New agreements to purchase electricity power at a cheaper rate could benefit Iola’s electric fund.
City Administrator Sid Fleming detailed at Monday’s City Council meeting some potential savings the city could realize as part of the Southwind Energy Group.
Over the past few months, SEG has secured agreements to reduce the cost of purchasing power, Fleming said, creating savings pegged at more than $883,000 annually.
The maneuver could be a lifesaver for the city’s flagging electric fund, which is used to supplement the city’s General Fund and to pay for recent updates to the city’s generation system.
Higher than budgeted expenses, coupled with reduced sales attributable in part to mild summers in recent years and the closing of Herff Jones and Haldex Brake have put a significant strain on the electric fund, Fleming said.
As such, Fleming is recommending the Council approve changes in the city’s energy cost adjustment formula in order for Iola to recoup those savings. The energy cost adjustment (ECA) is the formula used to determine what customers pay on top of the market price of electricity.
In summary, while Iola will pay less to purchase electricity, the city will realize those savings, not the customers.
Councilman Jon Wells noted Iola took a different approach three years ago in switching from the old Kansas Power Pool to Southwind Energy Group. When that switch was approved, all savings went straight to the customer, not the city.
By increasing the city’s profit margin, Wells said he was hopeful Iola could put aside funds to eventually purchase new generators and increase Iola’s generating capacity.
Council members voted, 7-0, to direct Fleming to draft an ordinance for their approval Jan. 23.
Councilman Bob Shaughnessy was absent.
COUNCIL members approved a request to extend a 2-inch water main more than a mile south of town to serve customers who formerly had been a part of Rural Water District No. 7.
Extending the water line will allow the city to sell water to “three, maybe four” residences from Minnesota to Maryland roads along 1100 Street — Old 169 highway between Iola and Humboldt.
“It essentially creates a loop for us,” which should lead to greater service, Assistant City Administrator Corey Schinstock said. The 6,000-foot extension is expected to cost about $12,000, Schinstock said, and will be paid for by the customers.
Three of the residents there have agreed to share the cost. They’ll pay the front half before work begins, then pay the balance in the 30 days after project is complete, Schinstock said.
“That’s a pretty reasonable price to get hooked onto a water district,” Councilwoman Beverly Franklin agreed.
THE COUNCIL approved a request from Iolan Job Springer to erect a fence along property he owns near the intersection of what would be South Vermont and East Spruce streets.
While both streets are platted to run through the property, neither does, Schinstock explained.
City crews in years past have mowed and maintained the land, which lies in a floodplain.
Springer has agreed to maintain the grass around the fence, Schinstock said, “which will take away from the time we have to dedicate for maintenance.”
Schinstock said he was reluctant to abandon the streets altogether because the land is vital for stormwater runoff in that part of town.
THE COUNCIL ratified a policy designating smoking areas in Riverside Park.
Signs pointing out the smoking areas already have been posted at the park, paid for by Thrive Allen County last summer.
Council members noted the policy contains no penalty for violators, in part because it’s difficult to enforce.
“If we have an ordinance with no consequence, what good comes of it?” Councilman Aaron Franklin asked.
“You’d hope people respect the policy,” Councilwoman Nancy Ford responded, “and behave the way you’d hope nice people would behave.”
The vote for the policy was 7-0.
THE COUNCIL accepted the resignation of Spencer Hart from the Fire Department.
