City commission OK's hike in electric rates

2/6/2013

Increase to go into effect in March and will appear on customers' bills in April.

Increase to go into effect in March and will appear on customers' bills in April.

BY SCOTT AUST

saust@gctelegram.com

Due to two years of increases in wholesale electric rates, the Garden City Commission on Tuesday approved a pass-through rate increase for all city customers.

The increase, which amounts to about 9.15 percent, goes into effect March 1. Customers will start seeing the impact on their April bills.

In December 2011, just as the city finished a comprehensive electric rate analysis and cost of service study and the commission raised rates for the first time since 1998, Wheatland Electric notified the city that wholesale electric rates would increase 6 percent in January 2012, followed by additional 6 percent increases in 2013 and 2014.

Wheatland's 2012 6 percent increase cost the city about $1.05 million. The 3.15 percent increase took effect Jan. 1 and will cost about $677,000. Combined, the fiscal impact on the city of roughly $1.72 million can't be absorbed within the electric budget and must be passed through to customers.

The base charge for all rate classes will not change. The increase will come from energy and capacity charges.

Wheatland's increases prompted the city to spend 2012 looking for other power suppliers. In December, the city ended its contract with Wheatland and will be contracting with the Kansas Municipal Energy Agency for future power needs starting in 2014.

While the city believes the KMEA contract will stabilize electric rates, officials said it's also possible it could lead to lowering electric rates in the future, though likely not immediately, according to City Manager Matt Allen.

To avoid raising rates last year, the city used its utility reserves to absorb the increase. Now, the city needs to rebuild that fund, Allen said.

"We spent down a reserve fund that was pretty healthy. Most of the first couple of years ... the first order of business with the savings realized by the new power supply agreement will be restoring the financial health of the utility. Once that's accomplished, we're optimistic we'd be able to make some improvements on rates," Allen said.

The commission also approved a preliminary power supply purchase agreement with KMEA. A final agreement will be worked out this year before KMEA begins supplying power beginning Jan. 1, 2014.

In other business Monday:

* Commissioners approved a memorandum of understanding with Mark Pamplin regarding Pamplin's proposed renovation of the State Theater.

In December, the commission chose Pamplin's proposal to turn the city-owned 84-year-old State Theater in downtown Garden City into a state-of-the-art, 400-seat theater in the round that offers performances year-round that draws audiences from the region to downtown.

The project is estimated at $3 million for a renovation that would gut the interior and create a central stage surrounded by seating on the first floor and turn the second floor into rehearsal and office space.

The agreement spells out the intent of each party concerning the project and is not binding. According to the agreement, the city will sell the building to Pamplin for $1 and issue building permits at no cost. The city also will be responsible for environmental remediation of mold and asbestos, which will be coordinated after construction plans have been prepared.

Pamplin is in the process of raising private funds for the project, a process he estimates will take about six months.

* Commissioners want the planning commission to specifically make a recommendation concerning the apartments proposed in a redevelopment of the old American Legion building. The planning commission has been unable to reach a decision about an amendment to zoning regulations that would allow apartments on the first floor of buildings in the central business district.

The American Legion building is different from most other buildings because it is a split-level building. Without an amendment or something like a variance or conditional use permit, apartments couldn't be built there because technically they would be on the upper half of the first floor.

At its January meeting, the planning commission decided to leave the issue open until after the downtown master planning process is completed, which is anticipated to be sometime in May.

But city commissioners didn't feel it was fair to make the developers of the American Legion building project wait that long without a resolution.

Carlos and Candace Gamino, who own CSS Properties, LLC, have proposed creating an apartment complex out of the former American Legion building at 125 Pine St. The two-story property would be renovated into either four three-bedroom, two bathroom apartments, or a combination of four two-bedroom and two one-bedroom apartments.

"If we're comfortable with this project, if we feel this is a doable project, why make these people wait another couple of months?" Mayor David Crase said.

Because of the action, the commission tabled a request from the developers to dedicate 12 public parking spaces for the proposed apartment building, and indicated dedicated parking may not be necessary at all.

Allen said providing parking is not a requirement in the central business district.

"In this case, it more than likely would be our recommendation that there isn't dedicated, signed parking. Right now, 24 hours a day, you can park anywhere you want," he said.

*Commissioners approved a resolution required by the state before applying for transportation enhancement funds from the Kansas Department of Transportation for a landscaping project along East U.S. Highway 50/400, and a pedestrian/bike path extension along Kansas Avenue from Campus Drive east to Leslie Road.

*Commissioners approved the recommendations of the Alcohol Fund Advisory Committee for distributing alcohol tax funds to various Garden City and Finney County agencies' substance abuse prevention programs.

A total of $92,000 is being distributed to nine agencies. Garden City budgeted $78,000 while the county budgeted $14,000. The county commission approved recommendations on Monday.

The agencies receiving the funds are: 25th Judicial District Community Corrections, $13,000; 25th Judicial District Youth Services, $20,000; Area Mental Health Center, $10,800; Big Brothers Big Sisters of Finney and Kearny Counties, $20,000; City on a Hill, $3,000; Garden City Family YMCA, $5,000; Real Men Real Leaders, $2,400; Salvation Army, $7,800; Spirit of the Plains, CASA Inc., $10,000.

*Commissioners approved $38,000 in requests for Community Grant funds. Seventeen agencies applied for funding, totaling more than $117,000. The city had about $40,000 budgeted.

Agencies receiving funds were: Alta Brown Elementary School library, $1,000; Community Day Care, $7,000; Communities in Schools, $2,500; Families Together, Inc., $800; Finney County Public Library, $4,000; Friends of Lee Richardson Zoo, $500; Garden City Downtown Vision, $1,000; Girl Scouts of the Kansas Heartland, $2,500; Habitat for Humanity, $5,000; Miles of Smiles, $1,000; Senior Center, $3,000; Southeast Asian Mutual Assistance Association, $4,000; Summer playground program, $5,000; Western Kansas American Red Cross, $700.

*Commissioners approved recommendations of the Arts Grant selection committee for distribution of $20,000 budgeted for arts programs. A total of eight applications totaling $39,907 were received.

Applicants receiving funding were: Garden City Arts, $6,000; Ryan Steel, $4,000; Sandhill Arts Association, $4,800; Southwest Kansas Live on Stage, $1,500; Tumbleweed Festival, $3,000.

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