by P.J. Harston
Northern News Services

NNSL (Aug 08/97) - City hall's "hostile takeover" of the city's electric company came within a committee vote of being recommended for the recycling bin.

Mayor Dave Lovell, the only voting member of the city's financial, legislative and administrative committee to show at a meeting Wednesday, put the kibosh on killing the bid for Northland Utilities.

"What I want is for this to be fully debated in council. I don't want it to be rubber-stamped," he said.

City staff recommended to the committee that council withdraw its letter of intent to purchase Northland Utilities and wait until April 2000 -- 18 months before Northland's franchise agreement ends -- to take another look at buying the company.

Council decided in March to explore a purchase because Northland's franchise agreement with the city includes a buy-out clause.

Through an independent study of the utility, the city found that it could probably cut customers' bill by between three and 10 per cent, mainly due to the city's tax status and a low interest it could get on a loan needed to finance the takeover.

Northland, however, doesn't want to sell and if the city decides to exercise its option, an arbitrator could be brought in to determine the utility's price. "Once you go to arbitration, you lose all control," said committee chairman alderman Blake Lyons. "If we went to arbitration, we don't know what the outcome would be."

An independent appraisal of Northland listed its value at $15.7 million. Northland disputes the figure, saying $18 million to $21 million is more accurate.

The city has already spent $55,600 studying the idea, but that figure could rise by as much as $200,000 if the city is serious about it. Costs would be incurred for another independent study, legal costs and arbitration.

Alderman Vi Beck, who isn't on the committee but attended the meeting anyway, said she doesn't understand what had changed since council's March decision.

The lawyer representing the city on this issue, Leo Burgess, said there's really nothing new, but a decision has to be made. "To be blunt, it's time to fish or cut bait," he said.

He also noted that Northland is contemplating legal action if the city was successful in its takeover. That might cost the city even more than the $250,000 it had earmarked for the process.

City council is scheduled to debate the issue next Monday at a regular meeting. Lovell and Lyons encouraged Yellowknife residents to attend.