March 8, 2021 Special Meeting Minutes
GOODLAND CITY COMMISSION
Special Commission Meeting
March 8, 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, 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
DISCUSSION AND ACTION ITEMS
- Electrical Cost Plan – Alan stated, this meeting was scheduled to approve documents for the loan that legislature approved for municipalities. A criteria of the loan is to review reserves available to use for extraordinary costs in February. Dustin and Mary evaluated reserve information and submitted a plan to pay these costs and recoup money for projects planned for electric utility. Prairie Land estimates costs passed on to the City are $1,229,000. Mary and Dustin are presenting a plan to pay extraordinary costs less generation costs from the City reserves in CIRF, MERF and Electric Reserve. The plan is then to recoup the reserve money by proposing an additional $8.00 charge to the meter charge for each user over a four year period. Commissioner Farris stated, I think this is a good plan; however, I feel the additional fee for small business accounts should be $10.00 or $35.00 meter charge per month and large commercial $30.00 or $45.00 meter charge per month. Commissioner Thompson asked, is your reasoning to repay reserves quicker? Commissioner Farris stated, I just feel it is the fair way to do it, if it pays back faster that is fine. Commissioner Thompson stated, when I looked at reserves the balance in electric reserves is $800,000; why are we hindering projects and not paying from the electric reserve account? Mary stated, we evaluated the balance in electric reserve and some of the money is budgeted for the Employee Benefit fund so we cannot utilize that money. Commissioner Thompson asked, are you comfortable putting off planned projects? Dustin stated, we prioritized projects and looked at the projects already started. We started easement and engineering work on the south loop project so cannot use that money. In addition, that is where our growth is and expansion has been crippled. Our seven mile tie was evaluated recently and the tie should be good for few years. The tie is our connection to the outside world with electricity. The sub-station is tied into the plant and feel we will be fine. We prioritized projects and believe this is the least impact on the electric department. Mayor Garcia asked, when did you start on south loop project? Dustin stated, I believe 2013. We recently evaluated costs for the project, costs are $1,400,000, and our reserve balance is $900,000. Mayor Garcia asked, will this additional money go back into reserves? Mary stated, that is the objective of our plan. Commissioner Thompson stated, another option discussed was that Sunflower wanted to renegotiate our contract and consider writing off cost. Do we have details on this option? Alan stated, that is a long term conversation. We will have to meet to see what they are offering. While it may be a viable path in the future, we do not know how they are assessing fee now. I feel the prudent path at this time is paying this bill. Mayor Garcia stated, we need to invite Sunflower to a meeting to explain why such extreme costs are being passed on to the City. If they are willing to forgive these costs up front by extending our contract five years, they are recouping the money somewhere. Alan stated, it was not an offer but a conversation. They will be at your March 15th meeting. Tonight we want to gauge the intentions of the Commission for the plan to proceed. We will have an ordinance for formal approval on March 15th. Commissioner Farris stated, this is a good way to go. Commissioner Thompson asked, this amount is above and beyond normal fees? How will we differentiate the costs on customer bills? Mary stated, customer rates remain same based on their consumption. Our plan is asking for an additional fee on the meter charge. Mayor Garcia asked, what if a business wants to pay the entire amount up front rather than monthly? Mary stated, we would like to keep the fee the same for everyone to avoid any potential billing problems. Vice-Mayor Brumbaugh asked, what do you think of what Commissioner Farris recommended? The businesses use more consumption, would it be a way to proceed? Commissioner Howard stated, that is not necessarily the case as my business and residence use is comparable. May have a difficult time explaining same fee for everyone to the small users. Mary stated, coming up with a plan we felt the fee was from Sunflower not created by our customers since the City generated. We felt all customers should be treated the same and $8.00 for everyone would be the least impact. Mayor Garcia stated, I have no problem supporting Commissioner Farris’ recommendation. The sooner we can pay it off the better. Commissioner Thompson asked, how will the ordinance work? Mary stated, we will have a sunset clause in the ordinance for when reserves are recouped. Commissioner Thompson stated, I agree with staff’s thinking and am in favor of the $8.00 charge across the board. I feel people will be happy this is all they will have to pay. Commissioner Howard stated, I agree the $8.00 is a fair amount and people will be understanding of cost. I am unsure about making businesses pay more. There are smaller businesses that would have to pass any additional costs on to their customers. Commissioner Farris stated, I do not understand why the meter charge for large commercial customers is less than small commercial. Mary stated, the meter charge was set that way because large commercial pays demand charges and small commercial do not. Commissioner Farris stated, I forgot the meter charge was different because of demand charges. Alan stated, staff is looking for direction from the Commission.
- Electrical Cost Plan – ON A MOTION by Commissioner Farris to approve moving ahead with plan to pay extraordinary costs from City reserves and recouping the money by increase meter fees in the amount of $8.00 for residential, $10.00 for small commercial and $30.00 for large commercial customers seconded by Vice-Mayor Brumbaugh. MOTION carried on a VOTE of 3-2 with Commissioner Howard and Commissioner Thompson casting the dissenting votes. Alan stated, we will bring an ordinance to the next meeting. Mayor Garcia stated, I would like to extend appreciation to Dustin and Mary for evaluating the situation and recommending a plan with the least impact possible on our customers.
ADJOURNMENT WAS HAD ON A MOTION Vice-Mayor Brumbaugh seconded by Commissioner Farris. Motion carried by unanimous VOTE, meeting Adjourned at 5:30 p.m.
ATTEST: John Garcia, Mayor
Mary P. Volk, City Clerk