In response to are you sure?
I do not carry my notes around to show you and this telephone explaining is not working as you need to see it to understand it.
Although I am pressed for time I will condense the 3 points I found you are all having trouble grasping.
Then the worry warts I have and the doubters can judge for themselves.
I will begin with the 5% right of way fee.
It is a distribution charge passed on to the consumers of that service.
For those not of the utility world a distribution fee, is a fee charged to a utility for the privilege to connect to its distribution or transmission system.
In the utility world this is known as a privilege tax.
All one must do is look at your phone bill under taxes and surcharges and you will see City Franchise Tax. $.40 per month.
Before I go into the law as I read it, let me put this into perspective.
Yes a city can charge a right of way tax.
But only to other utility business who use the telephone poles to affix the cable they need throughout town. This applies to all other utilities like our water, sewer, cable TV and internet as well.
So in using just the telephone and comparing it to my electrical bill here is the low down.
My electric bill was $108.59 this month. This is the gross revenue for that utility.
So at 5% that would mean that $5.4295 of my bill this month went to municipal funding for non electrical uses.
So in reality the city only charges $.40 cents to a private utility and $5.4295 to me for a right of way privilege tax.
Now does that seem fair to you?
After all, we own the utility and the right of way, so the city is taxing us for something we own.
Now lets see if this taxation on ourselves is legal.
ORS 757.600 Definitions for ORS 757.600 to 757.689
(4) "Consumer-owned utility" means a municipal electric utility, a people’s utility district or an electric cooperative.
ORS 757.667 City authority over rights of way. Nothing in ORS 757.600 to 757.667 shall diminish, or authorize regulations that diminish, a city’s authority to control the use of its rights of way and to collect license fees, privilege taxes, rent or other charges for the use of the city’s rights of way. [1999 c.865 §17]
As I said a city can charge for the use of our right of ways. BUT NOT TO THEMSELVES!!!
They should have read the law once again before passing more illegal legislation.
ORS 757.672 Application of ORS 757.603 to 757.667 to consumer-owned electric utility; reciprocal electricity sales. (1) Nothing in ORS 757.603 to 757.667 is intended to limit or restrict the rights and authority of a consumer-owned utility, or to subject a consumer-owned utility to the regulatory authority of the Public Utility Commission not otherwise provided by law. ORS 757.603 to 757.667 shall not apply to a consumer-owned utility.
Note this law says; ORS 757.603 to 757.667 shall not apply to a consumer-owned utility. 757.667 granted authority for cities to charge a right of way priveledge tax and 757.672 is where the PUC bows out and on any regulations.
Look at it this way.
You own a car. You pay everything for that car.
But before you can drive that car you must pay a fee to spend on other things besides that car.
That is sure going to make it hard to keep that car running isn't it?
Quite the business logic we have here.
Yet what blew my mind was the attempts to quite those whom mentioned franchise fee, distribution fee or tax during discussion of this legislation by our City Administrator and City Attorney, although the title of this legislation was a right of way fee in the end it was called "a payment in lieu of" by our City Administrator.
Oh I must give him kudos for creativity but in the end it was in lieu of everything the city could not legally do.
Why you might ask. Because it is a privilege tax.
So you understand much like a private company using our telephone poles the minute we connect are utilities to the distribution network this provides direct access to our property from the utility.
ORS 221.655 Privilege tax on distribution utilities; maximum rate; allocation of tax among customers. (1) The city council or governing body of an incorporated city may levy and collect from a distribution utility providing direct access to electricity services under ORS 757.601 (1) or 757.676, except a municipal electric utility,
Let me make this clear.
A right of way is established when another utility hooks up to our network to sale a service.
That privelege tax is determined in the case of our telephone poles by the amount of poles used in most cases. That varies by cities.
Some businesses only use a portion of a network and pay less.
Those whom use more pay more.
But in our case the moment we hook up to the distribution network we are taxed for the privilege of the entire network for that one direct access point and it is not for the sale of anything.
We are being taxed for our own network here folks.
We pay for that network to survive in our fees and now we are being taxed to use it.
Is it that hard for them to understand?
What we have here is for over 25 years this city has been stealing from us.
Yes folks they have been just budgeting and taking who knows how much for over 25 years without the proper ordinance or resolution to authorize that.
So they learned that to continue to keep stealing from us that they needed to come up with a way for this to comply with budget law and fabricate some resolution so the city could continue stealing from us.
That council meeting reminded me of the boy who got his hands caught in the cookie jar and threw a fit to keep them there.
Remember that story?
Remember how he got in trouble and tried to sneak back into it?
Now remember what happened to him when he got caught again?
Well that is what is happening here right now.
Now lets further determine what uses the city can spend a municipal utilities funds on.
ORS 225.250 Application of earnings. The earnings of the electric plant or distributing system shall be applied and used in payment of warrants and interest thereon issued in connection with operation of any such plant or system, and also in payment for alterations, improvements, additions or extensions and for redemption and retirement of outstanding bonds, together with interest thereon, and shall be expended only in connection with and for improving such plant or system and not for other municipal purposes, except as otherwise provided in ORS 225.270.
ORS 225.270 deals with surplus earnings. Suplus earnings are additional earnings above what is budgetted, to maintain and operate the utility along with keeping a healthy reserve for emergencies.
Those earnings are to be used to lower property taxes.
Here they are.
225.270 Use of surplus earnings. When any city which owns or operates a municipal electric power plant or system or distributing system, has paid principal and interest to date on all indebtedness incurred in connection therewith, and has created and accumulated an adequate depreciation and replacement reserve in the judgment of the officer having control of such plant or system, the city shall, for the purpose of reducing general property taxes within such city, pay to itself not less than three percent of the annual gross operating revenue of such plant or system, or a volumetric charge based upon the amounts of electricity delivered, transmitted or distributed to retail electricity consumers regardless of the source. The volumetric charge shall not be less than the equivalent of three percent of the gross operating revenues of the municipality utility in 1999. The city shall adjust a volumetric charge to end users such that charges established for different customer classes bear the same approximate relationship as the gross revenues per kilowatt hour paid by the classes in 1999. [Amended by 1999 c.865 §32]
One would think that with this theft over 25 years that our property taxes would be zero.
Yet we have the highest rate the law allows.
So here again the city is forbidden from using the earnings of the municipal utility for other municipal uses and excess is to go towards lowerring property taxes.
Can anyone explain to me. With these laws. Just how this City thought that they were going to get away with this?
I have nothing but time yet the city now has until January 1st to set the rates.
ORS 225.210 Compliance with rate regulations. Each city which owns and operates an electric light and power system or which distributes electric energy for hire, shall charge such rates therefor as meet the requirements of ORS 225.220 to 225.300.
ORS 225.220 Enforcement of statutory requirements. (1) The requirements of ORS 225.210 to 225.300 shall be enforced and observed by that officer who by the charter is charged with the administration of any electric light and power plant or distributing system owned or operated by the city.
(2) As used in this section, “officer” includes board or other public authority of the city.
ORS 225.230 Rates set in accordance with estimates of annual expenses. (1) The officer referred to in ORS 225.220 shall annually before January 1, make a written estimate of the probable expense of maintaining and conducting the electric light plant or distributing system during the next ensuing year, including the cost of any contemplated alterations, improvements, additions or extensions, together with the probable amount necessary for redemption of any unpaid warrants and the interest thereon, as well as the amount required for payment of interest and maturing principal on any outstanding bonds of the city issued for or in connection with any such electric light plant or distributing system.
(2) The officer shall thereupon ascertain and prescribe as near as can conveniently be done an electric current rate or rates for the ensuing year which will create a fund sufficient to meet all requirements in subsection (1) of this section.
(3) The officer may also include a further amount sufficient to create such fund, as in the judgment of the officer may be desirable or necessary to meet requirements of future contemplated additions, improvements or extensions to the plant or system.
As this city wants to claim that all powers not specified in our charter are general powers of the council.
This means it must be done in public by council.
They claimed that power.
They threw it in our faces during the charter review.
I have it on video.
All power not specified in the charter is a general power of council.
They wanted it so it is theirs.
Now lets see what they are going to do with it?
It appears council has until January 1st to set the rates in accordance with estimates of annual expenses.
I do not believe these people realize the work this is going to require to get to the point that they can write the estimate to set the rates.
Not to mention they are going to have to seperate utility from other municipal uses and account for those expendatures, from some other source now.
Yet they want to cancel upcomming council meetings?
ORS 162.415 Official misconduct in the first degree. (1) A public servant commits the crime of official misconduct in the first degree if with intent to obtain a benefit or to harm another:
(a) The public servant knowingly fails to perform a duty imposed upon the public servant by law or one clearly inherent in the nature of office; or
(b) The public servant knowingly performs an act constituting an unauthorized exercise in official duties.
(2) Official misconduct in the first degree is a Class A misdemeanor. [1971 c.743 §215]
Now I am not an attorney but I can read.
So take all of your own city utility bills and come to a total.
Do not include the meter reading fee as that is another fee of its own.
Times that total by .05.
That is what you are being illegally charged this month.
Mine came to $8.349 and I do not have internet and only channel 23.
Take your totals for a year and what is that total?
Now think about every customer of the city utilities.
Now factor in expendatures above and beyond this 5%.
O.E.O. vehicles, trips to D.C. and all the rest and what do you have?
The highest rates around along with the maximum property taxes.
That is what you have.
Keep in mind that 5% of gross is before they pay the bills.
So just how much has that 5% increased?
Now what do you have?
Well we have once again the customer appriciation program to look forward to.
Yes they want to treat us as good little children and reward us with candy, to pay our bills on time.
Just like what is coming to council in the next meeting being the rules for our electrical company.
I presented documentation which conflicted with the law.
Yet is this referred to in the council packet?
Did I get a reply?
All I want to know is what statutory authority did this city base this legislation on as well as the changes being discussed.
Looks like that too will be on main street next week.
Looks like that too will be on main street next week.
Cody
14 comments:
As long as we are blogging about the electric company (utilities), I would like to put in my two cents worth. Included in my electric bill is: $3.33 5% franchise fee, $9.90 meter reading, and $2.25 for street lights. That total is $15.48. My usage, which I am very careful with, should actually be $51.10 instead of $66.58. That equals a little over 23% of my bill & are charges from the City. On top of that I am paying $3.99 per month for CH 23 which I cannot get the meetings or hear over half of the time. There is no refund for poor service though. Could they not at least fix the damn thing? Furthermore, why is it that the CA comes through loud & clear on his mike, but no one else does? The buzzing will drive anyone nuts.
That buzzing is probably the cell phone that SM Osbourn refuses to turn off. She appears to think she is the only one with a disabled child. Both ex-council member Mitchell and current member Pruit have a special needs child. Glad she is leaving. We don't need that "I'm more important than you attitude."
The other meetings come through just fine. So what is different when the Council meets?
Cody, glad to hear that it was a friend warning you, not threatening.
Now you really want to have some fun.
Lets compare ourselves to the City of McMinnville. Our closest municipal electric utility.
We have a monthly meter base fee.
This is $12.15 per month.
This is the $9.90 meter fee you spoke of and the $2.25 street light fee you also mentioned.
McMinnville is $7.87 cents per month.
Now realize that I do not know what all that fee covers but there could be some distribution charges we do not have.
It is very possible that they pay privilege taxes to cities and counties for right of ways to distribute that electricity through there networks and right of ways.
It is possible that the street department pays for street lighting to light the streets.
One would need to contact them for a break down of that fee.
So I will not try to compare it as apples to apples.
Yet I will compare the kwh fee.
Now we have fee of .0705 per kwh.
McMinnville charges;
.04139 for the first 1,000 kwh.
.04536 for anything above 1,000 kwh.
Putting aside the monthly fee if I take that 1368 kwh I used last month and multiplied that by .0705my electrical costs would be $96.44.
Which is correct as if I add the $12.15 meter base fee that totals out to the $108.59 that I was billed.
But now lets compare that $96.44 to McMinnville.
So my 1368 kwh for the first 1,000kwh totals $41.39.
The additional 368 kwh totals $16.69.
For a total of $58.08
A difference of $38.36
That difference is just shy from the total bill for McMinnville.
Upset yet?
As far as channel 23 I agree totally. I too have the same problems.
I am just wondering how long this city is going to continue to embarrass us letting these problems go on.
Cody
Thank you for your concern.
Cody
is that for me?
misanthrope
Yes it was.
Cody
Couple of questions...
Isn't McMinnvile bigger than Cascade Locks? Meaning, more customers = less cost? With a small customer base I would expect that it costs more to do business.
Also, I question your statement about Cascade Locks having the highest rate in the state. Check out Lane county.
What more is there to say.
This reminds me of the mob or something.
I want to puke.
Iam going to puke.
Barf
Couple of questions...
Good question.
First question.
Not necessarily.
A distribution network is a distribution network. They all face the same obstacles and location is all that separates them.
I used McMinnville as they are a municipal distribution electric company as well.
First one must understand that being a municipal electrical company has many advantages.
Preferential contracts with Bonneville Power Administration, not required to pay percentage of earned revenue to the Public Utilities Commission for regulatory fees, Tax free as it is classified as a non profit, ability to condemn property at lower prices for utility needs, lower or no rent on property ownership for the office and shop for example, property tax exempt on all property held by the utility and the like.
These are big advantages over the regulated utilities.
Then it comes down to management.
Now it would be a book here to fully explain this but here is a snap shot.
Lets begin with the utility itself.
There are 3 main pieces to an electrical utility.
First is Generation.
As we do not generate this becomes our wholesale market.
Now we do not purchase our electricity via day traders. We go to the source BPA which was created for utilities just like ours.
Another factor here is we are next to the source and that saves distribution costs, as a utility must pay a distribution fee every time and at every connection, it must connect to to get that energy to that specific market place, over the grid.
Big advantage here and I mean major.
The second and third pieces are Transmission and distribution followed by sales and customer service.
Yet all 3 of the pieces also have pieces.
Such as engineering, development and maintenance, infrastructure services and maintenance, BPO (business process outsourcing), consulting and system integration.
Inside of these pieces are more pieces.
Such as work and asset management, grid operations, document management, process automation (ie... alarm management), customer care, energy trading and resale, billing and receivables, inventory, equipment acquisition and control, GIS (geospatial applications development and implementation)(mapping), and the like.
Now these management tasks are broken down to specific workers.
The field workers, engineers, consultants and the like.
These workers have one main law to deal with and that is ohms law.
If you want to know what it is just look it up.
Then we have the administrative workers to upper management.
Not only do they do alot of the above functions they set the policies.
In the utility world more can be a bad thing.
Where problems of the past such as just building and getting the network to work, to today where doing that is common practice, we live in a world of consumer glut.
Everything is electric.
That is the problem.
Now it is about conservation as there is only so much electricity to go around.
Even our cars are going electric.
The trick is to use less and their are benefits' to that.
Rates are based on that as well.
Some utilities offer time of day rates for example.
Rates are based on many factors but since we are using McMinnville, they had the same choices as us when it came to choosing, which BPA option to buy power from them.
Part 1
Part 2
But in the end the success or failure of any utility boils down to management and policy.
They are all alike except in our case we have so much of an advantage over the regulated utilities that there is no reason for what is happening here.
Our disadvantage has been our upper management and policy decision makers have failed terribly over the years.
That is because it is ran by a government, which has no utility knowledge and dedicated their lives to any utility trade.
So we are left with politicians to do the work of professional's.
But being elected where the management changes at every election cycle, this creates a problem.
It takes years of dedication and commitments to be the professionals we lack and if they change every 2 to 4 years we have to start again.
Then there is also the problem being our elected officials are not paid nor do they work full time in this trade.
Not to mention a utility is not all they manage.
So what does this city do? This city passes off all upper management to all these city administrators.
Yet all these city administrators lack the most important requirement to do this job.
That is the the formal knowledge earned and the dedication of years in that specific trade.
Political science and utility science are not created equal.
So what happens then?
We have a field engineer spending hours of his time, administrator after administrator, council after council, trying to explain to government, something that they need to be a professional in the first place to understand.
Not only does this additional workload cost this utility more, this city has put to many hats on our department head.
As a matter of fact this city has put to many hats on our entire electrical department workers.
Hats not in their job description.
They did not train and dedicate their lives to be cable and internet guru's.
They dedicated their lives to high voltage not limited energy.
All this city did was threw these workers into the lions den.
Along with the municipal electric company.
Understand that these workers could probably care less about these other 2 endeavors this city has gotten them into.
Their priority is and should be the high voltage electrical company.
These other utilities are not in their job description, yet they were forced into it.
So we all pay.
I am sure they pay in customer satisfaction even though the problems we have are beyond what they know or they can do anything about.
We live in the day where the Jetsons are reality.
Yet we have 2 utilities which date back to the days of the Flintstones.
And through the years, management has mismanaged these utilities and ran them in the ground.
Because of this our electrical utility has to cover the losses of those other utilities.
We endure higher wages than these utilities normally pay to keep it alive.
We have to outsource engineering as our workers are not specialists in these trades.
As a matter of fact the majority of our entire internet is outsourced and this costs more.
So what does that all this mean?
It raises our rates.
I will also tell you why.
Management.
As for your second question.
Privately owned, public and municipal utilities are also not created equal.
What is the utility you are referring to?
Then I might be able to verify this and learn why.
Yet all I need to do is look at our neighbors and compare those regulated to our municipal utility.
I think my first answer will explain why.
Cody
This is great :}
Way to go.
PBJ
that was alot to take in
once i did i feel like barf
puke
This is nice to know but what can we do about it.
What makes you think they will listen.
Do they listen to people at the meetings.
Wait for the next council and talk to them.
John Boy
What you can do is let them know you disagree.
There is power in numbers.
Cody
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