City Reporter 

City Reporter

The Cost of Power

TVA's proposed rate increase could affect MLGW, Memphians.

By Janel Davis

A proposed rate increase from the Tennessee Valley Authority (TVA) and a White House budget proposal for the agency to reduce its debt could mean rate increases for Memphis residents.

The 8.1 percent TVA proposed increase for residential customers, while nominally offset by a 2.1 percent decrease for industrial customers, could take effect as early as October. The increase is designed to produce a revenue of $365 million annually to pay for the $1 million spent each day by TVA's adherence to clean-air standards. "TVA's residential rates are currently 11 percent below the wholesale market rate," said Lucha Ramey, spokesman for TVA. "With the increase, TVA's distributors would still be paying much less than most companies in the company."

For MLGW, whose electricity is provided by TVA, the increase will inevitably mean a rate hike for its Memphis customers. "If [TVA] proposes a rate increase, we want them to show us proof where the increase will be necessary," said Mark Heuberger of MLGW. "What everyone needs to understand is that the increase can't be stopped, not by the mayor or the city council. It's something we'll have to deal with."

Last year, MLGW served almost 355,000 residential customers. TVA has not imposed a rate increase since October 1997, when a 5.5 percent overall increase led to a monthly increase of $4 for residential customers.

"MLGW has serious concerns about TVA's proposed electric rate increase, particularly regarding its impact on our customers," said MLGW president Herman Morris Jr. "We will work to see that TVA presents a long-term plan for how the increase will be used, to the satisfaction of MLGW, the U.S. Congress, and our rate payers."

In addition to the increase for clean-air standards, last week the federal Office of Management and Budget (OMB) called for TVA to reduce its current debt of $25.3 billion by $12 billion by 2007. "That big a reduction would have adverse effects on our customers," said Ramey. "Our board and CFO David Smith are working aggressively with OMB to come to reduce the debt over the years instead of calling for such a large reduction at once."

While TVA is self-financed from power revenues and doesn't receive federal tax dollars, its debts are recorded as part of the government's budget deficit. "This [$25.3 billion debt] was carried over from the 1970s when TVA had an aggressive production of nuclear plants and before the energy crisis," said Ramey.

TVA's proposed rate increase is not associated with the government's debt-reduction plan, she said. "As for the effects of the debt reduction, it's too early for people to get upset [about an additional increase]. I feel that when this is said and done, a common goal will be reached."


At an Impasse -- Again

School board stymied by new funding proposals.

By Mary Cashiola

After months of political wrangling over ADA formulas, needs-assessment committees, and paying for two Shelby County school construction projects, the city's school board is no doubt wary of new funding proposals.

Percy Harvey, the city school board's attorney, presented a new plan from Shelby County mayor A C Wharton Monday night to fund the Arlington and Houston schools project, but the board took no action.

"We've gone through the turmoil of two, three, four different plans," said Commissioner Wanda Halbert. "Now at the fifth hour the whole scope of the project changes on us."

In a memo to the board, Harvey wrote that, under the new proposal, the mayor will require "Shelby County Schools to use funds available to it under the current school financing agreement. ... Shelby County Schools will in effect use funds currently that it would be entitled to receive in 2004, 2005, and 2006." The agreement, which would be made between the city schools superintendent and the county mayor, would essentially mean the county schools would be using money they had already been allocated through the current funding agreement. That plan is in effect until 2006.

The city board only recently approved Wharton's Needs Assessment Plan, the crux of which was to trade four annexed schools in exchange for funding for the Arlington project. But when the city council decided last week to annex only part of the Bridgewater area, it meant only two schools -- Kate Bond and Chimneyrock -- would become city schools. And without the other two schools, Harvey said, Wharton's plan wouldn't work.

"We were at an impasse over compensation," said Harvey. "With the uncertainty of when the [other two schools] were going to be coming in, it just became extremely complicated. ... This just buys some time."

Many of the city board members wondered what this meant for their funding, only to be told by Harvey that the district would be unaffected and would still get $57 million a year until 2006.

"In a way it could be said it's not our business how they're going to do it," said Commissioner Lora Jobe. "But they said they needed $49 million in new money. That's how it was presented to us. Are their needs being put on the back burner?"

The Arlington school and Houston renovation project were not part of the current funding agreement. This week, county spokesperson Susan Adler Thorp said the Arlington project is still on track: "This just shifts the amount of time the funding is received."

Commissioner Michael Hooks Jr. echoed Jobe's sentiments. "If they can build with existing funds, why wasn't that done in the beginning?" he asked.

Superintendent Johnnie B. Watson said he would not enter into the agreement with Wharton unless directed to do so by the board. A motion was made by Commissioner Deni Hirsh, but no one seconded it.

The two systems will still have to negotiate how much the city schools will actually "pay" for the two annexed schools. "Mayor Wharton's Needs Assessment Committee is still on the table," said Thorp, "and up for active discussion."


May I Please Help All of You?

McDonald's is ordered to comply with ADA.

By Janel Davis

The company that owns several fast-food franchises in the Mid-South has been ordered to make their burgers and fries accessible to everyone, not just those who can walk through their doors.

U.S. Attorney Terrell Harris' office has filed a complaint against Century Management, LLC, alleging that many of the McDonald's restaurants operated by the company are in violation of the American with Disabilities Act (ADA). The complaint alleges that the restaurants contain physical barriers which should be removed.

The complaint stems from an incident reported by a customer in a wheelchair who fell in the bathroom of one of the company's restaurants.

"Century Management owns about 50 McDonald's restaurants in the area, and the majority of those were built after 1996 and need improvements," said Gary Vanasek, one of two U.S. attorneys handling the case for the government.

The Justice Department enforces the Fair Housing Act and the ADA, which provide architectural standards for buildings opened to the public after January 26, 1993. Buildings built prior to that date are required to remove any barriers to access.

"We want the company to improve the older restaurants in a readily achievable manner. The time limit is negotiable," said Vanasek. Attorneys reached an impasse with the company after two years of talks. During that time, Vanasek said, Century removed some barriers, but other issues -- including narrow restroom stalls and handicap ramps leading to restaurant doors -- must still be addressed.

Century Management denied the allegations.

The justice department will surveys the restaurants and share its findings with Century Management. The company will then be required to correct the problems or could enter into court-ordered mediation. Vanasek expects the surveys to take from six weeks to two months.

The department has previously worked with Valenti Mid-South Management, operators of several Wendy's restaurants, which is implementing its renovations over a two-year span.


Sounds of the City

Council again delays ordinance to make city quieter.

By Mary Cashiola

Noisy businesses, loud public concerts, and squealing tires got a bit of a reprieve from the city council last week.

After over seven months of talk about an excessive-noise ordinance, the council approved a version last month. But at its meeting on February 4th the ordinance was sent back to committee for more discussion.

Council member TaJuan Stout Mitchell says the Memphis Police Department asked her to remove it from the minutes of the meeting. "I'm not sure [the ordinance] is gold yet," said Mitchell. "The police department wants to discuss a couple of sections they have concerns about."

The ordinance was introduced last year and has now been held over eight times.

"There are so many players involved," said Mitchell of the time element. "Code enforcement didn't think they could handle the administration of it, the police department had to review the operational end of it, [and] the finance department had to have a discussion about the cost for the city, so it could take a little time." The police department now has concerns about administering the law's variances.

During the 1950s, Memphis was known as the quietest city in America due to an anti-horn campaign. The newest ordinance doesn't say anything about honking but does make it against the law to remove mufflers from vehicles and sets decibel limits for residential and commercial districts, outdoor concerts, and construction zones.

"We've tolerated a lot of things and, as a growing city, we had to strengthen our noise ordinance," said Mitchell. "Up until now, we didn't have a way to measure the noise level. If the police came out, they'd have to use their own judgment."

According to Deputy Chief Charles Cook, the police department is requesting funding for eight decibel meters to enforce the ordinance. "Two of the eight are very sophisticated instruments," said Cook. "We get the baseline sound levels of an area with the two more sophisticated instruments because we have to know how many decibels are normal for an area."

Even though the ordinance includes offenses like tire squealing and loud car stereos, Cook envisioned it more for protection against noisy businesses and commercial interests.

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