Cathy (Renwick) Bemiss - Letter to the Editor
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To the editor:
To the citizens of West Union:
Currently, the geothermal contract presented to the City Council is under review with a lawyer. The lawyer is determining the compliance issues within federal and state law concerning a City-owned geothermal infrastructure and appropriate lease revenue for the access to the geo system.
I would like to comment on the first contract brought to the City for approval. The contract, if approved as presented, would have the City paying the Alliant bill for operation of the geo system, the City purchasing additional insurance (approximately $20,000 per year premium) for infrastructure below the street (think leaks), and receiving no revenue to put into an account for replacement of current infrastructure and normal depreciation costs.
Turning on the geo system is not as simple as turning on the water faucet. The impression left from the coverage of the work session implied if the City were not able to reach a contract with the LLC, we would have to return the grant money.
Think about this from a common sense point of view. The geothermal system is not the same as a sewer/water utility. They are essential services and the City requires all property owners to be connected to sewer and water. The City can not require any property owner to connect to the geo system. It is a retail product, and the connection is by choice only.
If the City could choose to operate the geo system, then a referendum vote would probably (still checking) be required. This vote would require a 60 percent approval from voters even to consider running the geo locally. Also in Iowa, City-owned utilities must be self-sustaining. No other monies can be used to support the operating costs.
The LLC has members with nine buildings. There are 59 buildings in the geo district. No one knows if that number (nine buildings), could support the operating costs of running the geo. The grant money required the City to build the geo system with the very best intentions of the City owning and running the geo system. We are not required nor can we run the system if there are not enough customers to make it viable for the City to operate.
If we choose to lease the system, we are required by law to lease the system at fair market value, which is still being discussed. The council has the responsibility to ensure the citizens of West Union are not underwriting any of the costs of operation directly or indirectly. A legal opinion given to us said that the grant money could not be demanded returned unless specific language in the contracts compels that consequence.
I hope we can turn the geo system on. It is a significant asset for West Union. It can not be done at the expense of the entire community. It must be in compliance with federal and state laws (think fair market value for lease, not $1 per year). According to some, this is a negative position for me to take. I prefer to think of it as a responsible position to take on behalf of the entire community, who own the geo system and elected me.
Cathy (Renwick) Bemiss