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City Clerk's Office Item # R7
Background Paper for Proposed
Ordinance
COUNCIL MEETING DATE: February 24, 2025
TO: President Mark Aliff and Members of City Council
CC: Mayor Heather Graham
VIA: Marisa Stoller, City Clerk
FROM: Carla Sikes, City Attorney
SUBJECT: AN ORDINANCE REFERRING A QUESTION TO THE ELIGIBLE
ELECTORS OF THE CITY OF PUEBLO, COLORADO AT THE SPECIAL
MUNICIPAL ELECTION TO BE HELD ON MAY 6, 2025 AND FIXING THE
BALLOT TITLE THEREFOR
SUMMARY:
Attached is a proposed Ordinance referring a question to the eligible electors of the City
of Pueblo to opt out of the Black Hills Electric franchise agreement and pursue the
purchase of the generation, transmission, and distribution assets of Black Hills Electric,
if feasible.
PREVIOUS COUNCIL ACTION:
In 2010, Council referred to the voters of the City, Ordinance No. 8186, which granted
an electric utility franchise to Black Hills. The Black Hills franchise was approved by the
voters in a Special Franchise Election held August 10, 2010.
On July 22, 2024, Council approved Resolution No. 15700 opposing the requested rate
increase for delivery of electricity for which Black Hills Electric of Colorado submitted to
the Public Utilities Commission for approval.
On September 23, 2024, Council approved Resolution 15776 establishing project
Account CI2450 Feasibility City Electric Utility, transferred budgeted and appropriated
funds in the amount to $35,525.16 from Project Account CI 2012 Energy Advocacy
Project to Project Account CI2450 Feasibility City Electric Utility and transferred funds
in the amount of $150,000 from Public Works Contract Services to Project CI2450
Feasibility City Electric Utility.
On December 23, 2024, Council approved Resolution No. 15867 retaining GDS
Associates, Inc. to perform a comprehensive energy strategy study.
BACKGROUND:
The City of Pueblo has a franchise agreement with Black Hills Electric which expires in
August 2030. Every five years for the term of the franchise agreement, the City may
choose to terminate the agreement and establish its own utility. City Council is
considering termination of its franchise agreement with Black Hills in August 2025
because Black Hills is seeking a significant rate increase from the Public Utilities
Commission.
On June 14, 2024, Black Hills filed a rate review petition with the Public Utilities
Commission seeking authorization to increase its rates by fourteen percent
(14%).
rates in the state. The City believes municipalization will freeze or reduce electrical rates
for the community.
On December 23, 2024, City Council approved the retention of GDS Associates, Inc. to
perform a comprehensive energy strategy study. The study was requested for the
generation, distribution, and transmission assets and forming a municipal utility.
The City of Pueblo, as a home rule city, has the constitutional right to use the power of
eminent domain to create and operate a municipal electric utility. The Colorado
territorial limits to . . . condemn and . . . operate . . . public utilities . . . and everything
This Ordinance will allow the City
assets, and municipalize, if Council deems such action feasible.
FINANCIAL IMPLICATIONS:
The City will incur the cost of a Special Municipal Election on May 6, 2025, to be
conducted as a mail ballot coordinated election by the County Clerk. The costs of the
election are currently unknown, but costs will be shared with the Pueblo West
Metropolitan District and perhaps other special districts also holding elections on May 6,
2025.
BOARD/COMMISSION RECOMMENDATION:
On November 21, 2019, the EUC recommended, by a unanimous vote, that the City
create a municipal electric utility and purchase or condemn Black Hills electric facilities
located in the City and Pueblo County.
STAKEHOLDER PROCESS:
Members of the public are the primary stakeholders affected by the proposed Ordinance.
The issue of canceling the franchise agreement with Black Hills Electric and creating a
municipal electric utility has been discussed at various public City Council meetings and
work sessions for many years.
ALTERNATIVES:
If this Ordinance is not approved, the voters of the City of Pueblo will not be given the
opportunity to vote on the creation of a municipal electric utility.
RECOMMENDATION:
This Ordinance must be adopted in order to refer the ballot measure to the voters.
ATTACHMENTS:
None
ORDINANCE NO. 10908
AN ORDINANCE REFERRING A QUESTION TO THE ELIGIBLE
ELECTORS OF THE CITY OF PUEBLO, COLORADO AT THE
SPECIAL MUNICIPAL ELECTION TO BE HELD ON MAY 6, 2025
AND FIXING THE BALLOT TITLE THEREFOR
BE IT ORDAINED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
There is hereby submitted to a vote of the registered electors of the City of Pueblo at the
Special Municipal Election to be held on May 6, 2025 a question whether the City should terminate
the Franchise Agreeme
generation systems if determined to be feasible. The ballot question (submission, clause and title)
therefore shall be as follows:
QUESTION NO. 2A - Cancelation of Black Hills Electric
Franchise
SHOULD THE CITY OF PUEBLO CANCEL ITS FRANCHISE AGREEMENT WITH BLACK HILLS
ELECTRIC AND ACQUIRE THE GENERATION, TRANSMISSION, AND DISTRIBUTION
ASSETS OF BLACK HILLS ELECTRIC, IF DETERMINED FEASIBLE?
For the measure
Against the measure
SECTION 2.
If any section, provision, paragraph, clause or phrase of this Ordinance is held or decided
to be unconstitutional, invalid or unenforceable for any reason, such decision shall not affect the
constitutionality, validity or enforceability of the remaining portions of this Ordinance.
SECTION 3.
All other ordinances or portions thereof inconsistent or conflicting with this Ordinance or
any portion hereof are hereby repealed to the extent of such inconsistency or conflict.
SECTION 4.
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.
Action by City Council:
Introduced and initial adoption of Ordinance by City Council on February 10, 2025.
Final adoption of Ordinance by City Council on February 24, 2025.
____________________________
President of City Council
Action by the Mayor:
Approved on _______________.
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 _____________
____________________________
President of City Council
ATTEST
________________________________
City Clerk