In May 2014 the city created a municipal electric utility, albeit only on paper. Xcel Energy sued, challenging the utility’s creation and saying that “Boulder had not done enough to show it could run a utility under the stated criteria.” (Daily Camera, July 18, 2017) After two lower rulings, that case is now awaiting a hearing by the CO Supreme Court.
City Attorney Tom Carr strongly advocated placing 2O on the ballot, arguing that resolving the existential legal question is of fundamental importance to bonding and rating agencies before they will deal with a municipal utility. Measure 2O is seen as a way to render the court case immaterial.
As part of forming a municipal electric utility, the city and Xcel proposed new construction to expand substations, increase the number of transformers, and erect utility poles or put wires underground. The Public Utility Commission’s (PUC) decision not to force Xcel to allow Boulder use of Xcel’s substations or utility poles will likely increase Boulder’s acquisition costs, although the city plans to argue that federal law requires Xcel to allow open access to any utility, such as Boulder’s municipal utility, under “just and reasonable” terms.
In 2013 voters limited debt related to acquisition costs for a muni to $214M. City staff are predicting that by 2019 or 2020 the city will have better information on the costs to create an actual electric utility – not just one on paper.
Measure 2O requires voters to approve the city incurring debt prior to this construction – a go/no-go vote. Any debt over the previously approved $214M would also need to be approved.
In addition to the generally unobjectionable idea of voter approval, the language to be added to Section 178 in the charter includes the curious phrase, “Provided, however, nothing in this section shall require any subsequent vote for future debt.” According to staff, this is intended to clarify that voter approval is a “one-time requirement.” However, TABOR requires voter approval for most debt – in particular, for “creation of any multiple-fiscal year direct or indirect district debt or other financial obligation whatsoever without adequate present cash reserves pledged irrevocably and held for payments in all future fiscal years,” but perhaps a municipal utility isn’t considered a district under TABOR.
In 2013 city voters passed 2F to amend Section 98 of the city charter to allow the city to negotiate private sales of bonds. The new language in Section 98 seems to imply that private sales of bonds are not subject to a vote of the electorate, but a reading of TABOR would preclude that, unless the passage of 2F in 2013 is considered voter approval for all such future private bond debt.
Recommendation: for the measure
Both municipalization supporters and opponents are generally in favor of 2O. While Xcel Energy and the CO Supreme Court may not agree with City Attorney Carr that 2O solves the legal entity question, it otherwise seems like a do-no-harm ballot issue. Measure 2O requires yet another approval step in the municipalization process – but it’s an easy-to-execute step compared to the PUC approvals and required agreements between Xcel and Boulder.
Website for the Yes side (Empower Our Future)
http://empowerourfuture.org/election-2017-muni-related-ballot-measures/
Website for the No side
No known website – Info on an opposition website appreciated.
Approved Ballot Language
Ballot Question 2O City of Boulder Charter Requirement for Vote Before Electric Construction Debt
Shall Section 178 of the Charter be amended pursuant to Ordinance 8193 to require a vote at a general or special election prior to the enterprise incurring debt for construction to separate the existing utility system for the City to provide electricity to customers of the City by a separate system?
For the Measure ____
Against the Measure ____
See Ordinance No. 8193 to put Question 2O to the voters
https://bouldercolorado.gov/central-records/document-archive then click on Browse City Council Records > Ordinances > 2017 > 8193
City Attorney Tom Carr strongly advocated placing 2O on the ballot, arguing that resolving the existential legal question is of fundamental importance to bonding and rating agencies before they will deal with a municipal utility. Measure 2O is seen as a way to render the court case immaterial.
As part of forming a municipal electric utility, the city and Xcel proposed new construction to expand substations, increase the number of transformers, and erect utility poles or put wires underground. The Public Utility Commission’s (PUC) decision not to force Xcel to allow Boulder use of Xcel’s substations or utility poles will likely increase Boulder’s acquisition costs, although the city plans to argue that federal law requires Xcel to allow open access to any utility, such as Boulder’s municipal utility, under “just and reasonable” terms.
In 2013 voters limited debt related to acquisition costs for a muni to $214M. City staff are predicting that by 2019 or 2020 the city will have better information on the costs to create an actual electric utility – not just one on paper.
Measure 2O requires voters to approve the city incurring debt prior to this construction – a go/no-go vote. Any debt over the previously approved $214M would also need to be approved.
In addition to the generally unobjectionable idea of voter approval, the language to be added to Section 178 in the charter includes the curious phrase, “Provided, however, nothing in this section shall require any subsequent vote for future debt.” According to staff, this is intended to clarify that voter approval is a “one-time requirement.” However, TABOR requires voter approval for most debt – in particular, for “creation of any multiple-fiscal year direct or indirect district debt or other financial obligation whatsoever without adequate present cash reserves pledged irrevocably and held for payments in all future fiscal years,” but perhaps a municipal utility isn’t considered a district under TABOR.
In 2013 city voters passed 2F to amend Section 98 of the city charter to allow the city to negotiate private sales of bonds. The new language in Section 98 seems to imply that private sales of bonds are not subject to a vote of the electorate, but a reading of TABOR would preclude that, unless the passage of 2F in 2013 is considered voter approval for all such future private bond debt.
Recommendation: for the measure
Both municipalization supporters and opponents are generally in favor of 2O. While Xcel Energy and the CO Supreme Court may not agree with City Attorney Carr that 2O solves the legal entity question, it otherwise seems like a do-no-harm ballot issue. Measure 2O requires yet another approval step in the municipalization process – but it’s an easy-to-execute step compared to the PUC approvals and required agreements between Xcel and Boulder.
Website for the Yes side (Empower Our Future)
http://empowerourfuture.org/election-2017-muni-related-ballot-measures/
Website for the No side
No known website – Info on an opposition website appreciated.
Approved Ballot Language
Ballot Question 2O City of Boulder Charter Requirement for Vote Before Electric Construction Debt
Shall Section 178 of the Charter be amended pursuant to Ordinance 8193 to require a vote at a general or special election prior to the enterprise incurring debt for construction to separate the existing utility system for the City to provide electricity to customers of the City by a separate system?
For the Measure ____
Against the Measure ____
See Ordinance No. 8193 to put Question 2O to the voters
https://bouldercolorado.gov/central-records/document-archive then click on Browse City Council Records > Ordinances > 2017 > 8193
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