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Updated: City staff asks to bring franchise proposal to LCEC elected board

By Staff | Oct 20, 2017

In response to a “final offer” franchise agreement submitted by the city’s electric utility provider, Cape Coral’s administrative staff will request authorization Monday to bring a counter proposal directly to LCEC’s elected board of directors.

City staff will ask the Cape Coral City Council to allow City Manager John Szerlag to present the proposal also supported by the Council for Progress, a business advocacy organization, to the electric co-op’s Board of Trustees and executive director for review.

The agreement then would come back the Cape Council for its consideration.

…”If the documents are favorably received by LCEC, the City will then initiate the process necessary for City Council to consider adoption of the Franchise Agreement by ordinance and adoption of the Memorandum of Understanding,” city staff wrote in a summary explanation to Council included in Monday’s meeting packet.

LCEC rejected those contract terms two days before the Council for Progress membership gave its approval, saying the utility and municipality were again at impasse and the co-op would agree to no additional concessions.

“The Council for Progress representatives made an effort to help us reach an agreement and we thank them for their time,” LCEC spokesperson Karen Ryan said in an earlier interview. “The CFP Task Force and City Staff do not have the advantage of having managed a large electric utility. Some of their positions would require us to turn over financial and operational control of the electric system to the City while remaining accountable for serving our customers – no responsible business would agree to that.”

The city supported franchise agreement hammered out with the help of the Council for Progress, however, is the best deal for Cape Coral ratepayers and its approval will not impact ratepayers throughout the rest of LCEC’s five-county service area, city officials maintain.

The contract would “provide a means toward further improving electric service in Cape Coral in terms of cost-effectiveness, reliability, transparency and technologically state of the art service without adversely impacting LCEC or LCEC members located outside of Cape Coral,” according to attorney Brian Armstrong, special utility counsel for the city in an Oct. 6 letter responding to Szerlag’s request for a review of LCEC’s version and related letter of agreement.

Armstrong enumerates various ways LCEC’s proposed franchise document falls short of agreements the co-op has made with other entities such as Marco Island, Sanibel and Lee County.

LCEC maintains the documents it has proposed, while not wholly in line with all the points suggested by Council for Progress facilitators and agreed to by city staff, include ample concessions made as a result of the talks.

Utility officials greeted Armstong’s analysis letter with frustration and surprise.

“It appears we are right back where we were two years ago when discussions began,” Ryan said. “So much time and millions of dollars spent only to reach an impasse. Many of the points the City’ contracted attorney included in his letter had already been discussed and resolved during negotiations.

“LCEC is not in a position to meet demands that are not in the best interest of our members,” she added.

Joe Mazurkiewicz, executive director of the Council for Progress, and Brian Rist, the business group’s president, worked with both sides for more than eight months in an attempt to reach an accord.

Mazurkiewicz said Friday that it remains a continuing process.

“We’re just continuing the process forward,” he said. “Before you can discuss legalese, you have to have some general terms that you agree upon.

“We’re only talking term sheets here,” Mazurkiewicz added.

Editor’s note: This story has been updated to include additional comment from LCEC