HomeMy WebLinkAbout1970-02-25 Council Minutes - Special MeetingNOTES ON STUDY SESSIQi - KENAI CITY COUNCIL ANU DON MEYER 2/25/70
Present, 7:30 p.m., City offices in the Terminal Bldg.: Mayor Eugene H.
Morin, Councilmen Bailie, aielefeld, Hulien, aridi McCann. Also, Ray
Burt, Treas.; Percy Be rgt, KCL Supt.; Bruce Massey, W&S Supt. and City
Manager Ormond Robbins.
Disposing of Terminal Bonds first, Council and Mr. Meyer aqreed the City
should not press for sale of the remaining $100,000 authorized; but un-
issued bonds. It is better to bring our Terminal Revenues in line with
the present Nequirement for outstanding bonds than to try to sell more
at this time.
It is hoped a building can be managed for the crash truck in
some manner, other than bonding.
There was also some discussion on space for Wien and Alaska.
Space vacated by Western plus the two empty offices on the North side of
the building can be utilized, 'though the arrangement leaves something to
be desired.
The General Obligation bonds - water and sewer, in the amount of $340,0009
will be used to connect the City to artesian wells, either existing or
yet to be drilled, and for improvements to the sewer treatment facilities.
This precludes setting up assessment districts to help pay for the bonds.
The Administration will try to get financial assistance in the form of
grants-in-aid from the Federal or State Government. If any bond monies
remain, after connecting to the wells and improving the sewage treatment,
they will be used for laterals, probably in the Cnjdlelight-Tinker Lane
area.
Meyer said the bonds should be on a 2 to 15 year basis, with
a 10 year call at par. He will arrange the prospectus and Thorgrimson
will draft the ordinance. The City should be able to have the money in
about 45 days.
Massey said the fire rating should go to 6 from its present 8,
when the fire water reservoir is operating. There's 123,549.63 in the fund
to pay for the rest of the Project.
Discussion on test wells drilled brought out the fact that the
! - high cost $9,000 for only 204' well was due to standby time charged on the
equipment. It is hoped the next test well can be put in at a much lower
cost.
Mr. Meyer said there are problems with the KCL revenue issue of 1967:
1. The $300,000 was voted by the people to buy HEA facilities in the
City; purchase price was $1659000 for 642 customers - the City still has
$180,000 set aside for this purpose, but agreement of November, 1967 has
been:•abrogated by HEA, using the cancellation clause. Meyer wants the
City to determine the status of the agreement as of now. It was generally
agreed, 'though there was no legal opinion on it, that the agreement is
defunct.
2. The bond prospectus on the 1967 KCL issue says the City has a contract
with Wildwood, and shows the profit derived from this. The City does not
make a profit on Wildwood, and now has no effective contract.
3. The offerings also say there is a certain amount of KW's available from
purchased generation, and this has not been the case.
To combat these problems, Meyer proposed:
The City give him authorization to negotiate a sale of the entire
$4256000 KCL issue with the holders of the present $3009000 issue, Allstate,
at 7 1/2%. In turn, the City would buy back $200,000 of the 1967 issue,
Notes -Council meeting with Don Meyer 2/20/70
Allstate would not lose faith with the City's intent as to purchases of
HEA. Also, the new issue would not be clouded by failure to fulfill
the objective of the 1967 issue.
Meyer said he is satisfied CUL can and will produce the gener-
ation promised; he toured the plant and talked with the operations mgr.
as well as with Strandberg. Only small parts are lacking to get the
machines on the line. He says CUL should be generating 7,000 Ws within
30 days.
In addition, the City paid $327,000 for power last year. He
says for about $130,000 interest payment a year the City could bond and
buy CUL's facilities, thus producing its own power. Council is in full
agreemnt with the longer range plan, but will not press the matter at
this time, since it is better to get the subdividers paid off, and the
contract with Wildwood settled before going on to other things.
Council unanimously authorized Mr. Meyer to go ahead with pre-
liminary negotiations with Allstate.
The Clerk questioned the authority to negotiate when we don't
know that 7 1/2% is lower than market, but Meyer seemed assured the Charter
grants this right.
Mr. Meyer will keep the Council informed as to his progress, and the City
will give him the data he needs for the bond prospectus.
FATsen
Cit
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PFASS ISLEASE CjjT tOUNCIL, MEETING 111714 DMALD A; '010 NARSKALL & MEVERs
SEATTLE 9 NASHINGTON 7:30 P.M.. 26 FEBRUARY* 10109 CHY OFFICES. KENAI
TERMINAL. WILDING
At a study session with bond Consultants Don Meyers the Kenai City Council
decided to p to market with Its authorized bonds for capital Improvements with-
in the City.
An issue of $845000 for water improvements will be used primarily
for connecting the present water distributign system to the City's artesian wills$
thus providing users, td," clears sweets unsihiltersted water, It Is possible a
no Well wilt. In dri)JO.O. closor to the existing sysUm* In the vicinity of the
High Schools visking coNnection costS Mort reasonable.
If my water bond way remains It will be used to construct lateral lines
for additional users.
Sewer bonds in the amount of $1256000 wil'I'be used to improve the treatment
facilities. Any monies remaining will be used for lateralsto additional customers.
Electric Light & Power bonds for $4269000 will be used to pay off subdivi-
sion developers who installed electric lines with the understanding they would be
repaid by Venal City Light at such time as bonds are sold. There will be about
• $1879000 left$ after these obligations are miet, for improvements to the power
system.
Mr. Meyer will prepare the p" ctus and see to the advertising of these
issues and estimates the City should the money In hand within 45 days.
Council decided not to press for sale of the $100s000 authorized terminal
bvilding'b4nds at this time as present facilities seem adequate for the need.
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