March 1, 2021 Commission Minutes
GOODLAND CITY COMMISSION
March 1, 2021 5:00 P.M.
Mayor John Garcia called the meeting to order with Vice-Mayor Jay Dee Brumbaugh, Commissioner Aaron Thompson, Commissioner J. J. Howard and Commissioner Gary Farris responding to roll call.
Also present were Dustin Bedore – Director of Electric Utilities, Frank Hayes – Chief of Police, Joshua Jordan – IT Director, Kenton Keith – Director of Streets and Facilities, Neal Thornburg – Director of Water and Wastewater, Danny Krayca – Director of Parks, Mary Volk – City Clerk and Alan Lanning – City Manager.
Mayor Garcia led Pledge of Allegiance
Approval of Agenda – ON A MOTION by Vice-Mayor Brumbaugh to approve Agenda as presented seconded by Commissioner Farris. Commissioner Thompson stated, I understand our attorney will not be present tonight so I would like to amend executive session under authority of KSA 75-4319 (b) (2) for consultation with an attorney for the body of agency which would be deemed privileged in the attorney-client relationship to executive session under KSA 75-4319 (b) (1) for personnel matters of nonelected personnel. Vice-Mayor Brumbaugh agreed to amend motion amending the agenda to change authority of executive session under KSA 75-4319 (b) (1) for personnel matters of nonelected personnel. Commissioner Farris amended second to the motion. MOTION carried for amended agenda on a VOTE of 5-0.
- 02/16/21 Commission Meeting Minutes
- Appropriation Ordinances: 2021-05, 2021-05A, and 2021-P05
- Reappointment of Cara Daise to the Goodland Housing Authority Board
- Reappointment of Tracy Hillmer to the Goodland Housing Authority Board
- Reappointment of Harold Gillihan to the Goodland Housing Authority Board
ON A MOTION by Commissioner Thompson to approve Consent Agenda seconded by Commissioner Howard. MOTION carried on a VOTE of 5-0.
- FAA Reimbursable Agreement – Alan stated, the Reimbursable Agreement is for the grant on the Tech Op’s portion of Runway 23 project. Total estimated costs outlined in agreement is $176,275.53; City will be reimbursed 90% of the costs, or $158,647.98. Commissioner Thompson asked, when will grant be available for the reimbursement? Mary stated, the agreement states no later than September 2021, but the FAA engineer believes it will be in the next couple months. ON A MOTION by Commissioner Thompson to approve FAA Reimbursable Agreement seconded by Commissioner Farris. MOTION carried on a VOTE of 5-0.
- Sherman County Speedway Funding Request – Alan stated, this is follow-up of request from last meeting. Staff recommends funding request at $1,500 even though request was for $3,000. Expenditure will be paid out of Other line item for donations. They received $1,500 last year. Commissioner Howard stated, I feel we should give them $3,000 because the event brings a lot of people to town. Commissioner Thompson stated, I agree with $3,000 donation. ON A MOTION by Commissioner Howard to approve donation to Sherman County Speedway in the amount of $3,000 seconded by Commissioner Thompson. MOTION carried on a VOTE of 5-0.
- Electrical Emergency Declaration – Alan stated, wereceived an email from the League of Kansas Municipalities asking City’s to declare a financial emergency for the increase in electric and gas costs incurred during the extreme cold spell in February. They feel it will assist us for any future federal funding. Does the Commission want to pass the resolution? Mayor Garcia stated, I feel we need to proactive, it is already an emergency across the state. Alan stated, if approved we will complete Resolution 1570 Declaring Local State of Financial Emergency. Commissioner Thompson stated, we need to do what we need to. ON A MOTION by Commissioner Thompson to approve Resolution 1570 Declaring Local State of Financial Emergency seconded by Commissioner Farris. MOTION carried on a VOTE of 5-0.
- City Manager – 1. In your packet is a detail of City assets. Street costs are based on mileage and type of road. We estimate City assets at $200,000,000. Property and vehicle estimates were received from insurance company. This is information for future planning. 2. The City is receiving COVID relief funds for tax revenue lost in Special Highway fund in the amount of $9.792.78. 3. On February 22 I received a call from Kirk Girard at Prairie Land, indicating City electric costs could increase seven fold due to the six to eight day period of extreme cold weather. The number he provided was $1,500,000 based on pricing from natural gas grid. We were asked by Sunflower to generate and we did. On Friday we had a conference call with Prairie Land to express our concerns and get a handle on what costs will be. We do not that have number yet and anticipate another call on March 8th or 9th with a number for us. There were fourteen states affected by this issue. We discussed that the City and our citizen’s cannot afford to pay the increased costs. I believe we will have the ability to pay final number over a period of time then have the ability to do same amortization for our customers. The City will have to pay the bill, just waiting on final number and whether there will be State and Federal funding available. Tomorrow there is a conference call with the Governor’s office to get more information and we will put information out as soon as we can to inform citizens. We have generation capacity which we used; this is not the City’s fault. I understand we will share in costs to supply energy on grid, whether we purchased it or not. We have not received information on gas costs. We are doing all we can to make it easy on everyone. The City will get credit for our generation costs, but not at the cost assessed City by Sunflower. Mayor Garcia asked, so we have no final costs? Alan stated, we are working on credits for time the City operated and what they can do for our generation. Mayor Garcia asked, in conference call was there any estimate on timeline to amortize costs? Alan stated, I believe it was spread over twelve months. Mayor Garcia stated, I feel it is wise to invite Prairie Land and Sunflower representatives into community to explain why we are facing exorbitant costs. Our citizens need firsthand information. Alan stated, I will invite them. Vice-Mayor Brumbaugh stated, I would like an explanation of our contract and fixed costs. Dustin stated, our rate is dependent upon what Sunflower buys power. Their costs during this period fluctuated extremely and at one point cost of natural gas was as high as $3,000 per MMBTU. Vice-Mayor Brumbaugh asked, what are fixed costs in contract? Dustin stated, we can no longer peak shave but they pass on all firm power costs to us. Vice-Mayor Brumbaugh stated, I understood this is a long term contract that we could not get out of, but that is was cheaper than anywhere else. Dustin stated, Gerry Bieker negotiated an increase in capacity charges they pay us to offset costs; however, costs to us are based on their costs. Vice–Mayor Brumbaugh stated, I understand we cannot run our plant as cheap as we can purchase from Sunflower. Dustin stated, when they called us to generate, it was that or we would be dumped from the grid and left with no power. They will reimburse our costs, but the costs they charge us are based on market costs. That devalues our plant and generation. Vice-Mayor Brumbaugh stated, so we are tied to them and they dictate costs. Dustin stated, I do not believe Rod Blake, Electric Superintendent at time contract was approved or I were in favor of this contract. Kirk indicated when this contract was negotiated, Sunflower wanted a ten year contract but City Manager at the time wanted a fifteen year contract. There is definitely cheaper power out there. KMEA would help us get out of contract if we were within three years of termination, but we are too far out. Sunflower indicated they wanted to discuss negotiating another contract. Mayor Garcia asked, does KMEA use same distribution lines? Dustin stated, it is all the same lines, just pay a small fee for distribution. There are several municipalities that got out of their contract and went to KMEA. If we were closer to termination of our agreement, we would have a better idea of what it will cost. Mayor Garcia stated, we need to let people know, had we not run we would have been without power. Dustin stated, that is correct. We started generating as soon as requested and ran 79 hours on diesel because Black Hills asked us to quit operating with natural gas. Commissioner Thompson asked, does our plant have capability of running full time? Dustin stated, it is not cost effective with our current equipment. If we want to run full time our cheapest unit will cost $95 per MW where we can buying it for $60. Our power plant is used as a backup and load control for Sunflower to control voltage. We usually get called on to run in summer. For Goodland to run to get out of our contract will not make sense unless we invest $15,000,000 in equipment. Mayor Garcia asked, are natural gas units normally cheaper? Dustin stated, yes but with crisis on natural gas during this emergency we could not run on natural gas. We burned about half our fuel on hand to generate. Commissioner Thompson stated, we need to look into getting out of our contract if possible. Mayor Garcia stated, there are specialized electrical attorneys that would understand terminology better and be able to negotiate better for us. Commissioner Thompson stated, there is an extensive amount of people that cannot afford a bill seven times as high. We need to come up with options to offset increased costs. Alan stated, we are looking at financing available. We had same conversation this morning and are concerned that people cannot afford these costs. Commissioner Howard stated, many elderly cannot afford any additional on their electric bill. Alan stated, we have to help out where we can. Commissioner Thompson asked, will this show up on April billing? Shauna Johnson, Deputy/Utility Billing Clerk stated, yes that is correct. Vice-Mayor Brumbaugh stated, we need to look at safeguards from this happening again. How do we know it will not hit again? No one is exempt. Mayor Garcia stated, I think it is important to bring someone in with a specialty to assist City. I know we may have twelve months, but even that will be exorbitant for people to absorb. Commissioner Howard stated, I am concerned that I got blind sighted by this. People called me because of what they saw on Facebook. Information like this should have been out to all commissioners so we are aware. Alan stated, we only knew there would be increased costs. Commissioner Howard stated, that is fine, but it should have been put out so Commission was aware of increased costs.
- City Commissioners
Commissioner Thompson – 1. I want to reiterate to citizens that we understand your concern and fear and are doing what we can to make it as easy as possible.
Vice-Mayor Brumbaugh – 1. No Report
Commissioner Howard – 1. I agree with Commissioner Thompson. Thank you to employees at power plant that generated for our community. I appreciate all the employees; they are doing good job.
Commissioner Farris – 1. No Report
- Mayor – 1. It is an extremely difficult time for everyone in the State of Kansas. I received an email from the State that indicated FERC is investigating what went on with these exorbitant costs. They are reassuring us they are actively involved to get answers. In eastern Kansas communities were previously buying $1,500,000 in natural gas a year and in these six days costs increased to $10,000,000. I want to reassure citizens we will do everything within our parameter to have least impact to citizens. 2. Appreciate we have employees on standby to generate so we would not be cutoff. 3. Reports from department heads are in your packet if you have questions or concerns.
- Executive Session KSA 75-4319 (b) (1) for personnel matters of nonelected personnel – Mayor Garcia made a motion at 5:43 p.m. to recess into executive session under authority of K.S.A.75-4319 (b) (1) for personnel matters for nonelected personnel not to exceed fifteen minutes. I request the Commission and City Manager be present. Commissioner Thompson seconded the motion. MOTION carried by a VOTE of 5-0. Meeting resumed at 5:58 p.m. Mayor Garcia made a second motion at 5:59 p.m. to recess into executive session under authority of K.S.A.75-4319 (b) (1) for personnel matters for nonelected personnel not to exceed ten minutes. I request the Commission and City Manager be present. Commissioner Thompson seconded the motion. MOTION carried by a VOTE of 5-0. Meeting resumed at 6:09 p.m. Mayor Garcia made a third motion at 6:09 p.m. to recess into executive session under authority of K.S.A.75-4319 (b) (1) for personnel matters for nonelected personnel not to exceed five minutes. I request the Commission and City Manager be present. Commissioner Howard seconded the motion. MOTION carried by a VOTE of 5-0. Meeting resumed at 6:14 p.m.
ADJOURNMENT WAS HAD ON A MOTION BY Vice-Mayor Brumbaugh seconded by Commissioner Howard. Motion carried by unanimous VOTE, meeting adjourned at 6:15 p.m. Next meeting is scheduled for March 15, 2021.
ATTEST: John Garcia, Mayor
Mary P. Volk, City Clerk