With the incoming potentially severe weather and current high winds, the City of Osawatomie would like to remind our residents that we are closely monitoring the skies and have crews on standby to address any issues that might crop up as we move into the late afternoon and evening hours. High winds (and falling tree limbs) were responsible for several scattered outages earlier today, and we were glad to get the issues resolved for those residents in a safe and efficient manner.
Should you lose power, PLEASE do not report your outage to the Osawatomie Police Department or the Miami County Sheriff. Those lines should be left open for emergencies and emergencies ONLY.
Instead, please report any outages via our new TextMyGov text message reporting program. Keep reading for instructions on reporting power outages.
Text “Hi, “Hello,” or “Hey” to the City at 913-557-8777. This starts a new chain of communication with the program.
Text “Outage” and wait for the prompts! TextMyGov’s smart texting technology identifies keywords to instantly provide a response.
TextMyGov also recognizes over 100 other keywords!
Follow the prompts until finished.
All reports are instantly submitted to the department in charge of the issue at hand. All reported power outages will be transmitted to the Electric Department for review.
The City of Osawatomie would also encourage anyone to sign up to receive special text alerts via TextMyGov by texting the following to 91896:
“OZGENERAL” to receive general, non-emergent alerts
The following is a to-the-day timeline of the severe weather-related utility price spikes experienced by the City of Osawatomie and the actions taken by staff and the Governing Body. A summarized news release regarding this continually evolving situation can be found here.
February 22, 2021 – Following the record-breaking cold weather and utility crisis that took place in mid-February, staff is notified by the Kansas Municipal Energy Agency (KMEA), an association of city utilities of which we are a member, that they are going to have a large bill and member cities would be moving to a weekly billing cycle the next two weeks instead of the regular monthly billing cycle. The reason for this is that KMEA’s Line of Credit that they could borrow against was $5,000,000 and the bill that they were going to get from Southwest Power Pool was for $9,000,000+; this imbalance meant that members needed to provide payment to the group on a more frequent basis to cover the gap in finances. As part of this temporary change in billing, KMEA provided all their member entities with an estimate and told Osawatomie to expect a bill between $700,000 and $1,000,000 for the total cost over the next two weeks (with the caveat it could go up or it could go down). KMEA said they wouldn’t know the final number for the first week’s payment until Friday (2/26/2021), but that we would need to have funds in the bank ready to be withdrawn by 12:00pm on Tuesday, March 2nd. So we were given notice that we needed to have some portion of $700,000 available by the following Tuesday, only two business days away. At that time, we only had about $500,000 in cash on hand in our Electric Utility Fund. We feared we were early in this financial/energy crisis and at this point there seemed to be a lot of guessing, so we started solving for a $1,000,000 problem, not knowing what it might be, but figuring that would give us some cushion.
February 25, 2021 – Working with our Bond Counsel and Financial Advisor, we identified KSA 10-116a which is a State Statute that allows city utilities to issue No Fund Warrants (borrow money) up to 25% of their annual revenues in a Utility Fund, if there is an extraordinary emergency in that utility. City Council meets in a special meeting and Resolution 849 is passed which then gave staff the ability to borrow up to $900,000 in No Fund Warrants. Remember, at this point we are still solving for what might be a $1,000,000 – we don’t know. That ability to borrow $900,000 and use $100,000 in cash on hand would get us to the $1,000,000.
February 26, 2021 – KMEA contacted the city at 10:57 am with what our first bill would be for the period of 2/10 through 2/16: the amount was $195,531.77. We asked if we could expect a similar amount for the following week, and the answer was probably, yes, but it could go up or go down. We then made an assumption that even if it did go up we could probably use some of our cash on hand to pay, but that we wanted to preserve as much cash as possible not knowing how all of this would eventually play out.
Simultaneous to all that was happening internally, we and several other cities/associations engaged the State in the problem. A bill was introduced and we submitted testimony in support of what became SB88, which created the City Utility Low-Interest Loan Program.
Mike Scanlon, City Manager
March 2, 2021 – The first payment of $195,531.77 is withdrawn. We hold another Special Meeting of City Council so the Governing Body can discuss and vote on Resolution 850, which grants us the authority to issue NFW and sell them to First Option Bank. The Resolution is published, becomes law, warrants are issued, and First Option provides us with $400,000 to both replenish and have cash available before our next payment due on 3/9/2021. We negotiated with First Option Bank and they agreed to buy our NFW at 1.2% APR.
March 3, 2021 – At 2:49 pm we receive our second bill from KMEA, totaling $498,163.32 which covered the period of 2/17 through 2/23. This represents what we believe to be our last “spike” billing for the City of Osawatomie, which brings the total in received spike bills to $693,695.09. This bill is due for withdrawal on 3/9/2021, just three business days away.
March 3, 2021 – In Topeka, SB88 is published and becomes law. The bill was introduced in the morning and voted through both the House and the Senate in the same afternoon. Governor Kelly signs it into law that evening. City of Osawatomie and other municipal utilities are eligible to borrow money from the state at .25% (one quarter of one percent).
March 4, 2021 – State Treasure starts promulgating rules and holds a conference call with municipal utilities to provide an update on the what is now called “City Utility Low-Interest Loan Program”
March 5, 2021 – The City Utility Low-Interest Loan Program application portal opens, and applications are accepted until March 15th.
March 19, 2021 – The City paid off the NFW at First Option Bank as was specified in Ordinance 3794. At this point the City has a $700,000 loan with the State of Kansas with a current annual interest rate of .25% (one quarter of one percent). This rate is adjustable every January. The loan from the State was 1% below what we offered by First Option Bank, so we took advantage of the lower interest rate.
Our first estimate was that we needed $700,000 available for payment over the course of eight business days for the two weeks of spike billing from KMEA. We only had $500,000 in our Electric Fund on hand, and we used $1,000,000 as our planning number – there was some fear that the $700,000 estimate might grow. Between NFW and cash on hand, we had a plan. The first bill from KMEA came in lower then expected, and we used it as a base line number to issue $400,000 (not up to the full $900,000 that Resolution 849 allowed) in NFWs. However, the second bill came in much higher and our total was closer to the original estimate of $700,000. Simultaneous to us issuing NFWs, the State jumped in to help cities and came up with a low-interest loan program which we used to pay off the original $400,000 in NFWs and cover most of the increased costs seen between 2/10 – 2/23. We are now working on how to best pass this “price spike” on to our electric utility customers, and will have a final plan in place after the April 8th City Council meeting.
How to Stay Informed
For residents wishing to stay informed of City news and happenings, we provide a variety of communication tools and always encourage attendance at Council meetings, which are held on the second and fourth Thursdays barring any federal holidays. Council meetings are free to attend, open to the public, and attendees are each allotted up to five minutes at the top of the meeting to voice concerns or questions regarding City business.
In addition to our online presence, the City also distributes a printed quarterly insert in the Miami County Republic that offers a comprehensive update of City news to those who might not have regular internet access. The next edition is scheduled to publish in the April 7th, 2021, edition of the Miami County Republic.
In emergency situations, the City also utilizes the Everbridge Alert System managed by the Miami County Sheriff’s Office. We encourage all residents to sign up for notifications through Everbridge.
Continued Utility Billing Actions Taken Regarding Electric Spike Charges
Osawatomie, Kansas – City officials continue to work toward a solution regarding the mid-February cold snap that caused price spikes in electric and natural gas utilities across the entire Midwest. The City of Osawatomie received around $700,000 in charges for a two-week period of severe weather, which is roughly the cost of six to eight months during a regular year. The issue has been a primary topic of concern at the February 25th, March 2nd, and March 11th meetings of City Council, and officials continued their discussion of the electric spike charges at the regularly scheduled March 25th meeting.
The City of Osawatomie was glad to receive a $700,000 ultra-low-interest loan from the State’s newly introduced City Utility Low-Interest Loan Program, which was designed for use by municipalities facing exorbitant utility bills as related to the February severe weather. This loan allows the City to pay off the $400,000 in higher interest no-fund warrants (NFW) as originally issued for the first portion of the charges due, and the City is able to stretch out repayment up to 10 years as compared to the one-year repayment for the NFW. This more forgiving repayment opportunity allows us to keep the monthly impact to consumers as low as possible.
After a presentation from City Manager Mike Scanlon regarding several proposed repayment options, and after listening to feedback from the residents in attendance, Council voted to approve a proposed 36-month framework repayment calendar. A final version of the plan will be presented and voted on at the April 8th meeting before implementation can begin in mid-April. The loan program timeline and necessary actions from City Council prevented these changes from appearing on the bill arriving next week as originally stated in a March 1st release. Once a plan has been established and approved by Council, the City will notify customers of their payment options.
The City of Osawatomie and all its associated staff members, community partners, and other advisory groups are grateful for the support and understanding of residents during this incredibly trying time. This has been a period of exhaustive new information, record-breaking speed of legislation, and complicated financial mathematics. The City is proud to have been on the forefront of many of these statewide conversations and spearheaded many of the solutions being implemented across the region.
For everyone who has been following along with our energy crisis this week, we have good news. We can breathe again!
Water is still running through the intake facility at the water plant and the pumps are still moving. Our power pool (SPP) has downgraded to an Emergency Energy Alert Level 0 (EEA0), which means we’re in the minimal risk level of their emergency alert system. They have also, however, asked that we and those in our region continue to be conservative with our energy consumption until 10:00pm on February 20th, 2021 due to continuing higher load demands and continuing severe cold weather to ensure grid stability as we reintroduce systems (like school districts, businesses, etc.). If the grid gets overloaded, we start this process all over again!
Thank you from the bottom of our hearts for tuning in to our updates, taking them seriously, and doing your part to keep our utilities as stable as possible. Many communities in our region were not as lucky, and we are grateful to everyone who was willing to sacrifice a little convenience and comfort to ensure continued safety for their neighbor.
This will be the last update regarding these utility challenges unless something critical changes in the coming days.