Divided Council Approves BVU Split from City

BRISTOL, Va. – Appearing as divided as its audience, the City Council narrowly approved a plan Tuesday that allows the Bristol Virginia Utilities to split from the city and form its own authority.

The proposal, which requires another council vote and the approval of the Virginia General Assembly, attracted a crowd of about 75 who filled the City Hall council chambers.

After listening to comments from more than 30 people – the majority of whom expressed support for the plan – the council voted 3-2 in favor of the authority’s spinoff. BVU’s board of directors unanimously approved the request last week.

"We were very pleased with the turnout. We had a lot of corporate people who came out and average citizens, and we had some good questions that we tried to answer," BVU board Chairman Paul Hurley said. "We’re certainly pleased with the vote to move forward with the process."

Councilmen Guy Odum and Jim Heaney expressed concerns about some specific aspects of the 21-page act, primarily dealing with the makeup of an authority board and how the change would impact the city in the future.

Hurley said BVU will make "every effort" to address those questions and concerns before the council takes its final vote on the plan Oct. 27.

If approved this winter in Richmond, the change would take effect July 1, 2010.

The council currently fills six of seven seats on the BVU board of directors, including four city residents and two council members. The proposed authority board would include one council member, three city residents appointed by the council and three more residents selected by the authority board. An eighth member from the Washington County, Va., Board of Supervisors, would round out the new board.

Odum asked BVU General Counsel Walt Bressler about apparently conflicting language setting the board size, but another passage empowering an authority board to go back to the General Assembly to change "anything."

Bressler said changing the size of the board wasn’t the intent of the wording and provisions establishing board makeup could be included as part of a contract with the city.

"That could only be changed if both parties – the City Council and the BVU Authority Board – agree to it," Bressler said.

Bressler said council members should receive a copy of the contract later this week.

"As to concerns about selling the assets, they’re not salable," Bressler said. "That is infrastructure to provide services."

BVU also couldn’t just spin off its OptiNet telecommunications division, as some audience members suggested, Bressler said, because it currently isn’t profitable enough.

BVU provides electricity, water, sewer and telecommunications services. It is currently a division of city government, with its operations overseen by the board of directors, with council oversight on some issues.

The change would empower a new BVU Authority to borrow money, file lawsuits, enter into contracts, leases and arrangements and increase rates beyond the 4 percent ceiling, without City Council approval.

A new authority board would control all rates except electricity, which will continue to be set by the Tennessee Valley Authority, and telephone charges, which must be approved by the Virginia State Corporation Commission.

Supporters of the plan ranged from the Bristol Chamber of Commerce and the top executives of Bristol Compressors and Snack Alliance to a number of city residents with no apparent links to BVU, a pastor, and the head of nonprofit Bristol Faith in Action.

Cousins and business associates Archie Hubbard and Frank Goodpasture III spoke on opposite sides of the issue.

"In the constellation of city assets, the Bristol Virginia Utility Board is the brightest star," Goodpasture said.

Hubbard, a former BVU board chairman, said he supports the move based on BVU’s "track record" of sound decision-making.

Former Mayor R.L. Light questioned how BVU’s potential expansion into other areas would minimize the role of the ratepayers who helped to build it.

"I fear this ever-expanding, regional utility will rob its present owners of first consideration in all services," Light said.

Some opponents urged the council to slow down, gather additional input and take more time to study the process before acting.

"We have a bad habit in this city of rushing into things," Heaney said during his remarks. "I’ve only had a few weeks of information and I don’t think that is a lot of time."

Mayor Jim Rector later said the authority "was not a rush deal," and that BVU has been speaking with council members since the spring about this proposal.

"Some, but not all of us," Heaney countered.

The final reading of is scheduled at the council’s Oct. 27 meeting, which will include another opportunity for public comment.

dmcgee@bristolnews.com | (276) 645-2532