The Clear Lake City Council met in regular session Monday, Feb. 19 in front of a packed council chambers.
The council discussed multiple topics, including opposing the Alliant Energy rate increase, pickle ball courts and swore-in Brandon Heinz as the new Captain for the Clear Lake Police Department.
On Alliant Energy, Clear Lake Mayor Nelson Crabb mentioned the rate increase letter being delivered to residents that estimates an increase in electric bills of residential customers by 13.4 percent, small businesses by 20 percent and large general service customers by 17.4 – 20 percent.
Other communities have also drafted resolutions to oppose this rate increase to send to the utilities board as well as legislative representatives.
“The resolution in the packet is a boiler plate model that was drafted and has probably been passed by three or so other cities that I would speculate across Iowa that will pass this same exact resolution,” said City Administrator Scott Flory. “After it is approved here this evening the clerk would file a copy with the Iowa Utilities Board for their hearing and file with the offices of our state senator and representative.”
The resolution opposes the increase stating Alliant Energy posted $1.72 billion in gross profits in 2022, increased its annual common stock dividend by six percent and paid its Chief Executive Officer $7,283,270 in total compensation in 2022. Alliant’s average annual cost per kilowatt hour (kWh) for residential customers in 2022 was once again almost the highest in the state.
The resolution continues that Alliant’s average annual bundled cost per kWh in 2022 for the three major ratepayer classes was significantly higher than the other investor-owned electric utility in Iowa (MidAmerican Energy Company). The resolution spoke to the serious hardship Alliant’s high rates are causing for low and moderate income households, fixed income households, small businesses, industries, nonprofit institutions, educational institutions and municipal government.
After discussing the resolution, council member Bennett Smith (Ward 2) spoke about the partnership with Alliant locally stating that this proposed rate increase is excessive.
“I do appreciate the fact that these other local governments, and we consider them partners, like the county, like Mason City, have approved the resolution already opposing this Alliant rate increase,” said Smith. “I certainly do appreciate the work we do with Alliant in partnership locally, but I do think it is important to say publicly that this rate request is very excessive on their part, that’s how I would characterize it. I’m very much happy to oppose it and hopefully the Iowa Utilities Board will take that into account.”
Clear Lake joins Mason City, Cerro Gordo County and more than 60 other communities such as Newton, Britt, Garner and many more.
If approved as proposed, residents would see a nine percent increase to the average electric customer’s bill by October and almost a seven percent increase beginning in October of 2025.
Mayor Crabb agreed with council member Smith on his comments. “They respond quite quickly when we ask them to and I am very pleased what they are doing in our community.”
The resolution was approved 4-0 and the council encouraged all citizens and ratepayers in the community to voice their perspectives and concerns to the Iowa Utilities Board by submitting comments and objections by email to customer@iub.iowa.gov or by mail at Iowa Utilities Board, 1375 E. Court Avenue, Des Moines, IA 50319-0069. All communication should reference Docket RPU-2023-0002 in the subject line of the email or letter.
Entering a Loan
Agreement
In other business, City Administrator Flory spoke on the city engaging Northland Securities as a placement agent in connection with the issuance of General Obligation Bonds, something the city has done in the past.
The City is looking to enter into a loan agreement and to borrow money not to exceed $1,625,000 for the purpose of paying costs for street, sewer, sidewalk improvements, as well as bandshell refurbishing.
City Administrator Flory spoke on the projects, such as housing project at South Shore subdivision and the structure related to the housing project for the Emerald Edge town home project, as well as the bandshell project.
“As we have done in the past, this would be a private placement, that’s why Northland Securities would be serving as the local placement agent so we anticipate, like with our most recent issues that there is good appetite with our local banks here in the area for this debt issuance,” said Flory. “We do not anticipate using any available tax increment financing funds (TIF) for any of these projects. Acting on this now we are able to get a debt service included in our fiscal year 25 budget that is why we are acting on it now. We are looking at a levy rate adjustment of 20 cents per thousand to service the debt associated with this bond issue over a 10 year payment schedule.”
Council member Smith commented on the benefit of this agreement and how careful the City has been on its use of debt.
“I know we have a history of being careful on our use of debt and you mentioned we have some great rates on that and it just looks like to me when we use debt it is for fantastic projects,” said Smith. “We have talked about the need for housing in this community and two of these relate to that.”
Flory spoke on the demand for the housing in the community.
“We are very judicious about our use of debt but we currently have among the lowest level of debts in the United States. Our level of debt is around three, or four percent and the gold standard is about 70 percent so three percent is like you virtually have no debt,” said Flory. “We have not issued much debt over the years so as you suggested, we are in a good spot.”
Flory spoke about the projects and their importance to bring housing to more people in the community.
“In talking to the developer out there, they already have several of those pre-sold at the townhome level, as well as the single family class,” said Flory. “The other townhome project in the region we anticipate getting off the ground here in the next month is of course the bandshell, what an iconic feature, much like the seawall and it just needs some updating. It’s been 25 years since it was built and just a refurbishment and updating is probably more than over due.”
The council approved the resolution to approve the engagement letter with Northland Securities 4-0 and set a public hearing for March 4, 2024 to enter in to a general obligation corporate purpose loan agreement and to borrow money thereunder in a principal amount not to exceed $1,625,000.
