In its first regular meeting of the new year, the Interior Gas Utility board of directors approved a budget Tuesday to finance operations for the remainder of the fiscal year, swore-in a new member and elected a new chairperson and slate of officers.
IGU board members approved what they called a “five-month budget” to fund operations through June.
“Basically, this is a continuation budget, for the remainder of the fiscal year,” General Manager Jomo Stewart said. He added the board didn’t want to pass a full fiscal-year budget last year, due to uncertainty about several unresolved issues, including whether the board would approve the $60 million purchase of Pentex Alaska. It did that last month.
“The board decided to simply pass a seven-month budget, to command from July 1 through January 31,” he said in an interview Wednesday.
Stewart said the other pending issues that compelled directors to approve the partial budget last year include ensuring compliance with the terms of a loan from the Alaska Industrial Development and Export Authority and renewal of a contract with Stantec, the utility’s main support contractor.
The five-month budget approved by the board Tuesday shows anticipated income from Feb. 1 through June 30 of about $475,865 and total miscellaneous nonoperating expenses of about $477,067.
Stewart says the board will be ready to resume budgeting for fiscal-year-to-fiscal-year in the runup to July 1.
“The Pentex deal is supposed to close by May 31st,” he said. “So, by the turn of the fiscal year, we’ll have a fuller understanding of what the financial picture is for both entities, and then we’ll budget forward from there.”
Also Tuesday, board members elected Pam Throop as their new chair. And they seated local air-quality advocate Patrice Lee, elected in October, as their newest member. The directors then selected Lee to serve on the board’s finance committee, and elected Frank Abegg as chair of the committee. They also selected Steve Haagenson to head up the utility’s efforts to convince area homeowners and business owners to convert to natural-gas heating systems.
Stewart said former board Chair Mike Meeks argued that one of the directors should oversee conversion, to help ensure success of the IGU’s efforts to make the price of natural gas competitive with heating oil and other fuels.
“He thought that appointing and fully empowering a board-level person for that effort would be prudent,” Stewart said. “And so the board concurred and Steve Haagenson was elected with unanimous consent.”
On another issue, board members split on a 3-to-3 vote a proposal to approve purchase of an 8-acre parcel next to a Fairbanks Natural Gas LNG-storage facility on the city’s south side for $75,000. The IGU plans to build a bigger natural gas storage on the FNG property, which the utility is buying as part of the Pentex purchase.
Stewart said Meeks, Haagenson and Jack Wilbur voted yes. But Throop, Lee and Abegg all voted no. Stewart says that's because they believed the IGU should hold off on the proposed purchase and instead invest in other, more-immediate needs. And because Bill Butler was absent, the tie vote killed the proposal.