MINUTES OF CITY COUNCIL
May 15, 2008
Present at this meeting were: Mayor Larry Tolzin, Councilmen Dennis Aisenbrey, Jerry Fischer, Galen Guthmiller, Jerome Kotalik, Darrell Mehlhaf, and Finance Officer Peggy Thranum. John Huber was absent. Also present were: Scott Beynon, NorthWestern Area Superintendent, Tom Marvin, Mervin Guthmiller, Rano Kirschenman, Daniel Mehlhaf, Erik Kaufman, Jerome Hoff, Roland Preszler, Cindy Aisenbrey, Willard Kirschenman, Victor Mehlhaf, and John Mehlhaf. Aaron Matthaei, Lavern Mensch and Gary Schelske entered later.
Mayor Tolzin called the meeting to order at 7:00 p.m.
Aisenbrey made a motion to approve the agenda. Guthmiller seconded; motion carried.
Tolzin introduced Tom Marvin, Director of Electric Services for the South Dakota Municipal League.
Thirty four municipalities own their own electric service in the state. Most follow the interstate corridor and have been around 70-100 years. With few exceptions, municipal electrics purchase power from a wholesale power provider and distribute it only within the city limits. With the exception of two, the city councils manage the municipal electric. They set the ordinances as to how the utility is operated and set the rates. Municipal electrics are not regulated by the Public Utilities Commission, unless there would evidence of discrimination or inadequate service. The municipal electric is operated as an enterprise fund and allows money to be transferred to the general fund to utilize any way the city sees fit.
NorthWestern is an investor owned utility. They are a vertically integrated utility which means they have generation, transmission and distribution as part of their electric utility.
To have a municipal electric, the council must first pass a resolution to create one. Secondly, they would pass a resolution to pay for the utility with revenue bonds. The revenue bond resolution will most likely come to a vote. If it passes, then a feasibility study is done to see if it would be a benefit for the municipality to own the electric utility. This study will cost upwards of $25,000.
Mr. Marvin recommends writing a letter to the Public Utilities Commission stating our grievances and following what happens with the Wagner utility.
Aisenbrey moved to adjourn at 7:50 p.m. Guthmiller seconded; motion carried.
ATTEST:
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