City officials will move forward with a plan to create a utilities department and a commission or board to make rate recommendations to the city council.
City council members appeared to reach a consensus by ruling out several different options for oversight of the Gardner’s electric, water and wastewater utilities.
Prior to 2008, all three utilities were contained within the public works department. In November of that year, city officials created an electric utility board to oversee the newly-created Gardner Electric. The board was tasked with setting utility rates and overseeing the utility’s operations.
However, legal counsel advised the city council earlier this year that some authorities of the utility board belonged to elected council members per state statute. In February of this year, the council changed the function of the board, making it more of an advisory board.
Months of discussion preceded the decision, and the council continued to discuss other options for general oversight of the city’s utilities.
During the June 9 work session, council members ruled out all but one option – creating a city utility department to oversee daily operations of water, wastewater and electric and creating an advisory board to make rate recommendations to the council.
Council members first ruled out the possibility of putting the electric utility back under the authority of the current public works department.
“I don’t want to go back to what we had before,” council member Steve Shute said. “It was an inefficient model.”
Council members also ruled out the possibility of selling the electric utility. Previous council members considered such a proposal in 2008, going so far as to receive an appraisal of the utility’s worth and take bids. An appraisal valued the electric utility at $12 million, but bidders were only willing to pay $8 million. Council members at that time rejected the offers and created the electric utility board.
Mayor Chris Morrow said he informally approached KCP&L, a neighboring electric company, about the possibility of purchasing Gardner Energy.
“KCP&L didn’t want to put a whole lot of effort into finding out what it’s worth,” Morrow said. “They don’t seem to have an appetite.”
Council members also ruled out a proposal to create a board of public utilities, similar to a board in McPherson, Kansas, to oversee Gardner’s water, wastewater and electric utilities.
City attorney Ryan Denk said he had some legal concerns about aligning such a board with state statute. Legally, he said such an appointed board should not have authority to set rates or bond the city, per state statute.
Council member Larry Fotovich did not support the creation of an appointed advisory board or commission. He supported keeping the electric utility as a department within public works.
“Why don’t we peel off the police department and form an advisory commission?” he asked.
Fotovich said the citizens elect members of the city council to make decisions.
“Why would we ever want to give the power to a group that is no longer elected? (The electric utility) was a department for 60 years and never had a problem,” Fotovich said. “Just as water and wastewater have done fine as long as there’s good leadership.”
Council member Kristina Harrison asked what is left for a commission to do if council retains bonding authority and all of the power to set rates and to approve utility budgets.
“It’s one thing to have people come in and make recommendations,” Harrison said. “If you have people who want to be involved, what’s the harm?”