Utilities
Board Meeting - November 5, 2014
MINUTES OF THE MEETING OF THE BOARD OF PUBLIC WORKS
A meeting of the Board of Public Works was held at the Hastings Utilities Board Room on Wednesday, November 5, 2014, at 9:00 a.m. This meeting was preceded by notice duly published in the Hastings Tribune on Friday, October 31, 2014, and by notices duly posted in the lobby of Hastings Utilities, 1228 North Denver Avenue, and the City Hall, 220 N. Hastings Avenue, and was therefore open to the public.
Present: Hunt, Dewalt, Shoemaker, Krieger, Kully
Also Present: Schultes, Meyer, Barfknecht, McCoy, Vrooman, Hartman, Cox, Cogley, Leonhardt, Odom, Goebel, Crecelius, Ptak, Patterson, Tony Hermann (Hastings Tribune), and Gary Oetken from AGP
The purpose of the meeting was to discuss the 2015 Hastings Utilities Budget.
Chairman Shoemaker stated that the Board of Public Works is subject to the Open Meetings Laws and acknowledged that the Open Meetings Law poster has been posted in the room. He also declared a quorum of members present.
The Pledge of Allegiance was recited.
Staff presented the proposed Electric, Gas and Water budgets to the Board and discussion was held. The total budget presented for 2015 totaled $97,939,000 for the electric, natural gas, water, sanitary sewer, street lights, and administration.
The electric budget was presented to the board with no rate change.
Discussion was held on paying off the 2004 electric bond issue. There was a consensus to call those bonds and use $6,115,000 from the rate stabilization fund. The In-Lieu-of-Tax Transfer was discussed. The national average as reported by the American Public Power Association is going up from our current percentage at 5.2% to 5.5%. The amount is applied to retail revenues only and is not applied to wholesale revenues. If the Board does call the 2004 bond issue, those more stringent covenants will no longer be in effect. Chairman Shoemaker asked the Board to consider applying the tax to wholesale revenues also. Barfknecht called Chuck Addy, bond counsel, to see if wholesale revenues would automatically be included with the call of the 2004 bonds, which would result in a larger transfer to the city. Addy said that there is a limit in the percentage that can be used for In Lieu of Tax transfer and that bond holders don't care what the transfer is as long as the limit is not exceeded. The Board asked that Barfknecht get the opinion put in writing for future information.
The gas budget was presented to the Board with no rate change. The Board asked staff to visit with Dave Rippe, Economic Development Director, to inquire if there are any potential companies planning to use the economic development money in 2015. If not, the Board would prefer to leave it out of the budget until such time as the money is needed. The Board could reopen the budget and make the necessary changes at that time.
The water budget was presented to the Board reflected a 12% rate increase as recommended by the consultant in the last water rate study. A discussion was held on funding of the projects in the water budget. Hastings Utilities is working with the NRD's on trying to obtain grant money from the Nebraska Water Resources. The Board asked staff to work with the City's lobbyist on the possible availability of obtaining grant money. The Board asked staff to prepare a resolution of intent to issue tax-exempt Combined System bonds up to $15,000,000. $4,285,000 will be transferred from the rate stabilization fund.
Moved by Dewalt, seconded by Hunt, that this Board go into Closed Session, which Closed Session is clearly necessary for the protection of the public interest in that said Closed Session will consist of a strategy session relative to negotiations and potential litigation. Roll Call: Ayes; Dewalt, Hunt, Krieger, Shoemaker, Kully. Nays; None. Motion carried.
The meeting closed to the public at 12:40 p.m. The executive session consisted of Board Members, Council Liaisons, the Board's Attorney, Schultes, Meyer, Vrooman, Marty Stange, and Keith Leonhardt.
Moved by Krieger, seconded by Kully, that the meeting be reopened to the public at 1:05 p.m., and that no decisions were made nor official actions taken during said Closed Session. Roll Call: Ayes; Keith, Kully, Hunt, Dewalt, Shoemaker. Nays; None. Motion carried.
The Board directed staff to prepare a Resolution of Intent to Bond in the Water Department for $15,000,000. Staff will visit with the City Administrator to make sure there will be no problem with a bank qualified loan. The Board will leave options open to bond the entire amount immediately, or other options including state loan funding options. The Board directed staff to prepare an ordinance to reflect an increase of 12% for the 2015 water rates.
Budget discussions will continue on November 6th, 2014. The sanitary sewer, street light, and administrative budgets will be discussed. The budget approval will be on the November 13, 2014, meeting agenda, following a public hearing.
The meeting adjourned at 1:20 p.m.