UTILITY COMMITTEE
The Utility Committee Meeting was held on March 27, 2006 at 5:44 p.m. with Chairman Carey presiding. Members present were Mr. Ruane, and Mr. Cregar. Mr. Snaman and Mr. Sadusky were absent. Members of Council present were Mr. Hogan (arrived at 5:52 p.m.), and Mr. Salters (arrived at 6:05 p.m.). Mayor Speed was also present.
AGENDA ADDITIONS/DELETIONS
Mr. Cregar moved for approval of the agenda, seconded by Mr. Ruane and unanimously carried.
Annexation Request - Property Located at 1040 South State Street, Owned by 1040 Properties, LLC
Members were provided the Petition to Annex and Zone Property for property located at 1040 South State Street, consisting of .6303+/- acres, owned by 1040 Properties, LLC (Lands of Robert Fox).
Staff assured members that the City is capable of providing utilities to the parcel, explaining that the cost-revenue analysis showed a positive cash flow to the City in the amount of approximately $5,650 over ten (10) years. Staff recommended annexation of the property.
Mr. Cregar moved to recommend adoption of a resolution setting the annexation referendum for property located at 1040 South State Street, consisting of .6303+/- Acres, owned by 1040 Properties, LLC (Attachment #1). The motion was seconded by Mr. Ruane and unanimously carried.
Request for Alley Abandonment - Alley Located Between Forrest Avenue and Lincoln Street, East of Bertrand Drive - Union Missionary Baptist Church, Inc.
Members reviewed a request received from Union Missionary Baptist Church, Inc. for abandonment of a 15-foot alley located between Forrest Street and Lincoln Street, east of Bertrand drive and west of Gibbs Drive. The Planning staff reviewed the request and recommended abandonment with conditions. It was noted that there are multiple property owners adjacent to this alley and that it is unimproved. There is an existing drainage easement for a portion of the alley’s length. An overhead electric utility line also transverses the length of the alley. The Electric Department does maintain an existing pole line and will require an easement for the entire length and width of the alley.
Mrs. Townshend advised members that during their meeting of March 20, 2006, the Planning Commission considered the request and heard public testimony from several adjacent property owners who had relayed opposition to the alley abandonment. It was noted that there was no representation of the Union Missionary Baptist Church to address the opposition. The Planning Commission recommended denial of the alley abandonment request.
Responding to Mr. Cregar, Mr. DePrima confirmed that, when considering such abandonments, it has been the City’s practice to require consensus from adjacent property owners since it would directly affect them and they would incur the expense of transferring the property. He indicated that the procedure for abandonment requires a public hearing before City Council, which would provide adjacent property owners, including the requestor, the opportunity to address the issue.
Mr. Cregar moved to recommend denial of the request for abandonment, noting that it has been the City’s practice to require consensus from adjacent property owners and there has been opposition relayed by the adjacent property owners for abandonment of the alley. The motion was seconded by Mr. Ruane and unanimously carried.
DEMEC Renewable Energy Portfolio Contract
Members were reminded that the State of Delaware created a new law entitled “Renewable Energy Portfolio Standards”, which requires all electric providers in the State to provide a Green Energy Program to their customers. Starting in 2007, a minimum of 1% of the City’s electric supply must be from green energy and this percentage increases to 10% by the year 2019. Dover’s Energy RFP requires a green energy provision; however, no specific arrangements have been made at this time.
As an alternative, the law allows the municipal electric systems in Delaware to create a special Green Energy Fund administered by the Delaware Municipal Electric Corporation (DEMEC). Municipalities must contribute at a rate of $0.178 per megawatt hour. For the City, based on 2005 sales, staff anticipates 731,635 Mwh times $0.178, equaling a total of $130,231. The funds collected will be used to provide partial funding for green energy projects requested by our customers, such as solar heating units, fuel cells, and geothermal heating units.
The Green Energy Program can be funded through costs to the customer and/or the City of Dover. Although other municipalities will reflect these monthly charges on the customer’s utility bill as a special Green Energy Charge mandated by State Legislature, staff has not concluded how these charges will be funded at this time. Staff recommended that the City Manager be authorized to execute an agreement with DEMEC to participate in the Green Energy Fund.
Mr. Pat McCullar, DEMEC, stated that the initial intention was to brief members on the action steps to take to implement this new renewable energy standard that the State is instituting. However, he advised members there has been new legislation that substantially changes the provisions of the renewable energy project and green energy fund. He explained that DEMEC will need to evaluate the effects of this new legislation before providing recommendations for implementation. As a result, members have been requested to defer any action; however, they are urged to move forward with executing the agreement with DEMEC so that they can efficiently implement whatever requirements are approved. Mr. McCullar also suggested that members of DEMEC communicate to their customers that “there will be a new green energy program implemented effective June 1, 2006 with details to follow”. Final conditions and terms have not been settled and may not be known for several weeks.
Responding to Mr. Carey, Mr. McCullar stated that the rate of contribution is mandated by the State of Delaware, which currently is $0.178 per Mwh ($0.000178 per Kwh). The new proposed legislation would double the contribution to $0.356 per Mwh ($0.000356 per Kwh). As a part of this proposed legislation, they are proposing to change the application of the monies so that 50% would continue to be spent on renewable energy projects; however, the other 50% would be designated toward energy efficiency. It was Mr. McCullar’s understanding that this was intended to be included in the original legislation. He stated that if the new proposed legislation is passed, as written, DEMEC members could either contribute and administer their own fund or they could contribute to the State fund with the State being obligated to assure that the amount of money is returned to the municipality’s community, less any administrative costs, in terms of grants and programs to the municipality’s consumers, which will be beneficial to municipalities.
In response to Mr. Ruane, Mr. McCullar stated that the DEMEC members have not yet determined whether the contributions will be a separate line item assessment on the utility bill or if it will be contributed out of utility revenues and not specified as a separate charge. He anticipates that some members will show the cost as a separate item on the utility bills and others will embed the cost in the rates. Mr. McCullar explained that approval of the agreement will allow DEMEC to act as the City’s agent in the implementation of the State legislation, which includes: account for the monies (whether paid into the State’s program or DEMEC) allocated by the communities and assure it was spent on grant programs within the communities in proportion to the amount contributed; all communication and administrative contact with State Energy Office, Department of Management and Budget, and DNREC. He stated that it is an agency agreement to allow for DEMEC to handle all of it rather than nine (9) separate communities trying to report differently. They would also be responsible for submitting the annual report to the State Legislature, which is required to document that the goals of the Renewable Energy Program are being met. If members chose to buy renewable energy, DEMEC would jointly purchase green energy.
Since the City of Dover has not yet determined how these charges will be funded, Mr. Ruane stated that he would not want it to be perceived that it would obligate the City to some charges that are not budgeted. Responding, Mr. Carey reminded members that the State is mandating that the City provide a Green Energy Program to our customers. Mr. DePrima stated that the funding will be included in the FY2007 City Budget. Staff recommended authorizing the City Manager to execute an agreement with DEMEC to participate in the Green Energy Fund
Mr. Ruane moved to recommend authorizing the City Manager to execute an agreement with DEMEC to participate in the Green Energy Fund, with the understanding that this action does not specifically obligate City funds. The motion was seconded by Mr. Cregar and unanimously carried.
Discussion - Electronic Utility Statements for Electronic Draft Customers
A letter was received from Mr. Schaeffer, a utility customer, suggesting that the City consider sending electronic statements to customers who use automatic bank draft to pay their bills. Estimating that it costs the City $1 to send the statements through the mail system, he felt that this cost could be saved if customers were notified electronically.
Mrs. Tieman, Senior City Administrator, researched the suggestion and advised members that, at this time, the City has no automated means of faxing or emailing our customers. The HTE software does not currently support such automated billings; therefore, the process would have to be handled manually. There are currently 1,541 customers utilizing bank drafting and faxing or emailing their statements manually would cost more than the $1 per customer savings estimated by Mr. Schaeffer. Also, there is doubt that all bank drafting customers have the means to receive faxes or emails.
Mrs. Tieman advised members that the Information Technology Department is working on e-commerce which would enable customers to retrieve customer information over the Internet. The capability to fax and email customers will probably automatically be added as part of the e-commerce goal. This suggestion has been referred to our Technical Advisory Committee to include it in the Information Technology’s e-commerce plan, which will occur within the next 2-5 years.
Although it was not his opinion that faxing would be beneficial, Mr. Ruane agreed that there could be substantial cost savings to the electronic notification of utility billings.
Mr. Ruane moved to recommend that electronic notification of utility billings for the City be one of the priorities of the IT Department as part of the e-commerce plan. The motion was seconded by Mr. Cregar and unanimously carried.
Mr. Cregar moved for adjournment, seconded by Mr. Ruane and unanimously carried.
Meeting Adjourned at 6:28 P.M.
Respectfully submitted,
Carleton E. Carey, Sr.
Chairman
CEC/TM/jg
S:ClerksOfficeAgendas&MinutesCommittee-Minutes20063-27-2006 UTILITY.wpd
Attachments to Original Minutes and File Copy:
Attachment #1 - Annexation Resolution - Property Located 1040 South State Street