Every month the City’s Electric Utility Refund Debt grows; however, the City’s ability to cover the cost of the Refund is diminishing daily. Residents and property owners should be aware and concerned about the lack of responsibility and information coming from Mayor and Council on this issue. I have no doubt that the Plaintiffs will win on Appeal because there is no way the Appeals Court will allow Judge Ellerbe’s ruling to set Statewide precedent by usurping the Home Rule Powers granted to municipalities by the State. What is the City’s contingency plan if the Plaintiffs win on Appeal?
The City has been collecting way more than $6 million (on the extremely low side) a year for the past six years in overcharges from 1,488 commercial businesses; 15,256 residential customers; and 67 churches. At a minimum, we are talking $36 million. During the Court proceedings, the Plaintiffs’ Attorney requested that the City place the contested charges in an escrow account. The City assured the Court that it would be able to pay the Refund if they lost the suit without setting up an escrow account. To be on the safe side, Mayor and Council should provide the residents and property owners information on how they propose to pay for any Refund if the City loses the lawsuit for two very important reasons.
- Everyday that the City implements charges under the June 2013 Ordinance, the Refund charges increases.
- On June 3, 2019 when the FY 2020 Budget was adopted, the MCT account had a fund balance of $31.4 million. As of August 31, 2019, the MCT account fund balance was $17.8 million. That is a $13.6 million decrease in two months. If the City does not have the total amount of the Refund charges in a City escrow account, the residents and property owners will have to make up the difference in increased electric rates and possibly another tax bill. All of the City’s utilities are covered by the “full faith and credit of the City” meaning the City’s property taxes. Mayor and Council need to do the right thing and come clean with what the City’s current actually liability is in this lawsuit; and their failure to minimize the City’s exposure.
What can the City do NOW to stop increasing the Refund charges? Mayor and Council could do what they should have done as soon as they learned of the purported June 2013 Ordinance. Since no Mayor and Council have amended or repealed the November 5, 2012 Ordinance, it is legally still in effect despite what the Judge ruled. Mayor and Council have two options according to the City Charter to correct this mess. They can:
- Freeze the June 2013 Ordinance rate structure until the Appeal is final; and reinstate the rate structure in the November 5, 2012 Ordinance, OR
- Repeal the November 5, 2012 Ordinance and adopt the June 2013 Ordinance.
Mayor and Council cannot afford to continue to govern in such a reckless manner. This is too important and financially detrimental to the residents and property owners. This is a crisis that needs to be addressed NOW!
For the August 2019 MCT account balance, CLICK HERE:2019-09-24 – Letter to Earnestine Pittman re_ORR dated 09-23-19
