Several recommendations were passed on to the Board of Aldermen following the June 14 meeting of the Salem Utility Committee.
In attendance was Chairman Alderman Kyle Williams, Alderwoman Amanda Duncan, committee members Catherine Dent, John Hambacker, Rick Letchworth, Nathan Kinsey, Harold Hamilton, and Ex-Officio Mayor Greg Parker. Parker attended around half of the meeting before stepping out. Also in attendance was City Administrator Sally Burbridge, Public Works Director Mark Nash, and City Treasurer Stacey Houston.
Several recommendations were passed on to the Board of Aldermen following the Wednesday meeting of the Salem Utility Committee.
A motion was made to recommend a reduction of the electric service availability fee to $8, and to sunset the fee after one year. The motion passed unanimously. According to the discussion of the committee members, there is intent to eventually do away with the fee altogether as reserve funds are built up.
As far as electric rates, a city ordinance states that rates will automatically increase or decrease commensurate with the increase or decrease in the Purchase of Power costs from previous months. City administrator Sally Burbridge said that a 7.7% increase in electric rates was set to happen automatically, unless the board of aldermen took action to prevent or alter the rate increase.
The committee looked at the proposed FY 2024 draft budget, plugging numbers in to see how different rate changes would affect the bottom line. Committee members expressed a desire to not raise the rate at all; however, as shown by the draft budget, a 0% increase would have left the budget with a significant deficit.
After plugging in several numbers, committee member John Hambacker motioned to raise the rates by 3.5% rather than the initially proposed 7.7%. Following a split vote of 3-3, committee chairman and alderman Kyle Williams broke the tie with a yea vote. Williams was quick to note that the actions taken by the committee are merely recommendations to the board of aldermen, and no rate increase would occur without first being passed by the board.
The committee discussed the ordinance that automatically increases or lowers the rates as the cost fluctuates. There was discussion about the timeframe of data that is used to calculate the rate increases. According to the discussion, the true numbers from more recent months have not yet been finalized. In an effort to use numbers that more accurately reflect the reality of the situation, a motion was made to recommend that the board of aldermen change the time period from May to April of the current year, or to the most “trued up” 12-month period for the increase and decrease of electric rates. The motion passed unanimously.
The committee discussed in-town rates versus out-of-town rates. There are 65 residential and 18 commercial electric accounts that use city utilities but live outside the city limits. According to the discussion, the water rate is already higher for outside customers to compensate for the fact that those who live outside of city limits don’t pay the same taxes that city residents do.
Since outside customers don’t contribute taxes to the utility system, the committee discussed raising the electric rate for outside customers to match the increased water rates. During discussion, it was unclear as to why the water rate was the only utility that had an increased rate for out-of-town customers. The committee moved to increase rates for electric customers who live outside the city limits by 26%, and to double the service availability fee for those customers. The motion passed unanimously and will be recommended to the board of aldermen.
The committee discussed terminology listed on some of the utility bills. According to Burbridge, AMP (Average Monthly Payment) bills showed a credit line, which she said was confusing to customers, because in this case, credit meant a customer underpaid. After discussion, a motion was put forward to recommend changing the terminology to be clearer, and to change the AMP program from running AMP to a fixed AMP, meaning that every month a new average payment is calculated to determine what that month’s payment is. The motion included language from the staff summary of that agenda item, stating that customers must be in good standing to take advantage of the AMP program. The motion passed unanimously.
Finally, mailing services were discussed. According to Burbridge, many man-hours and tax dollars are spent stuffing and mailing envelopes containing utility bills. Several committee members are noted to have assisted stuffing envelopes in the past in an attempt to alleviate some of the workload of city workers and to get bills out on time. After reviewing multiple options, the committee voted unanimously to recommend the use of Incode (the city’s utility billing service) to offer emailed bills to customers who sign up, and to contract with Ozark Mailing Services to mail the conventional bills. The motion passed unanimously.
Look for full coverage of the meeting in the upcoming June 20 edition of The Salem News.
