Electric Territory Expansion Information (9)
04-10-2017 UPDATE ON ARBITRATION - REGARDING THE CONSIDERATION TO EXPAND THE CITY OF BUSHNELL ELECTRIC SERVICE TERRITORY IN THE CITY LIMITSWritten by Administrator
The City of Bushnell has been a municipal electric utility provider since 1919, for nearly 100 years. In 1981, the City of Bushnell and Sumter Electric Cooperative, Inc. (now known as SECO Energy), entered into an Electric Service Franchise Agreement for a 30 year term. This agreement allowed SECO Energy to provide electric services to specific areas inside the city limits. The agreement included a purchase option clause that upon expiration of the 30 year term, the City could consider purchasing the SECO Energy electric plant and facilities inside the city limits that serve those Bushnell customers. Since the expiration of the agreement, the City has attempted to negotiate a settlement with SECO but has been unsuccessful. The terms of the Franchise Agreement outlined a formal process called Arbitration, where an arbitration panel of judges could determine the purchase price the City would pay for the system based on facts and evidence.
The arbitration hearing was held at the Sumter County Courthouse in the historic courtroom during the week of February 20-24th. Three arbitrators heard the considerations from both SECO and the City on the purchase option valuation for the service territory that SECO currently serves inside the city limits.
The City has been informed of the arbitrator’s final decision. Based upon the totality of the evidence presented to the arbitrators, the amount of the final award was very close to what the City’s own feasibility study indicated - approx. $5.1 million dollars. Remember, with this expense to purchase, there is offsetting revenue that comes from the selling of the new electric load. Now the City will be able to do a firm cost vs. benefit analysis to see if exercising the purchase option is a good decision for the City and customers. The City feels this is a very important decision and affects the future of the Bushnell Electric System. A larger customer base means more electric revenue to help offset operating costs, thereby spreading those costs out to more customers and possibly resulting in lower rates. It would be the City’s priority to provide the same great reliability to new customers, as our current customers enjoy. The Bushnell City Council will review all the information, carefully examining this purchase option and making a decision for the future of Bushnell in a specially called meeting, date to be determined.
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Download the attachment below for Final Arbitration Award Information.
If you have questions regarding this information, contact Susan Noell or Bruce Hickle at 352-793-2591.
UPDATE ON ARBITRATION - REGARDING THE CONSIDERATION TO EXPAND THE CITY OF BUSHNELL ELECTRIC SERVICE TERRITORY IN THE CITY LIMITSWritten by Administrator
The arbitration hearing was held at the Sumter County Courthouse in the historic courtroom during the week of February 20-24th. Three arbitrators heard the considerations from both SECO and the City on the purchase option valuation for the service territory that SECO currently serves inside the city limits. It will take some time for the arbitrators to go over all the information, and determine a fair market value. Once this occurs, the City will then be able to do a firm cost vs. benefit analysis to see if exercising the purchase option is a good decision for the City. The findings and subsequent decision will be discussed with Bushnell City Council in a public meeting.
To stay informed, visit the City’s website to view the upcoming agendas or sign up for automatic emails to alert you when the agenda is published before a meeting. Typically, the agendas are available one week before the public meeting. If you have questions regarding this information, contact Susan Noell or Bruce Hickle at 352-793-2591.
The City of Bushnell and SECO will begin Arbitration proceedings on Monday, February 20th, at the Sumter County historic courthouse, beginning at 9am. This process will take several days, and will determine the actual purchase price for the electric system inside the city limits that SECO currently serves. The Bushnell City Council will discuss and decide on this decision at an upcoming City Council meeting. If you would like to receive an agenda, you can sign up online and one will be automatically sent to you via email when it is published. Stay informed – sign up today!
Current Status on Consideration to Expand the Electric System inside the City Limits – Arbitration Hearing postponed for limited timeWritten by Administrator
The Arbitration Hearing, to determine the purchase cost of the SECO electric system inside the city limits, has been postponed, due to an unavoidable delay, until a future date in early 2017. The purpose of the arbitration is to decide the appropriate value of the SECO electric system, inside the Bushnell City Limits only, so that the City can do a cost benefit analysis to determine if this purchase is a good decision for the future of Bushnell’s citizens.
Citizens for Cooperative Power (SECO-Supported Petition):
A judge has ruled that the SECO-backed petition submitted by Citizens for Cooperative Power is illegal and ordered the City NOT to place the question requiring the sale of Bushnell Electric to SECO on the ballot. The judge also said that any ballot question on the sale of City property should include the terms of the deal.
Save Bushnell Citizens Group Petition:
That brings us to another petition from a newly formed group called “Save Bushnell”, which also conducted a petition drive to change Bushnell’s charter. That change would require the terms of a deal be shared with voters when they are asked to approve the sale of City property. Save Bushnell has collected the required signatures and the City Council is reviewing their proposed charter change. It has not yet been placed on the ballot.
In the meantime, Bushnell is continuing arbitration with SECO. The goal is to determine the fair market value of the section of Bushnell that SECO currently services. Once the facts are known we can continue the discussion about whether it makes sense to purchase SECO’s electric system in the city limits as allowed in our contract. We don’t know how long this process will take but the current calendar calls for a hearing before the end of the year.
Sumter County Times published a few articles on these subjects in their July 26, 2016 edition. Open the attachments below to read these articles!
Open the attachment below for the most up to date information on the Electric Expansion; including answers to frequently asked questions.
The Bushnell City Council decided at the Council Meeting on February 1st to determine the firm purchase price of the SECO electric system inside the city limits through a process called arbitration. What does this mean? Please find a document attached below with answers to your important questions.
The Big Picture
February 2, 2016
In October 2015, WHH Enterprises presented to the Bushnell City Council and the public the results of their study, titled “Franchise Purchase Option Analysis.” This presentation outlined several options for the future of Bushnell Electric and the future of the Bushnell community.
The analysis found that expanding Bushnell Electric’s customer base to include all homes and businesses inside the city limits would be a positive investment in the City’s future. That analysis, however, was based on reasonable financial assumptions, not exact dollar amounts, which were unknown at the time. Because of the potential benefits to the Bushnell community, specifics are now necessary.
The City Council needs answers before making a decision. At its February 1st public meeting, the Council directed the City Manager to enter into negotiations with SECO Energy to nail down the financial details of the possible deal.
The Franchise Agreement between SECO Energy and the City of Bushnell, signed by both organizations in 1982, dictates a process to arbitrate the price for this specific transaction at the conclusion of the agreement. The agreement ended in 2012, and the City of Bushnell, after careful analysis, is exercising its contractual right to determine the final price.
Only after the final price is known and the impacts are fully analyzed and understood, will a decision be made regarding whether to pay SECO Energy and provide electric service to all customers inside Bushnell city limits.
At this time, no decision has been made. The City of Bushnell is simply collecting all the facts before deciding if moving forward is in the best interest of the City and its citizens.
The results of the Electric Feasibility Study were presented to City Council, staff and the public on Monday, October 5 at a scheduled workshop. A PowerPoint presentation was given by WHH Enterprises, who was contracted by the City to perform the feasibility study. The completed Electric Feasibility Study was delivered to the City of Bushnell on Wednesday, October 7 by WHH Enterprises. City Council must now review the information and decide if the option to acquire additional customers in the Bushnell City Limits, who are currently served by SECO Energy, is in the best interest of the community. The City is aware that SECO Energy has launched a large campaign to make citizens fear this decision. Please bear in mind, the City has NOT made any decision at this time, and this process will take time. The City Council was elected by the voters to represent the citizens best interest, and that is exactly what they will do. The City will NOT spend your tax dollars on expensive advertising to dispute what SECO Energy is telling you. We believe it is irresponsible for any entity – a cooperative or a municipality – to make statements that affect your pocketbook without knowing the facts of the study and analyze how they will impact you.
To keep you informed of the FACTS, The City will post the PowerPoint presentation and the Electric Feasibility Study on our website. The City will also generate a “Questions and Answers” FACT sheet, which will be compiled with questions that the City feels the citizens need answers to, and will be updated to include any constructive questions that we receive from other citizens.
The City wants YOU – City of Bushnell business owners and citizens – to be informed of the FACTS. Please contact the City of Bushnell, by calling 352-793-2591, with your questions or concerns, and staff will be glad to assist you. You can also complete your information on the tab at the bottom of the homepage for “Agenda Email List”, to be automatically emailed agendas so that you can be informed when this or any topic of discussion that is of interest to you is on the agenda prior to the meeting.