City Hall Fails to Answer Questions About Proposed Charges and Rates

The city administration failed to answer questions about the proposed public utility charges and rates.

No response was received from City Council members except Mr. Agelasto.

To: City Council : Thursday, May 2, 2013 7:43 AM
Subject: Council – Steidel – Utility Study – Questions

Dear Mr. Baliles and Members of City Council,

Please ask the city administration to provide answers to the questions submitted to Mr. Steidel on March 24th.

Thank you,

C. Wayne Taylor

—– Forwarded Message —–
From: C WAYNE TAYLOR
To: Charles Samuels <Charles.Samuels@richmondgov.com>; Chris Hilbert <Chris.Hilbert@richmondgov.com>; Cynthia Newbille <Cynthia.Newbille@Richmondgov.com>; Ellen Robertson <Ellen.Robertson@richmondgov.com>; Jonathan Baliles <jonathan.baliles@richmondgov.com>; Kathy Graziano <Kathy.Graziano@richmondgov.com>; Michell Mosby <michelle.mosby@richmondgov.com>; Parker Agelasto <parker.agelasto@richmondgov.com>; Reva Trammell <Reva.Trammell@richmondgov.com>
Sent: Thursday, April 11, 2013 12:41 AM
Subject: Council – Steidel – Utility Study – Questions

Dear Mr. Baliles and Members of City Council,

Did you receive answers to the questions I submitted to Mr. Steidel? I didn’t.

In my opinion it is wrong for council to adopt the administration’s recommended customer charges and rates without giving the customers all the facts. The water and wastewater utilities are government monopolies and have a moral duty to be transparent.

Thank you,

C. Wayne Taylor

Copy: Better Government Richmond, Interested Parties, Press

—
From: C WAYNE TAYLOR
To: Robert Steidel <Robert.Steidel@richmondgov.com>
Sent: Sunday, March 24, 2013 5:28 PM
Subject: Steidel – Utility Study – Questions

Dear Mr. Steidel,

According to the study done for Mayor Jones the city of Richmond water utility needs revenue of $50 million next year. The study recommends collecting $2.4 million through monthly account maintenance charges.  Although it appears that the remainder could be collected by charging $3.89 for each Ccf (748 gallons) of water, the study recommends charging $3.21 per Ccf and continuing the practice of adding a monthly “meter charge” to each account. The meter charge would be for things called “extra capacity” cost or “readiness to serve” cost. The study only discusses the values of 30% and 20% for calculating the charge. The study does not discuss a 10% or 0% value. Nor does the study explain how the customers cause the utility to reserve “extra capacity” when the utility can produce 132 million gallons per day and the peak demand is only 90 million gallons per day.The city administration emphasizes the importance of meter charges to bond rating agencies.  However, the water and wastewater bond rating criteria of three major bond rating agencies do not appear to support that emphasis.  In “U.S. Water and Sewer Revenue Bond Rating Criteria” Fitch Ratings lists ten criteria. The meter charge is just one component of one criteria. (A 10% base charge is “mid-range” and 30% or greater is considered “stronger.”)Water utility customers deserve clears answer to some important questions: 1. Does the AWWA M1 manual recommend public involvement in rate structure studies?

2a. Does the utility have excess capacity?
2b. Does the total cost of service include excess capacity?

3a. Why are water customers charged to fund a poverty relief program?
3b. Why does the utility pay federal income taxes to the city?

4. Did city council approve the pricing objectives?

5. Why is each water rate option paired with only one wastewater option? 

6a. Is a meter charge necessary?
6b. Is a meter charge beneficial?
6c. Is fairness improved when the same charge factor is applied to all meters?
6d. How much does a meter charge contribute to a bond rating score?

Thank you,

C. Wayne Taylor

Attachment: COS_20130324.pdf – Study Analysis and Summary

Copy: Council, Better Government Richmond, Press