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TMU lowers electricity rates

August 12, 2009
Traer Star-Clipper

By Amy Jantzen

Managing Editor

The Traer Municipal Utilities Board held their regular meeting Thursday, Aug. 6. Attending the meeting was Chairman Bruce Overton, Vice Chairman Dann Larmore, Trustees, Dick Thompson, Sandra Whannel, Joe Morris, General Manager Pat Stief, Secretary Jon Panfil, TMU employees Brian Lyons and Mike McKinney and Ross and Mary Hamilton.

Chairman Overton called the meeting to order at 7 p.m. Whannel made a motion to approve the agenda, Larmore seconded and the motion carried. Thompson made a motion to approve the minutes of the previous meeting and the bills, seconded by Larmore and the motion carried.

The next item on the agenda was to consider authorizing payments on charge cards with due date prior to TMU Board meetings.

Stief explained that two cards in particular fell into this category. The Menards and Blaines Farm & Fleet charge cards. Stief was concerned about the amount of finance charges that they had been paying. Larmore asked if the companies would consider waiving the finance charges. Stief said that they were both such big companies that he didn't feel that was a possibility. Lamore then suggested that they had two options; stop patronizing these companies or authorize payments prior to the meetings. He also questioned if they had a policy in place to authorize payments without prior approval from the board. Panfil explained that the policy was in place and authorized expenditures up-to $5000 without prior approval from the board.

The board suggested that Stief authorize the payments as long as they eventually come before the board and that if he was in question to email the board prior to their regular meetings.

Larmore made a motion to the fact, Morris seconded and the motion carried.

Stief gave a report to the board regarding the wind turbine update. He said the plan was to form a limited liability company and they would own it for five to seven years and in that time TMU would purchase the power from it. After the five to seven years, TMU would buy the dept. from that group. He went on to explain that although they already had an agreement in place with the property owner two miles south of town, he didn't feel that they had sufficient data to make the deadline set by the USDA and that they should shoot for the next deadline.

Stief explained that due to wholesale electrical costs dropping the projected rates for 2011 will be much lower. He said that he thought the rates could be lowered up to 10 - 12 1/2 percent. He felt this decrease could happen two different ways. TMU could offer a partial decrease in 2010 and an additional decrease again in 2011; or offer the entire discount in 2011. If they offer the discount over the two years, TMU would be losing the first year due to the fact that they will not be experiencing the lower costs until 2011 and so the entire discount would be offered to TMU customers in order for TMU to recoup their losses from the first year discount.

Larmore commented, "that we promised our customers to reflect what is happening to us on to them."

Overton asked, "What would happen if we put this in our power adjustment?" Stief said that was a possibility.

Larmore said, "Our customers are working through this when it is hardest for them, we need to help them now. We have new information."

Lamore made a motion to use the blended adjustment, Thompson seconded the motion and in a roll call vote of all ayes the motion carried.

Stief updated the board on the natural gas. Stief and Cmelik had met July 30 in Cedar Rapids with two representatives from Alliant. Alliant was more focused on cost per customer. Stief said to show good faith they agreed to contact the appraisal and include the numbers from the towns of Mapletown and Alton. Larmore asked if it was possible to plug these numbers in ourselves. Stief said he was not sure of the formula the appraiser used to determine the final numbers.

Stief told the board that there is another meeting planned with Alliant on Aug. 27 and although he doubts Alliant will come and say lets negotiate a deal he felt the board should meet with the appraiser and attorney to decide on a ceiling price that they are willing to pay for the franchise. Stief also explained that due to the tenancy of the situation this meeting with the appraiser and attorney should be in closed session in fear that the information would be leaked to Alliant. Stief suggested that the board decide on a price the felt they would pay and that number be wrote down and sealed in an envelope and when the price is agreed upon with Alliant they would then make it public information and take the deal to the community.

Mary Hamilton asked that in the update Stief supplied to the city council it stated that Alliant would be willing to give their information to a third party, why do we need to update our appraisal then also?

Stief explained that if they agreed to that then TMU would be bound by the third party numbers and that they had no control what information they gave the third party.

Hamilton asked what it would cost to update the appraisal? Stief said the appraiser charges $200 an hour and was to sure how long it would take to update the appraisal.

Hearing no other questions or discussion, Overton adjourned the meeting at 7:30 p.m.

The next regular scheduled meeting is Thursday, September 3.



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