CHETOPA — The Chetopa City Council on Friday evening agreed to seek a $250,000 loan from the state to help offset a huge hit to the city’s utility budget caused by high electric costs during the February cold snap.
The council also agreed that payments for the large bills that residents received could be adjusted using level pay plans or by residents paying their normal billed amount for the month plus an additional payment each month for the extra electric costs in February. The council voted that residents can have up to 15 months to pay these higher bills off completely. The concern with extending the repayment plan out further is that the city has to pay for planned projects with the utility money that’s been diverted to pay for the higher costs of electricity. So the citizens paying that money back for electric usage will make that money available to the city.
Chetopa runs its own electric utility and buys electricity through a cooperative, the Kansas Municipal Energy Agency, which sells electricity to 81 cities in Kansas, according to its website. Council members on Friday heard that the city has received two bills so far for electricity provided to the city from the cooperative during February. One was for about $270,000 and the city paid that. The second, received recently, was for $198,118.17, and it’s due on Tuesday, which the council agreed to pay. The city may get one more bill for February from KMEA.
January’s KMEA bill cost the city about $39,000.
Toni Crumrine, Chetopa city clerk, said the city budgeted $541,660 for the electric utility for the year and most of that will be eaten up by the bills from KMEA. So far, the city paid $470,770.21 to KMEA for costs above normal electric rates, council members heard.
“It’s going to eat up the fund rather fast,” councilman Ernie Wulf said.
Crumrine and Chetopa Mayor Tammy Bushong watched a webinar Friday with the Kansas State Treasurer’s Office about low-interest loans using state idle funds and how to apply for them. The Legislature passed a bill and Gov. Laura Kelly signed it into law allowing the state to loan up to $100 million total in idle funds to help cities struggling to pay the huge bills for gas and electric service during the February cold snap that saw temperatures dip to minus 18 degrees in Parsons.
In a series of votes, the council approved a resolution to apply for the $250,000 loan, the first payment for which is due July 1. They also agreed to make monthly payments on the loan and pay it off over 10 years. The interest rate is one-quarter of a percent.
The council also voted how to recoup the extra costs from city electric customers, some of whom had bills that were $300 higher than normal to more than $1,000 higher and perhaps even more. Some businesses had bills much higher than that, council members heard.
Wulf noted that so far there is no help from the state or federal government on mitigating these costs to the cities because the city suffered no property damage or loss of life in the event.
The council discussed for some time different options for citizens to repay. They considered shorter repayment terms and longer repayment terms.
“I want people to be able to pay,” Wulf said.
They also made clear that failure to pay the bills could result in electricity shutoffs. Bushong said about three or four utility customers had service shut off for non-payment of bills, but that debt existed before the cold spell.
After discussion, and getting input from the public watching the meeting on Zoom, the council agreed that citizens could use the city’s level pay program if it works for them. Level pay averages annual usage and provides for a steady bill amount rather than one subject to the ups and downs of usage. Council members didn’t know if that was a good option for all citizens.
The other option is for citizens to pay their normal bill amount for electricity and then pay an extra amount, spread out up to 15 months, to pay down the larger bill from February’s usage.
Businesses would work out payment plans with the city individually.
Citizens are to call the city office to schedule a time to sign a separate payment agreement to pay off the high bills.
Council members may revisit the repayment program in the future.
Council members thought the electric bills should be back to normal amounts for March’s utilities.