Although no action was taken during Monday night’s meeting, the Trenton City Council is continuing consideration of making a transfer of electric department funds to the wastewater department to help pay for a headworks project.
The council reviewed a draft “memorandum of understanding” from City Attorney Tara Walker, which gave an outline of what the council plans to do in regard to the fund transfer and a brief description of the agreement terms. The council, at its March 11 meeting, had voted 3-4 against making the transfer of $2 million at a one-half percent interest rate over a 15-year period. However, at a meeting last week, the finance committee asked Mrs. Walker to draft wording on a transfer agreement that might make the action more palatable to other council members who opposed what was then termed a loan from one department to the other.
Mrs. Walker told council members that the MOU was only a draft and that more information would be needed before a final document could be presented for consideration. The MOU presented to the council stated the amount of the transfer, the payoff time and interest rate, however, Mrs. Walker asked that items such as amortization schedule, a document stating exactly what the money is to be used for and how money that will be available in 10 years to make additional payback payments will be used will need to be included in the MOU. City staff is to work with Mrs. Walker on a final draft.
As in the past, council members debated the pros and cons of using existing city funds rather than borrowing the money commercially, with the same arguments being made regarding concerns about committing future city councils to require the electric department funds be paid back. It was noted that while the transfer was not considered illegal, several financial consultants have mentioned concerns about this practice. Council members Glen Briggs, Travis Elbert and Jennifer Hottes all stated reservations about the practice, in particular future repayment of the funds. Elbert also stated that should the electric department need additional funds in the future, a rate increase in that area would affect customers much more than a rate increase in water rates, noting that water usage is more easily controlled than electric usage.
Councilman Brad Chumbley said making the transfer would put the city in a position to begin paying for its own projects rather than to continue borrowing funds. He said that the transfer would allow the city to take minimal utility rate hikes over the next few years and help pay for work that has been put off as well as continue to pay for existing operations.
Phil Hoffman, a long-time member of the Board of Public Works which previously oversaw operations of the city’s utilities, spoke to the council about his concerns with the transfer. He noted that the electric reserves being generated by TMU customers, if transferred, would be going for use to all residents of Trenton and not just to those who use TMU electric services and who generated those monies. He said the city is facing unknowns in regard to the future costs of purchasing power and that it would be prudent to keep a larger reserve in the electric department to meet those costs. He pointed to a time several years ago when the city’s power purchase costs continued to rise and rather than increase rates to meet those costs, the choice was made to take a $1 million loss and, eventually, a larger rate increase was necessary. He said the city is also looking at large costs regarding transformer replacement, which he said could cost over $1 million. Hoffman said that if the city really feels there is more money than is needed in the electric department, it should look at other options in reducing that number, including a rebate back to customers.
Mayor Dr. Nick McHargue expressed his disagreement with Hoffman, stating he felt Hoffman’s argument about the funds generated by TMU customers being used by all customers affected only about 3 percent of residents (those using KCP&L as their electric provider) and was a non-factor. Dr. McHargue pointed to what he says will be a $1 million-plus savings to the city by borrowing from itself instead of from a financial institution. Hoffman stated that many of the city’s electric department reserves are in investments generating as much as 3 percent and that lending those funds out at 1/2 percent didn’t sound like a good deal to him. The conversation then moved on to discussion regarding utility funds used to help with the Plaza Apartments project, which both Hoffman and Councilman Larry Crawford, who was a member of the BPW at the time, said was viewed as an economic development investment. Hoffman noted the city was looking at a cost of around $250,000 to take the building down if something wasn’t done with it and that the $100,000 assisted in getting the former hotel back in use. Crawford noted the project is over and done and doesn’t need to be rehashed.
Dr. McHargue then asked Hoffman if he was using the council meeting to further the agenda of candidates he is supporting in the upcoming city council election, which drew quick criticism from other council members, who said Hoffman had a right to speak to the council. Hoffman said that as a former BPW member, he felt he needed to say something to the council about the transfer issue.
The council delayed action on a contract with the Green Hills Animal Shelter to provide shelter care for stray animals picked up within the city limits so that the proposal can be amended to include a requirement that a proof of city license purchase be made before an animal can be adopted out. During the discussion, Councilman Crawford expressed support for an increase in the license fee, which is currently $5.
In other business, the council:
• approved an ordinance authorizing an agreement with American Fire Training Systems for a fire training tower.
• approved the re-appointment of Verna Kelsey to the Police Personnel Board.
• approved a bid of $39,900 from T&R Electric to purchase several pad and pole mount transformers.
• asked that a resolution be prepared, showing the city’s support of state legislation being considered to allow communities to assess a use tax on Internet sales on businesses with a presence both inside and outside of Missouri.
• agreed to remove “snow” and “ice” from the wording of an ordinance regarding items that must be removed from sidewalks to keep them in good repair.
An executive session was held for personnel, with no announcement made.
Building, Nuisance Board
The Building and Nuisance Board met prior to the city council, taking action on several items.
The board voted to declare two nuisances – a garage at 607 W. Crowder Road, owned by John Danks, and a home at 1618 Mable St., owned by Joseph Buckner II and Haley Garrison. Property at 1802 Carnes St., owned by Dwayne Crouch, was moved to a certificate of existence of a dangerous building.
Code Enforcement Officer Donnie Vandevender said there has been no determination made regarding the cause of a fire that destroyed buildings in the 600 block of Main Street in February and that no insurance monies have been issued. As a result, the buildings cannot be taken down at this time. Vandevender said the property owners, Scott Treadwell and the Trenton Area Chamber of Commerce, have been taking bids for the work. He noted that there would be no cost to the owners for a demolition permit, adding that one permit could be issued if both entities use the same contractor. It would be up to the property owners to make that decision. Fire Chief Brandon Gibler said the fire marshal’s office is continuing its investigation.
Vandevender and Police Chief Rex Ross presented structure and nuisance updates, with Vandevender noting the city will have 13 dangerous building violations in court on April 16. The nuisance board will also be hearing seven cases at its meeting on April 22. There will be no board meeting in May due to the Memorial Day holiday.
Vandevender also noted that Red Rock plans to start on the city demolition project once the ground gets drier.
This website brought to you in part by the following sponsor:
