Fiscal Note

Each piece of legislation that appropriates funds, creates position authority, or will create a financial impact through policy direction or otherwise, requires a fiscal note. The fiscal note should be drafted by department staff and should include all relevant financial information. After preparation by departmental staff, the Department of Finance will review and make necessary revisions before transmittal to Council.

Department:	Contact Person/Phone:	DOF Analyst/Phone:
City Light	Carol Everson/684-3181	Thomas Dunlap/386-9120

Legislation Title:

AN ORDINANCE relating to the City Light Department; amending Seattle Municipal Code Chapter 21.49 to modify City Light's rate schedules.

Summary of the Legislation:

This ordinance creates new rate classes for City Light customers in the City of Tukwila and sets higher rates for these customers. The ordinance also documents an increase of $0.0008 in the energy charges of non-low-income rate classes and $0.0004 per kWh for low-income rate classes to pass-through the effect of increases in the Bonneville Power Administration's power rates. City Light is authorized by existing law to implement the Bonneville pass-through without an ordinance. Previous pass-through have been implemented without an ordinance, with the result that the rates in the most current ordinances are not the rates that customers are being charged. Passage of this ordinance will eliminate the inconsistency between ordinance rates and the actual rates City Light customers see on their bills.

Appropriations:

Fund Name and Number	Department	Budget Control Level*	2003 Appropriation	2004 Anticipated Appropriation
TOTAL

* This is line of business for operating budgets, and program or project for capital improvements

Notes:

Expenditures (in $1,000’s):

Fund Name and Number	Department	Budget Control Level*	2003 Expenditures	2004 Anticipated Expenditures
Light Fund (41000)	Seattle City Light	General Expense (SCL800)	$600,000	$800,000
TOTAL

* This is line of business for operating budgets, and program or project for capital improvements

Notes:

Anticipated Revenue/Reimbursement (in $1,000’s):

Fund Name and Number	Department	Revenue Source	2003 Revenue	2004 Revenue
Light Fund (41000)	Seattle City Light	SCL Rates (443310)	$600,000	$800,000
TOTAL

Notes:

Total Permanent Positions Created Or Abrogated Through Legislation, Including FTE Impact; Estimated FTE Impact for Temporary Positions:

Fund Name and Number	Department	Position Title*	2003 FTE	2004 FTE
			0	0
TOTAL

* List each position separately

Do positions sunset in the future? (If yes, identify sunset date):

NA

Background (Include brief description which states the purpose and context of legislation and include record of previous legislation and funding history, if applicable):

The proposed ordinance makes two changes in the rates charged by City Light for electrical service. First, the ordinance creates new rate classes for customers residing in the City of Tukwila to reflect the terms and conditions of the new franchise agreement between Seattle and the City of Tukwila. The new franchise provides that City Light shall make payments to Tukwila in amounts equal to 4% of revenues derived from Tukwila residents in 2003 and 2004, 5% of revenues in 2005 and 2006 and 6% of revenues in 2007 and beyond. The franchise also authorizes City Light to set higher rates for the sale of electricity to Tukwila residents, subject to certain limitations specified in the franchise agreement. As a result of the comprehensive rate review conducted by the Council in 1999, the City of Seattle has already established higher rates for other suburban jurisdictions that implement franchise provisions similar to those in the new Tukwila franchise. The attached ordinance sets rates for Tukwila residents that are based on the Tukwila franchise and on the suburban rates established in 1999, as modified by the rate adjustments implemented in 2001 and 2002. Since the additional revenues anticipated by City Light as a result of the higher Tukwila rates are approximately equal to the payments to be made to the City of Tukwila, the net effect on City Light's financial results will be negligible.

The proposed ordinance also documents the pass-through to City Light customers of the impact of increases in the power rates charged by the Bonneville Power Administration. SMC 21.49.081 directs City Light to adjust its rates to reflect the impact of increases or decreases in Bonneville power rates. The rate increases that Bonneville has recently announced will require an increase of $0.0008 per kWh in City Light's energy charges ($0.0004 per kWh for low-income customers), effective April 1, 2003. While the Bonneville pass-through can be effected without an ordinance, the effect of the pass-through on rates effective April 1, 2003 is shown in the ordinance so that the ordinance rates will be the same as the rates customers actually see on their bills.

The financial cost of not implementing the legislation (Estimate the costs to the City of not implementing the legislation, including estimated costs to maintain or expand an existing facility or the cost avoidance due to replacement of an existing facility, potential conflicts with regulatory requirements, or other potential costs if the legislation is not implemented):

City Light is authorized by existing law to pass through the effect of Bonneville rate increases without an ordinance. However, an ordinance is required in order to collect the additional $800,000 per year in revenue from Tukwila customers that is authorized by the new Tukwila franchise.

Possible alternatives to the legislation which could achieve the same or similar objectives (Include any potential alternatives to the proposed legislation, including using an existing facility to fulfill the uses envisioned by the proposed project, adding components to or subtracting components from the total proposed project, contracting with an outside organization to provide the services the proposed project would fill, or other alternatives):

None.

Is the legislation subject to public hearing requirements (If yes, what public hearings have been held to date):

Yes. The Council typically schedules a public hearing prior to final approval of a rate ordinance.

Other Issues (including long-term implications of the legislation):

None.

FOR CAPITAL PROJECTS ONLY

Background (Include brief description that states the purpose and context of legislation, the expected useful life, anticipated customers/users, assumed level of LEED or other sustainable design elements. Also include record of previous legislation and funding history, if applicable):

Project Name:

Project Location:

Start Date:

End Date:

Spending Plan and Future Appropriations for Capital Projects (Estimate cost of legislation over time; list timing of anticipated appropriation authority requests and expected spending plan. Please identify your cost estimate methodology including inflation assumptions and key assumptions related to the timing of appropriation requests and expected expenditures. In addition, include the projected costs of meeting the LEED Silver standard in all facilities and buildings with over 5,000 gross square feet of occupied space. Also, be sure to include percent for art and percent for design as appropriate):

Spending Plan and Budget	2003	2004	2005	2006	2007	2008	Total
Spending Plan
Current Year Appropriation
Future Appropriations

Key Assumptions:

Funding source (Identify funding sources including revenue generated from the project and the expected level of funding from each source):

Funding Source	2003	2004	2005	2006	2007	2008	Total
TOTAL

Bond Financing Required (If the project or program requires financing, please list type of financing, amount, interest rate, term and annual debt service or payment amount. Please include issuance costs of 3% in listed amount):

Type	Amount	Assumed Interest Rate	Term	Timing	Expected Annual Debt Service/Payment
TOTAL

Uses and Sources for Operation and Maintenance Costs for the Project (Estimate cost of one-time startup, operating and maintaining the project over a six year period and identify each fund source available. Estimate the annual savings of implementing the LEED Silver standard. Identify key assumptions such as staffing required, assumed utility usage and rates and other potential drivers of the facility’s cost):

O&M	2003	2004	2005	2006	2007	2008	Total
Uses
Start Up
On-going
Sources (itemize)

Key Assumptions:

Periodic Major Maintenance costs for the project (Estimate capital cost of performing periodic maintenance over life of facility. Please identify major work items, frequency):

Major Maintenance Item	Frequency	Cost	Likely Funding Source
TOTAL

Funding sources for replacement of project (Identify possible and/or recommended method of financing the project replacement costs):