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HomeMy WebLinkAboutCCM-04-26-82 MINUTES OF SPECIAL MEETING OF CITY COUNCIL - APRIL 26, 1982 The meeting of the City Council was called to Order by Mayor Reiman at 5:35 P.M. on April 26, 1982. Council members Shepherd, Walker, Garretson, Johnson and McMullen were present. Also present was City Attorney, Dave Coots and representative from the Clerk-Treasurers office, Cynthia Graf. OLD BUSINESS Application for Taxi License - William Burger presented an application for taxi license (copy attached). Mr. Walker made a motion that the Carmel Cab Company be approved. Mr. Johnson seconded the motion which passed 4-0-1, Mr. Garretson abstaining because he had not been at the prior hearing of this issue. Water Bond Ordinance - Mr. Garretson stated in the last bond issue for expansion of the sewer system, that he voted against the bond issue of a 13% ceiling because he felt that rate was too high. He stated that sewers, however, were probably more important at the time because of the risk of losing 85% of the funding for the project from matching federal and state funds. With this present proposal, no loss of matching funds is at risk. Mr. Garretson commended Mayor Reiman on the savings to the city in purchasing the new plant from the Indianapolis Water Company, but still feels that a 15% to 15½% ceiling on the bonds was too steep. He felt that a 10% to 11% ceiling was more fiscally sound. Mr. George Gavit legal counsel with Ice, Miller, Donadio & Ryan explained to Mr. Garretson the reasons why the 15% ceiling was included in the ordinance - basically because of a bad market at present. Recent similar issues have been sold by other municipalities at under 15%. Mr. Garretson responded by saying he understood the rationale for the ceiling, but disagreed with the necessity of entering the market at such a time when rates were so high. Mayor Reiman asked Utilities Manager, Jim Dougherty, to explain why the administration felt it necessary to proceed immediately with the expansion and bond. Mr. Dougherty reported by listing the number of days last summer when our treatment plants operated to 20 hours per day or longer. He stated that equipment cannot be maintained when it is operated at this length of time. Mr. Shepherd voiced concern about The expense at this time and asked if conservation measures might not be taken or that people who water their lawns might not pay a higher rate than those who do not. Mrs. McMullen voiced her support for the expansion and the bond issue, feeling time was important. Mr. Johnson questioned whether delaying the issue was not more of a gamble than moving now. There was no guarantee that the market might not get worse, rather than better. He also questioned whether the savings exacted from lower rates later might not be more than outweighed by increased construction costs later. He felt the city had received extremely good bids in this project and that we should move now. City Council Minutes April 26, 1982 Page Two Mr. Robert Coma, managing partner of HNTB expressed concern about a delay. He indicated that the city was near an emergency situation and that the present expansion project was not necessarily a progressive move because without it water shortages were probable. He further stated that Indiana law on water quality has been slow in developing and that the city needs to get its house in order prior to these laws being enacted. Further discussion ensued. Mr. Garretson suggested a recess. Following the recess Mr. Garretson pointed out that prior to the meeting he was not aware that 1) the city was so near to an emergency water shortage and that Mr. Dougherty would be recommending no special sewer saving rates for the summer; and 2) that nearly 1/3 of the estimated increase in rates was due to a deficit in the operating costs of the water utility and that the bond issue was responsible for only a 40% increase in rates, rather than the full 65% increase. He then retraced the past 11 years of operation of the utility, pointing out that there had not been a rate increase in that period of time because of the growth of the utility (additional hook ons) during at least eight years of that period. The additional revenue allowed a surplus that built up to nearly a million dollars. Then for three years the utility earned substantial interest from its reserves, and this interest money compensated for operating losses due to far fewer hook-ons to the system, and inflationary effects on operating costs. Now that the reserves had been depleted with the purchase of the IWC plant on Gray Road there was no interest money to cover operating losses and he could understand why a 25% increase was necessary to cover operating deficits. Mr. Garretson regretted that in reading accounts of the proposed bond issue in local media he had been led to believe that the entire 65% increase in rates was due to the bond issue. With these two clarifications, Mr. Garretson indicated he would support the ordinance and rate increase. Mr. Walker still questioned the desirability of floating a 15 year bond. He felt that if customers were billed a surcharge the first two years of $175 that the customer would save over $800 over the course of the bond issue. He also asked Mr. Don Silvey of HNTB if the new plant, while under construction, could be used on a temporary basis to augment present plants in times of severe water shortage. Mr. Silvey said that such use would depend on delivery dates of needed equipment, but that to do so would jeopardize acceptance of the construction by the city prior to final inspection. Mr. Garretson called for the question. Mayor Reiman asked which of the two ordinances should be voted upon first. Mr. Coots recommended that the bond issue be voted upon first. (A-55 Water Bond Ordinance). During the vote, Mr. Walker made a point of inquiry asking the consultants if they would review his suggestion of asking the Public Service Commission permission to levy a surcharge on customers as opposed to floating a bond issue. The consultants agreed to study the question and report back to the Council. Mr. Coots indicated he would research the question and report back in two weeks. The vote was then taken on the Bond Ordinance which passed 4 to 1 (Mr. Shepherd voting in the negative). City Council Minutes April 26, 1982 Page Three Water Rate Ordinance - A-56 . Mr. Garretson called for the question and made a motion that we adopt the ordinance. Motion seconded by Mr. Johnson which passed 4-1, Mr. Shepherd voting nay. There being no further business to come before the meeting, the same was duly adjourned at 6:30 P.M. APPROVED: ATTEST