Ask Mr. (Electric) Answer Person: "What would passage of the May 1st referendum authorize?"

(Jamie and Braden have e-mailed Mr. Answer Person with similar questions.  Here's Jamie's e-mail: "With all the opinions and comments for and against establishing a city owned electric utility I would like to hear some clarity on what the vote on May 1st actually is for. Is it to only to allow the city to gather more information on establishing a city owned electric Utility? Or is it to allow the public to give approval to gather more information AND allow the city (council) to establish a city-owned electric utility should they decide to?  If it is (the first option), does this mean that there will be another vote by the public once more information and costs are obtained?" Here's Braden's e-mail: "There have been a lot of letters to the editor and other comments about the May 1st Referendum not mandating the city council to do anything but that it would allow us to "open Alliant's books" and get the real numbers on all this, and these comments seem to all seem to start with "It's my understanding that...".  It's my understanding from going to meetings and reading up on the IUB application process that Alliant won't be "opening their books" until the discovery part of the IUB application process, meaning after we've already started pouring money into a potentially years long process with no promise of a positive outcome.  I believe it's important for the people to know what exactly they will be getting with a YES vote.  Will we be getting more crucial information and solid numbers with which to make this very important decision, or will we simply be giving the City the green light to apply to the IUB, should they so choose?")

Mr. Answer Person says: "There are a lot of questions here, so let's start by posting the exact wording of the ballot issue: 'Shall the City of Decorah, in the County of Winneshiek, State of Iowa, be authorized to establish a Municipally-Owned electric utility?'

If the May 1st referendum is approved by voters, the next steps are up to the Decorah City Council.  First of all, the city council would have to decide whether to apply to the Iowa Utilities Board for the board's permission to create a Decorah municipal utility which would buy out Alliant.  This would start the "discovery part of the IUB application process" that Braden mentions. 

If the city council approved an application to the IUB, it would have to figure out how to pay for the costs involved.  There are two ways of getting money to create and operate a utility--"revenue bonds" and "general obligation bonds."  Revenue bonds are secured by pledging revenue collections against them and are a typical way of financing utilities.  But such financing comes into play for a utility with existing customers.  In Decorah's case, it would have to turn to general obligation bonds as a way to pay for the costs leading up to an IUB decision.  General obligation bonds would require a second voter referendum.

Decorah Power's feasibility study estimates the cost of legal fees at $1 million, while Alliant Energy's feasibility study estimates the cost of legal fees at $2.2 million.  Both Decorah Power and Alliant Energy say their estimates are for legal costs up until a ruling from the IUB.  However, the losing party in an IUB ruling would also have the ability to appeal the ruling, which would increase the total for legal fees.  Decorah Power is estimating it would take one year for the IUB to make a ruling, while Alliant is estimating it would take two years, citing the amount of time it took for the IUB to rule on the last application for a municipal electric utility.  However, Decorah Power says that ruling involved five separate applications and the IUB took eight months just to decide how to handle the applications (it eventually combined them).

Whichever estimate is more accurate, the money for the process would have to be approved by City of Decorah voters in a second referendum.  Braden's question came in the form of either/or, but Mr. Answer Person's reply is that both parts of his question can be answered 'yes'-- we will be getting more crucial information and solid numbers and we will be giving the city council the green light to apply to the IUB--but in order to get money to pay for the costs of such an application, it would have to seek voter approval for general obligation bonds."