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HomeMy WebLinkAbout2025-02-03 I06 Waukee Gas Utility_Resolution Support of SaleAGENDA ITEM: CITY OF WAUKEE, IOWA CITY COUNCIL MEETING COMMUNICATION MEETING DATE: February 3, 2025 AGENDA ITEM:Consideration of approval of a resolution selecting a proposal for the purchase of the gas utility subject to approval of the ballot question at the March 4, 2025 special election FORMAT:Resolution SYNOPSIS INCLUDING PRO & CON: Over the last several years, City Council members and staff have heard concerns from residents regarding higher natural gas bills in Waukee compared to surrounding and neighboring communities. Additionally, the City Council has expressed concerns about the risks associated with owning and managing a natural gas utility due to increasingly unpredictable winter weather, which has a significant impact on marketing price and demand for natural gas. In response, the City Council has revised policies related to the utility that have resulted in some cost savings related to natural gas pricing. However, after a thorough review and analysis, it is believed that costs continue to be higher within the City of Waukee. The City Council has approved the holding of a Special Election for Waukee residents to consider whether or not to provide authority to the City Council to discontinue and dispose of the Waukee Natural Gas Utility. The Special Election will occur on March 4, 2025. In preparation of the Special Election, the City has requested and received proposals from three utility companies that have a desire to own the Waukee Municipal Gas Utility. FISCAL IMPACT INCLUDING COST/BENEFIT ANALYSIS: COMMISSION/BOARD/COMMITTEE COMMENT: STAFF REVIEW AND COMMENT: Proposals were received from the following companies: 1.Interstate Power and Light Company/Alliant Energy: $16 million subject to an adjustment based on the working capital of the Waukee utility 2.Black Hills/Iowa Gas Utility Company, LLC: $17.5 million 3.MidAmerican Energy Company: $18.75 million subject to adjustment for actual net book value plus a 10% premium I6 RECOMMENDATION: Based upon a thorough analysis of the proposals received, staff would recommend approval of proceeding with a sale of the natural gas utility to MidAmerican Energy Company subject to approval of the Special Election, approval of the Iowa Utilities Board and acceptable completion of a purchase agreement for the utility. ATTACHMENTS: I. Proposed Resolution PREPARED BY:Brad Deets, City Administrator REVIEWED BY: PUBLIC NOTICE INFORMATION – NAME OF PUBLICATION: DATE OF PUBLICATION: THE CITY OF WAUKEE, IOWA RESOLUTION 2025- RESOLUTION SELECTING A PROPOSAL FOR THE PURCHASE OF THE GAS UTILITY SUBJECT TO APPROVAL OF THE BALLOT QUESTION AT THE MARCH 4, 2025 SPECIAL ELECTION IN THE NAME AND BY THE AUTHORITY OF THE CITY OF WAUKEE, IOWA WHEREAS, the City of Waukee, Dallas County, State of Iowa, is a duly organized Municipal Organization; AND, WHEREAS, the City of Waukee has owned and operated a natural gas utility within the City limits of the City of Waukee since 1966; AND, WHEREAS, the City has complied with the requirements of Iowa Code Section 388.2A (2025) and has submitted to the voters at a special election to be held March 4, 2025 the question of whether the City should be authorized to discontinue and dispose of the municipally-owned gas utility, known as Waukee Municipal Gas Utility, by sale?; AND, WHEREAS, the City has received three (3) proposals from state regulated public utilities to purchase the City’s gas utility subject to approval of the special election, the Iowa Utilities Board and acceptable completion of a purchase agreement. The proposals are: 1)Interstate Power and Light Company/Alliant Energy: $16 million subject to an adjustment based on the working capital of the Waukee utility 2)Black Hills/Iowa Gas Utility Company, LLC: $17.5 million 3)MidAmerican Energy Company: $18.75 million subject to adjustment for actual net book value plus a 10% premium. The proposals submitted by each of the companies are available for review by the public on the City’s website at www.waukee.org/SpecialElection. WHEREAS, the City has thoroughly reviewed the proposals submitted by each of the companies, including but not limited to the rate projections provided by each of the interested companies. Recognizing that rate projections for gas utilities inherently involve estimates of gas costs, which fluctuate in response to market conditions and various external factors, the City has carefully considered these rate projections as part of its evaluation of the proposals: AND WHEREAS, after considering the proposals and available data, the City believes it is in the best interest of the citizens, if the voters approve the sale of the utility at the March 4, 2025 special election, to move forward with the sale of the utility to MidAmerican Energy Company. NOW BE IT THEREFORE RESOLVED by the City Council of the City of Waukee that in the event the ballot question is approved at the March 4, 2025 special election that the City intends to proceed to sell the gas utility to MidAmerican Energy Company. BE IT FURTHER RESOLVED that the City Attorney and City staff should work with MidAmerican Energy Company to finalize an Asset Purchase Agreement and other necessary documents for consideration by the City Council at a subsequent meeting. Passed by the City Council of the City of Waukee, Iowa, and approved this the 3rd day of February, 2025. ____________________________ Courtney Clarke, Mayor Attest: ___________________________________ Rebecca D. Schuett, City Clerk RESULTS OF VOTE: AYE NAY ABSENT ABSTAIN R. Charles Bottenberg Chris Crone Rob Grove Anna Bergman Pierce Ben Sinclair