• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Voters to Decide Whether Collinsville Buys Gas System

Posted on: Wednesday, 3 August 2005, 18:00 CDT

City's contract with ONG expired in June

Next month, Collinsville voters will decide who should provide residents with natural gas.

The Collinsville City Council in June voted to hold a Aug. 9 special election to decide whether the city should buy its natural gas system from Oklahoma Natural Gas.

The city's 25-year franchise agreement with ONG expired in June, giving the city the option of buying the system, a move Mayor Stan Sallee and most councilors see as a way to control people's service fees while providing additional revenue for the city.

"We certainly have no intention of buying this system and raising our rates for customers -- it's really the opposite," Sallee said. "We think its an opportunity to keep rates lower than ONG because we're more cost effective.

"We are not a huge corporation that has to make a big return on investment for their stockholders.

"We can keep the profits from the gas system."

Sallee said with a city-owned natural gas system, councilors could be more cost-efficient in providing services to residents.

Because city employees living in Collinsville would handle gas leaks, emergency response time would drop, he said.

ONG does not have an office or employees living in Collinsville.

City officials have consulted with other municipalities, including Mannford and Drumright, who own their natural gas systems.

Mike Nunneley, city manager of Mannford, said revenue from a city- owned natural gas system fluctuates, depending on the cost of natural gas and changes in customer rates.

For this fiscal year, which began July 1, Mannford officials estimate its natural gas system will bring in a $150,000 profit, despite the high cost of natural gas.

"Our profit margin is low because the price of gas is high," Nunneley said.

Mannford residents have benefited from having a city-owned gas system.

"Our rates are cheaper than ONG's," Nunneley said.

Gail Rogers, vice mayor, isn't so sure.

Rogers said she has talked to other municipalities whose natural gas system does not provide revenue. She is uncertain that Collinsville rates will stay the same if the city owns the system.

Also, she is not sure the city can offer customers the same payment plans as ONG.

If Collinsville residents choose a city-owned natural gas system, the city would use the revenue to maintain the system's infrastructure and help fund city departments such as police, fire and streets.

Because the city has a limited sales tax base, Collinsville residents Trent Rogers and James Dugger believe revenue from a natural gas system is needed to support city services.

"It's a once-in-a-lifetime deal," Rogers said. "We will probably never have a Wal-Mart or a Target and draw resources from sales tax."

Dugger, who is president of the Collinsville Chamber of Commerce, said the chamber's board unanimously endorsed the city's purchase of the gas system.

Collinsville Public Schools also endorsed the purchase of the natural gas system, although it stands to lose more than $10,000 in property tax with a city-owned system.

Sallee said the city could lessen the impact to the school district by providing better services and lowering natural gas bills, which could spark more residential and commercial development in the community.

More development would bring more property tax dollars into the school system, Sallee said.

If voters approve the purchase, city officials plan to hire one or two people with experience in operating a natural gas system, Sallee said.

They also plan to train three to five employees from other departments to assist with emergencies such as a major gas leak.

Rogers said she is not sure the city can properly train people to maintain the system or safely handle emergencies.

The cost to buy out ONG would be based on appraisals from the city, ONG and one outside appraiser.

Because the city has already received its appraisal, Sallee is confident the cost to purchase the natural gas system is feasible.

Because the city cannot yet provide the cost to buy the system, or how long it will take to pay for it, Kyle Smalygo, a developer and Collinsville resident, said he would vote against the purchase.

"Nobody knows what it costs," he said. "I cannot support a purchase when Idon't know how much it costs."

BALLOT QUESTION

Should the city of Collinsville purchase and operate the gas distribution system within the city of Collinsville, which is currently owned and operated by Oklahoma Natural Gas, the purchase and operation of the system being authorized and allowed by the charter of the city of Collinsville and the existing franchise agreement?

Source: Tulsa World

More News in this Category