Other Views: BVU board member makes a case for splitting
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DOCUMENT: BVU Authority Transition Agreement
READ MORE:
Divided Council Approves BVU Split from City
BVU Spinoff Motivation Questioned
BVU Board Members Seek Break from City
OTHER VIEWS: BVU Board Member Makes a Case for Splitting
LETTER TO THE EDITOR: Writer Questions Plan to Separate Bristol Va. Utilities from City
LETTER TO THE EDITOR: Writer Fears BVU Change is Selling Out
Published: October 11, 2009
Updated: October 15, 2009
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.
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Reader Reactions
Look for a take over by AEP.
This is how I have to look at this issue. If I was Bristol Va. and BVU was half of my net worth and was a hugh chunk of my income (city tax revenue) then why would I want to get rid of half of my net worth? If expenses remains the same, and we all know they will not, then I would want to retain every source of income that I currently have. It would be foolish to cut my income knowing my expenses will only go up in the future. Where will I find the money to offset the income that I gave up to pay my expenses?
I think our City and County Board members need to look at this as if it were their check book and bank account. Oh! but maybe they are.
By Bill Meyer:
This morning I was awoken by my alarm clock powered by socialist electricity generated by the public power monopoly regulated by the US Department of Energy. I then took a shower in the socialist clean water provided by the municipal water utility. After that, I turned on the socialist radio to one
of the FCC regulated channels to hear what the socialist National Weather Service of the National Oceanographic and Atmospheric Administration determined the weather was going to be like using socialist satellites designed, built, and launched by the National Aeronautics and Space
Administration. I watched this while eating my breakfast of socialist US Department of Agriculture inspected food and taking the socialist drugs which have been determined as safe by the Food and Drug Administration.
At the appropriate time, as kept accurate by the socialist National Institute of Standards and Technology and the US Naval Observatory, I get into my socialist National Highway Traffic Safety Administration approved automobile and set out to work on the socialist roads build by the socialist local, state, and federal departments of transportation, possibly stopping to purchase additional fuel of a quality level determined by the socialist Environmental Protection Agency, using socialist legal tender issued by the Federal Reserve Bank. On the way out the door, I deposit any mail I have to be sent out via the socialist US Postal Service and drop the kids off at the socialist public school. If I get lost, I can use my socialist GPS navigation technology developed by the United States Department of Defense and made available to the public in
1996 by President Bill Clinton who issued a policy directive declaring socialist GPS to be a dual use military civilian system to be managed as a national socialist asset.
After spending another day not being maimed or killed at work thanks to the socialist workplace regulations imposed by the Department of Labor and the Occupational Safety and Health Administration, enjoying another two meals which again do not kill me because of the socialist USDA, I drive my socialist NHTSA car back home on the socialist DOT roads, to my house which has not burned down in my absence because of the socialist state and local building codes and socialist fire marshal’s inspection, and which has not been plundered of all it’s valuables thanks to the socialist local police department.
I then get on my computer and use the socialist Internet which was developed by the Defense Advanced Research Projects Administration and browse the socialist World Wide Web using my graphical web browser, both made possible by Al Gore’s socialist High Performance Computing and Communication Act of 1991. I then post on freerepublic.com <http://freerepublic.com> and fox news forums about how SOCIALISM in medicine is BAD because the government can’t do anything right.
Check the funding sources of all the large corporations in this area from their beginings. Government Grants, Economic Devolpment Dollars, and Low Interest Loans.
I can’t wait for the competition for the Socialist Police Departments, Socialist Fire Department,Socialist Highway and Bridge Departments, Socialist Gasoline an Fuel Inspections.
Oldman, I’m not really in the clear with your post. You say “private genuises I admire”. Do you mind being more specific?
Socalist loans to build samll power plants? Who are you speaking of?
“Look at all these great businesess you admire. All took huge low interest loans of PUBLIC MONEY”. Now you really have my interest. What business are you speaking of that I may admire and what loans are you soeaking of.
All those so called Private Genuises you admire took SOCIALIST LOANS at low interest to build small power plants but never could have wired the whole countryside.
Look at all these great businesess you admire. All took huge low interest loans of PUBLIC MONEY.
What idgets. Socialize the DEBT and Privatize the Profit !!!!!!
Good game conmen !!!
Rest assured,, this proposal by BVU will not,,, I repeat “WILL NOT” be in the best interest of their electric customers. The only reason they have been able to expand the omni-net without raising prices is BVU receiving grants and “tobacco” money that they don’t need to pay back.
It has not been so for the electric side of the house. Since they have “NO” competition though, every excuse they can come up with,, gets us a rate increase.
Furthermore I seriously doubt that omni-net is paying as much annual pole attachment cost as does the private sector that being the TV cable and Embarq telephone company.
Management at BVU does not see the day when free monies will dry up, nor do they practice good hiring policies. They hire sons of friends of the business. With the finacial breaks BVU’s omni-net has received, it’s easy to “look” good and flaunt awards, but just how efficient would they be under competition.
BVU is socalism. Competing with private businesses the city has licensed to do business within their jourisdiction. Here in the heart of republican country,, we talk about the democrats and their socialistic policies and here we harbor such a animal. Private business could have expanded their facilities also “IF” they had been treated to millions of free money.
Mark it down in red,,, When this proposal is set in motion,, the citizens of Bristol, Va. will get raped with every opportunity available to increase rates. Rosey and his now three cronies on the city council will give themselves hefty increases because there is no electric competition.
Back Door Privatization Move !!!!!!
Once they Issue stock they can be taken over.
Excerpt from BVU website:
BVU left the traditional utility “comfort zone” to deploy competitive services for the following reasons:
• to provide unsurpassed local customer service & technical support
• to meet a need in rural areas that was not being addressed by incumbent
data providers
• to improve the quality of life and the quality of service for ratepayers by reducing the costs for these services
• to meet customer demand for competition
• to enhance economic development opportunities regionally
Quoted from the article:
“This would allow us to run BVU as a business and shields us from the political process coming into decisions,” BVU President and CEO Wes Rosenbalm said after the meeting.
BVU is currently a division of the city, which means publicly elected City Council members have some oversight – particularly when it comes to the purse strings. BVU can’t borrow money or raise rates beyond a certain point.
Under the proposed change, the council would still appoint a majority of the BVU board members, but a BVU authority could borrow money, file lawsuits and impose rate increases greater than the 4 percent currently allowed without City Council approval.
Opinion:
So the purpose is to establish a new service authority that circumvents the restrictions put in place to insure better service and lower costs to the rate payers of our area.
We the rate payers and citizens elected the city council…who in turn employ and have oversite of those at BVU…have shouldered the initial startup costs and took the risk of additional debt…have supported and benefited directly from the success of the business venture…are now being asked to step aside so that Wes & Co can operate unrestricted and raise BVU’s SG&A expenses and our service costs to levels more in line with other providers???
HAHAHAHAHA..You’ve got to be kidding!!
WE DON’T REALLY HAVE TO ASK WHY DO THEY REALLY WANT THE RESTRICTIONS REMOVED??? The answer is in Rosenbalm’s statement…
Shouldn’t the BVU operational and consulting business successes be passed on to US the risk takers in terms of state of the art services. I could imagine city wide wireless services and holding programing costs to a minimum as the BVU entity success subsidizes these increases via profit sharing. Why would we turn this over when it’s just now beginning to provide a return? Why else would they be willing to take on all the debt and give back some return over a period of ten years? Is ten years as long as we expect use electricity??
Wouldn’t it be more efficient to simply broaden the mandate of the entity while keeping it under the City Council responsibilty?
If this were to actually happen, then we need to make sure ONLY under these terms:
City Council appointees are to be ELECTED by referendum
TERM LIMITS
Home territory rate increases be approved by referendum.
Provide a reversion clause that requires the arrangement to be reapproved every 5 or 10 yrs.
An open ended term of profit sharing arrangement in lieu of fixed payments (which tend to become worth less over time due to inflation).
Hey Mr Jim-
Can you guarantee us that rates will go DOWN under this Plan?
...and will you be taking the same salary after a changeover? If yes, for how long?
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