Archive for Wednesday, September 9, 2015

Baldwin City Council authorizes nearly $3.3 million in sewer bonds

Baldwin City government

Baldwin City government

September 9, 2015

The Baldwin City Council voted 5-0 Tuesday to authorize issuing $3.275 million in bonds for improvements to the city’s sewer utility.

The $3.275 million approved was one of three bonding options city staff presented to the council. The debt will pay for $500,000 to replace a belt press and bar screen at the wastewater plant, $175,000 to construct a sewer line to the industrial park and a $2.5 million interceptor to address current capacity issues on the city’s east side and serve future growth in that area. Associated costs for things such as publication, legal fees and underwriting fees would add another $100,000.

The council chose that option over two other alternatives. The first option would have paid the improvements at the sewer plant, which are needed to keep the plant operational, and the sewer line extension to the industrial park the council approved last month, while the second would have made those improvements and replaced some undersized, at-capacity sewer line on the east side for an estimated $750,000 in lieu of the new interceptor.

Public works director Bill Winegar said the cheapest option was really not an option as it did not address the problem of the about half dozen east-side, undersized lines of from 400 to 500 feet that are at capacity. The second option would provide the city “four to five years of relief” but eventually would cause problems elsewhere where the newer, larger line merged into a smaller line “downstream,” Winegar said.

The council has already approved sewer rate increases that will provide the revenue to retire the debt associated with all options. In April, the council approved a three-year phase-in of rate increases. The increases maintained the existing $16-a-month base rate, but raised the old $3.85 per 100 cubic feet consumption rate to $4.43 this year, $5.33 in 2016 and $6.27 in 2017.

The council, nonetheless, struggled with the decision because of the uncertainty there would be any growth for the $2.5 million interceptor to serve.

As a possible alternative to investing that gamble, Councilwoman Christie Darnell proposed developing shovel-ready engineering plans, estimated to cost 9 percent of the interceptor’s construction cost. That would put the city in the position to construct the interceptor when a developer came forward, she said. In the mean time, the city could put revenue from the rate increase away until it was needed to pay for the improvement.

Winegar and City Administrator Chris Lowe advised against the proposal for two reasons. One concern was future councils would be tempted to spend the fund on other sewer needs, Lowe said. He and Winegar also questioned how long engineering plans would be applicable. In 10 years or less, the Kansas Department of Health and Environment could insist parts or the entire engineering be redone, they said.

Although Lowe said another argument for the large bond was that low interest rates made it a good time to incur debt.

Speaking in favor of the interceptor option were Mayor Marilyn Pearse and Councilman Tony Brown. Pearse said replacement of smaller sewer lines would spend $750,000 on a stop-gap measure that could have been invested in the long-term solution of an interceptor.

Brown said installing the interceptor rather than developing engineering plans for the improvement would be a signal to developers Baldwin City was serious about growth. The investment in the interceptor was the cost of being in competition for development with Eudora, Ottawa, Gardner and Lawrence, he said.

“If we want to be at the table, we have to ante up,” he said. “If I wanted to build and was told to come back in a year, I’d go elsewhere. If we do just enough to meet current needs, I’m afraid they will go elsewhere.”

Although ultimately all council members voted for the interceptor option, Brown and Bauer were the only members to vote "yes" when the question was first put to vote. However, council members Darnell, Kathy Gerstner and David Simmons did not vote “no” either. Pressed by Pearse to make a vote, they joined in making the decision unanimous.

Winegar said it would probably be a year before the engineering design was in place so that work could start on the interceptor.

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