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HomeMy WebLinkAboutMinutes - Finance Committee - 09/20/2010 -Finance AdministrationC~t f 215 N.Mason StreetP0Box580FortcoLLinsFortColOns,CO 80522 970221 5782 4ax Council Audit ft Finance Committee Minutes 9/20/10 Council Attendees:Mayor Doug Hutchinson,Mayor Pro Tern Kelly Ohlson,Ben Manvel City Staff Attendees:Darin Atteberry,John Voss,Mike Freeman,Mindy Pfleiger,Tom Vosburg,Steve Mason,ELlen Switzer,Steve Catanach,Wendy W1L[iamsm Heather Shepherd Others:John Knezovich,Citizen Approval of the Minutes from the July 19,2010 Meeting Ben Manvel moved to approve the minutes and Doug Hutchinson seconded the motion. Minutes were approved unanimously. Ben Manvel brought up a procedural correction to the last meeting,regarding the contract renewal of McGLadrey a Pullen.An actual motion is needed to renew the contract,so Ben Manvel made the motion to renew their contract for another year and Doug Hutchinson seconded the motion.Unanimously,McGladrey &Pullen’s contract is formally renewed. 2009 Audit Report—Staff Response John Voss reviewed the staff response rnerno to the Audit findings.Most of the audit findings were minor corrections which the City is responding to.One main comment from regarding MIS was that a formal policy is needed as a guide for how the department functions.Tom said that and MIS agrees,and is working on completing it. Utility Rate Increases Update Ellen Switzer advised committee members of the current rate increase status •Proposed electric rate increases 2011 +6.5% 2012 +6.2% Recommended increases vary by rate class per cost of service study recommendations Vary from 0%tolO% •Components of the 2011 retail rate increase: PRPA rate increase (6.1%whoLesale)4.7%retail inc 2 Phase of energy policy implementation 1.8%retail inc If approved,effective for meter readings on or after January 1,2011 0 Cltyof ~rtc~Lins 3 Electric Rate Options 1.Implement a 6.5 percent rate across the board for all customer classes 2.Implement the full cost of service increases and decreased 3.Implement the cost of service with no class increasing more than 10 percent and no class decreasing (modified COS) What is Cost of Service? A COS fills in the blanks in our electric rate tariffs *Fixed charge 4/per account *Demand (purchase power)charge 4/kWh or kW *Distribution Facilities charge x$/kWh or kW .t.Energy (Purchase Power)Charge S/kWh *PILOTS 6%of above The following costs come mostly from the budget: Purchased Power Operations &Maintenance Administrative &General /Billing &Collections Customer Assistance!Energy Services Average 10 Year Capital Non-Operating Income (credit) Change to reserves (difference between COS and revenue target +6.5%) Cost of service recommendations: •Rate classes more closely aligned with costs •Rate class cost components accurately identified •Foundation is laid for analyzing impacts of various future proposed rate structures Ellen Switzer asked whether this committee supports the cost of service recommendations and the proposed 10 percent cap on 2011 electric rate increases? Doug Hutchinson stated that the hybrid approach recommended by the Utility Department makes sense,and that he supports it.Ben Manvel agreed. 2011 Summary —Monthly Electric Rate Increases +65%(Vary by rate class per cost of service in 2011 (0%-10%) Monthly Water Rates +3% Monthly Wastewater Rates +9% Monthly Stormwater Rates --no change Electric Development Fees Reduction of 1%to 3% —Water,WW,SW Plant Investment Fees --no change Darin suggested a one page summary to all of council explaining the highlights. City of~F~rtCcThn~Lins Other Business John Knezovich observed that in the 2010 wastewater budget the City had Lost a big customer and now it seems another big customer will be Lost in 2011?Brian Janonis said that the Large customer who will be leaving wasn’t due to Utility rate increases.They had already been planning to switch from the City’s Utility system,but that didn’t end up happening for a year.