City of Russellville, KY

MINUTES of REGULAR SESSION

of the BOARD of COUNCIL

of the CITY of RUSSELLVILLE, KENTUCKY

held FEBRUARY 2, 2010

 

The Russellville City Council met in regular session on Tuesday, February 2, 2010, at 6:00 p.m. in city hall. Mayor Gene Zick presided over the meeting with council members Jimmy Davenport, Pat Bell, Jack Whipple, Doug Nash, Russell Jones and Lanny McPherson present.

 

The mayor asked for a motion to approve the minutes of the regular session of council held on January 19, 2010.

 

McPherson moved, seconded by Nash, to approve those minutes.

 

The mayor asked for additions or corrections. Being none the motion to approve the minutes passed unanimously.

 

The mayor had no appointments.

 

Next on the agenda were the mayor’s announcements. Former mayor of Adairville and Logan-Todd Regional Water Commission member Wilford Arnold passed away. The city has received notification that the Congressional and Senate appropriations requests are due by February 12^th through the 16^th. We received some damage (to the fence) due to the recent snow at the park complex; an individual traveling on Francis Avenue ran under it. A major water leak has been found on Rhea Blvd. It was a 4’ line that has apparently been running for a long time; 600 gallons a minute. Employees did an outstanding job on snow removal. Several departments pitched in. The Carpenter Center has over 1,406 members. The traffic through the center this past month was 4,853 people, one of the highest attendances. The council may soon see information in the paper, on radio and on web pages about a project called the “Good Men Project”. This is an essay writing contest about men; what it means to be a good man in the 21^st century. There will be two contests, one for high school (students) and one for adults with 3 winners. The KLC will be holding several meetings around the state because of the problems they had with policies and procedures. Issues include will be: they no longer have credit cards, finance will be meeting at least monthly to review expenses, they will start to be paid the federal perdiem for travel. Children, spouses and guest expenses will no longer be paid for, conflict of interest statement must be signed. They will no longer have vehicles, and a procurement policy has been put in place. This is a major upheaval. The local meeting will be held February 9^th at Bowling Green (Ky.) city hall from 6:00 pm until 7:30 pm. They welcome everyone to come and give their opinions.  We attended a breakfast held by the Kentucky Rural Water Associations, meeting with several legislators. While we were there it was indicated the governor will be taking any funds not being used or committed in some way to patch the holes in his budget. While we were there we noticed that members of Logan-Todd Water was there and apparently met with Senator Pendleton; Adairville, North Logan and Russellville were not represented. The mayor asked McPherson if he had been invited and McPherson said no and he thought that had been very interesting. We had a demonstration of the ladder truck at the Chrysler building.

 

McPherson asked the mayor how big the leak was that had been found on Rhea Blvd and the mayor said it had been 600 gallons a minute. McPherson said that was not possible. Utilities Director Wayne Thomas said the guys had put one 300 gallons a minute pump on it and it wouldn’t keep up with it and they had to put another 300 gallon a minute pump on it. McPherson asked Thomas if it was possible if it was possible it was only leaking that fast after we uncovered it because that is about what the city is using in a day. Thomas said the whole end of the pipe was gone and going down into the ground. McPherson said that was great and could be a big part of the city’s problem but thought it had to be constrained in some way. Thomas said the water was going down but the hole that it had cut out was probably about 3’ in diameter and he didn’t know how deep it went. Thomas said it had been running for a good while. The mayor said he thought McPherson was right; once the pressure came off the sides (of the pipe) it flowed a full pipe.  The mayor said there was another find in the Bethel area as well.

 

The mayor asked if there were any committee reports.

 

McPherson reported Logan-Todd was looking at ways to reduce costs; nothing had been firmed up yet but being gone over. He said they had to figure a way to stabilize the cost of water. We have a nibble in Christian (County)to sell some water but just raising the rate is making it a little more difficult to do because their wholesale rate was less than what ours is now anyway. But, they are still interested. The mayor said McPherson had mentioned having a meeting at the last council meeting but McPherson said they had been unable to get together but are trying to get another worked out.

 

Davenport said he and Bob Hedges had a real productive meeting of the deGraffenried Committee and he was sure he would be touching bases on that.

 

Next on the agenda was a financial report of the city by City Clerk Bob Riggs. Riggs reported the General Fund cash at the beginning of January was down to $20,000 during the short revenue months and at the end of January we were $203,000. There is no short term debt. We had the large revenue month in January; February and March will be smaller. The Woodland Drive paving of $99,000 was reimbursed during the month of January. The Rockwell Park project spending is still at $809,000; we still have $720,000 available. The StreetScape grant of $325,000 is still being pursued and it looks like it will be given to us at any time. The annual audit was completed and will be presented tonight. The insurance premium fees have been voted to be reduced and we (now) have to think in terms of getting an ordinance read twice, passed and published then sent to the Department of Insurance by March 23^rd in order for it to be in effect as of July 1^st of this year. This is something we need to think about if we continue to make the reduction of about $100,000 from our insurance premium fee revenue.

Riggs reported the Water and Sewer operating cash starting the month with $97,000 and ended the month with $25,000. We do not have any short-term debt. The month of January was right at budget; we had $336,000 revenue and the average month of the budget is $340,000. The 1998 Sewer Bonds are still on hold, the interest rates crept up during the process and we were advised it wouldn’t be worthwhile. We have spent $488,000 on Phase I of the Rockwell Sewer project, Johnson Street and $48,000 so far on Phase II; we still have $381,000 available for Phase II. The Rockwell Water portion of that money was $708,000 and is complete. The $381,000 still available will be used to pay the loan portion of the $800,000 KIA grant-loan so we have the funding available to make that grant accessible for the Johnson Street project.

Riggs reported the Perpetual Cash was at $185,000; we didn’t have any changes to that during the month. In Municipal Road Aid we had $48,000 at the beginning of the month and we had $43,000 at the end. We expect sometime during this month to receive $40,000 from the state in those funds.

The mayor asked if anyone had questions for Riggs on his report.

Next on the agenda was a Cemetery Department report by Kenny Gregory. Gregory reported there had been 88 funerals in 2009; this is down from 94 in 2008. Graves sold in 2008 had been 34 and 55 in 2009. The city’s website has been updated and the prices now correct. Gregory said he has had some concerns at Greenwood Cemetery, there is a drainage ditch eroding through there that is getting wider and stones are trying to fall. He said he had taken some old water (meter) casing at the water department and he had put them together and made a tile. They covered them up and leveled it and it is now draining very well. We are going to change lights on the existing light poles. This will be a low cost project hopefully. Other than that they have been helping the street department.

The mayor asked Gregory if he has had a vehicle running through the cemetery and Gregory said it had been a four-wheeler running through yesterday. He said they had not been able to catch it. It had been running in-between the stones. When it would leave it would go down Cherry Street.

Next on the agenda was Tim Pitts with a report on the Street Department. Pitts reported the department had a lot of snow removal this past weekend. The salt (supply) is now down to ten tons or less. We have been using a winter abrasive from Irving Materials. This is a chemical-sand mixture. Pitts said he did not think it worked as good as the salt but it is available when we need it. He said several other departments had helped; he had on-going shifts Friday, Saturday and Sunday in preparation and working the snow storm. They have not received a lot of complaints so felt good about that. His department is also still picking up limbs and leaf bags. The zones he has been using seems to be working out well, two weeks instead of a full month. This saves fuel and we also have men to do other tasks. We have been doing a sign replacement program, the ones that are faded and missing signs around town. If anyone sees any of these my phone is always on. They have also been patching potholes here and there and repairing road shoulders as needed.

McPherson asked what the priority (route) was for the truck with the blade on it. Pitts said priority was the fire department, hills, Armstrong Street, First and Second Streets, Hospital Hill, and Sportsman Club Lane. They also tried to get central dispatch (E911) and any place emergency vehicles might be running. This way if there is an accident we want those to be able to get there in a timely manner. McPherson told Pitts he might want to add to the bottom of that list was the hill going up to the animal shelter by Crossroads Church; it got really slick over the weekend. Pitts said that shouldn’t be a problem because they also go the park and need to be able to get in and out of the dump site.

Next on the agenda was a report on the Service Center (maintenance department) by Jeff Meador. Meador reported the city had gotten a new salt truck this year. It had replaced the 1995 model that was in bad shape; the last 2 years the brake lines have rotted and it was becoming a safety concern. It had been replaced with a 1999 model. To help make this last a long time, 7 cans of undercoating were applied to help make it last longer and help keep it from rusting and anything from rotting out. The heater also works a lot better so the guys can work longer shifts and not get as tired. Meador said the salt spreader they replaced was 8 years old and was in pretty bad shape. The new one was a stainless steel model and should last a lot longer. Plus, when we put this one in we set it to where it takes about 10 minutes to pull it out of the truck so we can sweep it out, wash it out and put it back together. We are also using a silicone-based compound to literally paint the truck with to make it last longer and keep it from rusting out. He explained the salt did not stick to it as much. Meador said he had other projects going for other departments also.

Next on the agenda was old business but the mayor said Anna Gentry with Kem, Duguid and Associates needed to leave as soon as possible. If there were no objections from the council or city attorney he would allow her to go next. There were none.

Mrs. Gentry was there to report on the firm’s findings of its audit ending June 30, 2009. Gentry told the council it was a lengthy report so she had picked out items she wanted to go over quickly. The council had a copy of the audit in front of them. Gentry began her report with the Independent Auditors Report on page one which was the Auditor’s Opinion of the audit of the financial statements on the governmental activities or business-type activities including all components units and major funds of the city. Gentry explained it was their job to express an opinion on the statements and their work but the ultimate responsibility relies within the management of the city. The 3^rd and most important paragraph of the audit report states that in their opinion the financial statements referred to present fairly in all material respects the financial position of all the activities of the city. She explained this was an unqualified opinion or a clean opinion and was the kind of audit the city would want to have.

Gentry began on page 11 of the audit, a series of financial statements. This page summarizes all of the governmental activities which is the General Fund and Municipal Road Aid and any grant funds received relating to governmental activities. The business-type is the Water and Sewer and the Carpenter Center. The summary looked at total assets and she would round off for her report. In the total column, total assets was $22,428,000 and of that approximately 16 million is capital assets; buildings, infrastructure, equipment etc. Total Liabilities of the business-type and governmental activity was $9,642,000. Gentry explained the majority of that is long-term debt of $6.4 million and the city’s bonded debt which will be looked out in detail later on and any short-term debt. The short-term debt to the General Fund represents $550,000 of that debt. Total net assets are $12,787,000.

Gentry next moved to page 15 of the audit report; revenue and expenditures of governmental activities which is just the General Fund and Municipal Road Aid. Total revenues were $5,314,000 and exclude any other grant revenue; just operating revenues. Expenditures total $5,457,000 and of that there is Capital Outlay of $615,000. Gentry said she would look at the detail of that later. Next were debt retirement- principal payments totaling $322,000 reducing the General Fund debt. Other financing sources or other in-flows to the city totaled $240,000 from the issuance of debt, proceeds from grants totaling $1, 724,000; and of that $1.5 million was Rockwell funds used for the park, or the starting of the park this year. Gentry explained to the council she had segregated other activities during the year. Because of the ice storm the city received approximately $81,000 in FEMA funds. She explained there were more expenses than what was received and reflected as $96,000. The bottom line total change in fund balance was an increase of $1,276,000 for the General Fund and Municipal Road Aid.

Gentry moved to page 18 of the report. This was what happens in the city’s enterprise funds, the business-type activities; Carpenter Center and Water and Sewer. She said the funds were separated. She reported a positive increase of business-type activities of $172,000 for the year.

Gentry moved to page 21, the Judiciary Assets, or deGraffenried. These funds are excluded from the city’s operations because they were an expendable trust fund and they are not associated with the daily operations of the city. Total assets of the fund are $1.1 million. Included in there are student loans that have been on the books for some time and each year they are accruing interests on those to the tune of between $8,000 and $9,000 a year. Gentry said she understands there has been some review of those student loans and there is a possibility of writing some of those off. Those loans, with accrued interests of several years, are represented in the total assets. Gentry moved to page 22, the change in the deGraffenried Assets which was a positive increase of $19,000; $9,000 of this was accrued interests. Gentry explained that interest accrued every year is being shown as revenue but it is not going to be recognized because a lot of the loans have been uncollectible for some time.

Gentry moved to page 35, Capital Assets, Note 6. Gentry said the first one she wanted to review was the governmental activity of the General Fund. There was Capital Outlay of $615,000; Construction and Progress (Park project) was approximately $223,000; the remaining $391,000 had to do with building improvements, infrastructure, police equipment which was heavy this year approximately with $150,000 in new police equipment this year and is reflected under equipment and furniture of $215,000.

Gentry moved to page 36, Capital Improvements to the Carpenter Center. This was approximately $35,000 to the fitness and office equipment.

Gentry moved, to page 37, additions to the Water and Sewer Operations was approximately $949,000; $790,000 was associated with the Rockwell funds; Johnson Street project. These are shown as construction work in progress because they are still pending projects and incomplete at the end of the year.

Gentry moved to page 38, Debt. In Note 7, short-term debt Gentry explained the city had borrowed $625,000 in short-term borrowings and repaid $425,000. At the end of the year $550,000 was still outstanding for short-term borrowings.

Gentry moved to page 43, Long-term Debt. The combined enterprises of the Carpenter Center and Water and Sewer had $999,000 repaid for principal on outstanding debt. There was no new debt financing for either fund but a significant amount of repayment of that debt this year.

On page 44, Gentry reported on the General Fund Debt Long-term. She said a new Note this year was $240,000 to the Herndon Road project but paid back principal reduction of $322,000 of long-term debt.

Gentry said the last thing in the audit reported she wanted to point out was on page 49. This was the budget statement on the General Fund. Total revenues received were approximately $208,000 more in revenue than was budgeted. This relates to the new insurance Premium Tax received and that helped with this revenue. Total expenditures were within budget for spending. About $400,000 more was budgeted than was actually spent. Other Financing Sources a little more was budgeted for anticipated debt proceeds but not as much debt was taken out as originally budgeted for. She explained that the remainder of the report relates to particular findings they had; these have been discussed with management. Also in the back of the audit report was the report to management that was stapled in and everyone should have a copy of that. She said she wouldn’t go over the letter in detail. Gentry asked if anyone had any questions.

The mayor remarked that essentially the city had reduced its debt by one million dollars over the year and Gentry said more than that; that was just Water and Sewer. It was about $1.3 or $1.4 million dollars in the reduction of debt.

The mayor resumed the agenda which was old business. This was an update from the committee on the water rate increase and what the committee’s findings were and options. Chairman Riggs told the council the committee had talked again about the magnitude of the problem of the 13% increase by Logan-Todd. He said the city is looking at $145,000 more in expense in the next 12 months. There are also other increases and costs that are going to be affecting the Water and Sewer budget as we get into that next year. He explained there would be all kinds of cost of living items, electric, fuel. He knows that oil has gone to $80 a barrel and those (type of) things will impact us. We do not have any capital spending for Water and Sewer in the current year budget. Next year we may want to buy something so the $145,000 probably needs another $100,000 to be considered to have a break-even budget next year. The committee talked also about how these things needed to be dealt with. Riggs said the city’s revenue for a 12-month period for Water and Sewer was right at $4 million; we have right at a $250,000 problem. He said 10% of $4 million was $400,000 so $250,000 is a 6% problem. This is quite a bit to address and we know it won’t go away and we have to do something. The committee did not have a unanimous attitude but it was pretty much a consensus that we needed to look at the COLA (cost of living adjustment) that was in the ordinance passed in 2007. Looking at the COLA provision our attorney, Bob Hedges told us that we really needed to do an ordinance to amend the previous Water/Sewer rate ordinance so this is on the agenda for later.

Riggs said at this point he wanted to report the committee focused on two options (even though) there are an unlimited amount of options. These are from doing nothing to doing something that will take care of the problem. One option (looked out) would be to go with a Consumer Price Index (CPI) and depending on what the index might be we would raise revenue by $170,000. We have $4 million in revenue; 4.3% would raise $173,000 but we would still have an $80,000 shortfall when we put the budget together; $80,000 is at least 2 employees or something to that equivalent. Riggs explained when he was saying 2 employees he meant the council would have to reduce the number of people in the budget or take another action that would reduce cost. We cannot reduce debt payments, neither principal or interests; that is not an option. We have to pay electric bills and fuel bills; there are very few things that we can control. Riggs said if we go into the budget with an $80,000 problem it is a big deal but it was one option. Riggs said if the council went with a 4.3% (increase in rate) we would have a monthly water and sewer bill of $44 for 2,000 gallons. This is $1.83 more per month than it is now. There was also a consensus that anything the council does of this nature it would increase the low income allowance from $10 a month to $15 a month for those people that can qualify for it. This would help them with any type of increase.

Riggs said the other option the committee talked about was about a 5.9% increase. He said again if there was $4 million in revenue and a $250,000 problem it was going to take about 5.9% and then we would come close. We would come within about $20,000 of raising enough revenue to pay for these expenses that are going to happen next year. This would give us, for 2,000 gallons a $45 water and sewer bill and that is not counting sanitation, it would be added to it or thought of separately. This is an increase of $2.52 for 2,000 gallons. If we went up and thought about 3,000, this would be an increase of $3.72 for 3,000 gallons.

Riggs said these were the options that made sense and going through a CPI procedure to make it a part of the ordinance seems to be a method to handle these types of problems. He opened discussion up to council members.

McPherson asked Riggs if the revenue projected, the $4,028,252, was the budget minus the Rockwell project. Riggs said yes, there was no Rockwell (funds) there. McPherson asked what it would be if we took the Rockwell project out of our budgeted expenditures for the year. Riggs said it would be about the $4 million; we pretty much spend what we bring in. Riggs said he thought council would recognize (when) each month he tells them how much cash the city has it fluctuates between $20,000 and $80,000; this is because we have big and small months but overall the whole year is expected to spend all of the money that we bring in. McPherson said he was just looking at numbers and it looked like it was about $4 million there is about $65,000 to $70,000 there of revenue above expenditures budgeted for the year but of course this may not turn into reality either.

Jones said he had made most of his comments at the last meeting but if he thought the $3.72 would be devastating on a household that uses 3,000 gallons of water he would be against it, but he doesn’t think it is. He said he thought the council almost had to…we cannot absorb everything, and this is one thing we cannot absorb when the cost goes up to us. Jones said this would not be passing on everything that Logan-Todd was passing on to us; we are below what they are passing on. He said we had to have monies to buy equipment and monies to find leaks and fix sewer problems and we cannot do that if we continue to sweep it under the rug and absorb things. This has been done that way too many years. We have to keep up with what things are going to cost.

McPherson said he knew it was on the agenda to look at the ordinance for the COLA to come through. He asked if that would normally happen at budget time; June. Riggs said it could be done any time but if you take it for a 12 month period a logical 12 month period would be ending in December and then it would be available sometime in January or February on the Internet, the index, and if you implement that and tell people it is coming. It can be made to start anytime you wanted to. It is just that Logan-Todd picked March 1^st so that is the way this ordinance is written, because it is their date.

 McPherson said he would like to know where that vote (ordinance for COLA) was going before he voted on this one. He said if they were going to make that increase in March so if council looked at the ordinance and said that on June 1^st it will institute the COLA increase then that means we will have to absorb it for March, April and May, which we might could do. It looks like we are voting on these backwards to him. He said he would like to know where that ordinance is going to end up and how the council feels about it. He said he would not want to vote or not vote for an increase and then the COLA increase would go into effect next year which would be an additional.

Jones said it would also be interesting to know if Logan-Todd was going to do anything different and McPherson said they weren’t.

The mayor said it was just the first reading of the ordinance so no action has to take place. If we have the second reading we can also table it or it can be tabled tonight.

Jones said to remember also attached to this is going from $10 to $15 on the senior discount.

The mayor said social security was not being indexed up and consequently the guidelines will not show a reflection of a raise so they are being re-evaluated based on their income status as current to the guidelines.  He said so some more may be included in qualifying for the $15 discount.

The mayor asked each council member for their opinion.

 

McPherson said he was still trying to think about what kind of impact the leak found on Armstrong  (Rhea) Street was going to have; we have no way of knowing. He said if it was that big it could be a big part of our water loss problem. The mayor said there could be another leak tomorrow. 

 

Jones said he heard the city was at 25%-30% (water loss) ten years ago and now we are up to 35% and 40% so it seems we are getting worse.

 

Nash said he had spoken his piece at the last meeting and didn’t have anything to add.

 

Whipple asked how many employees were in the Water and Sewer. The mayor said there were 6 in the water department counting Melvin Smith would be 7, in I&I there are 6 and 7 in waste treatment.  The mayor explained that I&I was different because (it was formed) after the sewer incident, the tree roots going into the clay pipe. This is why we are doing Johnson Street Phase II, because of the clay pipes.

 

Bell said she was like Nash, she said what she felt about an (increase) at the last meeting.

 

Davenport said he had also been pretty vocal at the last meeting. He agreed with McPherson in hoping that some of the leaks we are finding will have an impact on what we are paying.  He said he had the same stand he had 2 weeks ago.

 

The mayor said again if council wanted to wait we could do that without going forward to see if there is any impact. He said sooner or later the council would have to make a decision one way or the other.  The COLA was put there so we could at least have a step up on the first reading and again, no action has to take place.

 

McPherson said he understood but maybe there would be some discussion to give the council a clue on how everybody feels about that. He said he just hated to vote or not vote for an increase and then the COLA ordinance passes. The mayor said there was a COLA paragraph with the current ordinance as well. McPherson said the way that was written almost makes it automatic. The mayor said that was based on McPherson’s suggestion. He said he understood that but he didn’t have control of the COLA numbers and they can be skewed somewhat. The mayor said they were based on a reputable calculation.

 

Riggs told the copy that was given to the council at the last meeting was exactly what this referred to.

 

Nash said what was in the ordinance is on the southeastern region, why was it not on the United States index. The mayor said that was because we are in the southeastern region; the cost of living here was totally different somewhere else. Nash said he understood that but we don’t get all of our pay out from here; lots of it comes out of Washington, DC. Social security and things like that where there is a freeze on it for 3 years that comes out of Washington, DC. Whipple told Nash that was done years ago and Nash said he understood that but most big companies cut out COLA years ago and even with that when they did kick COLA out it was based on the whole United States, not just one region. The mayor said that was what the unions have bargained for, to use the U.S. and it’s a little fairer if you buy a cup of coffee here and you buy one in Washington and again on the gas if you buy it here versus Washington, DC and that is what the cost of living is based on. Riggs said he thought that was a negotiable point as long as you are consistent it works. If you use the south region you want to use it every year because they may have things coming in and out like energy costs and you do not want to jump around. If you use the same index every year then it is true, it works. Riggs said the city has been using the south region to do our budget every year. The mayor said (for) the employees last year there had been a negative COLA.

 

Nash asked Riggs when he was talking about the southeastern region what area was he talking about. Riggs said on the Department of Labor website, it has it broken out and it has different size cities. He said this one happens to be the one that says, ‘south, urban, less than 50,000 people. He said this seemed like the best fit several years ago when it started. Nash said there was a difference in the southeastern and the southern region.

 

McPherson asked what the rate would be for the southeastern region if we enacted it right now and Riggs said at December through December it was 4.3%.

 

Next on the agenda was discussion on the ladder fire truck cost options. Riggs said this project was different in that instead of trying to recover money we are going to have to spend money we do not have. Riggs explained what we have is a need for a ladder truck and we have not put out bids; we have not announced it in the paper. We have information accumulated by the chief in talking with Pierce and E1 and another maker of the trucks. Riggs said he did not think we could possible buy a fire truck based on the information, we would have to put an ad in the paper; competitive bids. He said at this point we were looking at approximately $600,000 but where do we get the money. He said the current fire truck loan was for $135,000 for 3 years and it will be paid off next fiscal year; near the middle of the fiscal year. This was to upgrade the truck that we bought in he thinks 2004 that had problems. He said we got a 2008 and spent $135,000 getting the nicest Pierce pumper truck. The payment is about $50,000 a year.  This one being $600,000 we would probably have to go longer than 3 years. If council wants to go 7 or 10 years they would be obligating the resources of the city for a long period of time for one item. Riggs told council that was not necessarily what they would want to do. They needed to think in terms of what other kinds of capital can you buy and what you need when they are thinking about financing this one. He said he didn’t know if they could be buying police cars or backhoes but normally we think 3 years when we finance things. If we go 5 years the payment would be about $135,000 a year. If we can get a grant for some part of that it could be reduced. Kaye Simmons is working on that angle by working with the USDA. It would take some time to do that because the state and federal governments are tight on their budgets right now. But, if you wanted to buy the truck and finance all $600,000 at 5 years think about a $135,000 payment. Riggs said what he had put together for council to look at is 2 options in terms of making the $135,000 payment through taxes (revenue). The entire property tax revenue is $900,000 so if you want to increase it by $135,000 for 5 years then drop it back down we would have to go from a property tax rate of .255 per $100 to a .293 per $100; this is about a $0.04 increase per $100. This would be if we want to pay for it as we go, paid for in 5 years then take it off. The .255 rate has been there for almost 5 years, we haven’t changed it. Riggs said the other option he had was on the insurance premium fees. He said some places look at the fire and peril portion of insurance and put a fee on it that is used to buy fire trucks or equipment. If we look at this revenue it is currently $116,000 a year for these fees. We would need $135,000 for this payment so we would have to more than double that if you wanted to get it from your insurance fees; from your fire and peril portion. He explained this would not be the property, or liability insurance etc just the fire insurance; you would have to go from 7% to 15%. Riggs said if there was a question if we could go to 15% he had looked and found a city that had 15% across the board on its insurance fees. Riggs said he knew neither one of these were very nice options but wanted to give council something they could get their hands around and to know how much it cost to buy a $600,000 fire truck and pay for it.

 

The mayor said it had been asked at the last council meeting about grants; it looked like the state would open up on grants around springtime. We said the federal government would not act very quickly. This would apply to a Homeland Security grant. We have written letters to our state representatives, congress and senators to get support. With this the mayor said he thought it would be mid-year before we would be able to get any type of funding. The USDA would give us 35% of what we are looking for and then ask us how we are going to pay for it. We will then be back in the same box. If we talk to bankers they might say we have $100,000 in revenue we are throwing away now out of the insurance fee. The mayor said the city has had difficulty in borrowing a small amount within the last few months.

Riggs said it wasn’t a small amount he remembered. He said when the city refinanced its short term debt in June of last year, it was more difficult to borrow than in the last and it was just a simple case of our finances are pretty tight.

 The mayor said and if you look at what is going on in the world now and the magnifying glass the bankers are under currently it is not going to be easy to get a loan. The insurance fee is what does it for Bowling Green and that is how they buy two trucks a year. Their population is a lot higher so their income is a lot higher. A point that Chief Poole had brought up last time that had really struck nerve was the EPA is coming out with new regulations and any more trucks built will have to comply with new regulations and may add about $15,000 to a truck if we wait maybe a year.

McPherson asked how urgent the matter was, would the truck last us another 6 months or a year and the mayor said spare parts have been bought and he thought Meador has been able to manage but we had to have a nozzle; without the nozzle we can forget it (because) we just can’t get water running. He said there are other things relative to hydraulics but if we look at the number of runs the truck makes in a year, he thinks 4 or 5. Poole had been in panic mode the other day when we saw smoke coming from a church but someone had just turned a boiler on. The mayor said it was a big decision no doubt but the question was where we get the money.

Whipple asked if we could get the parts made and the mayor said no. We have scavenged some trucks and got the parts that we did. He said the turntable was a big item and what we are trying to manage and hold together.

Bell said she thought Poole had also said the engine was going to need work and the mayor said that was kind of regular maintenance and not going to be the kind of thing to pull the truck off line. He said what would pull it off line was the turntable, the ladder or the nozzle; the motor we can manage through.

Nash said the engine should run 500,000 miles and the mayor said it did not get that kind of use and that was part of the problem. Nash said and also that is why it was so hard to start. He said if they take that truck and run it 300 or 400 miles wide open it would run.

McPherson asked how close the closest ladder truck was and Bell said probably Bowling Green.

Davenport asked if the ladder truck was working now and the mayor said absolutely. They crank it up at least once a week to make sure it will run.

Jones said he ran trucks with more miles and about as old and he wasn’t afraid to go to Greenville or anywhere else and he was hauling gas, not water.

The mayor said his position would be to hang in there, see what we can do on grants. He does not think it is an emergency at this point in time.

McPherson said it should definitely be something for the next budget year to look at.

Nash said the way some of that works is if the motor quits it can be operated manually; this is the way he understands it. Bell said there wouldn’t be enough fire fighters to fight the fire and manually do that.

Upon a question from Nash the mayor said when there is a major problem we go to Bowling Green because that is where the experts are; certified to work on those type vehicles.

Bell said for safety, in all the classes she has attended, they say after 10 years of service. Also now we are a Class 4 in insurance rating and if it does tear up our rating will change. The mayor said Poole had mentioned needing another for back up and Bell said if we had 2 we should be a Class 3, we are a Class 4 now.

The mayor said if he read the council correctly we would hold off on the ladder truck for now.

In new business on the agenda was first reading of Ordinance 2010-01, amending Ordinance 2007-01, automatic adjustment the water and sewer rates based on the cost of living sponsored by Russell Jones.

The mayor said we could go ahead with the first reading and get it on the books because there is no vote required.

City Attorney read Ordinance 2010-01 in its entirety because it was a revenue raising ordinance (see attached).

Jones told Hedges he might want to bring out this was Ordinance 2007-01 we are amending and at the bottom of page 7 is the statement about it being regional consumer price index shall be used.

McPherson asked if council needed to put an out in there or would that be contrary to what they are trying to accomplish. In case we ever not wanted to take the COLA increase. The mayor said there was an out in the one that council has now in that they have to vote for it. McPherson said he was talking about down the road. He said he guessed the ordinance would just have to be changed again.

Dickie Carter, magistrate asked if the COLA would not go into effect this March and Riggs said the Logan-Todd rate would change March 1^st. This was a December to December CPI. Carter asked when it would go into effect and Jones said the ordinance said July 1^st on an annual basis. Riggs said that had been revised and is now March 1^st. Carter asked would this not be on top of the city was raising the rates for Logan-Todd’s increase. McPherson said no, we have not passed that along yet.

Next on the agenda was first reading of Ordinance 2010-02, amending Ordinance 2002-11, sanitary sewer system mandatory hookup guidelines sponsored by Jack Whipple. Hedges read the heading of the ordinance only (see attached).

The mayor told the council the ordinance would also have to be approved by the state.

The mayor said the agenda was complete but asked if anyone had any comments.

Bill Decker said he had worked for the city a number of years and in the past the city, when a piece of equipment was needed like the ladder truck, had gone with a lease-purchase option. This could lower a monthly payment and you don’t have to take bids until you buy the piece of equipment. It might be something the council might want to take a look at and consider. It was a good way to procure a piece of equipment without spending a lot of money. The mayor told Decker the suppliers have been asked to give the city an estimate on a lease-purchase and have even looked into state funds to see if we could have buying power with them.

Resident Doug Daech asked if the ladder truck should break down and the city’s insurance class changes, how much would that affect the homeowner’s insurance and their mortgages. Bell said she was not sure but Poole might have an idea. Daech said that might be able to be compared to what the tax might be because they may have to pay it one way of the other.  The mayor said as he recalled Poole said it would not be an awful lot of money.

Carter said he was still confused over the ordinance, the first ordinance on the automatic adjusting of the water and sewer rates based on the cost of living. He asked if this had anything to do with the Logan-Todd and the mayor said it did because it impacts the water rates and the sewer rates. Carter asked if it had anything to do with the cost of living raise and the mayor explained no, it was a way of gaining revenue. Instead of raising the rate per se you are doing a mechanism.

McPherson asked the mayor what the state’s objection might be on Ordinance 2010-02. He said there could be a couple, if the lines are in the middle of the road, and if people on septic systems would be able to stay on them if the system is not viable what do they do. McPherson said the other side of that would depend on where the property is, if the city chooses to put the sewer line on the north side of a road and someone has property  on the south, when they hooked up they would have to bore under the road and pay for that cost; the property owners. McPherson said if the property owner is on the south then there would be no cost. He said it was not a fair assessment in any case. Whipple said the city was not offering sewer hookup to one guy on the side of the road, it’s offering it on the other side too.

The mayor asked if there was a need to go into executive session. Being none he asked for a motion to adjourn the meeting.

Nash moved, seconded by Bell, to adjourn the meeting. The motion passed unanimously.

 

 

ATTEST:

 

 

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City Clerk                                                                                                                             Mayor