The goal wasn’t to neuter the Gardner’s Electric Utility Board, but council members reached a consensus to slash several powers of the board.
When the board was created by ordinance in 2008, it was tasked with policy making for Gardner Energy and given exclusive control of constructing, acquiring and expanding, and operating the utility as well as budgetary discretion to set electric rates, hire employees, and set employee pay and policies. The ordinance, no. 2296, gives the board autonomy and the authority to set electric rates, purchase real estate and implement economic development incentives.
“Our mission and our charter is to work for our ratepayers who are citizens of Gardner,” EUB Chair Eric Schulz told the council.
Staff did not make a recommendation related to ordinance 2296. Brian Faust, Gardner public works director, said the council has three options. They could leave the electric utility as it currently is. Council members could change the board’s control and oversight to an advisory board, similar to the planning commission, or they could add council oversight on major functions of the board.
“Almost a cafeteria plan,” Faust said.
City finance director Laura Gourley explained that the utility’s budget is part of the city budget, and EUB budgeting decisions could affect the city’s credit rating and audits.
“State statute does not recognize authority of the board to adopt its budget,” Cheryl Harrison-Lee said.
She said the state views the electric utility as a division or department of the city – not as an autonomous entity.
City officials and the EUB butted heads as the city was drafting its 2014 budget, late last summer. The EUB adopted a budget before the council completed its budgeting in early August. City staff said the EUB overcharged the city for electric rates for several years, and council members decided to balance the city budget by requiring the electric utility to furnish a rebate for two years worth of overcharges.
The budget debate raised questions over which entity – the city council or the EUB – had the authority to make that decision.
“I don’t want to turn this into some kind of urinating contest for distance and accuracy between us and the board,” Mayor Chris Morrow said as discussion heated up at the Oct. 7 work session.
Current and former members of the Gardner Electric Utility Board attended the meeting, and spoke from the audience. The council’s discussion took place at the council dais.
Council member Larry Fotovich proposed scrapping the EUB all together and starting over, but a majority of council members reached a consensus to make the EUB more of an advisory board, in which the EUB would make recommendations and seek approval of the city council.
“We’ve already eliminated three of their functions. I keep coming back to, let’s start over,” Fotovich said.
Council member Heath Freeman seemed to oppose limiting the authority of the EUB.
“The EUB has to have an element of control so they can be proactive,” Freeman said.
EUB members also stressed that they are the only city department or unit that must compete with private businesses. While Gardner Energy’s customers must be within annexed parts of the city, companies like Kansas City Power and Light also operates within city limits.
That’s one reason, Schulz explained, the EUB decided to expand its utility lands on the eastern edge of Gardner on 175th Street. Gardner Energy power is now available to potential developers east of the Interstate 35 interchange.
“KCP&L can serve within Gardner city limits. It’s kind of a squatter’s mentality,” Schulz said.
Staff worried that Gardner Energy’s expansion plans aren’t necessarily in line with the city’s economic development goals.
Morrow said council members are in the process of creating an economic development task force that could include a member of the EUB.
The staff presentation also highlighted concerns about the EUB’s authority to offer pay raises. For example, there are EUB employees earning salaries above and beyond the city’s salary ordinance, which sets pay for city staff.
The city council didn’t make any final decisions during the Oct. 7 work session. However, it appears they have reached a consensus to strip the EUB of three of its existing powers. First, council members appear to agree that economic development decisions – expanding the utility and purchasing right of way – should require council approval.
“I believe it should be an advice and consent role,” council member Steve Shute said. “(Economic development decisions) need to come here so we can bless it.”
Secondly, final EUB budget authority will rest with the city administrator and city finance director in the future. The EUB may make budget and rate recommendations to the city administrator, but the council and city administration will have the final word in the future.
Hiring and pay decisions will go through city administrative services.
Council member Kristy Harrison said salary decisions should go through Mary Bush, city director of administrative services.
Meanwhile, the council may consider changing the electric utility board to a board of public utilities that would offer oversight of electric, water and wastewater in the future.
Freeman opposed the idea to limit the current board’s power and to expand or add water and wastewater to a similar advisory board. He said there is no way to equate the EUB to the planning commission or to water and wastewater management.
“The EUB, they’re going and seeking ways to enhance their business,” Freeman said.
City officials briefly considered creating a board of public utilities. Morrow, when he was a council member, presided over a citizen committee that studied the issue.
The council will consider amending or changing the ordinance that created the EUB at a future meeting.