Board of Estimates Approves Historic Deal, as Mayor Affirms Commitment to Moving City Forward
Wednesday Feb 15th, 2023
FOR IMMEDIATE RELEASE
BALTIMORE, MD. (Wednesday, February 15, 2023) - This morning, the Board of Estimates (BOE) approved the City's agreement with Baltimore Gas and Electric (BGE) over the use of the City's conduit. This is a historic deal that results in millions of dollars of additional investment into the conduit while also ensuring the City retains 100% ownership over every inch of the conduit system.
"I am here today to reaffirm my intention of moving the agreement with BGE forward," said Mayor Brandon M. Scott. "When I was elected Mayor, I made a commitment to always do what is in the best interests of the residents of this City."
"We are committed to moving forward with our city business despite the absence the City Council President and the Comptroller. Neither the City Charter provisions nor the rules of the BOE allow that detrimental result." said Acting City Solicitor Ebony Thompson, "We will continue to follow the BOE rules and regulations, and ensure that all necessary steps are taken to ratify contracts and obtain the required seals from the Department of Finance."
It is imperative that the absence of less than a majority of members does not impede the progress of important City business. BOE rules do not allow a meeting to be cancelled by mere failure to attend; rather, all five members must vote on a cancellation via BOE Rule 27.01.01.04 F. Not only does the Charter allow BOE members to appoint a substitute if they cannot attend (Charter, Art. VI , § 1(c)), the BOE rules require that a member recusing him or herself "shall arrange for a substitute as designated in the Charter to participate in consideration of the matter in order to achieve a quorum." BOE Rule 27.01.01.04E(2). Moreover, the BOE rules are clear that if a member abstains from a matter, instead of recusing, "that member will still count toward the quorum." BOE Rule 27.01.01.04E(1). Additionally, because the Charter provisions establishing the BOE do not specify what constitutes a quorum, a majority of BOE members (three) legally constitutes a quorum, and any change to that number would need to be enacted in the BOE's Charter provisions.
Thus, for all of those reasons, the BOE proceeded with a quorum to consider the matter on today's agenda that could not be postponed because to do so would have cancelled the deal entirely. As repeatedly stated, this agreement is NOT a sale or transfer of ANY control of the City's conduit or any improvements made to it. The City retains 100% ownership over every inch of the conduit system. The City remains in control of the quality of any improvements that BGE undertakes to the conduit. The City continues to have the right to maintain the conduit and make any improvements it chooses. BGE has a right to place its electrical lines under the ground in the City pursuant to laws from the late 1800s. The City cannot fail to agree to terms on BGE's use of the conduit. As the City has done for decades, it reaches new terms on BGE's occupancy as each prior agreement expires.
As the BOE has done on every prior agreement concerning BGE's occupancy of the City's conduit, the matter was put before a majority of the BOE and that majority approved it.
The agreement requires BGE to perform capital improvements to the conduit while the City retains ownership of the conduit and full control over all maintenance and operations, which will serve as a model for good stewardship over the City's resources.
Over the next four years, BGE will undertake $134 million in capital improvements and will pay $1.5 million annually in maintenance fees. The City will collect $6.5 million more than what was collected under the previous agreement in 2016, and will still be able to perform its own capital improvements, maintenance, while charging others for use of the conduit. BGE is obligated to employ at least 25% of minority and women-owned businesses by Maryland's Public Service Commission, and has agreed to be completely liable for any system failures or other mishaps as a result of its work on the conduit.
The City will receive the remainder amount in a lump sum if the full amount is not spent by the end of the 4-year agreement.
By entering into this contract with BGE, the next in a long line of contracts outlining BGE's terms for occupancy of the conduit, the City has guaranteed improvements to its aging conduit. BGE can now proceed with its filing this week at the Public Service Commission that will include these conduit upgrades. The City anticipates that this will result in better energy delivery to the citizens of Baltimore and the entire BGE service area than would have resulted from a continuation of the prior fee structure.
The Administration will continue to work diligently to ensure that all City business is conducted efficiently and effectively