City Council and the Power Board held a special joint public meeting Thursday (5/12/2016) night for the purpose of reviewing the Murfreesboro Electric Department valuation study.

The study was conducted as a portion of the due diligence required to consider the Middle Tennessee Electric Membership Corporation offer to purchase MED. The analysis and summary report were completed in accordance with the National Association of Certified Valuators Analysists (NACVA).

Certified Valuation Analyst Steve McDonald presented the study to the power board and city council.

McDonald said, "We believe a range of $175 million is the worth of the OCLD." OCLD means original cost of assets less depreciation. As for the RCLD, reproduction cost less depreciation, it's worth up to over $247 million.

He also said MED should consider other intrinsic value factors as well including having control over electric system operations, contributions to the financial well-being of the municipality, ability to provide community service, and sharing resources.

Possible next steps include performing an economic impact study comparing status-quo continued operation with presumed sale of system. The study would be performed using a variety of assumptions regarding such things as future financial costs.

McDonald recommended to go the higher route with the $247 million. He also recommended the value of the utilities MED has to offer and that if they do sell to MTEMC, they would possibly have no control over it anymore.

City officials were in agreement that Murfreesboro Electric Department would remain a part of the local government and would not be sold to MTEMC.

NewsRadioWGNS' Jackson Jones has more...

VERBATIM:

We spoke with Murfreesboro Electric's Steve Sax about his reaction to the valuation study...

One of the most important things Sax thinks he took away was this...

Some members of the power board agreed they don't want to lose control of their utilities, not saying that MTEMC couldn't do the job, but there are many places where work needs to be done.

Other members said it's not so much about MED, but the city tax payers.

Councilman Eddie Smotherman made a motion to conclude further study into the valuation. The council voted in favor of this decision.

MTEMC announced last year that the utility had asked the City of Murfreesboro to enter discussions on a potential sale and consolidation of MED into MTEMC.

In considering whether to enter into negotiations with MTEMC, City administrators and elected and appointed officers are analyzing a number of financial and operational issues.

Middle Tennessee Electric serves 205,000 residential and business accounts in a service territory that includes Williamson, Wilson, Rutherford, and Cannon counties.

Murfreesboro Electric Department serves approximately 55,000 homes and businesses within the city limits. Sax said in the next six months that number may exceed 60,000.