Electricity discussions continue

Published 12:00 am Tuesday, December 4, 2007

FRANKLIN—Members of the Franklin City Council are still debating how to operate the city’s electric department, and that discussion will continue at the next meeting on Dec. 10.

During its recent, daylong retreat, council members decided that more conversation should ensue about establishing rules that apply to the transfer of funds; addressing a target amount to keep in the electric reserve; dealing with a designated reserve amount; and the possibility of establishing an independent commission.

At Monday’s City Council meeting, Mayor Jim Councill said, &uot;We asked Andy (Rose, financial director) to develop policies and procedures to keep us informed of any money that’s moving, when to put that money back, etc.

&uot;It’s also been suggested that we list these (financial matters) separately on our agenda, rather than including them in the consent agenda.&uot;

Councilman Charles Wrenn said, &uot;It’s obvious we need something in place. If over a certain amount is being transferred, I’d like to know it.&uot;

Councilman Joe Scislowicz suggested an annual review during the budget process to ensure that there was a sufficient amount in the reserve.

Wrenn said perhaps there could be a range requirement pertaining to the amount in the reserve so they could &uot;operate around some limits and wouldn’t have to knee jerk all the time.&uot;

He also thought it more appropriate to look at the reserve amount on a quarterly basis.

Vice Mayor Raystine Johnson, after confirming all the money transferred had been paid back, said, &uot;The next step for me mentally is understanding and tracking the reserve fund.&uot;

Rose explained that cash and reserve is not necessarily the same thing.

&uot;You have to have reserve to have the cash available,&uot; he said.

Johnson asked why there couldn’t be two funds.

Rose said, &uot;You can’t take $2 million and put it in savings because you need some cash to operate. The cash balance in the general fund and other funds are so low, you couldn’t afford to do it.&uot;

Councilman Mark Fetherolf asked, &uot;So, the reserve, which was at one time, 3.8 million, which was in our ‘savings account’ was put in our ‘checking account’ and then was put back—are we back to 3.8?&uot;

Rose said, &uot;No, because we lost cash. You’re at about 2.1 million.&uot;

The electric rates charged by the city have been both more and less than those charged by Dominion Power recently. They are now a little less than Dominion’s. Community Electric is between 24 and 28 percent higher than the city’s.

Scislowicz said he also thought there should be discussion about the policy dealing with rates.

&uot;Do you reduce the rates when Dominion reduces its rates?&uot; he said. &uot;I think we need to think that through to see if we are going to do that. I don’t want us to be put in a situation where our hands are tied.&uot;

Mayor Councill said he thought think the council would want to stay with an agreement made by a past council to attempt to be a percentage below what (now Dominion Virginia Power) is charging.

Vice Mayor Johnson said, &uot;We need to keep that promise of the former council alive.&uot;

Councilwoman Mary Hilliard was concerned about comments in the packet that read, &uot;To believe the city’s rates can always be below Dominion is not realistic.&uot;

She asked why this was unrealistic.

Rose said &uot;It would be tough because what drives your cost isn’t necessarily what they charge. If they bumped up the wholesale price, it may not be realistic (to think we can stay below) because their pockets are deeper.&uot;

Rules and policies will be further discussed at the December meeting, as well as a methodology of how to accomplish their goals, procedures for setting rates, and the independent commission.