HOISINGTON — The residents of Hoisington will see a drop of about 7 percent in overall electric bills, the Hoisington city council approved on Monday.
By a unanimous vote, the council voted to reduce rates about 1.3 cents per kwh per the recommendations of Sawvel and Associates Inc., an engineering firm hired to consult on the electrical rates.
Hoisington has had high electric rates compared to neighboring communities.
The city’s rates were compared to Midwest Energy and Western Residential, and Hoisington’s rates were found to be higher than both. Western Residential rates were 30 percent lower, and Midwest Energy’s rates were 18 percent to 24 percent.
Sawvel also informed City Manager Jonathan Mitchell that they did not recommend selling the plant until they could see if the rates could become more competitive, which is the process the city is currently undergoing. The engineering firm has also recommended that the city cut rates on electricity about 19 percent off the base rate next year.
If the rates do become more competitive then there would be no reason to sell the plant, according to Mitchell.
Sawvel also recommended that the city continue trying to shed its excess base load. The city has excess electrical capacity for the amount of customers.
The amount of reserves in the electrical fund is at the level is should be. In 2009, the electrical fund had a negative cash balance, but by the end of this year, the city will have $600,000 in reserves. Sawvel also said that the plant was well run and that cutting the number of employees to the current three was the minimum that could efficiently run the plant.
In addition, Sawvel encouraged the city to develop a demand charge for large electrical users in 2013 because large businesses are efficient users of electricity.
A demand meter registers the maximum amount of electricity flow during a billing period for which the business is then billed based upon. Demand meters have been placed on large commercial businesses already.
The Hoisington Utility Task Force will have another meeting at 10 a.m. on Dec. 18 to further discuss the recommendations of Sawvel.
In other business, after a public hearing, the city council approved a Community Improvement District for the new Subway restaurant, which has plans to open this week. A CID is a defined area where a business can charge an additional fee to fund improvements.
A 2 percent CID was approved for 22 years for the Subway. Mitchell informed the council that the company has made approximately $275,000 in improvements to the Hoisington building.
The tax would cease if the Subway closes down.
In final business, the council approved:
•Authorizing Mitchell to inform vendors that infrastructure improvements to McKenna Meadows need to be done by March 1.
•Approved Cereal Malt Beverage Licenses for seven Hoisington businesses.
•Are still waiting on a proposal from Stutzman’s regarding the sale of the sanitation utility.
•Approved GIS mapping of the electrical utility and distribution area for $16,979. The city will be reimbursed 70 percent of that amount through a grant.
•Tabling a discussion of transfer of the newly purchased 61 acres of property northwest of town to the Land Bank. The council did approve paying for the property.
•Approved city fees for next year.