Council accepts developer-funded $10,000 deposit to evaluate municipal power plan, tables resolution on creating utility

Toquerville City Council on May 21 approved a cost-reimbursement agreement with a solar developer that will deposit $10,000 to pay for the city—s evaluation of creating a municipal power department, and separately tabled a resolution that would authorize the city to move toward creating a municipal electric utility. City staff said the $10,000 would cover the initial costs of evaluating whether establishing a municipal power department is feasible, and that the deposit would be held by the city while the work proceeds.

The agreement approved Tuesday says the developer will "deposit with the city the amount of $10,000" to reimburse costs incurred while the city evaluates the project. City staff summarized the arrangement as limited to the evaluation stage and not to the cost of creating or operating a utility.

Why it matters: The two agenda items were linked. One is a private developer offering money to cover the city—s evaluation costs; the other is a policy-level resolution that would authorize city officials to pursue the creation of a municipal electric utility. Council members split the items: they accepted the developer-funded evaluation but decided to postpone a formal commitment to create a utility until the study and related details are clearer.

City staff counsel framed the agreement at the start of the discussion: "So what this is an agreement between, Browse Solar, the developer, and the city in which Browse Solar agrees to be responsible for, up to $10,000 in fees, required to evaluate whether they want to pursue, establishing a municipal power department," (Ben, city staff). Attorneys and council members debated how to protect the city if the developer changed course while the study was under way.

Several council members asked that the agreement more clearly protect the city from absorbing unpaid costs if the developer terminates the agreement. Councilmember Gary proposed specific edits that staff recommended be added before execution: remove language allowing the developer to terminate "at any time and for its convenience," increase termination notice from five days to 10 business days, and require the city to return only "accrued or unspent" funds from the deposit upon termination. Council discussion also asked that a recital in the agreement referring to the developer—s planned home construction be removed because the plan had not yet been approved by the planning commission.

After additional drafting and attorney review, the council voted to approve the reimbursement agreement as amended. Roll-call on the motion recorded: Joey, aye; Duane, no; Todd, aye; Gary, aye. The motion carried.

On the separate resolution to authorize pursuing creation of a municipal power department, several council members said they wanted the technical and financial data the evaluation will produce before committing the city. Councilmember Todd explicitly moved to table the resolution pending the evaluation and related written commitments about who would pay for which steps; the council voted to table the resolution.

What happens next: City staff and the developer will finalize the cost-reimbursement contract reflecting the council—s edits and will proceed with the evaluation work. The council said it expects to review the consultant findings, anticipated cost estimates and written funds commitments before considering the formal resolution to pursue a municipal power department.

Council members and staff said they want the evaluation to include discussions with regional providers and UAMPS (the Utah Associated Municipal Power Systems) and for the developer to provide any business-plan materials it already has so the consultant work can start with concrete financial assumptions.

No ordinance was adopted. The cost-reimbursement agreement is a limited, study-stage contract with the city; the later resolution that would have authorized creation of a municipal electric utility was tabled.