From Better Government Richmond:
Re: City of Richmond Department of Public Utilities
Dear Members of Council,
As you prepare for this Fall’s City Council meetings, please keep in mind that the City’s water/sewer rate structure that includes unusually high services charges is still an open issue. This past year the Department of Public Utilities reduced the service charge but there are still matters that need your attention. In fact, there are many points included in the list below that Better Government Richmond would like to be addressed by Council when taking up the City budget.
A. CITY NONFEASANCE
1. ITEMIZED UTILITY BILL
Why has the city failed to reformat the utility bill?
The city said the bill would be reformatted to include itemized charges and put into use around July of 2013. It has not been done. Customers should be told the amount of each charge that is included in the total for each utility.
2. BRADLEY LAWSUIT
Who authorized the settlement for Bradley vs. Richmond?
On the 1st of August 2013, it was reported that there was a settlement of Bradley v. City of Richmond, which sought damages for alleged racial discrimination and harassment in the public utilities department. The city paid $1,000,000 to settle the case. City Council did not approve the settlement or payment. We asked Mayor Jones why the settlement bypassed City Council yet a previous settlement required Council approval. He refused to answer the question.
B. ACCOUNTING PRACTICES
How are utility department general operating costs allocated to each utility?
How are City services allocated and charged to the utility department?
How are utility services allocated and charged to the City? It is our understanding that charges are not based on actual time spent by the utility department employees.
Are fire hydrant and street light costs charged to the City? The American Water Works Association recommends such costs should be charged to a municipality.
Operating without a logical allocation system can result in excessive cost allocation to any one utility.
Has the utility department started tracking time spent by using manually kept records as previously suggested by citizens? We are informed that Mr. Steidel, the Director of Utilities, agrees that the department needs a system to track service department costs.
C. FEDERAL INCOME TAX CHARGE
How and when did the City originally determine that the City Charter permitted the collection of federal income taxes from utility customers and turning the funds over to the City?
How did City Attorney Allen L. Jackson recently justify collecting the federal income taxes?
The utility department pays a “PILOT” (Payment in Lieu of Taxes) to the City for taxes that would have been paid by a private utility. The PILOT includes a payment for the theoretical amount a comparable privately owned utility would pay to the federal government in income taxes. The utility department adds the PILOT charges to customer bills, which means city utility customers are paying roughly $7 per month in “federal income taxes” to the city of Richmond.
We can find no other public utility in Virginia that charges a federal income tax PILOT. We understand that City Attorney Allen L. Jackson issued a private opinion concluding that the charge is lawful. We believe the public has a right to know the legal justification for the charge.
D. METROCARE WATER “CONSERVATION” PROGRAM
We consider the Metrocare Water Assistance Program more of an economizing measure than a conservation effort.
Who will be eligible for “conservation” assistance?
Is the James River already protected by minimum flow requirements?
What are the proposed water “conservation” measures? (Household conservation measures typically include low flow toilets, low flow showerheads, grey water, etc.)
What is the estimated cost of each water “conservation” device or upgrade?
Why is a low-income “conservation” program preferable to rate charges that accurately reflect the cost of the service?
E. METROCARE WATER (& SEWER) ASSISTANCE PROGRAM
How was it determined that utility payment assistance should be a City priority? Citizen utility rate reformers asked for fair charges and rates, not a utility assistance payment program.
What is the proposed amount of the payment assistance subsidy?
Will all low-income customers in Richmond receive a subsidy?
Will the same amount be available for each low-income customer?
Would Richmond’s low-income customers be better served by adopting Norfolk’s $1 monthly base charge and rate calculation method?
F. METROCARE FUNDING
What is the proposed source of funding for the Metrocare programs?
We believe it is erroneous to state that the utility department PILOT payments to the City would cover the costs of the proposed Metrocare programs. Currently the PILOT payments are credited to the City’s General Fund and available for other uses. Any City funds applied to the proposed Metrocare programs will then be unavailable for any other uses.
City Council members, Better Government Richmond appreciates your time and interest in reading this list of points. We are very interested in making sure that the Department of Public Utilities receives needed attention and reform.
C. Wayne Taylor, Secretary
Better Government Richmond
Better Government - US LLC
Copy: City Clerk, Better Government Richmond, News media, Interested parties