phitchins@vicksburgpost.com

It’s gone. After more than three years, a fuel surcharge on City of Vicksburg gas bills is no longer needed, meaning customers who heat their home or water or cook with natural gas will see a reduction in their utility expenses effective this week.

The Board of Mayor and Aldermen voted Monday to reduce to zero what they dubbed the monthly purchased gas adjustment. The surcharge had been at $1.89 per 100 cubic feet of natural gas since Feb. 25 and had been as high as $8.26 since being created in January 2006.

“There will be no gas adjustment going forward on your gas bills,” said Mayor Laurence Leyens, citing stable natural gas prices from suppliers and saying the city was in good shape with its contracts.

“This is not an April Fool’s joke,” chimed in North Ward Alderman Michael Mayfield.

City purchasing agent Tim Smith confirmed that the price adjustment will go into effect in time for the month’s first cycle of bills, being mailed out this week, and will save the average home-owner about $8.50 a month, based on an estimated monthly usage. If the natural gas portion of the water, gas and garbage pickup bill had been $65.54, it will decrease to $57.03, Smith said.

Vicksburg instituted a natural gas price adjustment after a post-Katrina market spike put the city into a $4 million debt from the disparity between supply price and what customers were being charged. The surcharge remained high while the spike was paid off and to keep up with fluctuations.

In 2008, a year of rapidly changing energy costs, the board changed the PGA six times, from a low of $2.56 per 1,000 cubit feet in January up to the high of $8.26 on June 25. On Aug. 25, the PGA was lowered to $4.31, reflecting the nationwide drop in gas prices.

City Strategic Planner Paul Rogers said he expects the rate to remain at zero until the economy begins to rebound.

Utility rates are set by city ordinance, Smith said, and include the cost of natural gas and its delivery, as well as gas department personnel, equipment, pipes, vehicles and all other costs involved in its transmission into homes. The city sets a base rate based upon contracts with suppliers, then adds the adjustment when natural gas increases in cost. Income from the gas utility, which has about 10,000 customers, is not used to supplement general city operations. Under prior administrations, however, prices had been kept artificially low because the policy was to subsidize the gas department with general fund revenue. This administration’s decision to shift the supplement to other purposes and make the gas utility more of a stand-alone operation coincided with a national energy price surge. That translated to shock as customers opened their monthly bills.

City purchasers watch the market, Smith said, and sometimes enter into long-term contracts ahead of need if they want to lock in prices.

“We try to keep the cost down as much as we can,” he said, “though we don’t have a crystal ball.”

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On the agenda

Meeting Monday, the Vicksburg Board of Mayor and Aldermen:

• Administered the oath of office to eight new police officers: Deneka Tinner, Charles Huggins, Latoria Kerr, Leon Kennedy, Jaclyn Noel, Jack Miller, Phillip Rees and Kevin Rushing.

• Received three bids for weed control and two bids for reselling collected white goods.

• Authorized seeking bids for a manufactured office building.

• OK’d seeking Justice Assistance Grant Recovery Program Funds, anticipated to be $265,607 and split evenly with Warren County.

• OK’d a revised agreement between the city, Good Shepherd Community Center and United Way of Central Mississippi due to the allocation of additional funds.

• OK’d federally required resolutions to accept Housing and Urban Development grant funds for Hurricane Katrina relief.

• OK’d an agreement between the city and the Mississippi Department of Transportation for each to contribute matching funds required to receive Federal Aviation Agency grant money for the airport.

• OK’d $307 to Parks and Recreation for an amplifier.

• Tabled a request for a change order for the Riverfront Parks Improvements Project.

• Approved prices from Premier Election Solutions for primary, runoff and general elections.

• Authorized paying VenuWorks for use of City Auditorium for election training April 25.

• Tabled paying a $2,235 bill of the Vicksburg Convention Center for advertising at the Jackson airport.

• Approved a request from Parks and Recreation to pay $2,624 to the Vicksburg Girls Softball Association for affiliation and insurance fees.

• OK’d purchase of promotional items for Vicksburg Police Department underage drinking and child restraint programs.

• OK’d $200 for advertising the Good Shepherd Center’s Fun Day April 24.

• OK’d paying WVBG radio station $495 for the Miss Mississippi and Miss Outstanding Teen pageant advertising.

• Approved a request from BluzCruz Marathon for a $500 sponsorship and permission to use the north boat ramp at City Front and restrooms on Catfish Row on April 18.

• Approved a request from Vicksburg Catholic School to close part of Grove from Howard to Hayes from 8 a.m. to 4 p.m. May 2 for the 39th annual Play-A-Day-In-May-Away.

• Approved minutes from March 2, March 3 and March 5.

In executive session, the board:

• Approved eight employment requests in the fire, information technology, right of way, parks and recreation and recreation departments; seven pay adjustments in the fire department; and one firing in the fire department.

• Approved disciplining one police officer, resulting in a demotion from sergeant to patrolman with a five-day suspension.