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Home My WebLink About03182020 PACAB Work Session Packet PORT & COMMERCE ADVISORY BOARD WORK SESSION PACKET Topic: Review the high vessel property tax, and Discuss power factor adjustment and interconnect policy. Wednesday, March 18, 2020 at 12:00 p.m. Council Chambers Port & Commerce Advisory BoardWork Session March 18, 2020 TABLE OF CONTENTS DataProvidedby Kenai Peninsula Borough onHigh Vessel Property Tax............................Pg. 2 Clerk’sNotesonFebruary 19, 2020 PACABWork SessionwithElectric...............................Pg. 11 Port&CommerceAdvisory Board Resolution2019-003 on Interconnect PolicyCouncil....Pg. 14 Resolution2017-068onSeasonalRates& Rate Adjustments...................................................Pg. 21 Homer Application for InterconnectPolicy.................................................................................Pg. 25 Phil Kaluza’sCorrespondence with Electric Utility Manager John Foutz..............................Pg. 27 1 From:Aeschliman, Melanie To:"nregis@cityofseward.com";Jessica Stallard Cc:Tilly, Chris Subject:FW: Seward Boat Info Date:Monday, March 16, 2020 3:28:29 PM Attachments:image001.png CityofSeward_Boat_Detail_2019.xlsx Importance:High External Email: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Hello, It is my understanding this got lost? I am resending the report and added Ms. Stallard. From: Aeschliman, Melanie Sent: Thursday, March 12, 2020 8:42 AM To: 'nregis@cityofseward.com' <nregis@cityofseward.com> Subject: FW: Seward Boat Info Importance: High Good Morning, Attached you will find data you requested.My appraisal manager, Chris took all the boats in each of the Seward TAGS from 2019 (both main and supp roll combined) and calculated the City Tax and what the KPB Flat tax is. From that information you should be able to take the numbers and re-calculate whatever you are thinking of doing whether it be adopting a flat tax or changing the mill rate. I cannot say with any certainty if the Finance department would allow/can even permit a different mill rate for personal than real property, so I would suggest if that is a consideration that you contact Brandi/Jen downstairs at the Borough Finance office. Sincerely, Melanie Aeschliman, Assessment Director Kenai Peninsula Borough Assessing Dept. Phone: (907) 714-2230 Email:maeschliman@kpb.us PUBLIC RECORDS LAW DISCLOSURE: This email and responses to this email may be subject to provisions of Alaska Statutes and may be made available to the public upon request. 2 CITY OF SEWARD TAX AMOUNT TAGBOAT CLASSCOUNTASSESSED VALUEMILL RATE 4012 5603.84$ 2.15 40222 83,9053.84$ 322.20 40344 822,8343.84$ 3,159.68 404269 8,759,909 3.84$ 33,638.05 405236 20,833,5683.84$ 80,000.90 40631 28,565,6463.84$ 109,692.08 4076 10,092,1743.84$ 38,753.95 4110 - 3.84$ - 4120 - 3.84$ - 4131 2,2753.84$ 8.74 4140 - 3.84$ - 4159 1,428,070 3.84$ 5,483.79 41624 4,032,960 3.84$ 15,486.57 4174 1,745,525 3.84$ 6,702.82 $ 293,250.92 3 FLAT TAX KPB RATETAX AMOUNT 0$ - 0$ - 50$ 2,200.00 150$ 40,350.00 250$ 59,000.00 500$ 15,500.00 1000$ 6,000.00 0$ - 0$ - 50$ 50.00 150$ - 250$ 2,250.00 500$ 12,000.00 1000$ 4,000.00 $ 141,350.00 4 TAGBOAT CLASSCOUNT 40 - SEWARD CITYBoat Class 1 Count1 40 - SEWARD CITYBoat Personal Class 1 Count1 40 - SEWARD CITYBoat Class 2 Count10 40 - SEWARD CITYBoat Personal Class 2 Count12 40 - SEWARD CITYBoat Class 3 Count6 40 - SEWARD CITYBoat Personal Class 3 Count38 40 - SEWARD CITYBoat Class 4 Count33 40 - SEWARD CITYBoat Personal Class 4 Count236 40 - SEWARD CITYBoat Class 5 Count35 40 - SEWARD CITYBoat Personal Class 5 Count201 40 - SEWARD CITYBoat Class 6 Count28 40 - SEWARD CITYBoat Personal Class 6 Count3 40 - SEWARD CITYBoat Class 7 Count5 40 - SEWARD CITYBoat Personal Class 7 Count1 41 - SEWARD SPECIALBoat Personal Class 3 Count1 41 - SEWARD SPECIALBoat Class 5 Count3 41 - SEWARD SPECIALBoat Personal Class 5 Count6 41 - SEWARD SPECIALBoat Class 6 Count15 41 - SEWARD SPECIALBoat Personal Class 6 Count9 41 - SEWARD SPECIALBoat Class 7 Count2 41 - SEWARD SPECIALBoat Personal Class 7 Count2 648 5 TAGBOAT CLASSVALUE 40 - SEWARD CITYBoat Class 1 160 40 - SEWARD CITYBoat Personal Class 1 400 40 - SEWARD CITYBoat Class 2 15,512 40 - SEWARD CITYBoat Personal Class 2 68,393 40 - SEWARD CITYBoat Class 3 158,242 40 - SEWARD CITYBoat Personal Class 3 664,592 40 - SEWARD CITYBoat Class 4 2,751,173 40 - SEWARD CITYBoat Personal Class 4 6,008,736 40 - SEWARD CITYBoat Class 5 6,927,496 40 - SEWARD CITYBoat Personal Class 5 13,906,072 40 - SEWARD CITYBoat Class 6 28,514,271 40 - SEWARD CITYBoat Personal Class 6 51,375 40 - SEWARD CITYBoat Class 7 8,599,486 40 - SEWARD CITYBoat Personal Class 7 1,492,688 41 - SEWARD SPECIALBoat Personal Class 3 2,275 41 - SEWARD SPECIALBoat Class 5 564,420 41 - SEWARD SPECIALBoat Personal Class 5 863,650 41 - SEWARD SPECIALBoat Class 6 1,018,650 41 - SEWARD SPECIALBoat Personal Class 6 3,014,310 41 - SEWARD SPECIALBoat Class 7 1,574,400 41 - SEWARD SPECIALBoat Personal Class 7 171,125 76,367,426 6 WATERCRAFT ADVALORUM TAXATION Owner reports year purchased and purchase price of the respective vessel on a submitted boat information form or personal property statement. This information is entered into our system and a 5% depreciation factor is applied each year until a floor of 40% good is reached. This 40% good factor is maintained on the vessel until such time as it is sold or removed from the respective account. Should the owner not report the purchase price staff will estimate the purchase price using the best means available to them at the time. 7 8 9 10 Port & Commerce Advisory Board February 19, 2020 Work Session – Electric Rates & Utilities Clerk’s Notes On February 19, 2020 from 12:00-1:00 p.m., the Port & Commerce Advisory Board (PACAB) conducted a work session to review the February 3, 2020 council work session on electric rates and utilities. Board members Laura Schneider, Erin Lemas, Lynda Paquette, and Ben Smith were present withActingHarbormaster Matt Chase present as their administration. Electric Manager John Foutz, Finance Director Tammy Stromberg,andUtility Clerk Jeremy Rogers were in attendance and available to answer questions. In response to Schneider, Electric Utility Manager JohnFoutz said the demand meters wereconstantly being monitored, and the Finance Department would work on getting PACABa percentage of how many utility customershaddemand meters. He said the demand meter policy was created to ensure that people were being treated fairly. If a meter waschanged out, then the citypaidfor the meter. Utility Clerk Jeremy Rogers explained the process of getting a new meter. The meter was assigned by Foutz, whocalculatedthe load in order to ensure thatstaffappliedthe proper service to the billing. If anything changed in a customer’sbill, then the cityinformedthe customer of their usage loads and showed them the data they were seeing. Foutz said the City Code specifiedthat the Utility Manager madethe decision as to whether a customer was moved from small general service to large general service.The demand meter policy stipulatedthe conditions by which a customer wouldbe moved from small general service to large general service, but customers could alsorequest this change in their service. During the meter exchange, changes were made to approximately three customers’ utility bills. In response to Paquette, Foutz said ifcustomers hadquestions about their utility bills, they should contact the Utilities department. In response to Smith, Foutz said the city received 5,000meters from Kodiak Electric for free, and additional demand meters were purchased by the city through Council Resolution 2018- 011. In response to Schneider, Foutz said he believed the people who livedin Seward year- round appreciatedthe seasonal rates. The intent of the seasonal rates was to give Seward’s year- round residentsa break on their utilities in the winter time. However, this did increase electric rates in the summer time. The first time theseasonal rates were implemented there was a 25% increase in customers’ electric bills and then a couple years later, the electric rates were adjusted to be only a 10% increase in the Seward portion of the bill. 11 In response to Public Works Director Doug Schoessler, Foutz said customers hadthe option to pay a large amount upfront to reduce their monthly utility payments. In both rate studies completed over the past five years, the recommendation was for the utility to estimate what the cost would be for the year and then, charge everybody a single rate for the entire year. Foutz said council chose not to implement this approach. Foutz said ChugachElectric chargedthe City of Seward’s utilities for the energy, demand, and fuel. There wasno way to accurately determine what the fuel costs weregoing to be on a month-to-month basis, but he believed the costsof energy and demand were both fairly level. The fuel cost had been 6.5 cents per kWh for the past five to seven years. In response to Paquette, Foutz said Homer had a fixed cost and a Cost of Power Adjustment (COPA). Finance Director Tammy Stromberg believedChugach was able to garner better prices because of the economies of scale that they had. In response to Schneider, Foutz said a resolution was being prepared forcouncil to conduct a rate study for future utility rates. The overall net effect of the utility was zero, and the seasonal rates were intended to make the year-round residents’ net effects close to zero, as well. Foutz believedthe electric rates werecontingent on how much electricity each individual chose to use between the winter time and the summer time. In response to citizen Aiden Wilcox, Foutz said seasonal rates had been implemented for a total of four years, but he believed the first two years had more of a dramatic effect on citizens’ rates than the last two years. A study had been completed on the effects seasonal rates had on the Utility, but a study had not been completed to determine the effects of the seasonal rates on individual customers. In response to Schneider, Foutz said most utilities were regulated by the Regulatory Commission of Alaska (RCA). However, Seward was a home rule city, whichmeant that the City Council regulated the City of Seward’s utilities. A regular utility could change their electric rates up to four times a year, and Chugach Electric changed their rates two or three times a year. Foutz said Seward changed their electric rates once a year to adjust the rate for the upcoming year. In response to Schneider, Foutz said other utilities submitted very extensive rate studies to the RCA any time they asked for an adjustment to their rate, which could be up to four times a year. He said a rate study was completedfour years ago for the City of Seward. The recommendation received from thatrate studywas that a review studyand an extensive rate study be completed. The extensive rate study should be completed every three to fiveyears.The last rate study was completed twoyears ago, and the last extensive rate study was completed five years ago. 12 In response to Paquette, Foutz said that the last extensive rate study cost between $35,000 and $40,000, and the rate study completed two years ago cost between $12,000 and $15,000. In response to Schneider, Foutz said the utility was always looking for ways to reduce costs,but citizens could also lower their electricity rates by being more cognizant of how much electricity they used. The board suggested havingan Energy Fair in the fall to educate the public, as well as adding links with educational information about conserving energy to the city website.They also suggested that the Electric Utility Department go paperless and provide electric bills to citizens electronically. In response to Schneider, Foutz said the city had a contract with Chugach Electric to purchase all of our power from them, but Chugach had always been willing to work with them on using generators to produce more power. In response to Paquette, Foutz said the City’s generators were run on diesel fuel, which was the most expensive type of generator,and cost approximately $3,000 per hour. Foutz said the city’sgenerators had been used in the past to help Moose Pass and Cooper Landing, but this decision had to be made by Chugach Electric. He believed theupfront cost for producing our own power was too much for the city to handle on itsown.The citywould need to find a fundraising source to help, and there were opportunities for this available through the federal government. In response to Paquette, Foutz said the Lowell Canyon Hydroelectric Projectwas the best opportunity to put generation onto the system,but it would take about ten years to get to this point. He said a solar farm did not have the permitting restraints that a hydroelectric facility had. Foutz had looked into this option,but he had not found a good location for a solar farm yet. He heard from other utilities in the Alaska Railbelt Cooperative Transmission & Electric Company (ARCTEC) that solar farms were not lowering their costs. Theywerebelieved to becosting the utilities more money. Utility Clerk Jeremy Rogers said solar panels took about 18 years to pay for themselves but only hada 12year lifespan. For this reason, he believed solar panels would quit working before the owners had a chance to make their money back that they had spent on it. In response to Chamber of Commerce Executive Director Jason Bickling, Smith said the wind turbine was put at the Alaska Vocational Technical Center (AVTEC)for training purposes and it was not a utilityresource. It was a $1 million turbineand it made between $40 and $100 a day in electricity. Submitted By:Jessica Stallard, Deputy City Clerk City of Seward, Alaska 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35