BPU Board Approves Dividend Payment
A BPU dividend payment will be heading to the city’s general fund again in 2014, but not in the way it has been debated.
On Tuesday, the BPU board approved by a 6-3 vote to provide a dividend payment of $475,000 toward the city’s budget for next year. However, unlike previously discussed, all the money will be coming from just electric division profits.
The dividend payment was proposed in October in Jamestown Mayor Sam Teresi’s executive 2014 budget, and approved by City Council when they passed next year’s spending plan on Monday, Nov. 25. The proposal was to take $400,000 from electric and $75,000 from water revenues.
Prior to passing the dividend payment resolution, the board met in executive session. After the meeting, John Zabrodsky, BPU board chairman, said the board discussed the dividend payment from the electric division during the closed-door session. An executive session was scheduled for the dividend payment discussion under the label ”Potential litigation item.” Zabrodsky said this was the case because several potential challenges, including decisions from the state Public Service Commission, could come from the BPU’s electric division that could end up in court at some point.
During open session, Fred Larson, BPU board member, said the dividend payment is a ”modest portion of the electric profits,” which are projected to be more than $4 million in 2013.
Carl Pillittieri, BPU board member, said he is concerned about the payment toward the city because of how it affects the utility’s bottom line. He said by giving BPU revenues to the city’s budget to lower a property tax increase, it takes funds away from maintaining the utility, which could lead to rate increases. He said a BPU rate increase would be similar to a property tax hike for city residents.
Zabrodsky said the BPU board has to work to develop a policy on how to use revenues toward the city’s budget before the 2015 spending plan is discussed.
The ”yes” votes on the resolution were from board members Teresi; Dr. Len Faulk; Maria Jones; Larson; Jeffrey Lehman; and Gregory Rabb. The ”no” votes were cast by board members Zabrodsky, Pillittieri and Wayne Rishell.
This is the second consecutive year the BPU board has approved a dividend payment toward the city’s general fund. In the 2013 budget, $300,000 was used from electric and $120,000 was used from water revenues. The vote in November 2012 was the same as this year, 6-3. Also, last year the three no votes came from Zabrodsky, Pillittieri and Rishell. Last year was the first year in more than half-a-century a BPU dividend payment was made toward the city’s budget.