Oskaloosa USD 341 to make offer to gas company

by Dennis Sharkey

A figurative cloud of gas has been hanging over the USD 341 budget for a couple of years and board members are ready to dispel the problem.

Kansas Gas Service approached the district two years ago and said they were owed more than $111,000 for gas that was used by the district but not paid for. The company blamed the issue on a faulty gas meter. The company says that the district was not charged the proper amount for gas used between 2005 and 2008.

Now the company has an offer on the table that would let the district pay summer rates that would reduce the bill to a little more than $79,000. The money could be paid in equal monthly installments over three years.

All legal opinions to this point are telling the district they are liable for the charges. Earlier this summer the district sought a second opinion from attorney Greg Goheen with McAnany, Van Cleave & Phillips law firm of Kansas City.

Goheen attended last week’s board meeting but did not have encouraging news.

“They basically put all the power in the hands of the utility companies,” Goheen said. “They truly do. With a utility company your hands are tied.

“In a private business you would be run out of business if you tried to act that way,” Goheen added.

Goheen said utility companies are protected by state contracts and there is not much the district can do. Even though it is not the district’s fault the problem was not caught, they are still liable for gas used.

He said the district is not alone. He said a couple of years ago the same problem arose for the University of Kansas with two of their buildings.

Goheen gave an example of a yard mowing service. He said one year a person could have a contract to have their grass cut weekly but the next year the property owner could decide to cut the grass themselves. If the property owner does not notify the company not to cut the grass and they do it anyway, the property owner is still liable. Goheen said the property owner might not pay as much as they would have but they still have to reimburse the lawn service for its time and expenses since a service was used.

Most board members, however, have a problem with what they believe is an arbitrary number provided by the gas company.

“I feel like we should pay for what we use,” Board Member Denise Selbee-Koch said. “But it feels like they may be pulling numbers out of the air. Changing the rules in the middle of the game to me is what they’re doing.”

Goheen said many times the gas companies don’t know what a customer used because they often don’t read meters and just guess. He said the district could hire someone to analyze the meters but the cost would offset any savings the district found.

Goheen suggested, and board members accepted, a proposal to make a counteroffer to the company for $50,000.

Goheen said there is nothing the district can do to protect itself from the gas company attempting something like this in the future. However, the district can take some steps to protect themselves such as writing one check for $50,000 but demanding that the district be void of any future claims up until the date of the check. He also suggested that the district conduct internal audits periodically along with asking for audits from the gas company.

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Posted by on Sep 26 2010. Filed under Oskaloosa School District, Schools. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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