Wednesday, February 13, 2013

TOP STORY >> Voting set on power utility in Sherwood

Leader staff writer

The Sherwood City Council on Monday approved by a 5-2 vote a petition requesting a special election.

May 14 is the tentative date when voters will decide whether to repeal an ordinance that renewed the city’s contract with North Little Rock Electric through 2032, according to the Pulaski County Election Commission. The utility services 7,500 Sherwood residents.

The election will cost $25,000, according to the commission.

Don Berry, spokesman for COST — Citizens of Sherwood Together, the grassroots organization formed by the petitioners — said he didn’t expect the aldermen to vote at the meeting.

“It was a very pleasant surprise. We’re delighted that the citizens will get to vote on the issue,” he said.

Aldermen Charlie Harmon and Tim McMinn voted against the measure.

Both expressed concern that the ordinance that was required by law to be attached to the petition was in 3- or 4-point font size and printed with four pages on each 8-by-11-inch piece of paper. McMinn suggested that people who signed the petition might not have looked at the attachment because it was difficult to read.

Berry said Tuesday, “The only thing that was reduced in size was the franchise agreement. I thought it was a last ditch effort by North Little Rock to suspend the council’s pas sage determining sufficiency.”

He was referring to an e-mail North Little Rock’s city attorney Jason Carter, the interim general manager of the utility, sent to the council on Monday afternoon.

In the e-mail, Carter states that the petition is invalid because the law requires a “full and correct copy of the measure on which referendum is ordered,” and COST’s attachment was “reduced to one-fourth of the actual size.”

He concludes the e-mail with, “While I firmly believe that COST’s referendum petition is flawed, I will respect whatever decision the Sherwood City Council may reach regarding this matter. If the Sherwood City Council calls for an election, I will prepare to inform Sherwood’s citizens about the benefits of our franchise agreement. If the Sherwood City Council agrees that the petition is deficient, I will prepare my litigation team to defend in any legal challenge.”

Alderman Marina Brooks abstained from Monday’s vote.

It has been suggested that the electric decision is a conflict of interest because her husband, former Alderman Tom Brooks, owns Cinergi Contractors and recently entered into a contract with the city of North Little Rock to build sidewalks.

The alderman said previously that lawyers were consulted and they told her that her voting on the issue is legal.

Had she abstained from the vote when the council renewed the contract, the measure would still have been passed, by a 5-2 instead of a 5-3 vote.

Before Monday’s vote, residents who wanted to speak were given five minutes each to express how they felt about the electric decision and the petition.

John Boles of 1300 Corn-flower Lane questioned what petitioners hoped to gain with this election and accused COST leaders of having hidden agendas.

“The issue is not whether it’s Entergy, First Electric or North Little Rock Electric. I feel like we’re being misled on this whole thing,” he said.

Boles said people have been telling him that Sherwood is taking the $470,000 from North Little Rock and using it on The Greens at North Hills golf course.

The $470,000 a year he was referring to is a tariff the utility pays Sherwood in addition to a 4.25 percent franchise fee, which generates about $600,000 a year.

The utility’s excess revenues are returned to the local government via North Little Rock’s general fund. The $470,000 for Sherwood also comes out of those revenues.

Boles said he didn’t believe the rumor about the golf course was true.

The mayor said the $470,000 goes into Sherwood’s general fund. She said it is spent on a wide variety of things, including street repairs and police department salaries.

Kim Ferguson of 802 Autumnbrook Circle said her North Little Rock Electric bill is 14 percent higher than that of Entergy and First Electric.

She also said the process the council used to choose a provider “seemed like a big rush.”

Alderman Mike Sanders defeated Ferguson’s husband, Bob Ferguson, in the November race for Ward 1, Position 2. Kim Ferguson said that is why she started attending council meetings and getting involved in the electric issue.

She joined COST and started circulating the petition because several of the group’s members were financial management professionals and analysts.

“They’re looking toward the future. They’re looking at the big picture,” Ferguson said.

She said the council chose the $470,000 instead of the residents it is supposed to represent.

“I feel the council voted to put money into the city’s budget instead of for individual families,” Ferguson added.

Amy Sanders of 708 Wildwood Ave. said no one had addressed what another utility would have to pay for North Little Rock Electric’s infrastructure if Sherwood did switch providers. Sanders said that cost, which could be as much as $20 million, would be passed on to ratepayers.

She served on a citizen’s committee appointed by the mayor. The group recommended Sherwood stay with North Little Rock Electric.

“To me it was black and white. Why should we change when nothing is wrong?” Sanders asked.

Charlie Wood of 210 N. Devon Ave. said he works for Entergy and knows the business.

Wood argued that the other two utilities have to receive approval from the state to raise rates while North Little Rock Electric only needs to have a few board members agree that the utility needs more money from customers.

He also said, “(The $470,000 is) a real need. It’s not right to take it out of my pocket like a hidden tax.”

Wood added that he would vote to stay with North Little Rock Electric if the utility offered customers the same refunds the other two providers offer their customers. But he said he didn’t think that was probable.

Roger Bynum of 202 Dogwood Lane said, “I believe it’s very inappropriate that a certain segment of the population pays so much more (for electricity).”

Bynum said North Little Rock Electric customers shouldn’t have to contribute more money to Sherwood’s general fund than the rest of the residents, which they are doing through the utility’s $470,000 tariff.

Robert Hardin of 212 Katye Lane, the next speaker, agreed with Bynum.

Lou Mangrum of 8500 Pennwood Drive and Rod Radlein of 1613 Britney Drive were in favor of sticking with North Little Rock Electric.

Radlein said rates don’t matter and that fees, like those Entergy passed on to cover damage caused by the Christmas Day snowstorm, are more important when it comes to electric bills.

He said Entergy’s and First Electric’s infrastructure is aging and ratepayers will be footing the bills for repairs and upkeep later. Radlein said, “Most of (their infrastructure is) older than everyone in this building.”

He added, “It just doesn’t make any sense (to change providers).”

Several who agreed with the two men said North Little Rock Electric was more reliable during an outage crisis, like an ice storm, than Entergy.

Ferguson said Entergy and First Electric have a reliability rate of 99 percent in Sherwood while North Little Rock Electric could not provide her with any figures.

Karilyn Brown of 335 Alanbrook Ave. said North Little Rock Electric is a “cash cow” for Sherwood’s neighboring city. She said, “There were so many thoughtful and intelligent people who had concerns (about the electric decision).”

Deb Flynn of 108 Heather Drive said she signed the petition because she wanted her opinion on the matter to be heard. “Why can’t we invest in this? Let us at least have a voice,” Flynn said.

Several North Little Rock Electric customers at the meeting who wanted to stay with the utility asked how it was fair that everyone in the city, regardless of who their provider is, gets to make that choice for them.

Alderman Mary Jo Heye said the electric decision affects all residents because most of the city’s public buildings have North Little Rock Electric. She said all residents would be impacted by a change of utility providers in those buildings.

But Heye acknowledged that North Little Rock Electric customers would see the impact of a change in providers more than everyone else.

Heye also said the city should have hired an independent expert with “no dog in the hunt” to help the council choose between the three electric providers.

She pointed out that no one on the council and no one on the citizen’s committee is an expert in that field. She suggested that the information provided to Sherwood officials by the competing utilities, including technical details, was confusing and taken at face value.