Management Statement on
Proposition No. 1
The Homer Electric Board
of Directors and management strongly recommend a “YES”
vote on Proposition No. 1.
This proposition amends Article VI of the
Articles of Incorporation, increasing the
cooperative’s debt limit from $150 million to $450
million. It is important to note that a debt limit is
not required by state or federal statute. In fact,
there are very few electric cooperatives around the
country that have a debt limit included in their
Articles of Incorporation.
Since the original Articles
of Incorporation were adopted in 1945, Article VI has
been amended twice.
In 1954, the members of the cooperative
approved increasing the debt limit from five million
dollars to $40 million. In
1977, the members of the cooperative amended Article
VI to increase the debt limit to $150 million.
Due to
the continuing growth of our cooperative, the debt
limit needs to be increased to $450 million.
Homer Electric has grown
substantially since the last time Article VI was
amended. In
the past 20 years, the cooperative has increased the
number of meters it services by 75 percent and has
added 666 miles of additional line. This
type of growth can be expected to continue into the
future and will require additional financing by the
cooperative. It
is projected that Homer Electric will reach its
current debt limit in 2005.
Homer Electric is in
excellent financial shape.
The assets of the cooperative total more than
$192 million. If
we were an investor-owned utility, our lender has told
us we would be “A or AA rated” in the bond market.
Voting “YES”
on Proposition No. 1 will help insure that the
cooperative can:
-
Continue
retiring capital credits to members
-
Respond
to natural disasters that cause extensive damage
to electric facilities
-
Finance
primary and secondary line extension projects
-
Avoid
significant rate increases
PLEASE
VOTE "YES" ON PROPOSITION No. 1
