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Cape to take franchise offer directly to LCEC’s elected board

By Staff | Oct 24, 2017

The Cape Coral City Council on Monday unanimously agreed to authorize City Manager John Szerlag to present a draft franchise agreement and memorandum of understanding to LCEC’s elected board in hopes breaking the latest impasse and reaching a new contract.

Negotiations to reach an agreement between the city and LCEC have been on again and off again for nearly three years, since well before the previous 30-year agreement expired on Sept. 30, 2016.

In an attempt to help the two sides reach an agreement, Brian Rist and Joe Mazurkiewicz of the Council for Progress volunteered to facilitate the latest round of talks between Szerlag and Dennie Hamilton, chief executive officer of LCEC.

Rist and Mazurkiewicz told City Council Monday that the parties were able to get close on some issues and needed continue to talk, adding that lawyers and courts were still an option.

The two also presented an analysis of the positions of the city and the co-op, and the Council for Progress’s recommendations for a new franchise agreement. The Council for Progress’s recommendations have been accepted by city staff.

Szerlag called it a big deal, since he said it means the business community has come down on their side of the issues.

The terms include the length of agreement (20 years with 10-year auto renewal) franchise fee, rate constraints, street lights, construction schedule for rights of way, tree trimming, new technology, buyouts, audits as well as non-disparagement clauses.

City Council expressed concerns about how new technologies could make the way LCEC does things seem antiquated in a few years and whether LCEC is really serious about wanting to come closer to the center.

Rist was confident, saying if they didn’t feel they could get something done, they wouldn’t get involved. He asked City Council to approve the resolution so he had something in writing to bring to LCEC.

The electric cooperative, which has submitted a final offer of its own, said the electric co-op has made numerous concessions and has gone as far as it is able to reach a new agreement.

Officials there also expressed unhappiness with what they say is the latest round of acrimony on the part of city administrators and paid advisors.

“It’s clear from the materials prepared by City staff that in spite of our diligent efforts to reach an agreement the City will continue efforts to paint LCEC in a negative light in a public forum,” said Karen Ryan, LCEC spokesperson, in a prepared statement following the presentation and City Council vote. “The drawn-out process of franchise agreement discussions has cost City taxpayers and our members millions of dollars over several years, and there appears to be no end in sight based on the discussion this evening.

Ryan added LCEC has made multiple concessions, but can not agree to terms that aren’t in the best interests of all members throughout the co-op’s five county service area.

“LCEC has made unprecedented concessions to the City throughout franchise agreement discussions and negotiations,” she said. “However, we are unable to agree to terms that are not in the best interest of all of our members and leaning toward giving the City operational control of our business. We are proud to serve our members in Cape Coral and we have been committed to doing it well since the first model homes were energized nearly 60 years ago. Many of our members in the City share our disappointment that this issue continues to drag on. The good news is that the City’s decisions do not change our commitment to our members in any way. We will continue to provide reliable electricity and quality service at the lowest possible rate as we always have, even without a franchise agreement.

The contentious issue took another turn late in the evening, when during Council reports, Councilmember John Carioscia called out Councilmember Marilyn Stout over an e-mail she sent to Hamilton, accusing her of perhaps undermining the negotiations.

The Oct. 7 e-mail states that Hamilton doesn’t have the support of the current Council and that the vast majority of citizens want LCEC to continue to provide services in the city.

“You strategized against us and the city. The city manager and the Council for Progress are doing the negotiations. I find this very disturbing,” Carioscia said to Stout. “Let Joe and Brian do their job and work and not work underhandedly with the CEO.”

Stout said City Council isn’t getting the entire picture and that the only people benefiting are the attorneys fighting the issue.

“I find it disturbing, too, that it has to be done on the dais because of Sunshine Laws. You dislike what I’ve said, well, I’m calling a spade a spade,” Stout said, adding that the city had a chance to make a deal months ago but didn’t pull the trigger.

When Mayor Marni Sawicki asked if Council could take any action regarding Stout’s email, City Attorney Dolores Menendez mentioned censure. In the end, Council decided to drop the matter .

Szerlag had no comment on the situation.