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AMP debt on agenda
Council to discuss failed power plant
Monday, May 12, 2014
By MICKEY POWELL - Bulletin Staff Writer
Martinsville City Council on Tuesday will learn about the city’s options in paying debt incurred in the development of a ceased power plant project.
The latest calculations by American Municipal Power (AMP) show the city owes a maximum of $903,391 in so-called “stranded costs.”
A report in the council’s agenda packet shows AMP plans to hold onto the Meigs County, Ohio, location where the AMP Generating Station was to have been built for the potential development of another power plant.
For that reason, AMP is providing the city a credit of $364,467, leaving a balance due of $538,924, the report shows.
The city still could be held liable for the $364,467 if AMP cannot redevelop the site itself or sell it to someone, the report states.
The city buys wholesale power through AMP, a nonprofit organization, and distributes to customers of its electric department.
AMP discontinued the generating station project in 2009 after development costs suddenly rose sharply.
Full details of the city’s payment options have not yet been disclosed.
However, AMP President and Chief Executive Officer Mark Gerken stated in a memo to city Utilities Director Dennis Bowles that his organization is willing to give Martinsville “a (monthly) payment plan of your choosing” for 15 years.
The city also could pay off its debt in one or more “lump sum” payments, the memo states.
According to the memo, AMP expects the council to choose an option that would not cause the city to operate its electric fund at an annual loss or fail to meet other financial obligations.
The council must notify AMP of its choice by June 1.
The power plant matter will be discussed when the council meets at 7:30 p.m. Tuesday at the municipal building on West Church Street uptown.
Also on the agenda is a public hearing on the city’s proposed budget for fiscal 2015, which will start July 1.
Council members recently eliminated water and sewer rate hikes from the spending plan. No increases in other utility or tax rates are proposed.
Following the hearing, the council will consider adopting a budget ordinance on first reading.
The ordinance shows city officials expect to spend $89,326,163 in the new fiscal year but receive only $86,730,389 in revenue. As a result, plans are to use $2,595,774 in reserve funds to balance the budget.
A public hearing also will be held on proposed zoning ordinances changes that would temporarily allow land to be used for certain light industrial and commercial development while the ordinance undergoes an overhaul.
The council plans to set a public hearing for May 27 to receive and interview city residents interested in being appointed to the Martinsville School Board.
Seats now held by school board members Craig Dietrich and J.C. Richardson Jr. are up for grabs. Both are completing their first three-year terms and are eligible for reappointment.
Unlike other localities where school board members are elected by voters, Martinsville School Board members are selected by the council.
Also on the agenda are making routine-type budget amendments and hearing business from the floor.
At 7 p.m., the council will meet in closed session to discuss possible appointments to local boards and commissions.