Newberry City Council met Wednesday, May 8 in a work session to discuss the Utility Fund budget for the fiscal year 2019-2020.
Utility Director Tim Baker said that retail electric base rates were proposed to remain the same again this year, however the city would continue to use the Wholesale Power Cost Adjustment (WPCA) to pass through purchased power costs.
While electric rates remain the same, retail water and sewer meter minimum charges are proposed to increase by two percent. Baker said these increases were to offset the additional debt capacity needed to fund the 2015 series bonds and were a part of the rate plan adopted at that time.
Baker said the average inside city residential customer will see a total increase of approximately $0.74 per month based on a five-eighths inch meter.
The total estimated utility gross revenues for FY20 are $39,211,959 compared to $41,706,416 in the prior year, representing a decrease of $2,494,457. Baker said this reduction was primarily from a reduction in use of retained earnings.
Under the line item of Finance, the budget is proposed to increase by $67,945 and is attributable to increased payroll costs and increased financial software costs. At the request of the city’s auditors, Baker said the city has added an Assistant Finance Director.
“We have a very antiquated system of accounts payable right now and this new software will allow for more flow and free up employees for other duties,” Baker said.
The line item of Utility Administration, Baker said was recommended to increase $71,405 relative to FY19. This is due to a request of an additional part-time employee and an increase in maintenance contracts for call center assistance after hours and during outages also attributed to that increase.
During a large power outage, Baker said they would like to try finding a call center that would take overflow calls to provide the best possible service for city utility customers.
The Water Production Division, totaling $1,264,571 is recommended to increase $31,183 relative to the year prior for the request of a part time position being made full time as well as for sludge handling costs. Baker said he felt the new position was needed rather than paying overtime monies in the event that an employee was sick or was on vacation.
Under the line item of General Insurance, totaling $93,572 is recommended to decrease $57,713 or 38 percent relative to FY19, coming from an improvement in the department’s experience modifier due to a reduction in claims over a three-year period.
Due to increased employer contribution to retirement and insurance as well as employee reorganization, the line item of Employee Benefits is proposed to total $1,214,778, increasing $162,893 over the year prior.
Several Utility Capital funds are recommended to decrease this fiscal year to include Utility Administration Capital by $224,212 or 38 percent over last year’s $373,750. The Electric System Capital line item, totaling $2,195,000 is recommended to decrease $503,937, or 23 percent relative to FY19. These decreases come from completing some projects in 2019 and delaying others that were not critical.
Also decreasing by 29 percent, or $400,830 is the Water System Capital fund, projected to total $982,5000. This is also due, Baker said to completing or delaying projects when possible from the current fiscal year.
“We have many projects right now that we want to button up and complete so as to not spend all of our capital at one point in time,” he said.
Due to reducing engineering expenses and anticipated completion the city’s recreation complex, the Sewer System Capital line item totaling $797,000 is also recommended to decrease $469,195 or 37 percent over last year.
The Bond Fund Capital budget, totaling $6,435,049 is recommended to increase $1,201,167 relative to last year, Baker said coming from completing the remainder of the projects to which they were committed. These projects include the city’s electric substation 2 and outgoing circuits, the Scott’s Creek Sewer project, water distribution rehabilitation and the Kraft-Heinz Water Tower and associated pumps and piping.
“The utility department’s professionalism and emergency response is something our community can all be proud of,” said City Manager Matt DeWitt. “Only during rare circumstances do our customers ever go without their utilities - for a short duration, and our teams are always there quickly to restore services in expedient time.”
DeWitt said the city would look to continue to improve the City’s utility services offerings to bring the best services to city residents that they could provide.
The first reading of the budget will be conducted by City Council on Tuesday, June 11 at 7 p.m.