City receives financial emergency update
A financial emergency was declared by the Garden City Commission at its February 16 meeting due to high electricity costs and demand due to two weeks of sub-zero weather in the region.
An update on the situation was given at the regular committee meeting on Tuesday.
Mike Muirhead, director of utilities for Garden City, said that during the cold two weeks in February, the cost of utilities to buy natural gas and electric power was 10 to 1,000 times greater than the normal average, resulting in significantly higher than average utility bills for the citizens of Garden City and “threatening the financial health of the City of Garden City and potentially the city’s residents, businesses and physical well-being “.
Matt Allen, director of Garden City, said the weather event caused the city’s wholesale electricity supply costs to increase in the range of $ 8 million to $ 11 million.
The Southwest Power Pool always calculates the exact cost; however, the city was billed and paid $ 2,650,236.41 from February 10 to 16.
The financial emergency was approved by the commission so that people would be made aware of the existence of the situation and why the city made the statement, Muirhead said.
“The action of the governing body is a response to the situation of informing the public that they are exploring all avenues as relief, within the framework of financial management guidelines, and said that this financial emergency exists and has adopted this resolution 2868-2021, “he said.
In response to the emergency, there will be direct monitoring and expenditure of revenues, and the city manager and senior officials have suspended “ongoing procurement processes” until the commission decides the emergency is over. finished, Muirhead said.
In addition to the update, the city commission approved the mayor’s signing of a letter of support for House Bill 2429, which addresses financial hardship caused by extreme weather conditions in February.
Allen said the legislation provides a necessary tool for municipalities to respond to financial situations caused by weather conditions.
The bill allows for the creation of a low-interest loan program from which the city could borrow to cover costs related to the weather event, and could be repaid over a 10-year period, Allen said.
“If federal funding is made available due to the extreme weather event, those funds will be used to repay this loan,” he said. “Passing this bill would provide a possible option for the City of Garden City to consider when faced with the impact of these extreme energy costs estimated to be over $ 900 for each of the 11,500 electricity bills to consumers. residents of Garden City. “