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ORDINANCE NO. 9549
AN ORDINANCE TRANSFERRING FOUR HUNDRED FIFTY
THOUSAND DOLLARS ($450,000) FROM THE FUND
BALANCE OF THE GENERAL FUND TO PUBLIC POWER
PROJECT NO. CI1818 FOR PURPOSES OF COMPLETING
THE PHASE 2 STUDY OF A MUNICIPAL ELECTRIC
UTILITY ENTERPRISE
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
Funds in the amount of $450,000 are hereby authorized to be transferred from the
Fund Balance Account of the General Fund into the Public Power Project No. CI1818.
SECTION 2.
The officers and staff of the City are authorized and directed to perform any and
all acts consistent with this Ordinance to implement the policies and procedures described
herein.
SECTION 3.
This Ordinance shall become effective on the date of final action by the Mayor and
City Council.
Action by City Council:
Introduced and initial adoption of Ordinance by City council on September9
, 2019 .
Final adoption of Ordinance by City Council on September 23, 2019 .
President of City Council
Action by the Mayor:
☒
Approved on September 26, 2019 .
□
Disapproved on based on the following objections:
_
Mayor
Action by City Council After Disapproval by the Mayor:
□
Council did not act to override the Mayor's veto.
□
Ordinance re-adopted on a vote of , on
□
Council action on _______ failed to override the Mayor’s veto.
President of City Council
ATTEST
City Clerk
City Clerk’s Office Item # R-2
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: September 9, 2019
TO: President Dennis E. Flores and Members of City Council
VIA: Brenda Armijo, City Clerk
FROM: Mayor Nicholas A. Gradisar
SUBJECT: AN ORDINANCE TRANSFERRING FOUR HUNDRED FIFTY THOUSAND
DOLLARS ($450,000) FROM THE FUND BALANCE OF THE GENERAL
FUND TO PUBLIC POWER PROJECT NO. CI1818 FOR PURPOSES OF
COMPLETING THE PHASE 2 STUDY OF A MUNICIPAL ELECTRIC
UTILITY ENTERPRISE
SUMMARY:
This Ordinance will transfer $450,000 from the Fund Balance Account of the General
Fund to Public Power Project No. CI1818 for purposes of completing the Phase 2 study
of electric utility municipalization.
PREVIOUS COUNCIL ACTION:
On September 25, 2017, by Resolution No. 13790, the City Council declared the City of
Pueblo’s intent to terminate its Franchise Agreement with Black Hills on August 11, 2020,
and to create a municipal electric utility enterprise, if a due diligence feasibility study
showed that municipalization was an economically viable option.
On November 13, 2017 by Resolution No. 13820, the City Council created the Electric
Utility Commission (“EUC”) whose mission is to advise the Mayor and Council whether
the City, operating as a Municipal Electric Utility Enterprise, could successfully provide
electric utility service beginning on August 11, 2020.
On August 27, 2018, by Ordinance No. 9338, City Council established Public Power
Project No. CI1818 for purposes of evaluating the feasibility of moving away from an
investor owned utility and creating a municipal electric utility enterprise. Funds from this
Project were used to pay for a Phase 1 study of electric utility municipalization
On August 13, 2018, by Resolution No. 14032, the City Council approved an Agreement
with EES Consulting, Inc., a Washington corporation (“Consultant”) to perform a first
phase (“Phase 1”) feasibility study to evaluate the legal, technical and financial
requirements necessary for the City to assume control of the electrical utility services
currently provided by Black Hills Energy (“BHE”).
On May 13, 2019, by Ordinance No. 9452, the City Council approved an Amendment to
the Agreement with the Consultant for Consultant to perform a second phase (“Phase 2”)
study which would provide a more detailed technical and financial analysis of the
municipalization process. The contract amendment provided that the fees paid to
Consultant would not exceed $200,000 for the Phase 2 study.
On June 10, 2019, by Ordinance No. 9485, the City Council retained the Denver law firm
of Fairfield and Woods, P.C. (“Law Firm”) for the Phase 2 legal work. The Law Firm
estimated the cost of the Phase 2 legal study to be in the range of $250,000. In addition,
because the City is a public entity, Fairfield and Woods, P.C. agreed to give the City a
15% discount from its customary hourly billing rates.
BACKGROUND:
The Phase 1 study provided and overview of the municipalization process and concluded
that it was financially feasible for the City, operating a municipal electric utility enterprise,
to furnish electric utility service to the City’s residents. The EUC has recommended to the
Mayor and City Council that the City perform a Phase 2 study regarding the technical and
legal feasibility of forming a municipal electric utility enterprise.
In order to compensate the Consultant and Law Firm for their Phase 2 projects, it is
necessary for City Council to budget and appropriate funds in the amount of $450,000.
FINANCIAL IMPLICATIONS:
Funds in the amount of $450,000 shall be transferred from the fund balance account of
the general fund into the Public Power Project No. CI1818.
BOARD/COMMISSION RECOMMENDATION:
The EUC recommends completion of the Phase 2 study.
STAKEHOLDER PROCESS:
None.
ALTERNATIVES:
City Council may choose to abandon further study of the electric utility municipalization
process.
RECOMMENDATION:
Approve the Ordinance
Attachments:
Proposed Ordinance