Editor’s Note: This article is now complete.
We’re racing the clock to get to Danville City Hall for the second meeting of the Utilities Steering Committee. Refresh the page often for the latest happening, photos and commentary! The meeting starts at 4PM.
We’re here as the meeting starts. All here today except Mike Nicholas.
Jason Grey, interim director of Danville Utilities, answers questions raised during the first meeting. In the last five years, electric sales are flat. No significant gains or losses. Fewer metered customers but more electric use.
We have more people in the audience today. Buddy Rawley is the only other City Council member here.
Today’s agenda is explaining how some of Danville Utilities profits go to the city’s general fund. We’ll also talk about the 2010 deal with American Municipal Power to stabilize power costs.
Phillip Smith is asking good questions. Nobody seems to understand the cause of the high congestion charges on the power grid. The answer is because the grid was almost overloaded and PJM (the company that runs the regional transmission grid) was running out of electricity to provide due to high demand on the “polar vortex” days.
The city gets between 10 to 15 percent of electric sales into the general fund. The concept is that Danville Utilities “pays” its taxes that would normally be paid by a utility company, and dividends that would go to shareholders. Here’s the facts that hurt. If Danville Utilities’ revenue to the city disappeared, the property tax rate would go from $0.73 to $1.18 per $100 of assessed value. Ouch.
Phillip Smith Gets It. He said if an investor-owned utility bought Danville Utilities, they’re not going to have the local office, the local engineering, the local bill paying. That’s a big economic effect.
Danville Utilities also pays in a share of the other city departments that they use like Human Resources, Central Collections and City Attorney. That’s another $2 million and here goes another 9.5¢ increase in the property taxes.
Phillip Smith Gets It again by saying more local jobs would be lost if that happened. Joe King said that the utility’s part of the “shared cost” was more of a subsidy than what they “really used”.
The electric fund had also invested $4M into economic development grants and that’s quite a murky line item.
Phillip Smith wisely points out that money should have come from some other source beside the electric fund. There was a slightly heated back and forth as council members pushed back some. Have I mentioned that Phillip Smith Gets It?
There’s no way that money could have went to Job Busts… could it?
Jason Gray now talks about the power cost stabilization agreement. Fred Shanks wonders why council wasn’t notified about the utility fund deficit as it was accruing. Gray’s answer is pretty much because we didn’t say anything back then. So that happened…
I’m going to repeat what I said about the first meeting. Today’s meeting is an educational presentation that every Utility Commission member should have gotten. My point is reinforced by commission members Jim Turpin and Bob Schasse asking questions about today’s presentation during the public comment section. I asked those two about that, and Schasse agreed. Jim Turpin took off quickly. I guess he still doesn’t like me for coming out against the city retiree bonus issue.
Brett Vassey from the Virginia Manufacturer’s Association is mildly threatening when he says that industrial customers are paying high rates and are already paying high machinery and tools taxes. He also mentioned something questioning the legality of some fund transfers. He seems like a real fun guy if he didn’t come of to the microphone and sound like a junior mobster. You get a nice set of industrial customers here… it would be a shame if they were to leave town, you know? A shame.
This from the city…
MEETING CORRECTION: Please note that Brett Vassey, president and CEO of the Virginia Manufacturers Association, incorrectly stated at the meeting that industries in the city pay one of the highest machinery and tools tax rates in the state at 72 cents. He acknowledged the error when contacted today. In fact, Danville’s machinery and tools tax is among the lowest. Danville’s effective initial rate is 30 cents. In comparison, the mean (average) effective initial rate for all cities is $1.35. The median effective initial rate for all cities is $1.06. For counties, the mean is $1.07, and the median is 90 cents. For towns, the mean is 44 cents; and the median, 36 cents, but note that town rates are in addition to rates imposed by their host counties. The Weldon Cooper Center for Public Service provides a breakdown for all cities and counties. Here is the link to its 2013 report. http://www.coopercenter.org/sites/default/files/econ/TaxRates/taxrates2013/tr1013.pdf
We’re done here. I”d be perfectly happy with Phillip Smith running Danville Utilities and making all the decisions needed. He knows what’s going on and what the problems are.
More coming up on SouthsideCentral!
This is the committee that has no constituent members on it isn’t it? Council members and Utility Commission members serve on it, right?
I would think they’re all constituents. I know the Utility Commission members like Mike Nicholas and I forget who the other one or two are have brought up some pretty good concerns.
You really want to get in there don’t you Sheila?
Listen to Phillip Smith. He is more familiar with Danville Utilities than anyone in the room. Every Danville citizen, in effect, owns our utilities and the dividend is lower property taxes. I am very upset that city council was not kept up-to-date on what was happening. The benefits of joining with AMP Ohio were greatly oversold and now we must live with that.
At a certain point, council didn’t know ceases to be an appropriate excuse for the things that have gone wrong (job busts, AMP, overtime scandals) and begins to be an appropriate justification for house cleaning. It is probably time to seriously examine why council doesn’t have appropriate knowledge and control of this locality and to make changes that fix it before the voters are the ones who have to fix it. I hope those presently on the council see it that way for my friends who live in Danville and for the sake of those in the County who get stuck with the utilities follies, increases in meals taxes, and other annoyances associated with the problems that exist.
When was the meals tax raised in Danville?
I think it was 2009 or 2010. It’s the first tax I anticipate them raising any time they need money because it’s an easy way to get the citizens of surrounding counties to pay for Danville (which is just smart politics…I don’t hate the player).
They’re near the cap of that. I believe that the top rate allowed is 6%, and Danville’s at 5% now.
Danville meals tax is as high as any on the country. New York City lower.
Who knows of a higher meals tax anywhere?
Lee, I do not want to hear the “poor county resident caught up in the incompetent city money grab” stuff. Any county resident that wishes to stay out of the city knows where the city limits are. I was recently in a Parks and Rec meeting on how we should spend Danville parks and rec money. Half of the people in the meeting were residents of the county asking the city to build facilities for their use. I am happy that the Utility Department is keeping my property tax at the same level as the county property tax. As for the meals tax, no one is forcing any county resident to eat in the city.
I know where the city limits are, and I have actually defended the meals tax when old man Mantooth of Western Sizzlin goes on rants about it. I don’t love that I live in a place where the government is averse to any sensible development or expenditures and yet many of my tax dollars go to another jurisdiction that isn’t particularly well run, but I choose where I live. It’s not the end of the world. In my ideal world Pittsylvania County would get its act together and so would Danville, and both jurisdictions would be much better off for it. I am really irritated at this new animal shelter discussion. I’m not Paulette Dean’s biggest fan, but why there needs to be a second poorly done shelter in the county I will never understand.
You may not like my thoughts about all of this any more than you do those of others, but I rather doubt my concerns are ones people have heard before.
Bristol, Va at 7% is the highest meals tax.
That’s very interesting. I don’t know the layout of Bristol well enough to understand how they can get away with such a high rate, but I imagine they may be in a similar situation to Danville where they have an outsized number of the eateries.
In one sense, the meals tax isn’t a huge deal. In another, it really starts to add up now that we’re at 11.3% combined with the sales tax.
…and not a word about generating ANY of our own electricity, from our own river and dams…right? No nod to the facts of hydraulic power…?
I think that ship has sailed a long time ago.
If water power has ”sailed”, it is only because someone wants to keep the status quo, and purchase all of our electric power…not take even partial advantage of the megawatts sailing down the river, untapped. Does this sound a little like payola, to anyone? What river? What dams…? What is hydraulic power…?
This issue will not go away, until there is no more Dan River, flowing by…young people and geology profs will continue to notice, trust me on this. And when the customers begin to notice–stand back.
Not to me. I’m sure that regulatory expenses and all that crap has to be filtered in. Then you’ve got construction costs. Then there’s the inevitable people who don’t want an unsightly turbine setup. Heck if I know the specifics why it wouldn’t work, but the idea has never gotten past “thinking about it”.
The dam at Robertson Bridge did product electricity for Dan River at Schoolfield at some time in the past. My understanding was that it was low voltage power specifically for their machinery. I do not know the cost of upgrading the turbines/generators or the cost of bringing the distribution equipment up to date. The amount of power is determined by the following formula: Power = Head x Flow x Gravity x Efficiency. The head is the distance, in meters, from the top of the water above the dam to the turbine/generator blades. Gravity is a constant 9.81 and efficiency is about 60%. The mean flow in the Dan River at Danville, Va is about 32,000 liters per second. Using this formula the output of a hydroelectric facility at the Robertson Bridge dam would be 113 kilowatt. This would be the maximum since flow above the mean would flow over the dam. Much of the time the river is below 32,000 liters per second and the output would be lower.
The two dams near the white mill are both low dams and there is no place to build a power plant. The cost would be extremely high for a very low amount of power. Not economical.
Thew Schoolfield Dam was built by Dan River Mills, early in the 20th century. It is still operating as we speak. It was leased to STS Hydopower LLC. Dan River sld it to the City of Danville, but the lease is still in effect, so any power generated belongs to STS, which they sell.
Thanks for filling in the information on the Schoolfield Dam. Do you know the power output of the system? I am sure it is below the 113 kw that I calculated since I do not know the exact height of the dam or where the turbines/generators are located in relation to the top of the dam.
Harold, maybe this will tell you more.
http://www.powerplantjobs.com/ppj.nsf/PowerPlants2?Openform&cat=STS%20Hydropower%20Ltd&Count=500
I appreciate Mr. Garrison’s reply, and his considered opinion about why we should not consider generating our own electricity…but we are entitled to think larger than this, are we not? If we need higher dams, upgraded generators…can we not do this? Would the cost not pay for itself quickly, 365 days of the year? Are there not many days when the flow of the Dan is greater than the average…? We can make a place for power plants, and every 20 feet or so of ”fall” allows a new opportunity for hydroelectric POWER. If we only ever generated 40-50% of our electrical needs, think how that could bring down our electric bills.
Again, kudos to Mr Garrison…now we need some positive thinkers to step up, and take this to a progressive next step….imho.
While I like the idea, I believe the biggest obstacles to adding hydro power to the Dan River are political… a couple of examples include the inevitable legal bickering over whose land gets flooded by the new dam(s) and whose doesn’t, and how many endangered species and fragile ecosystems (not my terminology, but verbiage I’d expect to see repeated ad nauseam during the aforementioned legal bickering and P. R. campaigns) are affected. I simply believe that any attempt to build a dam large enough for any significant generation of electricity will be stillborn, a victim lawsuits and protests.
The people on the referenced board are members of council and of the utility commission. Why did they not ask others, no on council or the commission to serve on this steering committee? Those on the utility commission already have a voice, those on council have a voice in that they get reports from the commission and appoint those who serve on it. Why didn’t they pull from outside to get others in to learn more about our realities and to offer and opportunity to help steer the decisions and recommendations from these bodies? Council needs $9 million from utilities for the General Fund. That is a lot of money. Now, that cash cow has a money flow problem. Running is the red is not a good thing. Council still needs to be able to pull those millions from utilities, or collect it in taxes. Doing it the way they do, no one can call it a “tax”.
Look at the interest of the public from the number of people that attended this meeting.
I cannot seem to leave a reply of a few short paragraphs…is that a filter, blocking our comments?
Nothing on my end.
Bruce, It does happen if one post a long comment. When the comment reaches a certain length the bottom portion drops down the page and the scroll bar on the side will not allow you to scroll to the “Post Comment” position. I had this happen to me and had to backspace and eliminate part of my comment so that I could post.
Interesting. I’ll see if I can recreate that problem and try to fix it.
All you have to do is tab down to the name and email fields and you’ll regain the buttons. That’s how I leave long comments. 🙂
Thanks for the help with posting a longer remark…here goes a bit: Al. Einstein said that “Everything rises and falls on leadership…” I suspect that Danville will long be a backwater, although a blessed place, because of the kind of thinking that we are running into, on just this issue.
We cannot use the millions of gallons of flowing water power of the Dan…
–because we have not done it for a long time..
–we need to do a study on this ”new concept”..
–getting this cheap electric power would cost us money..
–two of our dams are low..
–improving the dam structures would cost us money..
–and finally, no one cares. Therefore, this ship has sailed.
And this very long remark: Better leadership might have said…
We need to find out how to invest and save big money on free water power…and form a plan.
We need to present the facts to the people, and get a plebiscite on how the people would react to cheaper electricity through water power…including the public means building excitement for a long term project, that will bless our grandchildren, as well as ourselves.
We need to be able to plug better, cheaper electric power for our families and for new industry that may want to come live and thrive here.
I don’t know..but I do know that this cat won’t stay in the bag forever. People WILL find out…and people will respond to ”can do” leadership.
Peace, brothers and sisters…
Blueridge
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