RAY NOLTING
The Chanute City Commission on Monday approved new wholesale electric rates for Ash Grove Cement, a contract change that will bring $85,000 more a month into the city’s budget.
Commissioners heard that Ash Grove will pay $10.25 per kilowatt as a demand charge and $2.48 per kilowatt otherwise, plus adjustments. The new rates begin in January and will increase electric utility revenue $85,000 a month. Ash Grove is a wholesale buyer of the city’s electricity.
As a wholesale user, Ash Grove is responsible for transmission lines and transformers on its footprint.
Commissioners heard that negotiations with Ash Grove began in April. The cement company had been on a multi year contract before the new rates.
Ash Grove’s bill has four components, a demand charge, an energy charge and a fuel and energy cost adjustment, which is a pass through based on the city’s costs. In addition, Ash Grove pays a 5% surcharge. Commissioners heard that the city looks at what Evergy is charging its customers, including industrial customers, and tries to keep rates below Evergy’s.
Mayor Jacob LaRue said he appreciated the city’s work on the contract and noted that Ash Grove had not seen an increase in multiple years. The city’s costs are not decreasing so the rate adjustment is warranted, he said.
In other business, the commission:
— Heard that groundbreaking for the city’s new water treatment plant will be at noon Thursday, Dec. 19.
— Heard that one of the city’s new trash trucks, with a side arm device to pickup customer trash, would be delivered after Christmas or by the first of the new year. The second truck would be delivered about two weeks after that. Sanitation staff will go through about a month-long training on the new trucks before the vehicles are placed into service, probably around March. The city ordered the trucks about two years ago. City Manager Todd Newman said about 50% of the customers who now have alley pickup will have to move their trash to the curb because of the additional operating space needed for the new trucks.
“I know it’s not ideal, but if you’re already taking it from the house to the alley, it’s literally going to the front instead. It’s a huge asset to the city as you know,” Newman said.
— Conducted a public hearing on amendments to the 2024 budget, which gives the city the authority to spend money available to it that wasn’t included in the budget. City staff generally estimates revenue and spending when it sets budget numbers. When revenue exceeds estimates or projects or spending not envisioned in the budgeting process, the city commission can agree to adjust the budget so the money that’s available can be spent on projects. One amendment makes more money available to make natural gas purchases if needed. Another relates to credit card processing fees for utility services. Commissioners approved the amendment that provides another $2 million plus in spending authority.
— Agreed to approve the bid from Central Consolidating so the HVAC project can get started on the depot building. The money for this work will come from a library contribution and from the electric utility fund because the expected cost of repairs to a turbine was less, leaving $1.49 million that could be used on the depot HVAC. Sales tax revenue will reimburse the transfer over the next four years. Newman assured commissioners that a turbine rebuild may not be needed for another seven to 10 years because the city has been generating less electricity. Unless something breaks or there is a catastrophe the utility funds won’t be needed for four years, commissioners heard.
— Approved two applications for property tax relief under the city’s Neighborhood Revitalization Program, which offers property tax reimbursements on property improvements. Green Living Foundation is listed as the owner of the two homes that will be built at 1615 10th Lane Road and 1625 10th Lane Road in the new Osa Johnson option B development that has space for eight housing lots. Commissioners heard that the city has contracts on five of the eight lots.
— Heard Commissioner Larry Taylor praise the city’s response to a reported gas odor across the city over the weekend that turned out to be a leaking propane truck traveling north on U.S. 169.
