Special to The Gardner News
The Gardner City Council held a special meeting to decide the future of electric rates for some Gardner residents at a special meeting March 30.
A one page agenda was posted to the city’s website late March 27, and residents had until noon Monday to provide input. Complete information was not included in the agenda, but was made available to The Gardner News after the meeting upon request.
Council members voted for an electric bill holiday for the month of March for residential and commercial customers. Mark Baldwin, council member, dissented. The decision was made to ease the burden for customers struggling to pay bills due to a rate increase last year and the pandemic.
The holiday does not appear to address concerns some al electric customers had with a rate incease.
Steve Shute, mayor, said Gardner is a blue collar community, and everyone is struggling. “A pandemic isn’t anticipated,” he said.
Baldwin asked Shute what the city was trying to solve. “Are we helping as many as possible while the hurting the most,” he said.
Shute said everyone was struggling. “We are trying to fulfill the electric utility to serve the community,” he said.
City staff presented eight scenario options that council members could vote on.
As received after the meeting, those options were approved:
-Option 7: Provide a one-month holiday to electric
residential customers. This option involves not charging electric residential customers for their March charges. The city would forego collecting approximately $733,573, which includes service charges, power cost adjustment and consumption.
-Option 8: Provide a one-month partial holiday to electric commercial customers. This option involves not charging electric commercial customers for the first 5,000 kilowatt hours of March consumption. The city would forego collecting approximately $56,828.
Amy Foster, utility business services manager, said option 7 would be the easiest to put in effect.
“We would undo the March bills and rebill it all at zero cent per kilowatt,” she said. The decision had already been made to stop late and shut off fees. Foster said customers have been so grateful so far. “The panic is out there,” she said.
Option 8 would not charge commercial businesses for the first 5,000 kilowatts.
Foster discussed payment plan options that could be available up to 12 months. “They could pay as you can and then when the doors open again they can come in, sit down and we could work with them,” she said. “Most are willing to do that.”
Foster said people are concerned they aren’t being sent the delinquent notices. “They are worried we will just show up and disconnect them,” she said.
Foster said the council can vote on one or a combination of options or adopt an ordinance revising part of Title 13 of the municipal code.
Todd Winters and Tory Roberts, council members, said they both liked options 7 and 8.
“Don’t want to single another group by hurting other citizens,” Winters said. “Option 7 or 8 are unusual, but we are in an unique position-the country really.”
He said it was a chance for the city to make a huge gesture.
“We might be kicking the can down the line,” he said. “But a lot of people don’t have income, and this will have an immediate impact and be well received in the community. It puts a lot of good karma out for the city.”
Roberts said it was an unique situation but people are struggling. “We have to get outside the box,” she said. “It will hit our budget and hit our reserves, but we can figure it out later.”
Matt Wolff, finance director, said it will not impact the budget immediately, and the rates will be held as steady as possible.
“If the city continues to grow we won’t have to increase the rates earlier as in four to five years from now,” he said.
Rich Melton, council member, said they were kind of in a quandry and he wasn’t worried about nationally but Gardner. “I’m just wondering who I will offend,” he said.
Baldwin asked city staff why the CAF wasn’t out before the meeting.
Foster said they were trying to get all the billing out, and staff is only running at 50 percent due to social distancing. “We didn’t have the numbers until Friday,” she said.
Baldwin said the city website is also misleading people to think they are getting a two percent discount.
“I dislike 1, 2, 3, 4, 6,” he said, regarding options. “They are not equitable. Five is irresponsible and not following our plan and will null and void the entire rate study.”
Baldwin asked Foster how many people were not caught up on January and February electric bills.
Foster said out of 1,300 customers, 200 customers are currently on payment plans.
Baldwin said rates had needed to change. “No one wants to get hit with a big bill,” he said.
Baldwin asked about how the city would handle water rates when they are raised in July. He also asked the mayor about the Good Samaritan Project.
“This sounds like charity not government,” he said.
Shute said Baldwin had been talking for years how the city has been overcharging customers.
“Your approach has been consistently to do something or give back,” he said. “We are going with the second option.”
Shute said many people in the community won’t be getting a (pandemic) federal check.
“They don’t run fast and people in this community are hurting now,” he said. “That’s why options 7 and 8 make sense. It is an equitable way to use surplus. We are not giving back but forgoing revenue for a month.”
Shute said choosing to halt March bills is easier than going back to rebill February.
“We don’t have millions in the Samaritan Project,” he said. “This is a way to help existing customers through a tough patch until the federal checks ease the burden.” In July 2019 Shute announced the Good Samaritan projects and said he was working with key leaders in the community to form the Gardner samaritan project. This initiative was to connect those in need to volunteers and organizations that can help. There has been one announced project to date.
Baldwin said it was a whim of the governing body to make the electric bill holiday decision.
“You can say it is a pandemic or not communicating,” he said. “But you are giving it back and are giving everyone a holiday.”
Baldwin said the city would have to pay it back.
“It could be worse for all electric customers,” he said. “There is only so much improvement you can do in a trailer.”
Shute said the community needs higher end but better constructed housing.
Baldwin continued to bring up how the city will continue to be in the same situation in July with the water rates.
“I know we want to run electric like a business,” Shute said. “Do you think right now KCPL isn’t working with their customers. They are beholden to their shareholders.” Shute said Gardner’s shareholders are the citizens of the community.
“Does an investor care more about citizens,” he said.
Wolf said retail sales are down but still growing but projects have been delayed. “It is a policy decision,” he said. “We have a healthy balance now that we can dip into now.”
Baldwin said some rate classes will be subsidizing others.
Shute said it is the city’s one time shot to do what is right.
Baldwin said he was worried about the precedent it is setting.
“This isn’t in the plan,” he said.
Shute said a pandemic isn’t anticipated.
Baldwin said where does it stop with rates and fees.
Randy Gregorcyk, council member, said it isn’t tax dollars but payment for service. “We didn’t communicate the rate change for all electric,” he said.
Gregorcyk said he preferred option 7 with a slight addendum because it helps everyone in the community. “It aligns with Covid-19 and the furloughs, lost jobs and hours cut in half,” he said. Gregorcyck suggested exempting the city council from the rate holiday as they were the ones who determined the rates.
Melton questioned the exemption and said the council was probably working harder on the rates than anyone else.
Baldwin said he would vote for Option 9 to continue to keep the plan as is.
Council passed options 7 and 8 without Gregorcyk’s suggestion. Baldwin dissented.
The beginning of the meeting experienced technical difficulties with the livestream.
Shute also read letters from citizens concerned about the electric rates since they were unable to attend due to social distancing measures from Covid-19.
Electric rates were reviewed by the Gardner City Council during their March 16 meeting, addressing concerns about more than 1,300 total electric residential customers that had seen their bills more than double this year. In February, 2019 the council changed rates and residential electric customers were charged a $6.72 service charge plus $0.1038 energy charge per kilowatt hour. Residential customers do not pay a demand charge. By comparison, both USD 231 and the city receive lower rates per kilowatt hour.
Reached after the meeting, Shute said, ““These two actions will be welcome relief for all in our community who are struggling with bills and other obligations as they are waiting for federal government assistance,” said Mayor Steve Shute. “As a Governing Body, we recognize that we own our Electric Utility for such a time as this, and we are willing to exercise these options to assist all of our citizen ratepayers (our electric shareholders, if you will) through this difficult time.”
(Some information for this article supplied by Kiesia Kay)
‘Rate holiday’ given to electric customers