Alderman fail to pass ordinances in electric utility sale process.

Monday’s Full Council meeting  had a full house of spectators including the print and broadcast media, local residents and Fredericktown business owners. Ward I Alderman Brandon Hale was absent.

The council’s agenda included a vote on two ordinances related to the exit from the Missouri Public Energy Pool (MoPEP) contract and the sale of the Fredericktown electric utility to Black River Electric Co-op (BREC). The two ordinances failed to pass with four nay votes heard from Ward I Alderman Harold Thomas, Ward II Aldermen Sie Merriman Sr. and  Rick Polete and Ward III Alderwoman Karen Wright. One aye vote heard from Ward III Alderman Mark Tripp. Tripp said, before the motion and vote,  he believed this was a “historic vote’ for the city. The first ordinance was authorizing the city to execute an amendment to the asset purchase agreement between the city and BREC which would indemnify the city from certain operational expenses. The second ordinance  would have allowed Fredericktown’s contract obligations/Interests in the public energy pool to be assumed by St. James. The cost  to Fredericktown for the second ordinance was estimated at $100,000 according to Merriman Sr.  When both ordinances failed, the audience spoke up demanding answers as to why.

Mayor Danny Kemp said the city would have a press release distributed, but the audience refused to accept that as an answer. One resident said a vote had been taken and passed indicating the residents and businesses were  in favor of the sale. However, Merriman said the constituents he spoke with indicated they were not in favor of the sale. He said they were concerned over higher electric rates. The audience countered saying the problem is not so much with a rise in rates as it is concerning the infrastructure of the electric utility itself, saying it is “dramatically bad.”  Merriman Sr. said he could not agree to the ordinances when too many questions were left unanswered. He said agreeing to the ordinance could force Fredericktown to go to the open market for electric power on January 1, 2009 if the sale fell through at some other point. Open market electric prices are considered to be much higher than pool or co-op prices. Other potential votes that would affect the sale and transfer of interests from include: The city’s Bond rating, Missouri Joint Municipal Electric Utility Commission         (MJMEUC) vote, Midwest Independent Transmission System Operator Inc. (MISO) contract obligations or other contracts that have yet to be signed and binding according to  the aldermen. The audience also asked each alderman for their reasoning behind the no vote. Thomas said based on the information he has seen, which was provided by the city, in the short time he has been an alderman, he believes the rates will stabilize in the future. He said it seems like electric rates will be a better deal down the road.

The Board wanted to make it clear the electric infrastructure is the problem and NOT anything to do with the department’s employees. They have been doing a great job according to the aldemen.

Wright said she understood that only two of the four Fredericktown electric utility department employees would be picked up by BREC leaving two without jobs.

Polete said the city would be obligated to pay the $100,000 of tax payer’s money for St. James entry into the MoPEP  and if the vote in February failed, all that money would be lost. Polete said about $70,000 has already been spent on attorney fees in this process.

Audience members asked the aldermen “re-think this,” to re-visit this vote and continue on with the sale to BREC.

In Remarks of Personal Privilege;

Tripp said “I’m disappointed to see this issue failed.” As I shared with the Board earlier in the closed work session, I think it is a dis-service to those who voted  for us.  Tripp then went on to show appreciation for the committees he has been a part of, recognizing the fire and police departments for escorting the Project Happy Feet walk-a-thon,        (which Mayor Kemp attended and walked in) and the Board members and mayor for their work.

In other actions;

Interim City Administrator James Dismuke said the contract offer from AT&T regarding the cell tower rental proposal was as good as it would get. He recommended the Board accept the offer. The proposed offer is rent of $7,380 annually with an escalation fee of 7.5 percent every fifth year.

An ordinance regarding  the trash hauling contract with Southern Illinois Landfill was tabled for further discussions.

Kemp said he wanted to bring up the issue of an increase in the number of dogs owned and allowed within city limits to the Board of Aldermen. Kemp said he had been asked by some residents to consider increasing the amount allowed.

An ordinance accepting audit services from Boyer and Associates of Park Hills, Missouri for the year ending September 30, 2008 was passed.

An ordinance executing a settlement agreement and release of all claims between the city and former city administrator Michael O’Gara was passed by motion and vote. The agreement details were not disclosed other than it involved employee contract claims.

Accounts payable passed and bills were to be paid.

Council adjourned.