During a meeting of the City of Salem's utility committee March 8, the committee was presented with a financial report by city treasurer Stacey Houston.
From July through Feb. 28, Houston reported that electric consumption is up 389,000 kilowatt hours compared to the same time last year. Electric sales revenue was reported at $4.9 million, compared to $3.7 million during the same time period last year.
“That's up 34% over last year, which it should be, because the rate increase that we did in October did not take effect until July of last year,” said Houston.
A total of $200,820 of that $4.9 million figure is from the $10 availability fee, according to Houston. Electric revenue collected was $4.5 million through Feb. 28.
Water consumption was reported at 97,781,344 gallons, compared to 93,918,283 gallons from July-February of last year. Water sales revenue billed was reported at $638,409, compared to $600,380 last year. Houston reported that revenue was up 6% from last year, and that $107,022 of that revenue was due to the $6 base rate. water revenue collected was reported at $595,348.
Sewer revenue billed was reported at $670,183, up from $561,972 during the same time period last year. $102,576 of that total came from the base rate. Sewer revenue collected was reported at $595,369.
Electric revenues were reported at $5,167,401. All expenses year to date were reported at $3,956,825. As of the meeting, Houston reported a surplus of $616,691.
“Utilities for the electric fund are running high, as we’ve been talking about this year. We’re at 75%, and that’s from purchase of power, but hopefully with the sales revenue being 74% of our budget, they will kind of offset each other so there won’t be too much of a difference there,” said Houston.
While presenting a slide containing a summary of electric funds, Houston reported the city is paying $380,000 more for power than July through March of last year.
“These are also heavily influenced by our natural gas prices, so as our natural gas prices continue to rise, our costs will continue to rise. Last year (the city) paid 2.4 cents per kWh. This year, 3.2 cents per kWh, which doesn't seem like a lot, but it's actually a 31% increase, which comes out to a dollar amount of $326,000,” said Houston.
“If you take out the transfer fees, we take out all that, it’s a 30% [sic] increase in the power we’re buying,” said Committee Chairman and Alderman Kyle Williams.
Houston then presented the water fund summary. She reported that year-to-date, water revenue was at $678,843. Expenses were reported at $566,563, leaving a $112,280 surplus.
“The utility line is running high. We had a water leak, so the water and sewer will be much higher than normal for the next few months. I believe they said they just got that fixed,” said Houston.
Sewer revenues were reported at $699,304 year-to-date, with $638,785 in expenses, leaving a $60,509 surplus.
Public Works Director Mark Nash was then asked by Williams to update the board on any infrastructure developments such as main breaks.
“We’ve only had one main break, and it’s taken care of,” said Nash. “On the street side, they're supposed to open up the asphalt plans at the end of the month.”
Nash said that currently, the only asphalt available for purchase is a year old, and that he feels that it’s not a good idea to spend that much money on an inferior product.
“Right now, potholes, we're just having to put chat in them, because you can't get any asphalt,” said Nash. “We're just waiting for those plants to open.”
Public comment
After the main business of the meeting, the floor was opened for public comment. Williams said he had been doing research on some of the questions that were unable to be answered at the last town hall meeting regarding the sewer bond and 1% tax increase ballot questions.
“One of the questions about utilities that did come up was about the 1% sales tax applying to utility rates. According to Missouri State statute, in general, the general sales tax does not apply to utility rates. However, there is a subsection in the Missouri statutes that says we can add that, and have the city charge that tax on utilities. We currently do not, according to our codes and statutes city-wide. So I can say right now, from what I’ve seen and what I’ve researched, the 1% sales tax does not apply to utilities,” said Williams.
Also discussed during public comments:
• Williams was asked by a member of the public what would have to change for that tax to apply to utilities. Mayor Greg Parker replied that it would take an ordinance, which he said was a lengthy process.
• The board was asked if the ballots had been printed yet. Sample ballots are available at the Dent County Courthouse upon request.
• Questions were raised about making sure grant funds are spent on the appropriate expenditure. City Administrator Sally Burbridge replied that for most grants, the city does not receive a lump-sum, rather, the city must prove they spent the money on the appropriate project and request monthly reimbursement from the entity that issued the grant. All funds received by the proposed sewer bond will be used directly to solve the problems with the sewer plant, as determined by Missouri Department of Natural Resources, according to Burbridge.
• One member of the public raised concerns that the ballot question for the sewer bond was phrased in a way that sounded counter-intuitive to the goals of the project. Burbridge replied that a bond attorney, after being briefed on the scope of the project, had written the exact wording of the ballot question. “That’s the legal, recommended language,” said Burbridge.
• A question was asked about the city’s freshwater infrastructure, and efforts to maintain it. Burbridge replied that at the same time the city was awarded a $5 million DNR grant, the city was also awarded two other grants for drinking water, and that those funds would be going toward improving well infrastructure in the city as well as identification and remediation of lead service lines.
• A question was asked about matching funds for the downtown improvement project. Burbridge replied that the grant is an 80/20 split, meaning the city must cover 20% of the cost. She said that part of the funding comes from capital improvement, and part of it comes from the electrical fund. Houston said that some of the funding had come from the electrical fund because new streetlights are part of the plan for the downtown. Capital improvements will pay for the sidewalk portion.
• The board and members of the public discussed the solar rate. Currently, the city pays avoided fuel costs to homeowners who have solar, if they exceed a certain threshold of production. Two members of the public asked the committee to consider raising the rate to be more competitive with actual electric rates. Williams said solar metering would be on the next meeting’s agenda for further discussion.
