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SPECIAL COUNCIL MEI;T[NG <br />September 30, 1985 <br />Page Two <br />At this point, the prison is saying they will go to fuel oil, <br />North Central, wood chips or something else if Circle Pines <br />does not reduce rates. However, they are in a franchise area <br />and Mr. Schumacher has written to them explaining what their <br />options are. The only way they can get out of the franchise <br />is if Lino Lakes changes the franchise. As far as wood chips <br />is concerned, there is state legislation prohibiting its use. <br />Mr. Reinert said they should not be gouged and suggested working <br />with Circle Pines to reduce the rate. <br />Mr. Schumacher said he does not believe that North Central <br />can profit from the rate they are proposing. He had checked <br />with a similar North Central user and they were paying $4.75 <br />which is much higher than being proposed for the prison. <br />Mayor Benson said what it boils down to is that the Council <br />will have to take a hard look at the gas utility because it <br />may be needed for future revenues. This is the real reason <br />for working with Andy Gibas and the Circle Pines gas commission. <br />He felt this City should get together with Mr. Gibas and question <br />what the operating expenses are and what the administration <br />expenses are. We may find these expenses are not even close <br />to being accurate. No doors should be closed here, but go <br />and find out where these cuts can be made and make this utility <br />more profitable. <br />Mr. Schumacher said the next step in the process is for Circle <br />Pines to contact their supplier. He said the unfortunate <br />thing is Lino Lakes does not have any input, not even a letter <br />from Circle Pines saying how do you feel about this profit <br />or loss. <br />Mr. Bohjanen asked when Lino Lakes will have representation <br />on the Circle Pines Utility Commission. Mr. Schumacher said <br />Mr. Gibas is pushing for a five person commission and Lino <br />Lakes would have one representative and Circle Pines would <br />have the majority. Presently, Mr. Schumacher is proposing <br />a seven member commission, two from Lino Lakes and five from <br />Circle Pines and the membership would change based on the <br />formula of users. <br />Mayor Benson said he wants a full accounting of the gas system <br />including the number of customers each City has, what their <br />gas usage is and what the administrative and operative costs <br />are. The franchise is up for renewal in 1986 and unless this <br />City can look at some profits in the future he would not be <br />in favor of spending a lot of time expanding this utility. <br />1 <br />117 <br />