Charter Amendment #3
An Amendment Changing the Requirements Necessary to Sell any City Water Plant or Electric Utility.
Do you favor an amendment to the Lakeland City Charter that changes the approval necessary to sell any water plant or electric utility from the existing requirement of 2/3 of all electors qualified to vote to 2/3 vote of the City Commission and 65% of those actually voting in the next general election following City Commission approval?
Is there an offer to buy Lakeland Electric?
Is there a plan to sell it?
Is it possible under the current charter?
Not really. The current charter requires two-thirds of all registered voters to approve a sale rather than the actual turnout, rendering a sale impossible as a practical matter.
Should it be possible?
Of course! Nothing should be impossible.
If the charter is amended to make a sale possible, will it be sold?
Nope. Not before a valid offer is made, vetted, accepted, and voted on.
If an offer is made, and accepted as appropriate, how will it be approved?
A super majority of commissioners (at least five) and at least 65% of voters who participate.
How much is it worth?
Who knows? The value of the real estate and infrastructure can be calculated, but its value is driven by market forces, just like the ones that determine what your home or car might by worth.
Besides relatively low rates, what does LE provide to the city?
$31,000,000 annually to the General Fund
In a very casual public conversation, Justin Troller, a vigorous opponent of selling the utility, suggested the value might be $1,000,000,000. Subtracting its $400,000,000 debt, the net result would be $600,000,000 in cash.
Invested at the average rate of return of the S&P 500 for the last 30 years - 6.73% - it would yield about $40,000,000 annually. Some years more, some less. A conservative strategy would be to limit the General Fund transfer to the average of the last ten years of the traditional LE dividend, leaving a surplus to add to the corpus, making lower returns on a large investment produce a reliable benefit.
Other views suggest there are many financial requirements of the utility that would necessitate payment before the City could recognize a net investment corpus and what rate of return might be realistic. This corpus would be the last remaining ‘material’ source of funding that could maintain an affordable community with the high level of services we expect and might most likely be invested at lower risk which would generate much lower returns, but would better secure the funds for the future.
Some worry that future commissions and the voting public would be tempted to reduce the corpus for big projects or special expenditures. This can be mitigated by imposing the same requirements that allowed for the sale in the first place: a super majority of the commission, a ballot initiative, and 65% of the voters who go to the polls.
And, a privately owned utility would pay the city ad valorem taxes and franchise fees. A perpetual source of revenue.
It’s okay to make it okay to sell Lakeland Electric. Vote "YES" on this charter amendment. Dissenting citizens will always be in charge of the transaction.