Utility Bill Moves Cash Reserve Policy To City Council For Consideration

The Trenton City Council will consider a policy establishing minimum cash reserves for the electric, water and wastewater departments of Trenton Municipal Utilities following action taken by the council’s utility committee on Tuesday night.
Committee members agreed to recommend the council approve the policy, which is based on making sure the utility has enough funds in reserve to cover operations and maintenance, debt service, its five-year capital plan and investments in assets. The policy would also establish a cap of 30 percent on the maximum amount of money that each department would have on hand unless specific projects or needs to exceed the maximum are identified.
It was noted that both the minimum and maximum numbers could fluctuate yearly, based on revenues and expenditures throughout the year. Based on the 2018 audit numbers, the electric department should have a minimum reserve of $2,206,617 under the new policy. The department’s cash reserves are currently listed at $3,986,517. The water department’s minimum would be $1,530,517, with the current amount being $2,434,718. The wastewater department’s minimum reserve should be $5,531,190, but shows a current reserve of $3,650,114.
Members discussed the possibility of loaning a portion of the excess funds in the electric department to the sewer department to help pay for a portion of its current effluent disinfection construction project. It was suggested that an interest rate of 1 percent could be charged, which would be less than the rate of a bank from which funds would be borrowed otherwise. The city auditor has said the city could make such a loan if it is repaid with interest.
TMU is looking at a projected cost of $2.4 million for rehabilitation of its headworks as part of the effluent disinfection project and committee members said the money could be used for that work. No funding source has been identified to cover those costs. The third year of a planned increase in sewer rates by TMU has been on hold since early this year while an engineer is studying the whether or not one is needed. That increase was originally approved to help pay for the wastewater plant improvements, which at the time did not include the headworks project.
The committee will also be recommending to the council that a TMU policy regarding discounted electric costs for new businesses that use 50,000kw or more of power per month be extended to Chelsea’s Market, which opened late last year.
Micah Landes, executive director of the North Central Missouri Development Alliance, said that Chelsea’s Market has been averaging 50,000kw per month in electric usage, which would qualify the business to receive a discount under the policy. She said that when the business first opened, it was not known that the grocery store would be using quite that much power or she would have approached the city about extending the policy earlier. Under the policy, which is good for a three-year period, a new business using at least 50,000kw per month can receive a 25 percent reduction in electric costs during the first year, a 15 percent discount the second year and a 5 percent discount in the third year.
The committee voted to recommend the council allow Chelsea’s to use the first year of the discount through February, with the second year kicking in with the March 2019 bill. The third year would begin in March 2020.
It was noted that the policy was last used when Piggly Wiggly was initially located in Trenton.
The council recently voted to discount residential electric rates by 5 percent, beginning with the November bill.
The committee also reviewed water and sewer projects currently under way as well as future projects. A rehabilitation/sewer line replacement project on Normal Street will be going out for bid. City Administrator/Utility Director Ron Urton said two other projects involving the Ninth Street crossing elimination and improvements to lines on Eighth Street, will need to be bid out soon. Other future projects include water main replacement on Ninth Street and water main work in the 10th Street and Oklahoma Avenue area.
Urton also said several concerns have been received regarding the entrance off Highway 6 for the new Dollar General store in west Trenton. He has contacted officials from the Missouri Department of Transportation about the concerns and is waiting for them to respond. He said the city has visited with Dollar General officials about additional lighting in that area.