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Seattle City Councilmember Bruce Harrell

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Nov 25 2009

City Council 2010 Budget Re-cap

Published by under Budget

The Council finished working through the 2010 budget process and approved an annual operating budget of $907 million. A prominent feature of this budget process was the restoration of $860,000 to Seattle Public Libraries that reestablished operating hours that would have been lost. Following are a few budget highlights.

In the area of Technology, the Council added a total of $110,000 which will include $20,000 to launch an “Apps for Seattle” contest that will tap into local web developers and citizens to develop applications, websites and tools using the City’s open data sets. This $20,000 can result in millions in dollar value relative to creating useful applications for the city. We also added $50,000 to the Technology Matching Fund grant program which increases access to electronic information and technology for citizens who may not otherwise have the means of access.

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Nov 12 2009

Smaller Rate Increase Would Have Protected People and Businesses

You may be aware that the City Council voted to implement a 13.8% rate increase for City Light. Below is my statement regarding Council’s decision. Also, we just learned that City Light was awarded $800,000 from a settlement with Enron. The money will go toward low income rate assistance.

“In a move to keep City Light’s borrowing costs low and maintain its commitment to conservation, the Seattle City Council passed a 13.8 percent rate increase which will begin in January 2010.

While I fully support the Council’s commitment to conservation and protection of the Utility’s borrowing status, I believe the needs of the people and businesses should always come first. I preferred a lower increase of 7.9 percent that could have given the utility the necessary funds to operate efficiently, improve its debt service coverage ratio to 1.6 and restored $1 million that was cut by the Mayor for conservation.

We must continue to drive the costs of its operations down in order to protect the people from unreasonable rates. However, even with a 13.8 percent increase, Seattle City Light offers power at 6.42 cents per kwh which is one of the lowest rates in the region. The average monthly bill of $44 will increase $6 per month. By comparison the US average is 9.7 cents per kwh. Los Angeles has a rate of 10.20 cents per kwh and San Francisco has a rate of 12.94 cents per kwh.

It is not that either proposal is right or wrong. We brought several choices to the Council. These are merely policy preferences with different points of view. The Rate Advisory Committee (“RAC”), a nine member committee appointed by the Mayor and City Council, recommended a 7-8 percent rate increase. The RAC represents small and large businesses, neighborhoods and lower income residents.

The Energy Committee will continue to identify where City Light can create efficiencies, and improve its development and implementation of the strategic plan it submitted last year under the Committee’s request.

The 13.8 percent increase will create greater certainty that the utility maintains its AA- bond rating which will allow it to borrow at a lesser interest rate when it issues bonds in April of 2010 and help to fund its capital improvement plan. The utility was rated A since 2001 and increased its rating to AA- in 2008. Less than 5 percent of Electric and Gas utilities in the United States fall into the AA rating. The higher rating was achieved because of the utility’s revised financial policies and because of its reduced reliance on purchased power.

Now that this current rate review has concluded, I look forward to an open and transparent process of making sure City Light’s strategic plan is complete and the people can maintain safe, reliable power at affordable rates.”

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Nov 11 2009

City Light Rate Options

As Chair of the Energy and Technology Committee, part of my job is to make sure my colleagues on the council understand the complexities and policy implications of rate decisions. You may find the internal document I prepared for my colleagues interesting:

From: Energy and Technology Committee Chair, Bruce A. Harrell

RE: Options to address City Light’s financial distress

Date: November 9, 2009

The Budget Committee is reviewing two different proposals/strategies for your consideration. Both proposals are in response to the Mayor’s rate proposal, which was intended to address City Light’s poor financial performance ahead of a needed $200 million bond sale in early 2010. While these different proposals may contain different rates, each approach is intended to achieve the same core purpose of providing the necessary resources to the utility such that it can remain one of the most reliable and environmentally sustainable power systems in the country. Continue Reading »

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Oct 26 2009

What else can Seattle do to help address the digital divide?

I am currently in the process of working with local high-speed Internet providers and the Office of Cable Communications to develop a “Project Share” program to help low-income residents receive access to affordable high-speed Internet service. For example and to use Comcast as an example, I want to explore the possibility of soliciting from customers a small voluntary donation that can be used to help those who are unable to obtain Internet access. I have previously written about how Internet access is a potential gateway relative to education, job opportunities, training, networking and economic growth.

I will request the Department of Information Technology via a Statement of Legislative Intent (SLI) during this year’s budget to report back to Council next year on the implementation of this new program.

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Oct 02 2009

Addressing Mayor’s proposed budget for City Light

Proposal includes a rate Increase and increase in spending for Operations and Maintenance (O&M) and Capital Improvements Program (CIP)

SEATTLE –On Oct. 2, 2009, the City Council will review a budget summary proposed by Mayor Greg Nickels and presented by Superintendent Jorge Carrasco. The City Council received the budget information on Sept. 28, 2009.

Councilmember Bruce Harrell, Chair of the Energy and Technology Committee has expressed his disappointment in the Mayor’s proposal. “Throughout all city departments, we have asked department heads to reduce their costs and increase efficiencies,” said Councilmember Bruce Harrell. “We have asked employees to assist in this process including personal sacrifices such as work furloughs. Throughout the year, we have delivered several policy directives to City Light with the expectation that they would conduct business in the same way.”

Harrell added that on April 1, 2009, the Utility indicated they had reduced capital expenditures by $43 million and O&M expenses by $21 million. These expenses were reduced with the goal of not jeopardizing the safety and reliability of the existing system.

“I am disappointed that the utility has proposed an overall 3.5 percent increase relative to the adopted 2009 budget and a one percent increase in the previously endorsed 2010 budget. This includes increases in their O&M costs and CIP spending. Changes will be made,” confirmed Harrell.

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Aug 16 2009

Can the Employee Head Tax be Repealed Without Sacrificing Transportation Projects?

As you know, the City Council has begun discussing the possibility of repealing the employee head tax. Businesses whose annual gross income is greater than $80,000 are required to pay $25 for each employee who logs more than 1,920 hours per year and travels to work in a single occupancy vehicle. The tax is part of the Bridging the Gap Transportation (BTG) Levy, which voters passed in 2006. The levy amount was $365 million. Funds generated from BTG are to address more than 20 years of maintenance backlog for paving, sidewalks, bridge repair and the planting and pruning of trees. Over the 9 year duration of BTG, the employee head tax is projected to generate $51.5 million. Last year, it raised about $4.5 million. Relatively speaking, $4.5 million is not large when compared to the $365 million levy and I support repealing the tax in order to ease the financial burden on local business and simplify the process. I want to make sure these types of taxes actually decrease the public’s reliance on single occupancy vehicles, as well as create incentives and alternatives for employee travel. Many citizens are rightfully concerned about how pedestrian and bicycle projects will be impacted. Before I agree to the repeal, I must be convinced that these projects will not be left on the cutting room floor or be subject to long delays.

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