Petersburg’s borough assembly voted Monday to go forward with a half million dollar remodel of the Petersburg Municipal Power and Light building at the corner of Haugen and Nordic drives. The project will be paid for with electrical department reserves. The assembly also talked about spending down some of that reserve money by offering a reduced power rate to some customers.
As the first phase of a major renovation of the borough office building and police station nears completion, the borough could be starting up another project just across the street.
This project would replace siding, insulation, doors, windows, stairs and railings on the Power and Light headquarters. The plans also call for a wheelchair accessible reception area for electric department customers. A portion of the lower floor would be removed on the corner of Haugen and Nordic to improve the sight lines for motorists and pedestrians at that intersection.
Assembly member Kurt Wohlhueter asked Power and Light superintendent Joe Nelson about the plans. “Just to refresh our memories. This was a long time ago I remember this thing. I don’t believe this was the most expensive option that we had. I think this was kind of the middle of the road. Refresh my memory if that was the case,” Wohlhueter asked.
“I think it was the most expensive option,” Nelson responded.
“But I think it was the most effective I think,” Wohlhueter said. “I remember we hashed this over quite a bit. So this was well thought out I think, even though I can’t remember.”
“It’s been shelved for a while, yes,” Nelson said.
The building, houses Power and Light offices and a shop and dates back to 1935. Local officials for years talked about moving the electrical headquarters and generators from downtown to land in Scow Bay. However, cost estimates put that plan out of reach and there’s been little interest in making that move happen on the borough assembly in recent years. In May of 201, the assembly OK’d a design for just remodeling the building. The estimate of that work is just under 540-thousand dollars.
Assembly members this week voted unanimously to seek construction firms to do the project. That contractor would be paid with electrical department reserves. The assembly would still have to vote to award the contract.
With an eye toward doing the larger move Power and Light has been building up its cash reserves through electrical sales. That money is now around seven and a half million dollars.
Nelson explained how the project has shrunk in the past two decades. “We had gone from 20-24 million, down to 16 million, down to four million, down to 2 million for the shop building and the interest kind of wavered and we didn’t go forward. So we are down now to the present project that you just approved for a half million dollars and stay at that location.”
Nelson says Power and Light needs to hold onto three million dollars in case of emergencies. But that still leaves about three million that’s no longer needed for moving the offices and generators. Assembly members started a discussion about spending down that money by offering a reduced electrical rate for the schools, hospital and borough government buildings.
Borough manager Steve Giesbrecht explained how the idea came about. “From a standpoint that you know the school, the hospital and the borough have been kinda getting together in these meetings to try and figure out ways that we can continue to function in the way the community wants without having to either cut services or raise property taxes or other things to try to fund what we, you know and it fits a little bit with if the assembly wants to spend down the power and light fund balance, this is one of many different ways, it could be done, to do that.”
Power and Light’s Nelson estimated the reduced rate would cost Power and Light around 340-thousand dollars a year in lost revenue. The reduced rate would have to be ended or subsidized by remaining electrical customers once those reserves are gone.
Hospital CEO Liz Woodyard thanked the assembly for considering the idea. “Coming up with this idea for a municipal rate made sense without imposing any fees on anybody else that we would have to ask for any additional money for other things. It would give us a little bit of a breather and help us with some of our costs for infrastructure and remodeling or being more efficient with the hospital.”
The idea had mixed reviews among assembly members. Some questioned why the reduced rate couldn’t go to all electrical customers. Others wanted only to extend that rate to the schools and hospital but not borough government offices. In the end, the assembly asked Nelson to come up with a list of projects that power and Light needed to complete as a possible use for that reserve money instead.