November 1, 2014

For a second time, council rejects proposal to change utility board

Danedri Thompson
dthompson@gardnernews.com
City council members discussed a proposal to give the city’s electric utility board (EUB) a more advisory role at a Dec. 3 meeting. Council members debated and rejected the exact same proposal last month.
The Dec. 3 discussion centered around a memo from city attorney Ryan Denk. Denk wrote that ordinance 2296, which created the appointed EUB, varies from Kansas statute in a number of instances.
Newly-appointed electric utility board member Lee Moore wondered why the board has been allowed to exist without incidence for the last five years.
“After five years, we suddenly find all of these flagrant violations of state statute,” Moore said during public comment. “It’s a miracle of modern technology.”
According to Denk’s memo, the EUB ordinance indicates that the board itself can establish its own financials including setting rates. However, Kansas law requires that the governing body adopt an ordinance to set rates. Only the governing body has the authority to adopt ordinances under Kansas law.
Council member Kristina Harrison asked what the ramifications could be to the city since the board, rather than council, has set electric rates. It was a question Denk said he’d rather not answer in public.
“That could be a situation that could expose the city to liability,” Denk said. The exchange led to a 10-minute executive, or private, session for attorney-client privilege.
Denk also said Kansas law allows only the governing body to enter into contracts for the purchase of electricity.
“It is my understanding that based upon this broad grant of authority, the EUB has entered into contracts for the purchase of electricity without governing body approval,” Denk wrote in his memo to council.
Council member Larry Fotovich said it’s clear the EUB has been operating in an illegal manner.
“If you’re doing something illegally, it’s void,” he said. Council member Steve Shute voted a second time against amending the city’s EUB ordinance. He wondered why the council was being asked to consider the exact same thing a second time after rejecting it once. He agreed the EUB was operating illegally, but said simple changes to the ordinance could fix the legal issues without completely changing to board’s purpose.
Council member Heath Freeman said some of the concerns can be addressed at an institutional level. For example, the Gardner Energy director has higher, individual purchasing ability than the city administrator or other director-level city staff. That could be remedied with simple changes to city policy.
Harrison said small changes won’t fix the big item of debate, the budget. Though the council could exempt itself from certain parts of Kansas law to allow the EUB to continue operating somewhat as they do now, the budgetary concerns and rate setting legal concerns aren’t ones in which the city can exempt itself.
Shute said passing the amended ordinance as written would result in immediate repercussions for Gardner Energy consumers including higher rates and lower levels of service.
Harrison said that was ridiculous.
“That’s a fear ploy,” she said. “It’s the exact same employees doing the exact same job. That’s ridiculous to me.”
Although every member of the council agreed the current make-up of the EUB is at odds with Kansas law, a majority of the council rejected the proposal to change it.
Shute said he would like to see the city move to create a board of public utilities that would oversee electric, wastewater and water.
Council members Freeman, Shute and Tory Roberts voted against amending the ordinance that created the EUB. Members Harrison and Fotovich voted to amend the ordinance to make it compliant with Kansas law.
In other business, council members:
• agreed to suspend the Gardner Police Department’s reserve officer unit. Chief Gerald Cullumber told council the department currently includes 11 reserve officers. The officers volunteer their time, and were only used one time last year – to man corners during the Johnson County Fair Parade.
• agreed to a contract with Ryan Denk, of McAnany, Van Cleave & Phillips, for city attorney services.
• authorized an agreement for banking with Metcalf Bank.

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