As Elizabethton Bureau Chief John Thompson reported in Sunday’s edition, Alexander thinks the utility’s value is in the neighborhood of $55 million based on its most recent audit, a sharp contrast to the $29 million-$34 million set by a utilities consultant.
Alexander described that gap as one of four deal breakers in the purchase negotiations.
The mayor’s list also includes what’s sure to be a major sticking point for the city’s taxpayers: BrightRidge’s proposal to gradually lower the amount of payment-in-lieu-of-taxes, or PILOT, paid to the city of Elizabethton. Elizabethton Electric voluntarily pays local property taxes, which has amounted to $1.4 million per year for the city’s general fund in recent budgets. BrightRidge’s proposal is to pay the full amount initially but reduce the contribution each year for a decade until reaching zero. The result would be a 52-cent tax rate hike for city property owners.
His other two dealbreakers involve the city’s representation on the BrightRidge board of directors and the difference between electrical rates between the two utilities.
What Alexander’s list did not include is the emotional factor. Elizabethton residents like the town’s identity as a distinct community from their bigger neighbor, Johnson City. Regardless of the name change from the Johnson City Power Board, BrightRidge remains a Johnson City entity in many a mind. The prospects of BrightRidge trucks on Elizabethton’s streets and BrightRidge bills in Elizabethton mailboxes may not sit well with the Betsytown faithful.
So it likely would take a sweetheart of a deal for the Elizabethton City Council to even entertain a BrightRidge acquisition.
If the first two items on the mayor’s list of deal breakers hold firm, more sugar will be needed. Elizabethton residents will have to measure just how much they stand to gain over the long haul. Just what would be their motivation to sell?