Other Views: BVU board member makes a case for splitting

In 2010, Bristol Virginia Utilities will proudly celebrate the 65th anniversary of its creation as a separately managed part of the city.

Back in 1945, BVU began providing electric, water and wastewater services to thousands of residents, businesses and industries in Bristol,

Washington County and Scott County.
During this time, BVU has been a government enterprise fund for the city of Bristol, Va., which means your utility has maintained a strong

working relationship with the city on business decisions in our service area.
Around 2000, forward-thinking city leaders joined BVU’s vision to become the first municipal utility to provide telephone, cable and

Internet services using fiber-optic broadband technology to the home. This gave residential and business customers more choices in Internet,

cable and phone service.
What began as a local venture soon received an overwhelmingly positive response from regional legislators, economic development experts and

business leaders who requested that BVU expand its network another 850 miles in eight neighboring counties. Overlooked and often forgotten,

Southwest Virginia, where broadband was not very prevalent, was not awakened.
Using statewide funding sources, BVU stepped up to this challenge. It reinforced our presence as a regional utility with a broader vision

that is helping the future economic sustainability of Southwest Virginia. With Cumberland Plateau Planning District Commission and grants

from the state and the constituent counties of Buchanan, Dickenson, Russell and Tazewell, BVU and CPC OptiNet extended the fiber system

through those counties. As a result of that effort, Northrop Grumman and CGI located in Lebanon a few years ago, providing high paying jobs

for the region. Local colleges and universities began revamping their curriculum and adding IT courses. It gave our smartest and brightest

students a reason to return home.
In the past few years, because of these broadband success stories, the need to become a separate authority able to operate like a true

business in a a position to react to customer demand and competitive pressures became apparent. To continue bringing state-of-the-art

service to its customers at the lowest possible rates, BVU needed the ability to provide ancillary products and execute long range business

plans with flexible access to financial sources.
We have studied this conversion carefully and we’ve tested the idea on quite a few people in the community, including council members, BVU

board members, business and industry leaders and city taxpayers. The benefits for the city and BVU are too great to pass up. The change

promises two positives for the city – more revenue and less debt. That’s a win-win for the city and its people. Additionally, the ability to

be more competitive will result in better services and lower costs for our customers.
With millions less in debt on its books, the financial consultant for BVU and the city has said it will enhance the city’s financial

position.
Now, let’s talk revenue opportunities for the city. BVU pledges to commit about $1 million annually to the city, in part because the state

has less money to give localities now. Here’s the breakdown: BVU will provide $500,000 annually to the Bristol Virginia Economic Development

Office to retain existing business and lure new business to the city, Another $350,000 will come from BVU’s electric system in lieu of tax

payments. The city will also receive $100,000 for the next 10 years in transition monies. And an additional $10,000 annually will be given

to the city from BVU’s OptiNet division as an in-lieu-of-tax payment, beginning in 2013.
Any concerns that BVU loses its direct connection with the city can be alleviated because of the makeup of the new board overseeing the

authority. That eight-member board would include a member a of Bristol Virginia City Council, a member of the Washington County Board of

Supervisors and six Bristol, Va., residents appointed by City Council and the current BVU board.
Finally, there is BVU’s history of maintaining affordable rates. In the past 10 years, the company has implemented only two wastewater

increases and just four water rate increases. Meanwhile, OptiNet has been in business for seven years, and BVU has implemented only two

increases in cable service and none for Internet or phone service. That’s a record unmatched by any competitor in our area. Remember, rates

will be set by a board of Bristol citizens appointed by the council. Additionally, the business plans for OptiNet, water and wastewater do

not include any rate increases in the forseeable future. TVA sets electric rates and the State Corporation Commission sets telephone rates.
Last year, a customer savings study showed that in the first five years of OptiNet’s service, our customers in Bristol, Va., and Washington

County saved more than $10 million compared to competitors’ rates. If given the opportunity to broaden our customer base as an authority, I

like our chances of maintaining those stable rates for the long haul.

Bruce J. “Jim” Clifton is a Bristol businessman and a member of the Bristol Virginia Utilities Board.