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HomeMy WebLinkAbout2001-05-10 Budget Committee Minutes Electric/AFN Minutes May 10, 2001, 7:00pm City Council Chambers, 1175 East Main Street ROLL CALL Present: Howard Braham, Cameron Hansen, Cate Hartzell, Marty Levine, Jim Moore, John Morrison, Susan Reid, Russ Silbiger, Regina Stepahin, David Williams Absent: David Fine Staff: Greg Scoles, Dick Wandersheid, Lee Tuneberg, Pete Lovrovich, Richard Holbo, Scott Johnson, Mike Ainsworth, Kirsten Bakke CALL TO ORDER Levine called the meeting to order at 7:06pm. PRESENTATIONS Electric - page 3-81 Pete Lovrovich and Scott Johnson presented for the Electric Department. The Electric Department is comprised of 3 divisions: Electric, Computer Services, and Telecommunications. Lovrovich gave an overview of the Electric Division. On page 4 of the handout he talked about service levels and capital outlay. On page 3-85 of the proposed budget he went over about personal services, materials and services. He talked about the requested Storekeeper/Warehouser position of 1.0 FTE, explaining that they were trying to cover that need with existing personnel. Moore asked if the position was included in the proposed budget. Tuneberg said that part of the position was there because of a vacancy. Lovrovich said it was a .5 FTE addition overall. There was a discussion about increases in the budget this year. The Subcommittee questioned and discussed several line items in the proposed budget. Levine asked about page 3-83 the net increase in personnel is .5 FTE and yet the dollars went up $202,000. Lovrovich responded that part of the reason for the additional dollars was because the Electric personnel that were allocated to the AFN in FY 2002 were allocated to go back to the Electric Utility personnel fund. Lovrovich said on page 3-85 materials and services projecting wholesale rates will go up hence franchise fees will go up bases upon a 10% franchise fee. Moore questioned page 3-83 materials and services total goes up by 22%. Scoles responded that was purchased power at about $3 million increase anticipated for purchased power from BPA. Scoles said that there were two things that drive this budget up: 1) $3 million in additional power. , 2) moving back the crew out of the AFN into the Electric side. Hartzell questioned if there was money in the budget for load management. Scoles added that the reason they were considering reduction in street lighting is because they heard from BPA that the potential rate increase could be as high as 250% on the wholesale side. Additionally if they don't have to produce as much power and consumers reduce consumption by 5-10%, maybe that increase would be below 100% on the wholesale side. The Subcommittee discussed alternative methods of power generation including hydro, solar and windmills. Hartzell asked about the Long-term Assumption that estimated power purchases for 2001-2002 are 75% higher than previous year. Is that in keeping with what we expect to happen in the fall? Lovrovich Electric / AFN 5-10-01 - Budget Subcommittee Page 1 of 3 responded that it was worded incorrectly. Tuneberg clarified on page 4-42 in line item of the proposed we have identified additional BPA power costs at about $3 million and ongoing costs of $4 million and that's the 75% or 3 fourths. Moore asked if we anticipate putting a cap on our surcharge. Tuneberg said yes, in fact, in our presentation we talked about the BPA increase and we calculated, as such, that we would not charge franchise fees or the utility tax. Levine asked for Public input. There was none. Computer Services - page 3-90 Richard Holbo presented for the Computer Services Division. He gave an overview saying that most increases were healthcare and PERS related. One of the ways they have reduced costs is by partnering with SOU with the Help Desk. There was a discussion about risk management and concern about server backup. Hartzell questioned the Baseline buildup from last year. Scoles explained that there was a personnel change that had been misallocated last year. The Subcommittee questioned and discussed several line items in the proposed budget. Levine asked if there was any public input. There was none. Levine motioned for a five-minute break. All agreed. Levine asked if there was any public input regarding AFN. Members of the public talked about the informal meeting before the Subcommittee met this evening. Telecommunications/ AFN - page 3-86 There was an overview and a discussion of how the business plan relates to the budget. Silbiger questioned changes to the business plan from the original. He was concerned about the larger increases in Interfund Loans, increased constructions costs, and not meeting targets for revenue, cable and ISP connects. He also questioned the percent of completion costs. The Subcommittee members advocated for a team to review AFN per the Business Plan. Also, there was a question of highspeed data users and assumptions within the Business Plan for new connects. Silbiger asked about increased estimates on FY 2001 construction and need for supplemental budget. Tuneberg responded that staff was conservative in both estimates. Levine again asked if there was any Public input. A few members of the community requested the floor. Public Charlie Lenuce, CEO of Tribalware and a customer of AFN, said that he had moved to Ashland for AFN. He said that AFN is a technology venture and things are going to change. He said it was important to have business knowledge in the analysis and not just focus on the numbers. He said they were providing the groundwork and infrastructure for something technologically phenomenal and it was incredible for the future of Ashland. Paul Steel, member of the community, supported AFN and asked the Subcommittee to consider AFN similar to Parks and Recreation or road maintenance. Levine said a road is an obligation for the City to provide. There was much input from all members regarding this consideration. Hartzell questioned procedure and asked that the public be given the floor without interruption. Moore motioned to approve the Electrical and Computers budget. Reid seconded. ALL AYES. Tuneberg suggested the Subcommittee recommend the proposed Telecommunications budget to the Full Committee with the stipulation that they establish a safeguard that reviewed and monitored the Business Plan for AFN. Electric / AFN 5-10-01 - Budget Subcommittee Page 2 of 3 Stepahin motioned to recommend approval of the Telecommunications budget with the recommendation that it was subject to the Council establishing a safeguard that reviewed and monitored the Business Plan. Hartzell seconded. Williams called the question. Roll call: Hartzell -Yeah, Morrison -Yeah, Moore - Nay, Reid-Yeah, Levine- Nay, Stepahin - Yeah, Williams - Nay, Silbiger - Nay Vote 4 to 4 ADJOURNMENT Levine motioned to adjourn the meeting. ALL AYES. None opposed. Motion passed. Meeting ended at 10:48 p.m. Electric / AFN 5-10-01 - Budget Subcommittee Page 3 of 3