BPU Holds On Dividend Payment
Contentious discussions by members of the Jamestown Board of Public Utilities will lead to an additional meeting in December.
On Tuesday, the BPU board discussed issues dealing with the budgets for each of the five utility divisions. These talks lead to more in-depth talks on topics like a new incentive recycling program, dividend payments toward the city’s budget and borrowing for capital projects.
By the end of the two-hour-plus meeting, the board still had several unresolved issues which led them to agree to hold an additional meeting on Tuesday, Dec. 3. The board will also meet again later in the month.
During the meeting, the board did pass three utility division budgets. The budget for district heating was passed, which included no rate increase. The last time the rate was increased was in 2008, said David Leathers, BPU general manager. The board also passed the budget for the wastewater division. In October, the proposed budget for wastewater was discussed, with a proposed 6 percent rate increase. However, Mike Anderson, BPU business manager, said, after more budget discussions, the rate increase was eliminated for 2014. This will be the fifth year in a row with no increase.
INCENTIVE RECYCLING PROGRAM
The group also passed the solid waste budget for next year, but there were questions on the new incentive recycling program the board has been talking about since its September meeting. Under the new incentive recycling program, rates would increase to $20 a month for those who do not recycle at least once during a monthly billing period. If a customer does recycle, their bill will drop to $10 a month from $12.10. Accommodations would be made for those who live outside the area during the winter or travelers.
During the meeting, the board voted to pass the solid waste division budget for 2014, prior to passing a motion to purchase the equipment for the new recycling program. When the motion came up to purchase the new equipment for $237,000 for 16,000 recycling bins equipped with radio frequency identification tags, and software and hardware to read the tags, Gregory Rabb, City Council president and BPU board member, asked if the board had even voted to approve the new program. He said he has heard negative feedback from city residents about the program, and wanted more discussion before approving the program. Jamestown Mayor Sam Teresi said he thought there was going to be more discussion by the board on the program Tuesday, as well. Fred Larson, BPU board member, said he still has questions on the fee schedule or possible penalties.
Leathers and John Zabrodsky, BPU board chairman, said they had received no feedback from board members following sent emails to them discussing the program. They thought the program could be approved this month because they received no new questions prior to the meeting. Also, because the program is part of the solid waste budget, the board had already approved the new recycling program when it passed next year’s fiscal plan. The board then agreed to add to the resolution for equipment to also approve the new recycling, which was passed. Even though the recycling program was approved, more discussion is still planned during the additional December meeting.
BPU DIVIDEND PAYMENT TOWARD CITY BUDGET
During the meeting, the water and electric division budgets were also discussed, but no vote for approval was planned. During the water division discussions, Anderson said the 6 percent increase proposed in October has been decreased to 3.5 percent. The budget for the water division did not include the proposed dividend payment toward the city’s 2014 budget. The dividend payment was also not included in the electric budget.
In Teresi’s executive budget, it was proposed that $475,000 be used from BPU electric and water revenues. The budget proposed taking $400,000 from the electric and $75,000 from the water divisions.
Last year, the Jamestown City Council used $420,000 from BPU revenues toward this year’s spending plan. In the 2013 budget, $300,000 was used from electric and $120,000 was used from water revenues. Teresi said last year’s dividend payment was the first in the city in 50 years.
Wayne Rishell, BPU board member, said he will not approve the dividend payment toward the city budget until recommendations given to city officials are considered to possibly lower cost. Teresi said Rishell’s recommendations, plus the recommendations from other sources, have been discussed by city officials and are implemented when able.
The board had planned to talk about the dividend payment during an executive session, but after the extended meeting no closed-door meeting took place.
CAPITAL PROJECT BORROWING
Another topic discussed during the meeting, was why the BPU does not borrow money for any capital projects. Larson said with historically low interest rates, BPU officials should be looking into bonding capital projects instead of paying cash. Teresi agreed with Larson stating large ticket items should be financed with low interest rates. Leathers and Zabrodsky both said borrowing has been examined by BPU officials and the board’s Finance Committee, but doesn’t align with the board’s long-term strategic plan. Larson said he would not approve any of the utility budgets for next year until borrowing is done for some 2014 capital projects. Leathers said BPU officials will study the option once again prior to the December meeting.