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There will be a referendum for North Branch citizens to vote on dissolving the municipal utility commission Water & Light,  and making the water systems fully a city enterprise.

The sale of the electric distribution network assets went ahead without any vote of the people, but now the city council is granting the taxpayers a chance to have a say.  

The ballot will ask if the water utility can be transferred to city council  oversight and if the utility commission will be abolished.  

The vote will be Tuesday, November 7.

Council heard from staff  during last week’s council session the utility will be run just like other city “enterprise” funds such as the sewer, liquor store, and others services that generate revenue from outside of tax levy.

Council authorized the referendum on a 3-2 vote, with Council members Schaps and Neider opposed.  

Schaps said he lacked detail on future budgeting implications.  At the point when the city becomes responsible for water systems and the remaining power generators that are still on the on-demand supply contract— what is the city liability?  He also was unsure of the debt service for old water system projects and hasn’t been told how much of the electric sale proceeds will be directed to this.  

“That’s what I am looking for,” he stated.

Council member Neider said she feels the sale of the electric assets was “pushed too quickly.”

Mayor Kevin Scheiber responded that Neider sat on the Water & Light Commission and voted in favor of winding down the utility and all the outcomes that entailed.

Neider said,  “I don’t want to get into it,” but claimed she was not accurately apprised of information she sought and now thinks she was misinformed.

In discussion about the referendum City Administrator Renae Fry assured council that state law requires the city takes over within 30 days post referendum and in terms of operations the city is already poised to handle billing, bookkeeping, etc.  declaring, “...that part will be fairly easy.”

As concerns the generators that get fired up when the regional power agency calls for extra supply, Fry and City Public Works Director Shawn Williams said this is budgeted and the city goal is to make this “sustainable.”  Based on the agreement for kilowatt hour reimbursement, Williams said “We are pretty confident we can make this work.”

Council member Neider wanted assurances the full population of the city will be informed the debts and bills, or what was formerly a utility customer responsibility (a few thousand customers versus the entire city population) become part of a citywide budget.  

Schaps added that the electric distribution side of the utility was “the revenue producing portion.”  He would like to wait and see how the budget for the utility services remaining shape up over a year or so.

Administrator Fry added the utility commission was only able to encumber debt and do projects through the authority of the city to issue debt. North Branch is going into this with eyes wide open, she said, “We’ve got a good plan... this will be managed in a pro-active way.”

Costs for the special election which will be borne by North Branch alone because there’s nobody else on the special ballot are expected to be $35,000 tops.  Council was advised some of the electric asset sale proceeds and new interest income from being able to invest previously restricted funds, will pay for the referendum— as well as staff hours no longer needed to reconcile two sets of financials.

The utility commission will probably be doing a vote yes campaign in the weeks leading up to the November balloting.

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