SE Illinois News

Harrisburg City Council met July 6.

Here is the minutes provided by the Council:

Mayor John McPeek presided over the meeting with Commissioners Natalie Miller, Beth Montfort, Richard Harper and Mike Weirauch answering roll call.

Mayor McPeek made the following statement: I want to apologize to all my friends, coworkers, family and all the citizens of Harrisburg. My immature actions on July 1st were uncalled for. I’m deeply sorry. I want to continue to move Harrisburg forward. I hope you all accept my apology. This will make me a much better person. Thank you also much.

Pastor Jerry Wells from the Dorrisville Social Brethren Church led the group in prayer and the pledge.

Commissioner Harper made a motion to approve the following items under Consent Agenda:

1. Minutes from the Regular Meeting of June 15, 2017.

2. Bill from O’Daniel Trucking for patch in the amount of $1,710.65 to be taken out of MFT.

3. Bill from Bob Barnett Ready Mix for concrete in the amount of $887.50 to be taken out of MFT.

4. Bill from Siegels Uniforms for D. Gunning gear in the amount of $146.99 to be taken out of Council Contingency.

5. Bill from Siegels Uniforms for D. Gunning gear in the amount of $73.50 to be taken out of Council Contingency.

6. Bill from Siegels Uniforms for D. Gunning gear in the amount of $1,099.55 to be taken out of Council Contingency.

7. Harrisburg Lake:

Request to Relinquish: Raymond Gunning - Second Addition, Block 2, Lot 6 Petition to Lease: Elizabeth Sloan - Second Addition, Block 2, Lot 6 Charles Russell and Hannah Russell - Southeast Addition, Lot 4 Commissioner Montfort seconded. By roll call vote, all voted yes. Motion carried.

Jim Brown from Brown & Roberts reviewed with Council the toe drains in the levee that were installed when the levee was built. They have been plugged a long time and no longer serve the purpose for which they were installed. The Corps has requested certain information before they will officially allow them to be abandoned. He has been working with Neil Cash who has requested a seep analysis which uses soil borings data in a computer program to analyze. He explained that is a very expensive process. Currently, the Corps is asking for a boring every 200 feet. The levee is 8,000 feet long so the expense could be as much as $4,000.00 to $5,000.00. He believed that 200 number was excessive so he is doing what he can to get that number down but thought it might not be easy.

Brown reminded Council of another commitment regarding the inspection of pump stations that would require scaffolding to perform the inspection at a cost of about $25,000.00. He would have an update for Council at the next meeting.

Mayor McPeek stated the City had entered into a TIF Agreement with Wooded Hills in June of 2014. The agreement was similar to others done at that time which was a 60% tax rebate. Various delays resulted in the project not being started until this year. As required, they have submitted a letter requesting an extension. The project was estimated to be completed in September. Mayor McPeek moved to grant the request for an extension. Commissioner Miller seconded. By roll call vote, all voted yes. Motion carried.

Attorney Todd Bittle explained the Intergovernmental Agreement in the packet. It was for two lots with an address of 30 North Club which the City acquired through a Deed in Lieu of Foreclosure. The lots had been cleaned up and would be beneficial to the Park District. They have agreed to pay $2,000.00 for the lots. Commissioner Harper moved to enter into the Intergovernmental Agreement with the Park District for the two lots at 30 North Club for the payment of $2,000.00 Commissioner Miller seconded. By roll call vote, all voted yes. Motion carried.

Attorney Bittle asked the Mayor be authorized to sign the deed for 30 North Club. Commissioner Harper moved to authorize Mayor McPeek to sign that deed. Commissioner Miller seconded. By roll call vote, all voted yes. Motion carried.

Attorney Bittle stated the bid of $1,000.00 for 1022 East Sloan had been accepted at the last meeting and he was presenting the ordinance to sell and the rehab agreement for Council’s approval. Commissioner Harper moved to pass Ordinance 1734 an Ordinance Authorizing the Sale of Certain Surplus Real Estate Owned by the City of Harrisburg. Commissioner Miller seconded. By roll call vote, all voted yes. Motion carried.

Commissioner Harper moved to enter into the Agreement for Purchase and Sale of Real Estate with Kathryn Gibson for 1022 East Sloan. Commissioner Montfort seconded. By roll call vote, all voted yes. Motion carried.

Attorney Bittle stated there had been three bids received for 129 South Shaw. Mayor McPeek opened a bid from Deon Littrell for the amount of $4,525.01, a bid from Karen Foster for the amount of $2,000.00 and a bid from Bob and Kathy Gibson for the amount of $3,550.00. Commissioner Harper moved to accept Littrell’s bid of $4,525.01. Commissioner Weirauch seconded. By roll call vote, all voted yes. Motion carried.

Commissioner Harper moved to authorize Attorney Bittle to prepare the necessary paperwork to complete the sale at the next meeting. Commissioner Montfort seconded. By roll call vote, all voted yes. Motion carried.

Mayor McPeek stated two events had requested closing Poplar Street. IDOT had to give approval via a resolution. Commissioner Harper moved to pass Resolution 17-0706A to close Poplar Street for the Summer Bash on August 12. Commissioner Montfort seconded. By roll call vote, all voted yes. Motion carried.

Commissioner Miller moved to pass Resolution 17-0706B to close Poplar Street for the Chamber sponsored Eclipse Celebration on August 20. Commissioner Harper seconded. By roll call vote, all voted yes. Motion carried.

Commissioner Montfort thanked Commissioner Miller for her efforts in getting the fireworks for the Fourth of July.

Commissioner Miller had some questions about the home inspections that were being done for rentals. She referred to 225 ILCS 441 Home Inspector License Act which she distributed to Council. She stated that she believed the inspections that Chief Gunning was doing before water can be changed to a renters name may be illegal. She believed that only a licensed home inspector could perform that function. She stated a Code Enforcement Officer could do it also. Commissioner Montfort stated that Chief Gunning was doing the inspection using State guidelines. Chief Gunning stated that when it came to things like plumbing or electric, he passed it off to a professional. Attorney Bittle stated he thought the City was OK because he was enforcing under City codes. He stated that David Williams had taken the classes for home inspection but had not taken the test. Commissioner Miller asked Attorney Bittle to look into the issue because she felt that because of liability, it might be better to have an independent person who does the inspection.

Commissioner Montfort gave the gaming numbers for the month of May for Harrisburg and the State.

Commissioner Montfort stated the Fire Department had done a training burn. She stated the new fireman was ready for the academy. She had held a meeting about a neighborhood watch program and would have a captain for each group of 12-15 homes. A map was to be created to identify the different groups and she was proposing a monthly meeting with the Captains. She stated the Police had received updated training.

Commissioner Miller asked if Commissioner Montfort was considering hiring someone as an investigator or detective. Commissioner Montfort stated she and the Chief were working on rearranging the schedules so each man could perform those duties. Commissioner Miller noted how much overtime had been used so far in the year to which Commissioner Harper stated that Chief Morris had already been to the Treasurer’s office to discuss moving money around in his budget to handle the situation.

Commissioner Harper moved to authorize the City Clerk to endorse back to the owner the insurance check that was being held on 1230 West Madeline for demolition expenses the City might have incurred had the structure not been taken down or repaired after a fire. Commissioner Miller seconded. By roll call vote, all voted yes. Motion carried.

Commissioner Harper moved to pay the IEPA Annual NPDES Fee in the amount of $17,500.00 and, as usual, to pay it under protest. Commissioner Miller seconded. By roll call vote, all voted yes. Motion carried.

Commissioner Weirauch stated he wanted to hear both sides regarding the Saline Valley water contract so he had asked Robert Wilson, Marti Watson and Alison Powles, who all represent Saline Valley, to attend this meeting.

Robert Wilson read the attached statement.

Wilson offered to take questions or go over the proposed contract by each paragraph. Attorney Bittle stated that since there is litigation on going between Saline Valley and the City, he advised Council to use caution in making statements. Wilson stated that litigation arose out of a Rend Lake Conservancy District court case. Mt. Vernon, who bought water from Rend Lake, had a neighboring town as their customer. That town wanted to buy direct from Rend Lake and sued Rend Lake to force them the sell directly to them. The court determined that Rend Lake did have an obligation to sell to that town. Following that case, Liberty/Ledford, a Harrisburg customer, approached Saline Valley and demanded they provide water to them direct. Wilson stated that Saline Valley filed a Declaratory Judgement Action which asks the court to decide if Saline Valley had an obligation to provide water to Liberty/Ledford. Wilson stated Saline Valley did not sue the City of Harrisburg. The parties involved in that Action were Saline Valley Water Conservancy, Liberty/Ledford and the City of Harrisburg. He did not believe that Action had anything to do with the water contract as presented.

Wilson stated the proposed contract was similar to the original contract that was a Farmers Home Administration form. He proceeded to read each paragraph of the contract and offer an explanation for some of the language changes.

A. 1. Quality and Quantity. – “no less than 30 million gallons per month calculated on the basis of a twelve month trailing average”. Wilson stated Saline Valley was going to have to spend a lot of money to drill new wells. The bonding company and sources of revenue to drill the wells want to know that Saline Valley has contracts that will provide adequate funds to pay for any loans. The 30 million could be adjusted if the twelve month average was reduced. Wilson stated that he had been informed that the City was concerned about losing IYC or HMC as customers. Language was added that allowed for the minimum to be reduced should they no longer be customers.

A. 5. – Pass Through of Water to Other Customers of Seller. – Wilson noted the customers to the south were Carrier Mills, Stonefort and New Burnside.

A. 6 – Pass Through Charge. - Wilson stated the original pass through rate was 10¢ per 1,000 gallons. When questioned how that rate was established, Wilson stated he did not know but Commissioner Harper stated he understood that Jim Brown was the reason that figure was set. Brown responded that all parties had sat down and agreed that was a fair number. Wilson continued that rate was adjusted by the same percentage of increase as any water rate increase from Saline Valley. In 2016 the pass through rate was 19¢. Wilson stated that the City says that is not fair and the City believes Saline Valley should pay for water leaks. A letter from the City was sent to Saline Valley increasing the pass through rate to $1.00. Wilson stated that government is not here to make a profit and Saline Valley is not out to make a profit. Saline Valley proposed a pass through rate of 40¢ which would increase at the same percentage rate as any Saline Valley’s water rate increase.

B. 1. Rates and Payment Dates. – Wilson emphasized that the rate of $2.92 was the lowest rate charged to any of its customers and that the City has always received the lowest rate. He stated the “subject to modification from time to time as provided below” was further explained in C. 3 – Modification of Contract. That section lists the items that are to be covered by Saline Valley’s rates and is a bonding company requirement.

Note: B. 1. Exclusive Supply, C. 1. Term of Contract and C. 2. Failure to Deliver were not read aloud or commented on.

C. 5. Miscellaneous – Wilson paraphrased the section which would allow Saline Valley to run water lines through the City. Mayor McPeek inquired why that provision was in the contract and was it an attempt to take City customers. Wilson stated it was not an attempt to take customers. He stated it was a response to the often heard comment that the water loss for the City was caused by all the water that ran through the system to the south. He stated by Saline Valley running a new line down the bike path to the master meter, the water loss complaint would go away. There would be no water passing through the system, but the 40¢ per thousand gallons of pass through would also go away. Wilson stated he had also heard rumors that Saline Valley was going to come through the City and steal IYC and HMC as customers. The State regulatory provision of 70 ILCS 2105/11(1) (a) included in the contact states that Saline Valley can’t serve the customers of Harrisburg that are inside City limits.

C. 6. Liberty-Ledford Water District. – Wilson referred to the Declaratory Judgement and to the pleading filed by the City which states Saline Valley gets to serve Liberty/Ledford as the reason for including the language. He transitioned into an explanation as to the reason for water leaks which centered around the 100 year old water lines in the City. He also mentioned the new metering system that provided quick notice of residential leaks as a step toward getting a handle on the leak situation.

C. 7. Back Pressure. – Wilson explained that language was to clarify the distribution to the college and Berry Hill customers which required a line feed to them rather than the water going directly to them from Saline Valley.

C. 8. Successor to the Seller. – Wilson stated that language was needed for the bonding company who would want to know that a successor could still cover their bonds.

Wilson then addressed the reason for a Saline Valley rate increase. He explained how the loss of Peabody as a customer greatly impacted them. He explained that the wells were old and needed to be replaced. The bonds would provide the money to do that.

Wilson stated he didn’t know how things got to the state where he felt a public meeting should be held. He encouraged Council to talk to each other and County Board members to talk to each other and share information. He then asked if there were any questions.

Commissioner Weirauch asked how much the pass through was? Wilson responded it was between eight and twelve million a month.

Commissioner Montfort wanted to clarify how many times Saline Valley had raised the rates. Wilson responded that it was raised seven times since 1981. She asked how many times the City raised the rate. Wilson responded it was 34 or 35 times. He showed paperwork that showed Saline Valley had raised the rate 154% and the City had raised it 310%.

Commissioner Weirauch asked what was originally charged to the City. Wilson responded it was $1.15.

Saline County Board Treasurer Jeff Murray asked if it was a 40 year contract. When he was told it was, Wilson asked to speak to that. He stated the bonding companies don’t want to amortize the debt for longer that the contracts. He quoted language from the Farmers Home Administration regulations which states the debt should be no longer that the life of the facility. Saline Valley District began during a drought and the only way funding could be acquired to dig wells was to borrow money from the Farmers Home Administration who set the 40 year mark which was the estimated of the life of the wells. The life of the wells has reached their end and so bonding is needed to dig new wells and the same time frame exists for the funding.

Commissioner Montfort asked when the City’s contract was up. She was told three years. Wilson stated that part of the pleading that was filed says the contract is done. He referred to a letter from Attorney Bittle which says the contract is unenforceable because neither party had the authority to enter into a contract for that length of time. Wilson and Bittle exchanged opinions as to the possibility of different lengths of time on the contract.

Wilson stated it was also important to the City to have a contract. Because, if the City were to seek bonding for replacing old cast iron water lines, the City would be asked if it had a contract to supply the water. He reminded the Council of the many leaks in the old system as well as the type of lines that are no longer used for replacement which have been installed.

Murray queried that if the 40 year contract were to be signed, if both parties could get together in a few years to see if everything was going as it should. Wilson stated the contract could always be amended but reminded Murray of the bonding company requirements of 40 years.

Murray wanted to clarify that, if the hospital or IYC were to close or leave, the rate could possibly go down. Wilson corrected his understanding of Wilson’s previous statement. Wilson stated the bonding company wants to know a minimum of what will be billed to Saline Valley’s customers. Wilson stated almost 40 million gallons a month are sold to Harrisburg. Wilson stated the 30 million minimum in the proposed contract insures Saline Valley will be able to cover the indebtedness. He thought the 30 million a month was a conservative number compared to the actual yearly usage of 400 million. Mayor McPeek asked what would happen if the City were to use less that the minimum. Wilson stated that even if the City actually used 25 million for a few months, they would be still be under the 400 million used in a year. Superintendent Hefner challenged Wilson’s numbers. Wilson accused Superintendent Hefner of lying to the Mayor about numbers. Mayor McPeek stopped the exchange and Wilson was asked again what would happen if the City used less that the minimum. He was asked if there is a minimum in other contracts. Wilson stated that there was not because Harrisburg’s contract was the first one to come up for renewal.

Commissioner Harper asked why there should be a minimum in the contract. Wilson stated it was so that Saline Valley could get the lowest possible interest rate which would turn in to a lower rate for the City. Commissioner Harper conceded that a lower interest rate would help both but then stated that EPA says the City should have two water suppliers in case of an emergency. Wilson stated he had been trying for years to work with other water districts to try and set up cross connections but there has never been any money to loan for those cross connections. He also stated that there is surface water that is not the same as well water.

Attorney Bittle stated the question about less than 30 million actually used was never answered. Wilson stated that, if less was used, the bill would be for 30 million. Wilson stated he has asked for a counter proposal and that Saline Valley was not getting any feedback on the proposed contract. Attorney Bittle outlined a time frame from the June 27 date of the proposed contract and which was discussed at a committee only the day before. He stated he had not had enough time to consider a counter proposal. Wilson stated another contract was sent two weeks prior and two Council members had asked the City Clerk for a copy of that contract and were told they couldn’t have one. Mayor McPeek stated that was when the committee was still talking about the contract. Attorney Bittle stated he took offense at Wilson’s accusation because he had asked three years ago to negotiate and had been laughed at and told it wasn’t their fault the City had signed a bad contract. Mayor McPeek stated that Wilson is appointed by the City to represent the City at Saline Valley.

Attorney Bittle asked if the contract was void or if there was more time on the contract. Wilson stated it really doesn’t matter because the childish behavior by both sides called for a reset button.

Citizen Jonathan Gericke stated he had heard that the City used to get its water from Harrisburg Lake and asked if the City could go back to that. Commissioner Weirauch stated the lines were gone and Wilson stated the water plant had also been torn down. He continued that it took a lot of money to build a water plant as well as issues with switching from underground water to surface water using the recent situation in Flint, Michigan as an example.

Commissioner Harper asked why Saline Valley did not provide adequate depreciation funds over the 40 years to be able to set new wells. Wilson stated that, in order to set aside money to build replacement wells while at the same time paying the debt on the original wells, Saline Valley would have to charge twice what it does. Commissioner Harper stated that, if the City signed a new contract, it would be paying for the new wells as well as paying for the depreciation fund. Wilson stated the depreciation fund is not for new wells. He stated there are two funds required by the bonding company, a reserve fund and a reserve for depreciation. Attorney Marti Watson explained the requirements by the bonding company for having an operation/maintenance account, bond interest account, bond reserve account, depreciation account and a surplus account. He explained that the depreciation account is not set up to fully fund a replacement in 40 years but it would be nice if it could. However, the water rate would have to be much greater. He stated the District has always had a depreciation fund in the amount of what the bonding company said. He stated the depreciation fund is used for needed repairs which are done on a regular basis.

Commissioner Harper asked what the reserve fund was used for and how much was in it. Alison Powles did not have with her the numbers needed to answer that but stated there is a certain percentage required to have and that it is fully funded. Wilson stated Saline Valley had provided requested audits and the information would be in the audits.

Attorney Bittle asked how much money was in the depreciation fund to pay for the new wells. Powles stated that if money were taken out, it would have to be put back in to keep the required amount in the fund. She stated there is approximately $1,490,000.00 in the account.

Commissioner Harper asked what other functions Saline Valley does besides sell water. Attorney Watson stated originally it was a drainage district, maintaining the Saline Rivers, monitoring and protecting its pollution and, years ago with the Corps of Engineers, they channelized parts of the Saline River.

Commissioner Harper wanted to know where the money came from to do this work and did it come from the sale of water. Attorney Watson stated there were two sides to Saline Valley, only one of which was the sale of water. The other side would be the maintenance of the drainage and is funded by tax levy. Attorney Watson stated the funds were kept separate.

Commissioner Harper commented that the rate increases for the last two years have been so great that he wondered what can be expected in the next years or 40 years. Attorney Watson stated because Saline Valley put off rate increases that they ended up playing catch up. Wilson commented that rates were reduced one time. Powles stated she had done a minimum rate increase last year but then drought, loss of mine sales and unexpected expenses had happened. Attorney Watson offered some comparisons from other districts such as Rend Lake which does a 5% rate increase every year.

Attorney Watson wanted to expand on the explanation of some of the changes. He noted that the original contract was from Farmers Home Administration. At that time that was the only funding available even though they were not funding water plants at that time so the language was slanted toward the purchaser. He stated that bonding companies look at things differently. He stated Saline Valley had attempted to get bonding insurance but could not get it because of the contract language which made the interest rate for the bonds higher. He stated that, as each contract comes up for renewal, they are trying to get things changed.

Commissioner Harper asked what was in the future for Saline Valley referring to a clause in the proposed contract regarding possibly Saline Valley being sold. Attorney Watson stated that was a carryover from the original contract and any buyer would want to know payments would be made. Wilson added that was bonding company standard financing language.

Commissioner Harper stated that Wilson skipped over the exclusive supply part of the contract. Commissioner Harper stated he believed the City should be able to get water from someone else. Wilson stated that he agreed but the financial side of that would be difficult and the bonding company needs to insure a revenue stream and Attorney Watson agreed with that statement. Commissioner Harper stated he believed there were several places in the proposed contract that would allow Saline Valley to not supply water to the City. Wilson referred to the storage capacity the City now has and how that would cover some instances. Commissioner Harper stated that a lot of the storage is for others to the south being supplied water. He noted there were no numbers in the contract regarding pressure which he believed should be in there because he did not think language that just stated enough pressure to fill the tank was not adequate language. He stated the proposed contract states if the City wanted more pressure, it would have to pay for it. Commissioner Harper wanted numbers in the contract to know that there would be enough pressure to fill the tank if the tank used more water than what was being supplied. Jim Brown stated there is no need for more pressure than what was needed to fill the tank. After some discussion between Wilson, Brown, Superintendent Hefner and Commissioner Harper, it was decided that 80 psi could be an agreeable number. Commissioner Montfort asked if there could be a meeting with everyone to determine agreeable numbers. Wilson suggested a meeting with Council, Saline Valley, the media and the public. Commissioner Montfort wanted to set the date. Commissioner Harper asked if there was still three years on the contract because he was in no hurry to get into a contract with someone who has increased the water rate by such a great amount in the last two years. Wilson responded that Saline Valley needs those rates to get bonding. Commissioner Harper asked why Saline Valley did not come to the City and explain the situation and their needs. Wilson responded that it was explained in the initial rate increase letter. Commissioner Montfort again asked for a joint meeting. Wilson stated that in the meantime he would like proposals from the City. Attorney Bittle stated that proper communication would be from attorney to attorney. Wilson again asked why the previous contract was not given to those Commissioners who asked for a copy of it. Mayor McPeek stated it was because the committee was not ready to talk about at that time.

Commissioner Montfort moved to have a meeting with everyone. Commissioner Miller asked who should be the one to set it up. Attorney Bittle reminded everyone that only two Council members can have a meeting without it being a violation of the Open Meetings Act and that was why Mayor McPeek, Superintendent Hefner and he were meeting to work on it. If everyone was to be at a meeting, then proper notice would need to be given. There was extended discussion about who would do what, when a meeting could be scheduled and where it should be. An audience member asked if the question of whether or not there was valid contract was ever answered. Wilson stated it was not answered. The audience member asked why have a meeting when there was still a valid contract. Attorney Watson stated Saline Valley had not filed a response to the pleading regarding the validity of the contract as agreed to by both sides in a meeting two months ago. Mayor McPeek still wanted to know if there was a valid contract. The audience member wanted to know that, if there was a meeting, would everyone get a copy of the contract and was told that would happen.

Superintendent Hefner asked to address Council. Superintendent Hefner stated the current contract limits May 1 as the time when a rate increase can be imposed as well as what a rate increase can cover. He asked if Saline Valley could raise rates to build their depreciation or reserve fund. Attorney Watson stated it would be only to the extent that the bond ordinance calls for. Superintendent Hefner noted the proposed contract states rates can be increased from time to time so he interpreted that to mean rates could be raised at any time. Attorney Watson stated that a rate increase would have to apply to everyone. Superintendent Hefner repeated that is not what the proposed contract says. Superintendent Hefner stated the current contract states an increase can only be a demonstrative increase based on the previous year but he referred to the rate increase letter which outlines rate increases based on reduced water usage from Saline Valley over the last four years. He stated their previous increase raised $380,000.00 for them. He referred to their debt service numbers and Powles stated those numbers were based on the reduced water usage. Superintendent Hefner stated the previous rate increase raised double what was needed to cover the debt service. Superintendent Hefner also questioned the amount in the debt service funds. Powles explained only part of that debt service is allocated to the regional entities. Powles stated that debt service numbers are all lumped together. Superintendent Hefner stated the reduction of usage by Harrisburg was 60 million which was almost as much as was lost from the mine. Superintendent Hefner stated that reduction was not just because of new meters. The reduction was the result of guys getting out and fixing things. He noted the decrease in Harrisburg’s usage since 2013 as documented in their letter. He referred to the possibility of losing Liberty/Ledford and how that would impact the usage number. He noted other big users that could affect what might be used which would also impact a minimum requirement.

Commissioner Montfort questioned Superintendent Hefner about seven increases from Saline Valley compared to 32 increases to the City’s customers. Superintendent Hefner stated he did not know why increases happened before him but stated the City code states a cost of living increase can be applied every year. He referred to an area water rate survey which showed Harrisburg’s rate is below the average of those surveyed. He stated he believed that Harrisburg’s rate is where it should be. He stated that a lot of places that buy water cheaper than Harrisburg charge more that Harrisburg.

Superintendent Hefner cautioned the Council about the minimum guarantee. He stated that the first check issued to Saline Valley in May of 1984 was for 40 million gallons when Harrisburg was a bigger place. He stated this year’s usage was 20% less or 32 million. If the next 30 years also saw a reduction in population and water usage, the minimum was a cause for concern. He stated that, if a minimum rate was established, he did not know what the motivation was to fix things even though that was the right thing to do. He stated that, with a minimum, it didn’t matter how much was fixed to reduce the usage, the City would still have to pay the minimum. Mayor McPeek stated the minimum needs to come out of the contract. Wilson stated the bonding company wants the minimum to provide a level of assurance for repayment and a lower minimum could affect the interest rate which in turn affects the water rate. Commissioner Harper asked if there were minimums on their other contracts. Wilson stated there were not because the minimum issue had just come up within the last five years. Wilson stated most of their contracts are 40 years old but the bonding company would like to have a minimum in all contracts.

Commissioner Montfort asked if there was a happy medium rather than argue all night. Superintendent Hefner asked if they dropped their claim and the City dropped its counterclaim, does the City have a valid contract. Attorney Bittle stated it did until a judge say it doesn’t. Additional discussion about a possible meeting date did not establish a definite date.

Wilson stated Saline Valley had contacted a bonding consultant to determine what needs to be in the contract to get the lowest possible rate. Attorney Bittle asked what interest rates have been quoted. Powles stated she did not have those figures with her. Attorney Bittle asked if there was a new rate based on the 30 million minimum and was told no. Wilson stated the requirements had changed over the years in regards to assets versus income with income being the current consideration but he did not want to borrow more money that was needed. Wilson stated the consultant stated that rates would be lower with minimums in contracts. Attorney Bittle asked why Saline Valley was seeking bonding now. Wilson asked Brown to respond to that.

Brown stated the three original wells had been in operation for 35 years and are coming of age as well as iron that is oxidized in the well fields. He stated that text books say 30 years is the outside. He stated there is also an issue with the aquafer. He stated the quantity or the quality has never been in question.

Mayor McPeek asked if Saline Valley needed a contract with the City. Wilson stated Saline Valley needed a contract to give assurance to the bonding company that Saline Valley can pay off the bonds. Wilson stated the City of Harrisburg is Saline Valley’s largest customer and always has been. Wilson stated the proposed contract was just a redraft with language to please the bonding companies. Wilson stated Saline Valley is not trying to make money off the City of Harrisburg. Mayor McPeek asked if they had a million dollars in reserve which Wilson confirmed but stated that was a requirement of the bonding company. Powles added that money was restricted in its use. Wilson stated the City of Harrisburg also has money in reserve. Commissioner Harper asked that, if a well expectancy is 30 years, could bonding also be 30 years and wanted to match a contract to well expectancy. Wilson stated the expectancy has been exceeded but Commissioner Harper was concerned about binding the City for 40 years. Commissioner Harper stated a 40 year contract could have a 10 year time span where Saline Valley could sock the City with an exorbitant increase in order to sink new wells. Brown stated that, even though the text book says 30 years expectancy, the wells have exceeded that and the capacity is decreasing. Wilson asked Brown how long it would be before new wells could be functioning. Brown stated it would be two years to get a bid and then a year to build. Wilson stated a bonding company would be leery of a contract that was less than the time needed to assure delivery. Commissioner Harper stated the City was not talking to a bonding company to which Wilson responded that it should be so it could fix all the leaks.

Commissioner Montfort asked how much was in the City’s reserve. Treasurer Linda George stated the General Fund had 1.5 million and the water had.5 million.

Discussion ended between Wilson and Council.

Commissioner Montfort stated she had forgotten to mention that on July 10 Harrisburg Woodmen Life Insurance was having an award ceremony at 6:00 to recognize certain City employees for being life savers.

Commissioner Montfort stated the Merit Board would be testing in August.

Commissioner Montfort stated that someone in town had approached her about training a police dog for free and she was checking into that.

Citizen Brandon Yates identified himself as the first cousin to the person who was recently killed in Harrisburg. He stated he knew that Harrisburg had relinquished the case to the State Police. He asked what the Harrisburg Police were doing since they knew who was talking to who. He stated it was two and a half weeks into the investigation and he had no information. He felt they should be doing more. Commissioner Montfort stated she had met with all parties last week and stated everyone had to pool their resources. Yates wanted to know who was in charge of the police doing their job. Commissioner Montfort stated she was working on it and making sure everyone was doing what they should.

Commissioner Harper moved to adjourn to Executive Session to discuss Property Acquisition and Personnel. Commissioner Weirauch seconded. By roll call vote, Commissioners Montfort, Harper and Weirauch and Mayor McPeek voted yes. Commissioner Miller voted no. Motion carried.

Adjourned 8:39 pm.

Reconvened: 9:20 pm.

Mayor John McPeek presided over the reconvened meeting with Commissioners Natalie Miller, Richard Harper and Mike Weirauch answering roll call. Commissioner Beth Montfort was absent.

Commissioner Harper moved to adopt a policy so all employees were made aware of the FMLA and their rights under that policy and COBRA before exhausting their paid time off. Commissioner Weirauch seconded. By roll call vote, all voted yes. Motion carried.

Commissioner Weirauch moved to authorize Chief Gunning to purchase two trailers for up to $600.00 from the Saline County Trustee. Commissioner Harper seconded. By roll call vote, all voted yes. Motion carried.

Commissioner Miller moved to adjourn. Commissioner Harper seconded. By roll call vote, all voted yes. Motion carried.

Adjourned: 9:22 pm.

http://docs.wixstatic.com/ugd/3acc7b_1994307c61624780a49e77a63b17dd73.pdf