GARDNER DISCUSSES RATE RELIEF FOR SOME ALL-ELECTRIC CUSTOMERS
by Lynne Hermansen
Special to The Gardner News
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.
City Council members changed the March 16 original agenda to consider an option for Gardner’s all-electric residential utility customers. Steve Shute, mayor, said they weren’t repealing ordinances and retroactivating rates.
He said he wanted to lessen the blow temporarily for the most vulnerable in the city such as the low and fixed income citizens to move forward this year.
At the last meeting about 40 residents attended the meeting. Council discussed the 1,302 households that were slammed by the increase, and council discussion then centered around referring customers to charity programs, making payment arrangements or providing equal pay opportunities. Residents had not been informed thru the city’s newsletter, web, bill insert or social media of the electric or water rate increases.
After a lengthy discussion March 16, council members agreed to call a special meeting for March 30.
Jim Pruetting, city administrator, said the city doesn’t have the authority to raise rates on those who got the cut. In addition, he said they don’t have a firm estimate but could lose out on $75,000.
“Going forward we need to give people time to prepare,” Pruetting said. “We have to phase in a holiday or give a break between winter and summer rates.”
Pruetting said they didn’t know the rate increase would occur when they did the original rate study, and the information hadn’t been provided.
“The world has drastically changed in the last seven days,” Shute said. “This will be felt by more lower and fixed income and the impacts of the economic downturn are causing this.”Amy Foster, business manager, said a lot of outreach has been made to look at the impact and how a complete rollback of the electric rate for residential and commercial customers would work. Nasta said the first year would be a $663,000 loss.
According to the March 2 meeting minutes, a report by Matthew Wolff, finance director, indicated the electric fund was “robust” and that the fund balance increased from 68 percent to 80 percent. There is an additional $3.1 million in electric capital reserve fund.
Shute discussed having a billing holiday to give reprieve for a month’s bill.
Foster said the March readings had been done but the billing cycle for March hadn’t been tabulated. “If we rolled back we will lose revenue,” she said.
Rich Melton, council member, asked if a memo could be quickly created showing the city’s different options.
Shute said he wants to buy folks time and lessen usage and demand. He said he would prefer a holiday option to temporarily relieve the heavy impact.
Foster said the big question was how the city can move forward and give relief.
Randy Gregorcyk, council member, said he wanted to know how to correct the city’s original mistake from the rate study but not lose revenue.
“We didn’t make a mistake and staff didn’t make a mistake,” Shute said. “This will be rectified.”
Mark Baldwin, council member, said he thinks the mistake is on the city.
Shute said the 70 percent some rate increase is inexcusable.
“We saw some numbers change with the rate class,” Foster said. “But the overall impact of one percent over a year seemed insignificant.”
Baldwin said there are always a few customers that use more.
Shute said the revenue will be negative, but they need to give residents time to prepare if they are going to struggle.
“We screwed up,” Baldwin said. He said that giving a holiday will make things worse.
Shute said he didn’t think it was a valid argument right now.
“Data is one thing but pragmatism says something different,” Shute said.
Gregorcyk said he suggests a pilot offset difference. He said they could tap into the electric funds savings account to offset the pilot from five to three percent.
Wolff said they would be shortening the general fund.
“We have got to do something for consumers no matter what,” Gregorcyk said.
Shute said we are now living in a completely different world.
“We are going to make it worse not better, “ Baldwin said. He said he was concerned the long-term impacts would cause a greater financial impact from a short-term reprieve or rate change.
Nasta said it would be exhausting to evaluate every individual bill.
Todd Winters, council member, said his biggest concern was people who installed all electric and especially apartments as most apartments are all electric.
Foster said they had some customers on doable payment plans but the biggest concern was for single family residents.
Shute said the city can’t favor one group over another.
Foster said the city would need a new ordinance to change rates.
Shute said the growth and demand in Gardner is driving the rates.
Winters said giving a rate holiday would give some customers back double the money.
“Changing everything now will be detrimental,” Baldwin said.
Tory Roberts, council member, said the city should do something to make it better for this situation. “I know we have a shortfall,” Roberts said. “I would like to see our options.”
Gregorcyk said he didn’t want to lose the momentum of the rate study and rate classes. He suggested looking at kilowatts and giving customers a credit for the next eight to nine months.
“We hosed these folks,” he said. “We don’t have another option.”
Shute said Gregorcyk should be careful with his choice of words.
In other business:
City council also passed the new insurance for City employees with Humana for the 2019-2020 year and approved withdrawing from the Midwest Public Risk health, dental and vision programs.
Alan Abramovitz, human resources manager, said they will have a $127, 009 savings with the new plan. He said they will re-evaluate the plan annually.
The new plan will take effect July 1.
Gregorcyk said staff did a good job in their hard work of getting employees a new plan.
“I am stoked to find this kind of savings,” Melton said.
Council members passed three year contract with National Insurance Marketing Brokers for employee benefit consulting and administrative services.
Abramovitz said there are more offerings, but it is voluntary to participate. “There is no pressure,” he said.
Shute said the range of services is more robust.
The city passed an adoption of Article 6-107.3a of the Personal Policies and Procedures for City Staff.
Abramovitz said Covid-19 is causing an existential threat. He said employees may still use sick leave, FMLA and have the option to use accrued vacation leave once their sick leave has been used.
“Because of this virus people may have to stay home at no fault of theirs,” Abramovitz said.
He said the extended benefit will expire when Johnson County lifts the State of Emergency.