It’s survival of the fittest and the powers that be aren’t taking any prisoners.
The fur is starting to fly in the battle of the Sherwood Electric contract. Why? The contract now in the hands of the Sherwood City Council will probably last between 20-40 years. If Sherwood turns away from North Little Rock, it could land a blow to the general fund coffers of the city of North Little Rock. North Little Rock’s general fund gets $12 million annually from the revenues earned from the electric company’s 37,000 customers, 7,000 of which are from Sherwood. But North Little Rock may not feel the blow for some time because it would be reimbursed for its estimated $10-$20 million in electric infrastructure inside Sherwood. However, losing Sherwood’s electric profits could complicate efforts of some city politicians and candidates who have come out publicly and called for such new projects as constructing a new fire station in the city’s East End.
On the other hand, Entergy is pressing hard for Sherwood’s contract because it would generate millions more in revenue for the next two or four decades. And the battle is on for the hearts and minds of the eight elected aldermen who are currently deeply divided on which way to go. First Electric Coop of Jacksonville remains in the mix because it has submitted a bid proposal, but its name rarely gets mentioned. The battle now appears to be between Entergy and North Little Rock Electric.
At the Sept. 24 meeting of Sherwood City Council, Aldermen Steve Fender, Ken Keplinger, Mary Jo Heye, Kevin Lilly, and Toni Butler voted against negotiating a new agreement with North Little Rock Electric, while Alderman Marina Brooks, Charles Harmon and Tim McMinn supported it.
For people wanting Sherwood to keep North Little Rock Electric, they need to retain the three council members they currently have and just get one to flip from the other side, bringing the vote to a 4-4 tie. If there is a tie, the decision would fall onto the shoulders of Sherwood Mayor Virginia Hillman.
Sherwood Mayor Virginia Hillman has come out publicly to support entering into a new agreement with North Little Rock Electric and said if the council deadlocks at 4-4 she probably would come out in favor of siding with North Little Rock Electric.
City officials supporting North Little Rock Electric partly feel the way they do because of the local utility’s additional contribution of $475,000 annually to Sherwood’s city coffers. If Sherwood loses the $475,000 it has grown dependent upon the last three years, coupled with another annual $300,000 hit to city coffers starting in early 2013 when Sherwood acquires new emergency radios, rumors are swirling around the corridors of Sherwood City Hall that city workers better get to the Oct. 22 meeting of Sherwood City Council and lobby hard for North Little Rock Electric. Some workers are being told that with a $775,000 hole in the 2013 budget layoffs could be looming because city officials have said publicly there is no more fat left to cut out of the Sherwood municipal budget.
Hillman said there is no talk of layoffs but she stressed if Sherwood doesn’t get North Little Rock’s money next year it could mean less city roads are maintained next year.
Hillman said North Little Rock’s $475,000 annual donation to Sherwood city coffers is only a part of the reason she likes the sister city’s electric company over Entergy.
Hillman said she questions Entergy’s integrity.
Hillman said Entergy treated some Sherwood aldermen individually to private lunches individual to make their case.
“I feel things like that should be said at a public forum,” Hillman said. “Taking people out to lunch is just too cozy.”
Hillman said North Little Rock offered to take city aldermen on a tour of its electric facilities just outside of Sherwood which she felt was very appropriate.
Besides Entergy’s integrity, Hillman also believes the utility isn’t as quick to deal with Sherwood problems as either North Little Rock Electric or First Electric Coop.
As Sherwood was working on the Brockington Road widening project, the city had to deal with First Electric and Entergy which has utility assets on the roadway.
“We wanted First Electric to move their utilities and they did it right away,” Hillman said. “We asked Entergy to do that and they were the only ones that wanted to charge to do that.”
Besides wanting to charge fees to move poles and its assets, Entergy took a lot longer to get the job done, Hillman added.
“First Electric was done in a few weeks while Entergy started in December and didn’t get done until April or May.”
Hillman said when she calls Entergy to do service work in Sherwood, she feels the city of about 30,000 residents is like “a minnow in an ocean” to Entergy.
However, in dealing with North Little Rock Electric and First Electric Coop, it is easier to get them to respond because they are more local and more responsive to smaller customers.
Entergy Attorney Wesley Hunt said the company did have individual lunches with three Sherwood aldermen to make its case about why Sherwood customers would be best served with Entergy.
“They were pretty normal business lunches,” Hunt said. “The two I was at. That violates no law. “
Hunt said sitting down individually with aldermen is a way to help them understand their options and make informed decisions about very complicated subject matter.
Hunt said if the mayor wants to make accusations about Entergy’s dealings with aldermen, she may want to take note that the spouse of a sitting alderman who gets money in his business from the city of North Little Rock is lobbying hard for North Little Rock Electric.
Former Alderman Tom Brooks, who owns Cinergi Contractors, has obtained a contract to construct sidewalks for the city of North Little Rock.
Hunt said he sees Tom Brooks’ actions as a conflict of interest in trying to persuade Sherwood aldermen to go along with North Little Rock Electric.
Hunt said Alderman Marina Brooks should recuse herself from voting on the electric contract issue. Brooks is one of the three aldermen which sided with North Little Rock Electric.
Another issue of debate between Hillman and people who want Entergy to get the electric contract is how much more will the 7,000 Sherwood customers pay if Entergy ends up having to pay $10-$20 million to North Little Rock for its infrastructure.
If Sherwood goes with Entergy, Entergy would negotiate with North Little Rock about a price for North Little Rock’s electric infrastructure in Sherwood, and Entergy would pay that sum to North Little Rock, according to West.
It is likely that the 7,000 impacted Sherwood customers would pay a portion of those infrastructure costs but that would be a decision made by the Arkansas Public Service Commission.
North Little Rock’s electric infrastructure has a value which has been set, but that value depreciates. It is a fair possibility that the 7,000 impacted customers would pay for the value of those assets after their depreciation were taken into account, West said.
West said Entergy would probably ask the Arkansas Public Service Commission rule that the infrastructure costs be spread out over all of Entergy’s customers, which would amount to an increase about two or three cents a month per Entergy customer.
West said Entergy customers outside of Sherwood would have the right to file a complaint with the commission if they felt they should not have to pay for the utility’s cost to service Sherwood customers.