Small Town News

Economy

City electric rate hike proposed

The Trinidad Times Independent of Trinidad, Colorado

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A proposed city ordinance that will lead to a significant increase in electric utility rates got its first reading at Tuesday evening's city council meeting.

Rates will be increased by 4.8 percent under the new ordinance, with an energy cost adjustment amounting to a further increase of 11 percent, making the total increase just under 15 percent. The ordinance will be discussed at a public hearing scheduled for Dec. 14 at the council's work session at 1:30 p.m. at city hall.

An unexpected increase in the mill levy, put in place by the Arkansas River Power Authority (ARPA), led to the proposed increase. ARPA's levy has recently increased to 21 mills, forcing the city into a situation where its Power and Light utilities reserve fund will go broke by the end of November 2011, according to City Manager Ed Gil de Rubio. The city currently has $1,471,618 in its reserve fund, but will need to steadily deplete those funds to balance its budget, unless electrical rates increase. The city's power and light department had prepared a chart for attendees at the meeting, showing the rapid depletion of the reserve fund over the next year, even with the proposed 4.8 increase. The chart showed that the fund would have a negative balance of $34,867 by the end of November 2011. A second chart showed that, by adding in the 11 percent energy cost adjustment, the fund would have a positive balance of $1,181,931 by the end of November 2011.

The city had budgeted for 14 mills in 2011, Gil de Rubio said, and the mill increase situation is likely to get worse. Another 2-percent to 3-percent increase may be required by the end of next year. An average residential customer can expect an increase of $8.50 on their monthly utility bill if the proposed changes are approved by the council at its next regularly scheduled meeting on Dec. 21.

The increases are necessary if the city wants to maintain a viable electric service, according to Power and Light Superintendent Dave Brunelli.

"We have a five-year capital improvements plan that has already been pushed back by two years," Brunelli said. "We need the energy cost adjustment (ECA) now. I do want to stress that the ECA is not an exact number. It goes up and down with the rates we have to pay for electricity."

One citizen voiced serious concerns with the rate increase and questioned why the city does not cut ties with ARPA, which is losing money on a regular basis. Businessman Lonnie Adkisson said the city should be looking at other alternatives besides ARPA.

"What happens if ARPA goes broke?" Adkisson asked the council. "There is no such thing as an unbreakable contract. It reminds me of that story on the news a while back where a man in the wilderness had his hand trapped under a rock. He cut his own hand off to save his life. I'm beginning to think that's what we need to do with ARPA. We need to cut ties with those people to save our city's financial life."

Gil de Rubio responded by asking what the consequences would be if the city broke its contract with ARPA. He insisted the company is in serious financial trouble and it might be best to play a waiting game, protecting the city's immediate interests while considering what to do in the future.

"The strategy I would suggest to the council consists of two parts," Gil de Rubio said. "In the short term, we have to raise the rates. We can't let tht reserve fund go broke. No responsible city would do that. The long-term strategy is to talk to other energy providers and see what we can do there, while we wait to see what's going to happen to ARPA."

IN OTHER ACTION. . .

The Trinidad City Council on Tuesday:

Passed a memorial resolution recognizing the late Filbert Garcia for his many years of service to Trinidad and the surrounding area.

Heard the first reading of a proposed ordinance that would appropriate certain revenues of the city and apply them to the appropriations for the fiscal 2011 budget. The public hear-ingonthe proposal will be at the council work session on Dec. 14.

Heard the first reading of a proposed ordinance amending the city code to allow for alcoholic beverages at tasting events by retail liquor stores and liquor-licensed drugstores, with the public hearing on the proposal scheduled for the council work session on Dec. 14.

Heard the first reading of a proposed amendment amending the city code for the purpose of prohibiting certain uses of medical marijuana. Public hearing is on Dec. 14 at the work session.

Heard a resolution proposing the levying of property taxes based upon the 2010 certification of valuation, to help defray costs of government for the city for the 2011 budget year.



Copyright 2010 The Trinidad Times Independent, Trinidad, Colorado. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from SmallTownPapers, Inc.

Original Publication Date: December 10, 2010



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