SE PUC, citizens address steam heat issue

By FRITZ BUSCH

Journal Staff Writer

SLEEPY EYE -- Steam heat is still alive in downtown Sleepy Eye after an hour-long, often-spirited Public Utilities Commission meeting with its auditor, downtown building owners and concerned residents.

The special meeting was called due to opposition from downtown building owners and residents when the PUC attempted to vote on a resolution to discontinue downtown steam heat 10 weeks ago.

The meeting followed a 30-minute committee meeting among PUC members Wade Schlie and Dan Murphy, Redwood Falls accountant Dennis Oberloh and Sleepy Eye City Manager Mark Kober.

In February, downtown building owner Marlin Huiras stopped the PUC from calling for a vote on the issue.

Hurias said he didn't disagree with the PUC's audit figures themselves but differed with their interpretation and application. The PUC said that downtown steam heat caused it to lose $135,000 from 1996 to 2001.

Huiras called the PUC's reasoning in ending steam heat "distorted and misleading."

"Sometimes what's true and what isn't can be very tricky business," Huiras said. "We want to make sure we're all singing on the same song sheet. We won't stand quietly by as unjust decisions are made."

Without steam heat, downtown businesses would face high heat conversion costs at a time when many other issues are on the city's plate including the hospital referendum vote, water park, airport improvements, lake dredging and downtown restoration, Huiras said.

The PUC already made up its mind to disconnect downtown steam heat, according to Huiras. Dan Murphy said the PUC would not compensate building owners at the February PUC meeting, Huiras said.

Several years ago, the PUC compensated residential steam heat users when that service stopped. Huiras said the PUC set a precedent at that time.

Murphy denied saying building owners would not be compensated and said a newspaper story was inaccurate in reporting he made the statement.

Phil Heymans, the numbers man for those against ending steam heat, carried on a spirited conversation with several PUC members and Oberloh.

Heymans questioned Oberloh and the PUC's accounting, which he said was flawed because it included double entries for steam heat transfer costs and depreciation in the profit and loss statement.

Oberloh, Kober and Sleepy Eye Utility Superintendent Dave Logue objected to Heymans' reasoning, saying steam transfer costs were not counted twice, that depreciation was a valid expense in determining profit and loss and that the PUC was not making a profit on steam heat regardless of depreciation expenses.

All three men said the audit was accurate. The discussion became heated at times. At one point, Weiss asked Heymans to stop.

Heymans said the PUC was overcharging downtown steam customers. Logue said the PUC was selling steam below cost.

Weiss asked Huiras and downtown building owner Mark Elijah what type of rebates they thought they should receive for disconnecting steam heat. Neither mentioned a figure.

Palace Clothing building owner Dave Vosbeck, who was also at the meeting, said it would cost him $25,000 to convert his building from steam heat to an alternative heating source. The conversion would be cost prohibitive, he said. His building is now leased to Sleepy Eye Public School for a cultural center that is part of a community integration plan.

The next regularly scheduled PUC meeting is 5 p.m., Tuesday, May 7.