HomeMy WebLinkAboutRes2022-087 Special Election May 2 2023 Sponsored by: Bower
CITY OF SEWARD,ALASKA
RESOLUTION 2022-087
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, SUBMITTING THE QUESTION OF SELLING THE CITY OF
SEWARD ELECTRIC UTILITY TO THE QUALIFIED CITY OF SEWARD
VOTERS AT A SPECIAL ELECTION IN AND FOR THE CITY OF
SEWARD ON MAY 2, 2023
WHEREAS,the City of Seward owns and operates the electric utility with approximately
2,900 meters and limited financial resources; and
WHEREAS, the financial burden associated with increasing technological demands,
completing infrastructure improvements,meeting more stringent industry standards and attracting
and maintaining qualified employees, has led to the City Council's consideration of selling the
City's electric utility; and
WHEREAS, it is in the public's interest to provide consumers with safe and reliable
electric service along with reasonable rates and value-added programs and services while, also
managing the City's assets for the long-term benefit of the citizens of the City; and
WHEREAS,prior to voter approval of the proposition to sell the electric utility, the City
will issue a Limited Solicitation Request for Proposals from interested and qualified electric
utilities in Alaska to provide electric services; and
WHEREAS, following receipt of the proposals, the City will negotiate with, and select,
the utility most qualified to meet the electric service needs of Seward while also sharing the City's
community-focused values; and
WHEREAS,the selected utility will be announced to the public prior to the vote on selling
the utility and the selected utility will be authorized to provide public information to City voters;
and
WHEREAS, the City Council will enact an ordinance in advance of the May 2, 2023,
election with an effective date contingent on voter approval of the sale of the utility, establishing
a permanent fund for the receipt, investment, and use of proceeds from the sale and to direct that
permanent fund revenues be used to make a yearly transfer to the General Fund and to fund capital
improvements approved by the City Council; and
WHEREAS, Seward City Charter 13.4 permits the council to sell, lease or otherwise
dispose of a municipal utility or of property and interest in property used or useful in the operation
of a utility only after a proposition to do so is approved by three-fifths of the electors (voters) of
the city voting on the proposition.
NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
CITY OF SEWARD,ALASKA
RESOLUTION 2022-087
OF SEWARD,ALASKA,that:
Section 1. The City shall submit the following proposition to the qualified voters of the
City at the May 2, 2023, special city election. Pursuant to Section 13.4 of the City Charter, the
proposition must receive an affirmative vote by three-fifths of the qualified electors voting on the
proposition to approve the sale of the municipal utility.
Proposition No. 1
Sale of Seward Electric Utility
Shall the City of Seward sell the Seward Electric Utility with the negotiated terms
and conditions previously approved by City Council that are contingent on voter
approval?
Proposition No. 1 Yes
No
A yes vote approves the sale of the electric utility.
A no vote means the City of Seward retains the electric utility.
Section 2. This resolution shall take effect immediately upon City Council approval of a
purchase and sale agreement for the Seward Electric Utility. Proposition No. 1 shall become
effective only if approved by three-fifths of the qualified voters voting on the proposition at the
special election on May 2, 2023.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 8th
day of August, 2022.
T . CT IF1 • ' :, •i! SKA
My ' erry, M or
AYES: DeMoss, McClure, Casagranda, Wells, Osenga, Calhoon
NOES: None
ABSENT: None
ABSTAIN: None
CITY OF SEWARD, ALASKA
RESOLUTION 2022-087
ATTEST:
Brenda J. al , M C
City Clerk
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City Council Agenda Statement
Meeting Date: August 8, 2022
To: City Council
Through: Janette Bower, City Manager
From: Rob Montgomery, General Manager - Electric
Agenda Item: Resolution 2022-087: Submitting the Question of Selling the City of Seward
Electric Utility to the Qualified City of Seward Voters at a Special Election in
and for the City of Seward on May 2, 2023
Background and justification:
With less than 3,000 electric meters on its system, the City of Seward's Electric Department has
limited resources, making it difficult for the utility to consistently invest in new infrastructure, system
maintenance, technology, and customer-focused programs and services.
In addition to the financial limitations, Seward's small number of customers and meters will make it
difficult for the City to maintain electric rate stability as necessary investments are made in the areas
mentioned above. A larger electric utility with thousands more customers and meters will be able to
spread expenses across its entire customer base,thereby ensuring more stability in customer rates.
While there are obvious advantages to selling the electric utility, a key question for the Council and
Seward citizens in looking at a potential sell is: "How will the City recover the lost revenue in the
General Fund from Electric Department contributions, which come in the form of a Payment In Lieu
of Taxes (PILT) and an Administrative Services fee for services such as billing, human resources,
accounts payable and receivable, etc.?"
The bottom line is that as long as the City runs Seward's electric system,there will be financial and
human resource challenges to address. These challenges will directly impact the utility's customers
in the way of rates, programs, services, and system reliability. For that reason, citizens of Seward
should be given the opportunity to decide whether to keep the electric utility with the City or sell it
to a qualified electric utility in Alaska, starting with a Limited Solicitation Request for Proposals this
fall.
City Administration is recommending to Council that a Special Election be held on May 2, 2023, to
determine whether to sell or not sell the City's electric utility. By identifying a potential buyer prior to
the Special Election, voters will have information made available to them that may assist in their
voting decision.
Following receipt of the proposals, the City will negotiate with, and select, the utility most qualified
to meet the electric service needs of Seward while also sharing the City's community-focused values.
The selected utility will be announced to the public prior to the vote on selling the utility and the
selected utility is authorized to provide public information to City voters.
Before the election, the City Council will enact an ordinance establishing a permanent fund for the
receipt, investment, and use of proceeds from the sale and to direct that permanent fund revenues
be used to make a yearly transfer to the General Fund and to fund capital improvements approved
by the City Council. This ordinance will be contingent on voter approval of the sale.
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Seward City Charter 13.4 permits the council to sell, lease or otherwise dispose of a municipal utility
or of property and interest in property used or useful in the operation of a utility only after a
proposition to do so is approved by three-fifths of the electors (voters) of the city voting on the
proposition.
Comprehensive and Strategic Plan Consistency Information
This legislation is consistent with (citation listed):
Comprehensive Plan: 3.7.1.4 "Continue to upgrade and expand utilities to meet existing needs
and encourage future development."
Strategic Plan: 13.3 Utilities
Other:
Certification of Funds
Total amount of funds listed in this legislation: $ 0
This legislation (✓):
Creates revenue in the amount of: $
Creates expenditure in amount of: $
Creates a savings in the amount of: $
X Has no fiscal impact
Funds are (✓):
Budgeted Line item(s):
Not budgeted
X Not applicable
Finance Signature:
Attorney Review
e✓ Yes Attorney Signature: CO
Not applicable Comments:
Administration Recommendation
eAdopt Resolution
Other:
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