HomeMy WebLinkAbout1998-0602.REG.MINMINUTES FOR THE REGULAR MEETING
ASHLAND CITY COUNCIL
June 2, 1998
PLEDGE OF ALLEGIANCE
Mayor Shaw called the meeting to order at 7:00 p.m., Civic Center Council Chambers.
ROLL CALL
Councilors Laws, Hauck, Wheeldon, and DeBoer were present. Councilors Reid and Hagen were absent.
APPROVAL OF MINUTES
The minutes of the regular meeting of May 19, 1998 were accepted as presented.
SPECIAL PRESENTATIONS & AWARDS
1. Mayor's Proclamation declaring June 8-15, 1998, as "Crosswalk Awareness Week."
2. Mayor's Proclamation declaring June, 1998 as "National Safety Month."
Mayor Shaw read both proclamations in their entirety.
CONSENT AGENDA
1. Minutes of Boards, Commissions and Committees.
2. Confirmation of Mayor's appointment of Richard Wanderscheid as Administrative Services Director.
3. Approval of annual liquor license renewals.
4. Application for liquor license for "Alfresco", 70 Water Street (Applicant Ann Clouse).
5. Application for liquor license for "Wiley's Organic Pasta Company", 1606 Ashland Street (Applicants
Terry and Julie Wiley.)
Item number three was pulled for discussion. Councilor Wheeldon inquired as to whether there was a comprehensive
list of applicants, and whether the OLCC was involved in the renewal process. City Recorder Barbara Christensen
briefly explained the process, and that the item before Council was a blanket approval to renew current licenses. City
Attorney Paul Nolte confirmed that the OLCC has authority in the renewal process. Mayor Shaw noted that the
Council's approval was perfunctory~ and that authority lies with the OLCC. Inclusion on the Council agenda allows
the City to advise the OLCC, but strictly speaking this does not need to be done. Briefly discussed the licensing
process, both for new applicants and renewals. City Administrator Mike Freeman noted that staff could provide a
comprehensive list of renewal applicants if the Council desired such a list. Councilors indicated that this would not
be necessary.
Councilors Hauck/Wheeldon m/s to accept the consent agenda. Voice vote: All AYES. Motion passed.
PUBLIC HEARINGS
1. Consideration of adoption of the 1998-1999 budget.
Public hearing open at 7:08 p.m.
Director of Finance Jill Turner briefly explained the budget process, and stated that this was the final hearing before
the Council. Noted that the City's budget is $69 million, and that nearly $20 million is capital. Also stated that tax
rates would be falling $0.18, meaning there would be about $9000 less in property tax funds available than last year.
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Ron Kramer/120 Wimer St./Jefferson Public Radio/Noted that his comments were based on his understanding of
the process. Explained that he had spoken at previous hearings at the committee level. Feels that approval of this
budget constitutes formal Council approval of the Ashland Fiber Network. Offered the same admonition given in
public hearings March 17th, noting that the amount, accuracy and importance of the available information make this a
critical decision for Ashland. Briefly noted the role of Jefferson Public Radio in providing multiple communication
services to the Ashland community, noting that they also serve as an lnternet Service Provider (ISP). Explained that
they have followed the Ashland Fiber Network with great interest. Emphasized that their interest is not merely
proprietary or competitive, but as Ashland citizens. Stated that authoritative information has been difficult to obtain
from the City, and additional financial information has not been made available to the public. Significant
assumptions behind the plan have not been updated. Noted that JPR has written a white paper on this issue. Stated
that unless the Council has received and studied other information, there is a prospect of significant losses and
adequate financial information has been unavailable. Emphasized the need to insist on accurate, publicly disclosed
information on this project and the need to be fully satisfied with the inforn~ation before moving forward with the
plan. Stated that the process to date gives cause for concern that the community's expectations of the Council are not
being fulfilled, and that the information is clearly inaccurate. Stated that if other information is being considered, it
is not available to the public and that brings any final decision on the project into question.
Russ Silbiger/562 Ray Ln./Stated that the budget being approved is merely a step, and not the end of the process.
Emphasized that the bond issuance process will allow for many opportunities to look at data. Sees no reason not to
move forward. Noted that he had spoken in favor of the Ashland Fiber Network at the original hearing, and has not
heard from anyone who has changed their position in supporting the project. Feels that there is significant public and
business support for the project. Stated that the plan has been well thought out until now, and there will be further
opportunity for comment.
Sharon Stern/15 South Pioneer St./Information Services Manager of the Oregon Shakespeare Festival/Noted
support of the Ashland Fiber Network, both personally and on behalf of the Oregon Shakespeare Festival. Stated that
it is exciting to live in one of the most visionary cities in the state, and possibly in the whole country. Stated that this
plan is the City's on-ramp to the information superhighway. Does not know why the City would give up on this
opportunity. Stated that the situation is similar to the national highway system in its ramifications for improving our
quality of life. Unbelievable opportunities for savings and cooperation with businesses. There are possibilities for
commerce, greater affordability of new technology, and many as yet undiscovered means to pay for the project.
Should not be stuck on financial issues at this point. As a municipal utility, the City already has access and is in an
ideal position. Emphasized that she and the Oregon Shakespeare Festival are behind the project one hundred percent.
David Hyatt/301 W 6th St./Oregon Cable Television Association/Noted that he had presented a draft financial
analysis of the Ashland Fiber Network plan to the Councilors at the budget hearing, and he has a finalized version of
that analysis to present tonight. Stated that his report is a straightforward analysis. Feels that the City's report is
inaccurate, and that original proformas make significant material overstatements. Noted that by his analysis, income
is overstated by $6-7 million; expenses are overstated by S2-3 million; interest expenses over a 5-year period are
overstated by $800,000 to $1,000,000; and bonding requirements are understated by $3-5 million. Feels that the
original report was so materially inaccurate that he hopes his report will be looked at along with that presented by
R.W. Beck, Inc., before the City Council chooses to proceed with this plan.
Mike Stalcup/624 A Street/Chairman of Southern Oregon Telecommunications and Technology Council, and
Vice President of Interactive Media Development with Project A, Inc./Spoke in favor of the Ashland Fiber Network.
Noted that City has invited Project A's president to sit on a steering committee for the project. While acknowledging
that there might well be pitfalls, Stalcup emphasized that Project A will use the same approach in serving on this
steering committee that was used in bringing technological improvements to the Ashland School District. Noted that
the Southern Oregon Telecommunications and Technology Council is made up of more than
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seventy five large stakeholder businesses that are in support of the Ashland Fiber Network. Stated that Don Masiati,
CIO of the State of Oregon, came out in wholehearted support of this project after reading the Ashland Fiber
Network business plan. Noted that Masiati had much experience with similar projects in other areas of the country.
Emphasized that opportunities for economic development are accurately presented and should move forward.
Publicly stated support of the Ashland Fiber Network plan for the record.
Wayne Schumacher/960 Mary Jane/Noted that the Ashland Daily Tidings front page has a story on the federal
government receiving an "F" grade on its "Year 2000" preparedness programs. Stated that the federal government
has had the foresight to pass an initiative requiring that in each agency, any initiative must be certified as "Y2K"
compliant. Urged that before heading into the Ashland Fiber Network, the City should be certain that the entire
project is certified in writing as "Y2K" compliant.
Public hearing closed 7:28 p.m.
Councilor Wheeldon noted that $783,000 had been identified as "New Funds Available" in the budget and asked that
Council meet to look at staff recommendations for appropriation of those funds. It was noted that those funds have
been approved, and that staff will bring back as many projects as possible in a Public Works presentation at a later
date.
Councilor Laws noted that the Fire Department's building money will need to be specifically allocated for the
purchase of land, architectural designs, construction, and etc. City Administrator Freeman noted that he had spoken
with Assistant City Administrator Greg Scoles on this matter earlier, and that it is a high priority along with City Hall
office space needs issues.
Councilor Wheeldon noted her concerns over the City's not owning the electric substations. Asked for information
on any plans for future acquisition. It was noted that Director of Electric Utilities Pete Lovrovich would speak on
this issue, and give a brief explanation of Sunday's power outage, later in the meeting. City Administrator Freeman
suggested that acquisition of the substation could be looked at in Council Goal Setting.
Councilor DeBoer noted concerns that the Ashland Daily Tidings had incorrectly stated that $450,000 had been
allocated for architectural drawings of the Fire Department building. Also noted that under Oregon state law, placing
funds in budget does not guarantee the approval of projects or the expenditure of the budgeted funds.
Councilor Laws noted that Ashland Fiber Network consultants have been working on two reports that are not in final
form, and have not as yet been given to council. Emphasized that Council will go no further on that project without
reviewing these reports.
First reading of "An Ordinance Levying Taxes for the Period of July 1, 1998 To and Including June
30, 1999, Such Taxes in the Sum of $5,359,000.00 Upon All the Real and Personal Property Subject to
Assessment and Levy Within the Corporate Limits of the City of Ashland, Jackson County, Oregon,
and Declaring an Emergency."
Mayor Shaw read the ordinance by title only.
Councilors Hauck/Laws m/s to move the ordinance to a second reading. City Attorney Nolte noted that the
ordinance needed to be read in full. Motion withdrawn.
Mayor Shaw read the ordinance in its entirety.
Councilors Hauck/Laws m/s to move the ordinance to a second reading. Roll call vote: Hauck, Laws, DeBoer,
and Wheeldon, All YES. Motion passed.
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Second reading of "An Ordinance Levying Taxes for the Period of July I, 1998 To and Including June
30, 1999, Such Taxes in the Sum of $5,359,000.00 Upon All the Real and Personal Property Subject to
Assessment and Levy Within the Corporate Limits of the City of Ashland, Jackson County, Oregon,
and Declaring an Emergency."
Councilors Hauck/Wheeldon m/s to adopt Ordinance #2818. Discussion: Discussed the need for two readings
in one night as ordinances take effect after 30 days and there was an error in advertising the hearing. Had to
declare an emergency. Councilor DeBoer questioned the need to include the tax rate per $1000 in the budget,
under the requirements of Ballot Measure 50. Director of Finance Jill Turner noted that this was not needed
as the budget included specific dollar amounts. Roll call vote: Hauck, Laws, DeBoer, and Wheeldon, All YES.
Motion passed.
3. Reading by title only of "A Resolution Adopting 1998-1999 Budget and Making Appropriations."
Councilors Hauck/Wheeldon m/s to adopt Resolution #98-11. Roll call vote: Laws, DeBoer, Hauck, and
Wheeldon, All YES. Motion passed.
PUBLIC FORUM
Public Forum opened at 7:40 p.m.
John Huskey/173 Ashland St./Director of Communications for Southern Oregon University (SOU)/Noted that he
will be serving as a liaison between the SOU, the student body, and the City government. Stated that he would like
to participate in Ashland government, and will be attending council meetings. Councilor Laws suggested looking
into the possibility that staff could provide Huskes with a Council packet prior to Council meetings. Huskes noted
that he would welcome any information, or suggestions, provided.
Public Forum closed at 7:42 p.m.
UNFINISHED BUSINESS
None.
NEW AND MISCELLANEOUS BUSINESS
1. Council Meeting Look Ahead.
City Administrator Mike Freeman noted that this information will be included in Council packets in the future. Noted
that abbreviations used are: "RES" for Resolution, "PRES" for Presentation, and "PH" for Public Hearing. Noted an
error in including "Oak Street Traffic Calming" as #11. Stated that this information would be discussed at the July
22nd study session as indicated under # 19.
Councilor Laws noted that this information is extremely useful for the Council. Thanked Freeman for providing this
information, and noted his hopes that it could be made available to the public. Also stated that synopses included
with ordinances have been very helpful and useful. Thanked staff for their efforts. Freeman stated that he welcomed
any feedback from Council.
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ORDINANCES, RESOLUTIONS AND CONTRACTS
Second reading by title only of "An Ordinance Authorizing the Municipal Court to Require
Mediation in Certain Cases."
Councilors Wheeldon/Laws m/s to adopt Ordinance #2820. Roll call vote: Laws, Hauck, Wheeldon, and
DeBoer, All YES. Motion passed.
Second reading by title only of "An Ordinance Amending Chapter 13.24 of the Ashland Municipal
Code Regarding Standards for Naming and Renaming Streets."
Councilors Laws/DeBoer m/s to adopt Ordinance #2819. Roll call vote: Hauck, Wheeldon, DeBoer, and Laws,
All YES. Motion passed.
First reading by title only of "An Ordinance Amending Section 9.08.060.J of the Ashland Municipal
Code Relating to Trackout Restrictions."
Councilors Wheeldon/Hauck m/s to move the ordinance to a second reading. Discussion: Councilor DeBoer
noted his concerns over enforcement issues around the requirement to pave private driveways. Stated that
while it is not officially required, in a wet environment driveways must be paved to avoid trackout. Councilor
Laws stated that he believes this only applies to construction. Noted that ordinance cannot be enforced 100%,
but that 90% of citizens try to conform. Mere presence of an ordinance provides guidance. While there may
be a few that do not comply, this does not mean the ordinance is negative. Discussed enforcement and the
permit process. Mayor Shaw said there would be no effort to require paving of existing drives, but on new
construction such as with flag lots, paving would be required. Councilor Hauck noted that requirements
would be dependent on what was included on the building permit conditions for each case. Stated that the
ordinance gives the option to impose requirements.
Director of Community Development John McLaughlin noted that paving would not be required unless a new
unit was being added and constructed. Other conditions might be imposed, but these would be appropriate for
the specific instance. Mayor Shaw noted that she believed section 8 was not specific to construction, and could
apply to driveways. Councilor Wheeldon asked McLaughlin to clarify. McLaughlin noted that requirements
relate to building permits, and so would be specific to construction. Stated that there might be instances of
imposing requirements outside of construction, such as on agricultural lands where farm vehicles could be
required to clean wheels or pave drives.
Roll call vote: Wheeldon, Laws, Hauck and DeBoer, All YES. Motion passed.
First reading by title only of "An Ordinance Amending Ashland Municipal Code (AMC) Chapter 9.24
and AMC Section 10.30.010 by Incorporating the Provisions of the Model Woodheating Ordinance
and Repealing Ordinance No. 2555."
Councilors Wheeldon/Hauck m/s to move the ordinance to a second reading. Discussion: Councilor DeBoer
questioned whether ordinance would prohibit outdoor barbecues. City Attorney Nolte confirmed that this
ordinance only related to space heating, and would not preclude cooking outdoors. Roll call vote: DeBoer,
Wheeldon, Hauck, and Laws, All YES. Motion passed
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First reading of "An Ordinance Levying Taxes for the Period of July 1, 1998 To and Including June
30, 1999, Such Taxes in the Sum of $5,359,000.00 Upon All the Real and Personal Property Subject to
Assessment and Levy Within the Corporate Limits of the City of Ashland, Jackson County, Oregon,
and Declaring an Emergency."
(Dealt witIt during public hearing.)
Second reading of "An Ordinance Levying Taxes for the Period of July 1, 1998 To and Including June
30, 1999, Such Taxes in the Sum of $5,359,000.00 Upon All the Real and Personal Property Subject to
Assessment and Levy Within the Corporate Limits of the City of Ashland, Jackson County, Oregon,
and Declaring an Emergency."
(Dealt with during public hearing.)
7. Reading by title only of "A Resolution Adopting 1998-1999 Budget and Making Appropriations."
(Dealt with during public hearing.)
Reading by title only of "A Resolution Certifying City Provides Sufficient Municipal Services to
Qualify for State Subventions."
Councilors Hauck/Wheeldon m/s to adopt Resolution #98-09. Discussion: Questioned how state monies are
presented in the budget. Director of Finance Turner noted that cigarette and liquor tax monies are shown as
General Fund Resources, and highway support is shown under the Street Fund. Noted that these are
represented in the budget as "intergovernmental resources". Roll call vote: Wheeldon, DeBoer, Laws and
Hauck, All YES. Motion passed.
9. Reading by title only of "A Resolution Declaring the City's Election to Receive State Revenues."
Councilors Hauck/Wheeldon m/s to adopt Resolution #98-10. Roll call vote: Laws, Hauck, Wheeldon, and
DeBoer, All YES. Motion passed.
10.
Reading by title only of "A Resolution Revising Rates for Electric Service Pursuant to Ashland
Municipal Code Section 14.16.030 and Repealing Resolution #94-30."
Director of Electric Utilities Pete Lovrovich noted the report from R.W. Beck, Inc., from September of 1997,
detailing their cost of service and rate studies. Stated that the guidelines behind the studies were for stability of rates
over time, with a competitive environment in mind. Noted the need for equity both across and within customer
classes, simplicity, and the concern that impact on the General Fund be minimized. Explained that the initial reason
for study was a decrease in the City's wholesale power bill from Bonneville Power in early 1997.
Director of Finance Jill Turner noted rate tariff sheets are slightly different as they now indicate utility department
numbers. Stated that the overall rate reduction is 7.2%. Noted effects on General and Electric funds. Stated that
based on a last minute request, the purple sheet given to council had been prepared to revise Seasonal Residential
rates which were developed 15 years ago. Noted that originally, seasonal bed and breakfasts (B&Bs) were classed
merely as commercial. When a special rate was created, it was halfway between commercial and residential. The
recent Cost-of-Service Study indicated that customer costs were more intense than residential, but not as high as
those for commercial. The change presented sets charges equal to residential rates, instead of halfway between
residential and commercial. Explained that the purple sheet is a single page substitution. Noted that there were B&B
owners in the audience who wished to speak concerning the proposed plan to adjust electric rates.
City Council Meeting 06-02-98
City Administrator Mike Freeman noted that staff concurs with charging a residential rate, as occupancy does not
effect base cost.
Turner explained that the recommendations pull rates down to the cost-of-service levels. Freeman noted that there is
no degradation in funds for the Electric Fund, and the General Fund is affected by about $20,000. Stated that this is
taken into consideration in the budget. Also noted that deregulation will make pricing system of rates much more
competitive, and there will likely need to be another adjustment within two years. Also requested doing away with
differential for institutional/governmental users.
Opened to public comment at 8:05 p.m.
R. B. Maddox/586 B St./WolfManor Bed & Breakfast Inn/Six years prior to his buying the building, it served as
Dunn House, a shelter for battered women. Noted that the City requires B&B owners to live on site. Stated that by
basic laws of economics, when there is more usage, unit costs should be less. Questioned how cost to the utility
could be any higher per kilowatt-hour if he has guests in his home.
David Fadden/326 N. Main St./Fadden's Inn/Noted that he was present in 1994 for discussions of this same issue
when no decision was reached. Setting costs by class is arbitrary, and the rate structure is not designed by actual
demands placed on the system. Feels that B&Bs are billed more than Dunn House was when it was in the same
building. Emphasized that he felt he was billed more based on an arbitrary class. Stated that other home occupations
receive residential rates. Charges are arbitrary and do not hold up to scrutiny. Stated that many houses would use
more than B&Bs. Until rate structure is equalized, it will be arbitrary.
Councilor Hauck noted that Dunn House, as a non-profit organization, had received commercial rates.
Public comments closed at 8:15 p.m.
Lovrovich addressed load differences between B&Bs and residential units. Stated that usage is definitely different,
and that costs are not determined by kilowatt-hour usage, but by kilowatt demand during a one-hour period. The rate
classes are not designed strictly on usage, but by the peak demand at any one time. Explained that the City's
wholesale power bill from the Bonneville Power Administration is charged on this basis. A B&B with customers has
more usage than a residence on average, but accepted industry standards also indicate that B&Bs place a greater
demand on the system. Costs for setting up service are being reduced to residential levels, but rates as a class are
different due to the higher wholesale power costs for this greater demand. Emphasized that the City is penalized for
high use when demand for a one hour period is high, and that power suppliers look at peak demand on a daily basis.
Reiterated that while everyone has a different rate of demand, B&Bs are generally higher than residential customers.
Director of Finance Jill Turner emphasized the need to look at the class as a whole. Stated that while Mr. Fadden
owns a small B&B, there are some larger B&Bs with 7-9 units that place significantly more demand on the system.
While Fadden's Inn may be closer to a residence, other B&Bs are much closer to commercial users. Stated that
competing electric utilities do not even have a special B&B rate. Stated that the current rate classes are fair to the
group as a whole.
Councilor Wheeldon questioned whether B&Bs elsewhere pay commercial rates. Turner stated that she was not
aware of a special class for B&Bs in the neighboring utility. Stated that Pacific Power probably charges some as
residential and some as commercial, as they may not be as aware of how properties are used because they are not
involved in the planning process.
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Councilor Hauck noted that the new system proposed as part of the Ashland Fiber Network will allow the utility to
have more detailed information on usage and demand, and this could potentially allow further modification rates.
Turner noted that sewer and water service for B&Bs are charged at commercial rates.
David Fadden questioned how, with no demand meters, the City can know he's more costly than a residential
customer. Stated that in his opinion, it costs less to serve him than it does for many of the residential customers in
the City.
Councilor Laws stated that the City cannot measure individual demand, so the rate structure must have classes based
on certain assumptions. One such assumption is that B&Bs as a class place a greater demand on the system in some
hours than do residential customers. Emphasized that the City cannot create a class for each customer.
Councilors Laws/DeBoer m/s to adopt the resolution as presented.
Discussion: Councilor DeBoer suggested that the motion be amended to include the changes recommended by
staff. Councilor Laws noted that he is concerned with the elimination of the in-lieu tax adjustment. Explained
that because many of the large utility customers in Ashland do not pay property taxes, the in-lieu tax
adjustment has provided a way for them to pay for city services as the tax payers do. Noted that in the
proposed rate adjustment, these customers did not receive a rate reduction, but were left as is and the lieu tax
adjustment portion of their bills was eliminated. Went on to explain that this was an attempt to bring rates in
line with upcoming competition, but that in all likelihood the state would contract with one provider state-wide
and Ashland's utility would be unable to compete. Stated that this removed the justification for eliminating
the in-lieu tax adjustment. Suggested that the in-lieu tax adjustment be kept until the City has been told it
cannot charge this fee. Stated that the City should not eliminate this source of revenue that substitutes for
lands that do not have to pay property taxes. Noted that the City will need to borrow money through the
bonding process to finance the Ashland Fiber Network, and could use in-lieu tax funds to assist with funding
and reduce the amount borrowed. Stated that this would be more sensible than borrowing more money at a
high rate, when there could be money available within the system. Noted that he has spoken with Turner and
that she has suggestions if the Council decides to retain the in-lieu of tax adjustment.
Councilor Laws recommended that Council adopt the other rates, and hold off on those for
governmental/institutional customers until staff recommendations can be prepared. Motion withdrawn.
Mayor Shaw noted that she had looked into the in-lieu tax issue and discussed it with City Administrator Mike
Freeman. Emphasized that she is concerned with governmental customers being charged more than it costs to
provide service. Also cited concerns about the possibility of appearing to cross-subsidize the Ashland Fiber
Network. Stated that Southern Oregon University, one of the major customers in this class, has had significant
cutbacks in the recent past, and has had to lay-off Ashland citizens. Stated that she felt that the City should help the
University to minimize its expenses in any way it can, when this can be done without providing a subsidy.
Shaw also noted that the Ashland School District is asked to subsidize other portions of the budget, when in this case,
the in-lieu tax money could be used by the schools in other areas. Emphasized that eliminating the in-lieu tax
adjustment will not eat away at the General Fund. Stated that the utility's growth has been too much, and that
savings should be passed on to these two institutions.
City Council Meeting 06-02-98
Councilor Hauck noted that he had previously made the same argument that Councilor Laws was making tonight.
Suggested looking at other options to reduce rates while keeping the in-lieu tax adjustment. Stated that it creates a
problem because there are so many lands in Ashland that cannot be taxed. Freeman noted that the amount brought in
by the in-lieu tax adjustment is approximately $200,000, which would only bring $20,000 to the General Fund from
the franchise fee.
Councilors DeBoer/Wheeldon m/s to adopt the resolution revising electric rates, with the staff-recommended
changes to the "Seasonal Residential Service" schedule.
Discussion: Councilor Laws noted that in-lieu tax funds could be loaned to the Ashland Fiber Network,
eliminating the need for additional bonding. Mayor Shaw stated that this would amount to subsidization of
the Fiber Network. Councilor Laws also noted that funds could be shifted around, and the excess available
from government institutions could be taken off of the top to pay the franchise fee. Funds could be shifted to
give savings to the people of Ashland.
Councilor Laws stated that he agrees with serving friends and neighbors, and he has been a part of Southern
Oregon University for many years. Expressed his concerns that the state has chosen not to support higher
education, and noted that Southern Oregon University is redefining its mission and some jobs may be lost.
Went on to state that it must be remembered that the University causes major costs for police, fire, and etc.,
and neither the University nor the State pay anything towards these costs. Acknowledged that there is a
commercial income from the in-flow of people to the community, but stated that there is not a commensurate
income to the City to cover costs incurred. Emphasized that the State does not provide any assistance for these
costs, and out of fairness the City should be able to recover some money.
Stated that the University will survive, that he does have more concerns about the School District, but that the
City is not in the business of subsidizing other institutions. While he would like to be able to help, it cannot be
done on this scale. Emphasized that the City must meet costs and expenses.
Mayor Shaw stated that the goal of the study was to keep rates to the cost of service. Emphasized that the
City's utility is in business to provide service to the community which cooperatively owns the utility. Stated
that the University is one of those owners, and the Cost-of-Service Study was designed to determine the costs
to serving customers and recommend rate adjustments accordingly. Shaw stated that what Councilor Laws is
suggesting would make money over and above the cost of providing service. Cited her concern that the
Council would consider cross-subsidization of the Ashland Fiber Network.
Councilor Hauck responded that the decreases recommended in the study were through several possible
options, and that the in-lieu tax adjustment could be added on to the reduced rates to provide revenue to the
general fund in the same manner as a direct tax. Explained that the act of removing the in-lieu tax adjustment
was in itself a form of subsidy, as all other Ashland residents are expected to pay their share.
Councilor Laws noted that what he had been suggesting might result in costs and revenues not being in exact
relation within the Electric Utility, but that it would put them in balance for total City costs. As it stands now,
the City subsidizes other areas of the community which are not recovered, which is why the in-lieu tax
adjustment was created.
Councilor Wheeldon questioned whether other organizations, such as non-profits, pay in-lieu tax. Director of
Finance Turner confirmed that they do. Councilor Wheeldon question why there was discrimination between
governmental entities and non-profit organizations, in that the City was seeking to eliminate the in-lieu tax
adjustment for the governmental entities.
City Council Meeting 06-02-98
City Administrator Freeman noted that the original recommendation of the study was to charge in-lieu tax to
governmental entities. Emphasized that he had researched the City's ability to tax the State thoroughly, as
this is most efficient way to get money to the General Fund. Noted that in speaking with City Attorney Nolte,
the legality of taxing the State was questionable. With this in mind, they looked at the other customers in this
class, and because the City could not tax either the State or the federal government, the remaining customers
were the City and the Parks Department. Under these circumstances, rather than collecting the in-lieu tax on
three of five customers in the class, it seemed more appropriate to eliminate the differential. Freeman went on
to note that while the in-lieu tax adjustment had originally been enacted to benefit the General Fund, it had
never been carried through from the Electric Fund to the General Fund, and the only benefit to the General
Fund was through the franchise fee which amounted to roughly $20,000 per year on these monies.
Councilor DeBoer clarified his motion as being to adopt the resolution revising electric rates (Reso #98-08),
with the staff-recommended changes to the "Seasonal Residential Service" schedule.
Councilors Laws/Hauck m/s to amend the motion to adopt the resolution revising rates but set aside the three
governmental rate schedules to allow staff to bring back recommendations for retaining the in-lieu tax
adjustment. Discussion: Councilor DeBoer expressed his hopes that the motion to amend would fail, that rate
schedules would be kept simple and savings passed on to the citizens of Ashland. Councilor Hauck stated that
the in-lieu tax adjustment could be changed so that it was applied to the General Fund in the same manner as
a direct tax. Roll call vote: Laws and Hauck, YES. Wheeldon, DeBoer, and Shaw, NO. Motion to amend
failed 3-2.
Roll call vote on the motion to adopt Resolution #98-08 with changes to the "Seasonal Residential Service"
schedule: Laws, Wheeldon, and DeBoer, YES. Hauck, NO. Motion passed 3-1.
Councilor DeBoer noted that he was proud of the City's efforts to reduce electric rates to cost-of-service levels and
pass $560,000 in savings on to customers of the Utility, and thanked Director of Electric Utilities Lovrovich for all of
his work on this matter.
OTHER BUSINESS FROM COUNCIL MEMBERS
Director of Electric Utilities Pete Lovrovich explained that at 2:20 p.m. on Sunday, May 3 l~t, a fuse opened at the
Nevada Street substation, causing a power outage. Noted that the substation is owned jointly by Pacific Power and
the City of Ashland. Explained that Ashland owns the distribution side of the station, and that he has recommended
purchasing the other portion to improve efficiency of maintenance and operations. Noted that there would be a
savings on power delivery charges if the city was sole owner of the substation, because at present the City must pay
maintenance as part of the delivery charge. These savings alone would be approximately $100,000.
Noted that on Sunday, City crews were on the scene within 15-18 minutes, but that the crews had to wait for Pacific
Power personnel. Once they arrived, they had to evaluate the situation, call out more personnel, and wait. They
found one fuse had opened, which was "single phasing" and decreasing voltage to the system. Noted his concern and
frustration over this type of situation. Stated that the Pacific Power crews were able to re-fuse and get the system
working again, but that this took over three hours. Noted that both he and the Mayor had received many calls on this
issue. Stated that he has asked to meet with Pacific Power's Medford supervisor to negotiate the possibility of
allowing City crews to work on the substation in these instances.
Councilor Laws noted that Ashland has one of the most reliable utility systems in the nation due to the quality of the
system, crews, equipment, maintenance, and the overall organization. Noted however that the City is still dependent
on power providers.
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Lovrovich noted that with the purchase of the Green Springs hydro facility and the Nevada Street substation, the
utility could remove many potential problems.
Councilor Wheeldon noted that she would like the public to be able to get accurate information during a situation like
this, and questioned whether the utility had a way to get information out. Lovrovich noted he had held a department
meeting after the outage, and had spoken with concerned citizens. In the future, if there is an outage, when City
crews go out to deal with the situation, a supervisor will be available at the utility office and calls will be routed there
by the dispatcher to handle citizen information requests.
Councilor Wheeldon noted there would be a public forum dealing with the Ashland Fiber Network in the Rogue
River Room of SOU's Stephenson Union on Monday, June 8th from 7-9 p.m. Stated that this forum would be taped
and televised on RVTV on Tuesday, June 9th.
ADJOURNMENT
The meeting was adjourned at 8:55 p.m.
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