Duluth mayor abandons plans for sale of steam co-opEfforts to sell the Duluth Steam Cooperative appear likely to be shelved as a result of Monday’s City Council actions.
By: Peter Passi, Duluth News Tribune
Efforts to sell the Duluth Steam Cooperative appear likely to be shelved as a result of Monday’s City Council actions.
A resolution expressing support for plans to privatize the steamworks failed 6-3, and Mayor Don Ness said Tuesday he’s not inclined to pursue the issue further at this time.
“Without council support, and with the insistence by the council for a referendum vote, I don’t see a path for success,” Ness said, reflecting on a proposed sale of the steam cooperative to Veolia Energy for about $7.3 million.
“I have a problem recommending that the city or Veolia invest a tremendous amount of more time and energy without strong support from the council,” he said.
Keith Oldewurtel, vice president and manager of Veolia Energy Grand Rapids LLC, did not return calls from the Duluth News Tribune on Tuesday afternoon.
Ness said that without the council’s backing it would be tough to get voter approval. Duluth’s city charter requires the support of at least two-thirds of voters in a general election to authorize the municipal sale of any public utility.
“We could have strung this out another five months with a referendum, but without the support of the council, it would be a complete waste of time,” Ness said. “I only regret not asking the council to state their position earlier in the process.”
The city attorney’s office had taken the position that the steam cooperative isn’t truly a public utility, because of its small customer base. The cooperative has fewer than 200 members, mostly in the downtown, Canal Park and Hillside neighborhoods.
“I think it’s a good thing the mayor’s backing off this issue,” City Councilor Kerry Gauthier said Tuesday.
Gauthier said he and other councilors felt strongly that any sale of the steam plant should be put to a referendum vote, and he suspects there would not have been sufficient public support for privatizing the system.
Gauthier also said he was concerned by some of Veolia’s past environmental violations.
Disappointed by the lack of council support for plans to sell the cooperative, Ness said: “This was a tremendous missed opportunity to reduce our debt, reduce our future liability and focus our attention on core city services. Instead, we continue to own a coal-fired steam plant.”