conservation and he feels there is merit to opening a discussion with them on this issue. Ms. Mueller suggested that staff prepared a report on the contract with the University, to include the history of the contract, implications of changing the contract, and options for the future. The issue of water conservation was discussed and Mr. Leon Churchill, Assistant City Manager, noted that line replacement may result in water conservation. The gas system was discussed. There are 200 new gas customers in the City due to aggressive marketing in areas where there has been gas line replacement. Staff continues to feel comfortable with the 10% rate of return for new gas customers and with the working capital requirement of 60 days plus $1/2 million. Payment in lieu of taxes is calculated using a formula of indirect cost allocation by function to utility and a percentage of estimated revenues based on last year's use. Payments in lieu of taxes amounted to $2.2 million this year from all funds. No increase in this amount is expected next year. Mr. Toscano said that he would like to ensure that City taxpayers get the benefit of any surplus utility revenues, if generated Mr. Cox said he would like to explore generating funds from utilities for undergrounding of utility lines. ORDINANCE: UTILITY RATES (2nd reading) The ordinance entitled "AN ORDINANCE TO AMEND AND REORDAIN SECTIONS 31-56, 31-57, 31-59, 31-60, 31-61, 31-62, 31-153, AND 31-156, OF THE CODE OF THE CITY OF CHARLOTTESVILLE, 1990, AS AdMENDED, RELATING TO UTILITY RATES," which was offered at the June 1, was approved by the following vote. Ayes: Mr. Cox, Ms. Daugherty, Ms. Richards, Ms. Slaughter, Mr. Toscano. Noes: None.