The newly-organized Utility Committee for the city of Trenton is recommending a reduction in electric revenues this year for TMU.
The three-member committee also voted last night to request a professional study of Trenton’s electric rates. All eight city council members attended meetings last evening at Trenton City Hall that also included the election of chairmen on the four committees.
Larry Crawford was elected chairman of the Finance Committee. Dave Mlika was elected chairman of the Administrative Committee and Cathie Smith will be the chairman of the Economic Development Committee. Of those three, Crawford was elected as chairman for the Utility Committee to oversee Trenton Municipal.
One of Crawford’s first comments pointed to what he called an excessive amount of cash within the electric department. The March 31 analysis shows total cash of $4,922,092. Only a small part of that, $281,000 are “restricted funds,” and the previous city council has decided the electric department should have $2,200,000.
With the feeling that efforts should be taken to reduce available cash without jeopardizing current or future projects, the committee reviewed several options on ways to accomplish the goal. After considerable discussion, the committee agreed to recommend to the full council to keep the lower winter rates in place during the four summer months which, in the past, have been at the higher summer rate for all customers.
In effect, the lower rates in place for the summer means a reduction in electric revenues of about seven and one-half percent for the year according to TMU’s Comptroller Rosetta Marsh. (It’s a 20% difference between winter and summer rates) Higher summer rates would have gone into effect in June, but if the full city council agrees when they meet May 13th, the lower winter rates would continue for June, July, August, and September for this year. Other options to reduce revenue that were mentioned last evening included a one-time, one month, zero charge for kilowatts consumed, a cash rebate or placing a credit on all three thousand accounts.
The desire to maintain current rates, which translates to a seven and a half percent reduction over the course of a year is in addition to the five percent cut the previous city council made last fall. Not changing to the summer rates means a reduction of approximately $550,000 to $600,000 in electric department revenue.
Council member Cathie Smith pushed for the electric rate professional study to be done by an outside third party. It would cover residential, commercial, and industrial rate structure. The information would determine if current rates are where they need to be while taking into consideration major electric department projects listed in a five-year capital plan. One of them that could potentially could cost over $1,000,000 is to buy a new main transformer and rebuild two others at the power substations.
The last electric rate study for Trenton was said to be five to seven years ago. The projected cost to have a new study was mentioned at $15,000 to $18,000.
In the monthly review of financial information, it was noted both the electric fund and water fund have balances above the recommended minimum amount, but the wastewater or sewer fund is still below the minimum set by the council. March 31 figures show the water department has $2,590,529 in total cash (including $229,260 in restricted funds). The minimum reserve previously set by the council was about $1,500,000. Wastewater fund shows cash of $4,317,030 while the minimum amount requested tops $5,500,000.
The next major expense for the wastewater department is financing the sewer headworks project. While no action or recommendation was made, discussion last night appeared to lean toward the city borrowing money to help pay for this project. Utility Director Ron Urton quoted the city’s financial advisor Charlie Zitnik as saying that a $3,000,000 loan could be combined with last years certificates of participation making a total loan of $5,100,000. Last years’ loan financed the effluent disinfection improvements underway at the sewer plant. Urton reported Zitnik believes the current interest rate of four point nine five percent could be lowered a full percentage point when the amount to be borrowed is increased. That would generate possibly $150,000 saved on interest money spent. Plus, Urton feels Trenton’s upgraded bond rating should attract more interest from banks.
The only other committee to conduct business, other than electing a chairman for each, was the administrative committee which had two topics.
Building inspector and code enforcement officer Donnie Vandevender discussed his duties as they relate to the construction of sidewalks. A sidewalk permit costs $35.00. A request was made by a citizen at the last council meeting to either reduce the cost of a permit or waive the fee. The four-member committee last evening voted to keep the cost at $35.00for a sidewalk permit. In an effort to encourage more sidewalk development, the city continues to allocate $3,500 in its budget to reimburse the cost of concrete, but not for labor.
Vandevender presented a recent example of a 20-foot sidewalk project generating a reimbursement fee of $142.00, which he compared against the cost of a $35.00 permit.
The committee also reviewed the city of Trenton ordinance on the use of yellow flashing lights on utility and street department vehicles. Also reviewed was a revision proposed the city attorney. The committee decided to recommend to the full council, to allow the changes as proposed by the attorney.
In addition to eight members of the council, the Mayor, City Administrator, City Clerk, TMU comptroller, and utility department leaders attended the meetings.