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Rate hike, solar farm in Esky electric budget plan

ESCANABA — The city of Escanaba began holding virtual budget work sessions for the 2020-21 fiscal year Monday. Among the topics was a potential new solar facility in the city and an electric rate increase.

City Manager Patrick Jordan provided a brief overview of the city’s budget. The general fund’s estimated revenues for the new fiscal year were listed as $8,534,940. Meanwhile, estimated expenditures for the fund were listed as $8,665,307.

Electric Superintendent Mike Furmanski spoke about the electric department’s budget for the upcoming fiscal year. The department is requesting a rate increase of 1.75 percent in the 2020-21 fiscal year.

The department’s estimated operating revenues were listed as $13,692,000 for the 2020-21 fiscal year. Its operating expenditures were estimated as $14,037,168 in the new fiscal year.

While rate increases have helped the electric department, its power sales have been down as of late.

“Overall, our sales — they keep sliding, and I don’t know what’s going to turn it around,” Furmanski said.

He noted the city’s electric department has the lowest rates in the Upper Peninsula.

Furmanski said electric cars potentially becoming more popular could help offset this decline in the future. Even if this does come to pass, he said it would likely not have a notably positive financial impact on the department for about a decade.

“With everything being shut down right now and gas in the $1.50 range, it gets that much steeper of a climb for electric vehicles,” he said.

Furmanski also discussed efforts to increase the city’s solar generation capacity. He said panels for an expansion to the solar facility at the Delta County Airport have already been purchased, but due to a shipping error, three pallets of panels out of the 42 pallets the city ordered are currently at the office of the facility’s developer in Chicago.

“They’ll be bringing them up here when they come to do the installation,” he said.

The department included $2 million in its budget for a possible new solar facility. Potential locations for

the facility have been discussed, but a final decision has not yet been made.

Furmanski said the new solar facility was unlikely to move forward in the 2020-21 fiscal year, but funds for the project were included in the budget in case progress can be made sooner than expected.

If an unrelated proposal to develop a solar farm in Escanaba Township moves forward, the department may attempt to request the services of the construction company that would be in the area to work on that project.

“We’re hoping … that if that project happens, that developer has that equipment here to do that installation. Maybe while they’re here, they can come on into town and do a two-megawatt installation for us,” Furmanski said.

Still, Furmanski acknowledged the controversy that has surrounded the Escanaba Township proposal.

“It’s a rather contentious project — I don’t know if it’ll ever happen or when it’ll happen,” he said.

If the proposed Escanaba Township project does not go forward, Furmanski said the city could go out for its own request for proposal for work on the new facility at some point.

Another topic addressed by Furmanski was the electric department’s goal of upgrading city electric meters to make them compatible with advanced metering infrastructure (AMI). The department has budgeted $1.5 million for the new meters.

“We’ve been kicking it around for a number of years, and (we’ve) just got to get to it,” he said.

Mayor Marc Tall asked why the electric department, which had set aside $1 million for the 2019-20 fiscal year in the hopes of performing the upgrade, was requesting an increase to that amount. In response, Furmanski said the extra funds could help accelerate the timeline for AMI implementation.

“I really think we could do the whole electric system in a year. We can change out electric meters pretty quickly,” he said.

As upgraded electric and water meters compatible with AMI would use the same system, Furmanski said the electric department and water department would likely split costs associated with the system. If the water department does not implement AMI this year, Furmanski said the electric department may go forward with its own plans anyway.

“I would like to do it at the same time as water does, but I’m not sure what their schedule would be,” he said.

Along with these requests, Furmanski said the electric department’s 2020-21 budget included funds for the purchase of an electric truck.

“I think it would behoove us to have an electric vehicle, so we can understand the charge time, cycle times – just everything about it,” he said.

Budget session participants were split on Furmanski’s request to purchase an electric truck.

“I understand you have a desire to learn, but is it worth $75,000 to buy an electric truck when certainly an F-150 running on diesel or gasoline is going to be much cheaper?,” Tall asked.

Mayor Pro Tem Peggy O’Connell supported the request, noting she has heard questions about electric car charging stations from customers at her businesses and people she rents to on AirBNB on a regular basis.

“It’s something that we probably should be looking at, so that we do understand it,” she said.

On the other hand, Escanaba City Council member Tyler DuBord felt that electric vehicles were not yet popular enough in the region to justify Furmanski’s request.

“I guess I’m not seeing it until I see the research showing that the increase of sales in electric vehicles (is) going up towards the Midwest,” he said.

Tall asked that the issue be discussed further at Tuesday’s budget session.

Finally, Furmanski requested an increase from his current annual salary of $93,538. He referred to a salary survey from the American Public Power Association (APPA).

“Every year since I’ve been getting them, I’ve been way below national average. I typically don’t even come close to the first quartile,” he said.

Tall said Furmanski’s salary will be addressed at today’s session or in the “very near future.”

“I would like to ask Patrick Jordan to quickly put together a report to the five council members about this issue, and we will discuss it after reading his report,” he said.

Budgets for the Downtown Development Authority, Public Safety, City Clerk, Marina, Water and Wastewater Departments, City Manager, City Controller, City Assessor and Planning/Zoning were also discussed at Monday’s budget work session.

Budget work sessions will continue on Tuesday, when another session is set to begin at 9 a.m. Public Works/Engineering, Library, Recreation and HR/Treasurer budgets will be discussed in Tuesday’s session.

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