Mild weather in 2015 has been kind to Iola utility customers, but hard on the city’s bottom line, City Administrator Carl Slaugh noted.
Slaugh gave City Council members a quick glimpse Monday at the city’s year-end budget figures.
Natural gas sales are down; the city’s water fund is in the black, but still not generating enough revenue to make ongoing loan payments to pay off the city’s water treatment plant; and the electric fund has taken some big hits after the city paid for EPA-mandated upgrades to its controls and spent more than $200,000 to improve electric service for yet-to-occur expansion at Gates Corporation. As it stands, the electric reserves are at 12.3 percent, much too tight for Slaugh’s comfort, especially since year-end transfers have yet to be made.
“It’s a very tight budget,” Slaugh said.
The city will transfer minimal amounts from the electric and gas reserves at the end of the month to close the city’s books on 2015. Slaugh said the goal is to retain about $1 million in the electric reserves to ensure some cash flow early in 2016.
“We’ll take a little out of electric, a little out of wastewater and a little out of gas,” Slaugh said.
He also noted the Council should consider adding fuel cost adjustments to its water rates, much like Iola does for electricity and natural gas. Thus, if the cost to treat water rises because of higher raw material prices, that added cost is shifted to the customer, not the city.
Slaugh said he has visited with the city’s energy consultant and should have a proposal ready in January.
IN A (somewhat) related matter, Council members approved a three-year agreement to purchase wind energy through Westar.
The agreement calls for the city to purchase 3 megawatts of power each month from a wind farm under construction near Pratt.
The wind farm should be online by the end of 2016, Slaugh said.
COUNCIL members also voted, 4-3, to pursue a federal Assistance to Firefighters Grant from the Federal Emergency Management Agency.
If successful, the feds will pay up to 95 percent, or $285,000 of the necessary $300,000 to buy a new pumper truck designed to fight rural fires.
The problem, according to the three opposed, was that the city has not budgeted funds for the city’s share if it were successful.
Council members Aaron Franklin, Bob Shaughnessy and Austin Sigg were opposed. Council members Don Becker, Nancy Ford, Jon Wells and Sandy Zornes were in favor. Councilwoman Beverly Franklin was absent.
“I just don’t see the harm in allowing them to apply for the grant,” Wells said.
Franklin said he also was opposed to the notion the city had to act quickly because the deadline to apply for the grant is Jan. 15.
“If we’re going to apply for a grant and the deadline is Jan. 15, could we get this information a little earlier?” he asked. “My second concern is we seem to throw around the term ‘rising maintenance costs’ as a cliché. I’d rather see documentation.”
COUNCIL members also:
— Renewed 2016 cereal malt beverage licenses for Ray’s Mini Mart, 205 S. State St., Pete’s, 709 N. State St., Jump Start Travel Center, 1700 East St., Walmart, 2200 N. State St., and Casey’s General Store, 712 E. Madison Ave., to sell unopened containers. On-site consumption will be allowed at Cedarbrook Golf Course, 2700 N. Cottonwood St., China Palace, 110 N. State St., Country Lanes, 2001 N. State St., Denny’s Sports Center, 18 E. Jackson Ave., Pizza Hut, 1612 N. State St., El Jimador, 902 N. State St., and Coronado’s, 1401 East St.
— Approved a bid from Hampel Oil to provide diesel and gasoline for city vehicles for 2016. Hampel’s bid, 7.2 cents per gallon above rack price gasoline and 7.6 cents per gallon above for diesel is slightly higher than a second bid from Le Roy Co-op. Council members noted the difference in price between the two bids — it’d be worth $140 if 25,000 gallons of gasoline and 40,000 gallons of diesel were consumed — made it more feasible to pick the local vendor.
— Agreed to purchase crushed rock from Nelson Quarries, Gas, for $8.50 a ton, the same price the city paid in 2015, and lower than what Iola paid in 2013 and 2014. Nelson’s bid was the only one received.
— Agreed to change the Oct. 10 and Dec. 26 meeting dates in 2016 because those dates fall on federal holidays, Columbus Day and Christmas. They’ll now be scheduled for Oct. 11 and Dec. 27. As an aside, Council members were reminded that there will be no second meeting this December — also Dec. 27 — because there won’t be enough Council members available for a meeting.
