Russellville Electric Board approves compensation increase
During its April 19 meeting, the Russellville Electric Board voted 3-2 in favor of increasing its board member compensation, effective in May.
Compensation rates, prior to the increase, have been $400 per month for board members and $450 per month for the chairman. The new rates will be $600 per month for members and $750 per month for the chairman.
Canida shared a listing of all the compensation rates for other Russellville municipal boards, noting that some boards compensate their members, while others don’t:
- Civil Service Board, $200 per month.
- Water and Sewer Board, $400 per month for board members and $450 per month for the chairman.
- Russellville City Schools Board of Education, $600 per month.
- Gas Board, $600 for members and $750 for the chairman.
Board member Bill Jackson, who initially proposed the increase at the board’s March meeting, made the motion to approve the increase, to bring the electric board in line with what the members of the gas board receive.
Board chairman, James McDuffa and board member, Leamon Mosely voted in support. Board secretary Chad Wells and board vice chairman Nick Willis voted against.
The allowable compensation range is determined by state law.
Canida later explained the last board member compensation increase was Sept. 12, 2006, following a motion made at a regular board meeting, which increased the compensation from $200 per month for board members and $250 per month for the chairman to $400 per month for members and $450 for chairman.
He said board members’ duties include being “responsible for the general oversight and management of property and business,” which primarily involves the monthly meetings as well as two annual meetings attended by the board, for which they are reimbursed for expenses – the TVPPA Annual Conference and Electric Cities of Alabama and the Annual Governmental and Affairs meeting.
Following the vote, three Russellville residents were on the agenda to speak – Gary Blackburn, Florence Randolph and Sascha Franklin – who brought questions about higher utility bills, electricity pricing, the postcard mailout by the board and board compensation.
“I attended this meeting last month to talk to you about my January bill because it had more than doubled,” said Blackburn, “and that had never happened before. I’m told it was very cold. I guess it hadn’t been very cold before that. I don’t know. I came away concerned about a couple of things.”
He explained that among the items of concern is the board’s approval during the January meeting to request TVA authorization of a 3.1 percent rate increase. He also mentioned the just-approved Board member compensation increase.
“Your rate-payers are facing rising inflation every day,” continued Blackburn, “probably the worst in 20 years or so. I don’t believe now is a good time for the Board to be getting a raise. Why not cut costs and expenses instead of getting raises?”
He said he didn’t understand increasing Board member compensation and requesting a rate increase at this time. “The majority of us can’t afford the kind of bills that people have been getting.”
Blackburn went on to inquire about the postcard many members of the community received after the March 21 meeting and before the April 19 meeting: a large, double-sided color postcard, addressed to “Russellville Electric Customer” and signed “Board Members of Russellville Electric.”
The contents of the postcard, also referred to during the meeting as a “mailer” or “flyer,” were not read during the meeting.
Item 6 on the postcard reads, in part:
“TVA is the exclusive retail rate regulator of REB, not the Public Service Commission (PSC). TVA and REB’s external rate consultant work very closely with REB to keep rates as low as feasible. TVA requires months of lead time to review rate increases, due to their comprehensive analysis; therefore, this is the reason a rate increase was brought before the Board well in advance of its official implementation.
“If TVA approves the rate increase, it will become effective in July 2022, the start of REB’s FY 2023.”
The notice states the last REB rate increase was in 2015 for 7.1 percent.
The postcard goes on to say:
“The 3.1 percent increase submitted to TVA will increase the average residential customer’s bill using 1,000 kWh’s by $4 per month and less than $4 for residential customers using less than 1,000 kWh’s per month.
“REB wants you to know that this decision was not taken lightly, but a lot of various factors played into the need for an increase in FY 2023.
“Since FY2019, REB’s revenue has declined over S690K due to a drop in kWh’s sold. The decrease in electricity sold cannot be attributed to just one factor, but weather and COVID did play a role in its decline. REB has seen an increase in expenses over the last few years, mainly due to inflation.
“Products that REB uses daily to keep your power on have significantly increased. REB is audited annually by TVA, an external audit firm (CPA) and a rate consultant.
“Also, REB is periodically reviewed by the bond rating company, S&P Global Ratings. So, REB has numerous entities overseeing the operation to ensure we are providing the most effective product for the lowest cost possible.”
Blackburn said he wanted to know if and when the mailer and wording were approved by the Board and how the postcards and postage were paid.
“If it was approved in a meeting by way of proper proceedings, when and where was this meeting? Was public notice given?” Blackburn asked. “This makes me wonder about the financial matters of the board, and I would appreciate answers to these questions tonight. People in other counties received this mailing. I don’t know how that happened, but it did.”
Franklin posed similar questions, particularly about the cost of the mailer.
Although the board did not answer any visitor questions during the meeting, Canida later explained there was no requirement for the mailout to be approved “since it was paid for by an anonymous donor,” said Canida.
RELIEF FOR RATEPAYERS
Randolph had spoken previously at the March 21 meeting, inquiring whether measures could be put in place to help those who don’t have the money to pay unexpectedly higher-than-normal bills during winter months, especially for the elderly and those with young children. She requested provisions be made for customers to be allowed to pay a portion of the of the bill and then pay in installments to take care of the rest.
At the April 19 meeting, Randolph said she had called the utility company and was told that couldn’t be done because it would be discriminatory under TVA law. She said she called TVA and was told by an employee that once the electricity is sold to a utility board, the TVA has no control over what is done with it at that point.
Randolph suggested that if it was somehow discriminatory, REB should consider making the provision available “across the board.”
“Like Tuscumbia, Florence and Muscle Shoals utilities,” said Randolph. “When those people can’t pay a whole bill, they let them pay some and give them a deadline, and it’s not a long one, but it’s something to help.”
Randolph said she also wanted the REB to consider implementing the Tennessee Valley Authority’s Energy Right Home Uplift program, which she said offers eligible customers up to $10,000 in free upgrades and appliances to have higher energy efficiency.
“For some reason, Russellville Utilities is not part of this, and I’d like to know why,” she added.
Randolph said it’s “ridiculous that the people in this city suffer the way they do and get treated the way they do.”
“It’s like we don’t even have a voice; no matter what we say, you’re going to do what you want to do.”
Canida later explained the REB had previously the TVA Energy Right Home Uplift program and determined it to be cost-prohibitive. Under the terms of the program, Canida said only four REB customers would be allowed to participate.
“The program cost, according to TVA, would be approximately $10,000 per customer for the four, totaling $40,000. The net benefit per customer, according to TVA, would be approximately $500 per customer spread over one year,” Canida said.
Canida said this makes it easy to see why the REB did not opt into the program. “It’s cost-prohibitive to invest $40K for a net benefit of only $500 for only four customers.”
He said another issue would be how four out of approximately 5,000 customers would be selected for the program.
Canida also addressed the possibility of offering a way for people to pay large bills in installments. Canida said the TVA does not allow Local Power Companies to discriminate between customer classes. “In other words, if we did this for one Customer Class, the LPC would be required to do it for all Customer Classes.”
Prior to the vote on board compensation, Canida also asked the board to take action on employee incentives. “What are the board’s wishes regarding the performance incentive for the payout for the employees?”
Jackson made a motion to do the performance incentive “as we’ve done in the past,” and the board approved that. No mention was made of how much money that would be.
Canida later explained the performance incentive approved at Tuesday’s meeting is for employees only, not for the members of the board. As an employee, it does include him. He said state law governs the conditions under which performance incentives are allowed.
“It is not a bonus,” explained Canida. “It is tied to specific objectives that have to be met, and that, in turn, determines the actual amount of the performance incentive. It is a twice-yearly performance payout, usually in May and October.”
Canida went on to explain the practice of paying performance incentives to board members stopped in 2018, resuming in 2019, due to the interpretation of Alabama State Law that was understood by the board at that time to be allowed.
“Since the board wanted to confirm whether or not it was OK to do so, a a board member contacted the Ethics Commission for the State of Alabama. An investigator with the commission advised that his opinion was to err on the side of caution and self-report and pay it back if there was any question in a board member’s mind whether they should do so,” Canida noted.
Canida said that, as a result, the board decided to pay back the incentives, with the exception of one former board member, who declined payback of his incentives totaling $5,000.
“The incentives paid back by the other board members totaled $38,400.”
Following the meeting, guests had various reactions to the outcome of their visit.
“I don’t appreciate no answers,” Blackburn said. “I’ll say that. The public should have their questions answered. It’s my understanding that the Board is there to serve the community, so why don’t they answer our questions? They should be required to answer.”
Randolph had similar concerns about the lack of immediate response.
Canida later indicated the Board’s policy is that guests speaking during the meeting are given five minutes to speak their piece. “If they come to the utility office, their questions will be addressed.”
In other business, Canida reported:
- The funds the REB received as part of TVA’s COVID-19 Community Care Fund will be used at Russellville Middle School – a $5,000 grant to be matched with another $5,000 by TVA, to be used for improvements to the school’s science department.
- REB has been assisting the contractor with the underground electrical service for the new Dollar General on Waterloo Road, located across the street from Northside Grocery.
- REB has made its monthly payment to the City of Russellville in the amount of $63,258.22.
Canida requested the Board move the next meeting to a week later, still on a Tuesday – May 24 at 6 p.m. The Board approved this request.
Meetings are held at the electric board warehouse, which is located next to the Russellville Utilities main office on South Jackson Avenue.