MINUTES FOR THE STUDY SESSION
ASHLAND CITY COUNCIL
Monday, January 6, 2014
Siskiyou Room, 51 Winburn Way
Mayor Stromberg called the meeting to order at 5:29 p.m. in the Siskiyou Room.
Councilor Voisin, Rosenthal, Morris, Marsh, Slattery, and Lemhouse were present.
1. Look Ahead review
Council moved the date for the Goal Setting session from February 8, 2014 to March 8, 2014 and discussed hiring a facilitator for the process.
2. Discussion of Current City of Ashland Utility Subsidy Programs (Request of Councilor Marsh)
Administrative Services Director Lee Tuneberg explained staff anticipated $200,500 for the Ashland Low Income Energy Assistance Program (ALIEAP), budgeted only $155,540 and clarified the Electric Fund would make up the estimated difference of $44,960. Weather varied estimates. Currently, there was not a revenue stream identified so the difference would show as a disparity in the budget and not have a greater impact on the Ending Fund Balance unless the City stopped giving money or capped the amount. Alternately, raising rates to pay for increased costs would affect the Ending Fund Balance. Council could also identify a revenue stream for the subsidies.
City Administrator Dave Kanner explained funding for the subsidy programs came out of the Electric Fund and the Electric User Tax came from the General Fund. Diverting Electric User Tax monies from the General Fund would eliminate $100,000 and he equated that loss to salaries for a police officer or firefighter, or most of the entire social services grants, or the housing program as examples of the impact to the General Fund.
Mr. Tuneberg clarified a privilege tax was similar to a franchise tax. Both involved charging a fee to use a right of way. Mr. Kanner added the City charged Pacific Power a privilege tax of approximately $340 annually and charged other companies franchise fees for right of way access.
Council suggestions wanted an assessment of franchise fees to determine if they could provide a revenue stream for subsidy programs, or a possible cap on the Electric User Tax with intentional increases instead of automatic to fund the subsidy program. Council suggested showing the amount citizens paid in Electric User Tax emphasizing it was a program they might need in the future. One suggestion would dedicate a revenue stream to the subsidy programs. Another did not want funds to come from the Electric User Tax and wanted the Electric Budget to show a dedicated amount of money as a line item.
Staff would bring scenarios to the Budget Committee meeting in the spring.
Mr. Tuneberg commented adding separate line items for dedicated monies for different programs on the electric bill would make the bill more complex. An explanation for the Electric User Tax currently showed on the back of the bill. However, there was a separate line for subsidy programs in the Budget. Council clarified they wanted a line item added to the Electric Fund, not the electric bill and options for a dedicated revenue stream.
3. Discussion of Electric User Tax (Request of Councilor Voisin)
Administrative Services Director Lee Tuneberg confirmed government, municipalities, and schools did not pay Electric User Tax. The City lowered the rates for residents and businesses that paid the Electric User Tax. Those not paying the tax were not eligible to receive lowered rates.
Councilor Voisin wanted to understand how the City used the Electric User Tax, what fund it went into and how it affected that fund. She referenced electric bill comparisons between Pacific Power and the City of Ashland and wanted another company included as well. Director of Electric/IT Mark Holden explained the electric bill comparison between the City of Ashland and Pacific Power were similar showing taxes, franchise fees, and the Electric User Tax. It was difficult to get electric bill information from other companies. Ashland electric users paid 18% less than Pacific Power customers did due to the City’s contract with Bonneville Power Administration (BPA).
Mr. Tuneberg clarified franchise fees were operating expenses covered in the overall rates and did not show on the bill as separate line items.
Councilor Lemhouse called for a point of order regarding the proper use of a Study Session and thought the discussion was out of order. Councilor Voisin explained she wanted an analysis and discussion at a future Budget Committee meeting regarding the long-term policy of City franchise fees, where they were placed, how they were managed, and the process that resulted in a 10% franchise fee for electric while other fees were 7% or below. Mayor Stromberg denied Councilor Lemhouse’s point of order and requested Councilor Voisin state and request Council support for staff direction.
Councilor Voisin requested adding an agenda item to a future Budget Committee meeting that discussed all of the City’s franchise fees and the franchise fee policy. Council agreed with the request.
4. Discussion of ordinance updates: City Council Rules (Chapter 2.04), Boards and Commissions Rules and Procedures (Chapter 2.10), and Miscellaneous Chapters (2.18 and 2.28) (continued from December 2 and December 16 study sessions)
Item moved to the January 7, 2014 Council meeting.
Meeting adjourned at 6:54 p.m.
Assistant to the City Recorder