A lengthy discussion last night on electric rates evolved into a request to establish a minimum of three months operating reserves and a recommendation to ask for a rate study.
The two-hour utility committee was attended by its three members plus the other five city councilmen; mayor, city administrator/utility director, city clerk, and four department heads of Trenton Municipal Utilities.
In the end, no action was taken on the Mayors’ request to cut electric rates at Trenton by ten percent due to a large number of reserve funds. Travis Elbert made a motion to require by policy, a three-month operating reserve in each of the three departments – electric, water, and sewer.
For the electric department, that would amount to approximately $2,000,000 to be kept as unrestricted funds. Elbert, Jen Hottes, and David Mlika approved the motion which advances to the Monday night meeting of the full council.
Discussion on how much money to have in reserve for capital projects has been delayed until another meeting of the utility committee. While the media reported the committee meeting on electric rates was open to the public, no one from the public attended.
Figures provided by TMU Comptroller Rosetta Marsh show the electric has $3,216,000 in cash and investments. That’s considered unrestricted funds and accounts for 36% of total revenues.
The discussion was sometimes heated between the Mayor and City Council on paying a third party to conduct an electric rate study.
Mrs. Marsh said the cost for such a rate study done by another community was $15,000, then $10,000 for a follow-up rate study in future years.
TMU Comptroller Rosetta Marsh said some persons who’ve paid their bills at city hall have complained about higher than the usual expense. But, no one from the public attended last nights’ committee meeting where electric rates were discussed, including a possible reduction.
Mrs. Marsh said when customer bills are reviewed, it’s often a case where the customer has had a greater than usual amount of electricity consumed for air conditioning, particularly during hot summer weather. She also noted Trenton has two rate structures for residential users of electricity.
There are four months of summer rates which have averaged $212 and there are eight months of winter rates which have averaged $179. TMU is now entering the winter rate period. The committee also received T-M-U cash analysis plus revenue versus expenses unaudited reports.
Mrs. Marsh also provided comparisons involving two other cities. Figures show Trenton’s average electric bill of $190 is higher than one and lower than the other.
Information also was presented showing the three towns cost per kilowatt hour; reserve funds and percentage of revenues; as well as area utilities that use third parties for rate studies. TMU three year history shows the electric department reserve fund has climbed from one point two million, or 17 percent, in 2016 up to the current three point two million dollars which is 36 percent of total revenues.
Other information involved Trenton’s’ purchased power costs which are down compared to last year. Detail also was given on monthly invoices from the Missouri Public Energy Pool of which Trenton is a member.
Elbert made the motion, endorsed by the other two committee members, to recommend to the full city council Monday night, to have a rate study conducted. Mrs. Marsh indicated a financial analysis was done perhaps five or six years ago.
Brad Chumbley suggested using some of the excess money from electric fund reserves to pay for the forthcoming headworks project at the sewer plant. He noted the money could be transferred from one TMU category to another, at a lower interest rate than what the city could obtain if it was to borrow money from a bank to pay for the headworks.
While the idea was discussed, no action was taken, due in part to a pending decision before the city council Monday night on whether to authorize Burns and McDonnell to proceed with the design phase of the headworks project.
The engineering firms’ cost is $240,000 to complete the design in sufficient detail to allow the design-builder to establish a lump sum price for construction. Burns and McDonnell also are to prepare a study on sewer rates to determine what amount of an increase, if any, is still needed. Previously, the sewer rates have gone up 30% in each of the last two years; but a 26% raise was placed on hold by the city council once it was known Nestle’s was moving into the ConAgra facility.
Utility director Ron Urton reviewed for the committee and council members projects that are under design including Normal street sewer rehab; water line work along 9th Street, as well as improvements along 8th Street.