During the meeting of the City of Salem Utility Committee on Jan. 11, a financial report was given showing usage and revenue for the year. Electric revenue billed was reported as $3,507,642, up 35% from last year. Of that, $3,271,597 has been collected so far. Water revenue billed was $483,473, up 4%. $445,441 of that revenue has been collected. Sewer revenue billed was $476,387, with $418,355 having been collected.
The report moved on to Purchase of Power, or how much the city pays for power. The city just received a January bill for $528,000, which is much higher than last year. According to financial director Stacey Houston and alderman Kyle Williams, the city hit a peak usage, which causes an increase in cost.
City Administrator Sally Burbridge said “We did set a new demand. It was 12,900 before, we set a new demand of 13,900.”
Committee member John Hambacker replied, “We’ve talked about peak demands many, many times, and here we hit it again. We need to address that problem and try to get that information out. If I had known you had a peak demand, I would have turned off a lot of stuff.”
“Here’s the difference: We did not receive an alert that we were approaching a demand,” replied Burbridge.
According to Burbridge and Williams, the power company doesn’t send out warnings for individual communities when they start reaching a new peak demand. The only alert the city receives is to notify that the grid is in danger of being overloaded from high demand.
“My concern is, again, that information getting out to the customers. If every community would do that, we may not have hit that new (peak), I mean that’s a pretty good chunk!” replied Hambacker, referring to the increased rate.
“It is, but again, we didn’t get an alert, so we had nothing to send,” said Burbridge.
“But that’s something then that we need to address with our supplier, they’re dropping the ball,” said Hambacker. “I think the people in our community would definitely try to do something”
Burbridge explained. “In the past when they have sent us an alert about a peak, there’s been an issue of potentially not enough supply, if all the communities didn’t conserve and somehow drop their usage. That wasn’t the case in this one, they didn’t have concerns about outages in this one.
So, we have this new peak demand, that was set last month, but we also have this difference. This is last month’s kilowatt hour rate we were charged, so 2.8 cents. For December, it’s 4.7 cents. So we have the demand, that’s set for the year, and we also have other prices that fluctuate, because they’re purchasing on the market, and even though they have contracts those can fluctuate based on demand, and that’s what that rate is.”
“I think this would involve some discussion and a solution with not only us and how we address our people, but definitely with the supplier. We’ve got to do something to let them know, you’re dropping the ball on us,” replied Hambacker.
Houston says she asked the person who sent the city an invoice about the higher rate.
“The higher rate was mostly due to winter storm Elliot, Plum Point tripped on the 23rd due to cold weather. We had to utilize one of the expensive AECI contracts to cover load on the 22nd and 23rd and the SPP and MISO market purchase prices were significantly higher during the storm,” read the response.
According to Burbridge, this means that one of the power generation plants went offline and was not producing, forcing the company to purchase power through more expensive means.
“So they incurred higher costs and they’ve passed that on to us,” said Williams.
“I’m happy to see that all our revenues are at least slightly up. I’m not happy to see that end-of-year bill, but… It didn’t seem to take us out completely, so we’ll have to see what the next month brings.” Said Williams.
John Hambacker presented the second part of his utility billing series, published in today’s edition of The Salem News. Part one ran in the December 6, 2022 edition of the Salem News. He outlines areas that the utility department may be missing out on revenue. Hambacker says that there are myriad costs involved in utility services beyond simply buying the power. There are equipment costs, man-hours, maintenance, and even the cost of H.R. employees and other support structures necessary to run any organization. According to Hambacker, some customers pay less of the costs than others, particularly those in multi-family dwellings or trailer parks where multiple customers are hooked up to the same meter.
“We’re looking constantly for revenue streams, and I feel we’re missing a revenue stream. And the people I’ve talked to that are involved in the 332 units, I don’t get to talk to all of them by any means, but I do talk to a handful of them, (to see if they think this is fair),” said Hambacker. “I use this water/sewer fee. To me it’s a unique fee applied to get some revenue from people who right now don’t pay any revenue. I don’t know if we’re all owners of property or homes, but we’re paying 12 dollars a month, 6 for water, 6 for sewer. These 332 are paying nothing,” said Hambacker. “It just seems to me that this is a fair fee that could be put into our community, and it would generate maybe 40 some thousand dollars.”
After discussion, Hambacker motioned that the city investigates the legitimacy and feasibility of a water/sewer usage fee. Catherine Dent seconded. A vote was called, passing the motion unanimously.
“We’ll bring that up to the board and have the board of aldermen and city investigate this water/sewer usage,” said Williams.
The floor was then opened for public comment. Prior to the meeting, a Facebook post by Lisa French received, according to French, over 100 comments in under five hours.
According to French, she posted to the Facebook group “Salem MO Neighbor to Neighbor” to ask if Salem residents had received their bills yet. As of publishing deadlines, the post had generated over 230 comments.
French said that many individuals report billing issues, having not received their bills, or noting a stark increase in their bills from last month.
French said she did not receive a bill, so she went to the city to ask for one. She said it’s an inconvenience to her to have to travel to receive her bill when it’s supposed to come in the mail.
She says she wanted to know if others were experiencing issues, so she made the post.
“The mayor said on somebody else’s post, ‘wait until Tuesday’, and I thought OK, I’ll wait. No bill.”
She said she called the city asking them to email her the bill. According to French, the utility office told her they would send it, but were busy, so it would “be a while.” French says she didn’t want to wait, due to people on Facebook noting increases. She says she went to the office, and had a bill printed for her very quickly.
“I’m not happy with the service. I’m not happy with any of it. I can see why people are angry,” said French.
French said that she made sure that people understand that it is not the fault of the front office workers.
“I was overwhelmed, honestly, by what happened. But people were private messaging me. So I said ‘I will get you help. And I have. I have been on that computer today ad nauseum,” said French.
“I’m not blaming any one person; you guys inherited a disaster. A complete disaster,” said French. “This is a mess, I know that. But we should be working together. Work with your citizens! You’re supposed to be representing us. Help us! Help us to help you.”
French thanked those within the city government and committees who did respond to questions and comments on the post but argued that the city needs to be more responsive.
Hambacker addressed French and other members of the public.
“Thank you, guys, for coming and sharing, and I hope you know we’re not paid $100,000 to sit here, we’re paid zero,” said Hambacker. “We do try to represent you as best we can.”
Alderman Williams said anyone with questions or concerns is welcome to email him.
In an email interview after the meeting, Mayor Greg Parker encouraged the public to become more active in the civic process that manages the costs associated with your bill.
“In the past the city has always encouraged its community to attend meetings to educate themselves on what drives these costs. The city has posted energy saving tips online and has also sent reading material inserts in their bills as well.”
The mayor goes on to say that board and city officials have stated numerous times in meetings that if a citizen has a billing issue, they are welcome to bring it to the administration office to have the issue looked at. He said there are many factors that affect usage and consumption on a household’s bill, some of which can be affected by the customer.
“I will speak with our city administrator and staff to put out an updated official statement on the recent events involving the last utility committee meeting updates. I would also encourage citizens with concerns to reach out to city staff at the admin office, and if they feel there is more that can be done, to reach out to myself or the aldermen and alderwomen. As my role as mayor, I do not want anyone to think their concerns fall on deaf ears and (I want) to be as transparent with our citizens as much as possible.”
The agenda and financial reports for this meeting are available at www.salemmo.com under Agendas and Minutes.
Hambacker's articles can be found below.
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My last article on Utility Billing Dec. 6, 2022 identified three distinct water usage custom…
