[bouldercouncilhotline] Hotline: Municipalization Expenditures from General Fund

[cmosupport at bouldercolorado.gov]

Sender: Yates, Bob

Jane, Cheryl, and Heather:


At Suzanne's request, I'm providing you with written input on the 2017 budget recently proposed by city staff. While I undoubtedly will have comments on other portions of the draft budget, this email focuses on staff's proposal that we spend $934,000 from the city's General Fund towards the municipalization project.  I oppose taking money from the General Fund for municipalization and I will vote against any budget that does so.  My reasons are as follows:


1.  Cheryl advised me yesterday that the proposal to take $934,000 from the General Fund in 2017 to pay for the municipalization project would be over and above about $2 million to be spent in 2017 on municipalization from the Utility Occupation Tax.  While Boulder voters approved the Utility Occupation Tax in 2011 for purposes of exploring municipalization, the voters have not authorized Council to take money from the General Fund for municipalization.  Money taken from the General Fund for municipalization reduces the amount that we can spend on police and fire services and to maintain our streets, parks, and open space.  Ironically, taking money from the General Fund for municipalization also deprives us of dollars we could spend on renewable energy projects that would be immediately effective.  While there may be an intention to "pay back" money taken from the General Fund from any subsequent profits of a city electric utility, there will, of course, be no ability to do this if the utility never operates.  And, in any event, the operation of a city utility--if it ever occurs--is many years away, depriving our other city departments of access to nearly a million dollars at a time when they could be putting the taxpayer funds to good use for current community needs.


2.  Heather advised us last night that the $934,000 that the staff proposes to take from the General Fund for municipalization will be used to fund the costs of preparing a transition of the power distribution network from Xcel to a new city utility.  However, such a transition--if it ever occurs--is quite some time away.  The city staff has yet to file an amended network separation plan with the Colorado Public Utilities Commission in compliance with the PUC's order issued in December 2015.  Once a separation plan is filed, the PUC will have 300 days to rule on it.  Assuming that city staff files the amended separation plan sometime soon, and assuming that the PUC approves it as submitted, such approval likely won't occur until the summer of 2017, as Heather confirmed at our study session last night.  Then, and only then, could Boulder commence a condemnation action in court, seeking a determination of the amount that the city must pay to acquire Xcel's city assets.  That lawsuit will likely take at least a year.  Even assuming that the legal action is quick and the outcome for the city is good, the earliest that Boulder could start the lengthy process of transition would be the summer of 2018.  Finally, setting aside the fact that this is the best-case scenario for Boulder, and it assumes the best of outcomes at every stage, it does not take into account the city's recent announced that the city is in settlement discussions with Xcel.  If those discussions are fruitful and the city settles with Xcel and forgoes municipalization, any money spent from the General Fund to prepare for a city-run utility will have been wasted.


For the foregoing reasons, I request that city staff eliminate from the 2017 budget any expenditures from the General Fund in furtherance of the municipalization project.


Best,


Bob