A public hearing for the sale of city owned property was held during the regular Primghar City Council meeting on April 13. No comments were submitted personally or in writing. Council passed unanimously to sell the lot at 255 Pumphreys Avenue to Alan Kreber to build a “shous” a shed house combination.
Dennis Haselhoff, P.E. presented the findings of the feasibility study conducted by DGR Engineering. The question to the council is how to provide backup power to the city in the event of current interruption.
Two generators installed in 1994 could produce backup power up to 1700 kW. Neither generator works or is repairable. DGR Engineers considered replacement of current capacity and also to reach capacity that could reach projected demand by 2040 as stated in the Missouri River Energy Services (MRES) study conducted just a year ago.
Four options with estimated costs were presented. 1) Install 1 new 1825kW diesel-powered generator at a cost of $2,231,000. This includes the necessary enclosure. 2) Install a 2008 model 1825 kW generator, also diesel powered and also includes the required enclosure. The cost is $1,669,000. 3) A new 2250 kW diesel powered generator including enclosure. The price tag is $2,481,000. 4) A new 2825 kW generator, diesel powered with enclosure. The cost is $3,019,000. Options 1 & 2 are rated to provide power to the city at current demand levels. Option 3 is just shy of producing the projected demand by 2040. Option 4 meets or exceeds projected electric demand in Primghar by the year 2040. No decisions were made. After discussion and questions with Haselhoff, council seemed to have a consensus for option 3, which allows replacement power in an amount sufficient to keep the city powered sufficiently under projected demand growth. The potential to sell excess electric power produced by a replacement generator indicated an additional possible use for the generator. Discussions for backup power to the City of Primghar will continue.
Lynn Porter, Black Hills Energy External Affairs Manager for Western Iowa shared funding opportunity for Primghar. Black Hills Energy (BHE) provides natural gas to the city of Primghar and other communities in northwest Iowa. BHE currently serves Primghar without a franchise agreement. In order for the city to adopt the franchise fee, it would have to grant a franchise to Black Hills Energy.
Porter gave a brief overview to the City Council about Iowa’s franchise fee. The franchise fee, authorized and governed by Iowa Code 364.2(4) allows for collection of money from 1% – 5% of gross sales of the franchisee’s product on behalf of the city. Different rates for different activities, i.e. residential use, commercial use, industrial use, can have different rates, but is uncommon.
If a city has a 1% option sales tax, that tax would be dropped from the customers’ bills. The fee would show on a customer’s bill in a separate line item and before state or county taxes.
It is currently not clear how a franchise tax would affect a school district.
Adopting a franchise fee would require the adoption of an ordinance, public hearings, and publication before it could be adopted. Council only heard a brief outline of how the program works. No decision was made.