City gets financial emergency update

Meghan Flynn
Garden City Telegram
Digital electric meters run for a group of Garden City residences.

A financial emergency was declared by the Garden City Commission at its Feb. 16 meeting in relation to high electricity costs and demand due to the two weeks of sub-zero weather across the region.

An update on the situation was give at the commission's regular meeting Tuesday.

Mike Muirhead, Garden City Public Utilities director, said during the two weeks of cold weather in February the cost of utilities to purchase natural gas and electric energy were 10 to 1,000 times higher than the normal average, causing significantly higher than average utility bills for the Garden City citizens and "threatening the city of Garden City's financial health and possibly the city's residents, businesses and physical welfare." 

Matt Allen, Garden City manger, said the weather event caused an increase to the city's wholesale electric supply costs in the range of $8 million to $11 million.

The Southwest Power Pool is still calculating the exact cost; however, the city was invoiced for, and paid, $2,650,236.41 for Feb. 10-16.

The financial emergency was approved by the commission so people would be notified that the situation exists and why the city made the declaration, Muirhead said.

"The action of the governing body is a response to the situation of putting the public on notice that it's exploring every avenue as a relief, part of the financial management guidelines, and declared that that financial emergency did exist and passed that resolution 2868-2021," he said.

In response to the emergency, there will be direct monitoring and spending of revenues and the city manger and senior staff have suspended "current procurement processes" until the commission decides the emergency is over, Muirhead said.

In addition to the update, the city commission approved the mayor sign a letter in support of House Bill 2429, which is in response to the financial strain caused by the extreme weather in February.

Allen said the legislation provides a needed tool for municipalities to response to the financial situations caused by the weather.

The bill allows for the creation of a low interest loan program which the city could borrow from to cover the costs related to the weather event, and could be paid back over a 10-year period, Allen said.

"If federal funding is made available related to the extreme weather event, those funds will be used to repay this loan," he said. "The passage of this bill would provide a possible option for the city of Garden City to consider when faced with passing these extreme energy costs estimated to be over $900 for each of the 11,500 electric accounts onto the residents of Garden City."