Altamont seeks a government loan to meet its energy costs | New
ALTAMONT – The city of Altamont on Friday evening approved a low-interest loan application of $ 735,541 from the state to deal with the impact of the high costs of electricity and natural gas incurred in February during the cold front of the Arctic.
The administrator of the city of Altamont, Audree Aguilera, detailed the financial situation of the city during the special meeting.
The city operates its own utilities, purchasing electricity through the Kansas Municipal Energy Agency and natural gas through the Kansas Municipal Gas Agency.
The extraordinary costs incurred by the city during the extreme weather event in February were $ 238,156 for electricity and $ 813,181 for natural gas, for a total indebtedness of $ 1,051,337.
The city’s budget to cover the costs associated with electricity for this entire fiscal year was $ 900,000, and $ 450,000 has been set aside to cover the annual cost of natural gas. In order to maintain public services for their residents, cities in the state must seek funding through the city’s low-interest utility loan program.
House Deputy Senate Bill 88 provides up to $ 100 million for low-interest loans to cities. If approved for a loan, the interest would be 0.25% for that year, however, the interest rate will be revalued each year to an amount 2% lower than the prevailing market rate at that time. the. Altamont Mayor Richard Hayward said the interest cost on the loan would be absorbed by the city and not passed on to residents.
City council member Raymond Coffey asked if vendors would be required to pay the city’s interest on loans if a settlement is reached allowing the city to recoup its expenses. Aguilera has stated based on what she has seen and heard to date that this will not be the case.
The city has about $ 315,796 in reserve funds, Aguilera said, helping to offset the loan amount the city would need.
The loan would be for 10 years, but can be repaid early without penalty. Applications must be submitted by Monday. Hayward said the first claim date for those eligible for the funds will be July 1. Payments will be made monthly.
The resolution states: “If the city receives collections as a result of a settlement or litigation or other extraordinary expense reimbursements paid by the city that relate to the extreme weather event of February 2021, these amounts (or any other Kansas State amount benefiting the city) will be used to pay off any outstanding loan balances made to the city under the city’s low interest utility loan program. The city will establish a dedicated revenue stream for loan repayment from rates, fees and charges for the use of services provided by and through its related utility system.
The State of Kansas and the Federal Energy Regulatory Commission are continuing their investigations into excessive utility charges incurred by cities that will be passed on to customers if no state or federal relief is granted.
Previously, officials in the city of Altamont said they knew many of its 1,144 residents would not be able to pay much on their monthly bills, given that they have fixed incomes. Aguilera said they would accept the payments.
Residents won’t know the impact of the February fee until they receive their April bill on the first of the month.
Some Chetopa residents facing the same situation are reporting electricity bills in excess of $ 1,000. It was reported that Chetopa’s businesses had been billed over $ 20,000. Such reports worry some inhabitants of Altamont, thinking of the double impact of gas and electricity charges.
Altamont city council did not vote to impose a mandatory payment schedule on its residents.
“I just want the city to start looking for options to see how much the city can absorb without passing the costs directly on to consumers, as well as to see what we can do versus what we can do versus what we can do versus what we can do. we can do, “city said Council member Ben Cochran.