Council ponders how to finance loan

The Washington City Council talked about hiring a firm to help the city manage the repayment of its loan for the sewer plant. Jenny Blankenship of Public Financial Management, Inc. told the council she could perform a cash flow analysis of the city?s repayment program. She would show the city how much money it could expect to generate through various sewer rate increases and whether those increases would be sufficient to pay off the city?s debt.

The Department of Natural Resources (DNR) has mandated that the city build a new wastewater treatment plant. The city is also planning to build a gravity sewer line. The two projects combined will cost about $20 million. Former City Administrator Dave Plyman had said the city would need to generate $1 million more per year in utilities to pay the debts incurred by the projects.

Before his departure at the end of May, Plyman had created a spreadsheet that included the water consumption of everyone in Washington. He used the spreadsheet to demonstrate how an increase in one of the utility fees affected the amount of money the city received. Knowing how much money the city needed, Plyman proposed increases to water and sewer usage rates and base charges. At the council?s June 15 meeting, interim City Administrator Dick Schrad said he looked at the spreadsheet and didn?t know how Plyman obtained the figures he did.

?I have to operate on faith that the numbers he has in there are correct,? said Schrad at the time.

At Wednesday?s meeting, Blankenship told the council she could analyze the city?s books to see if the proposed rate increases generate enough money. She said she would look at the sewer fund?s revenues and expenses over the past three years, and other facts such as how many cubic feet of wastewater the city treats.

Councilor Fred Stark asked Blankenship how soon she could perform the cash flow analysis. She said she couldn?t do it before the council?s next meeting but could do within a month.

At its June 15 meeting, the council voted 6-0 to approve the second reading of an ordinance to raise water and sewer rates. Under the proposed ordinance, the base charge for residences would double from $17.50 per month to $35, among other increases. Councilor Bob Shepherd said he has spoken to several people who are very unhappy about doubling the base charge.

?I?ve had people with purple veins in their neck scream at me,? said Shepherd. ?I?m telling you, people are ugly about it.?

Councilor Merlin Hagie remarked, ?You?ve heard stuff that I haven?t. I?ve heard resignation like, ?Oh well, it?s coming.? I haven?t had a single person want to lynch me yet.?

?Oh my God, are you kidding?? said Shepherd. ?I know a couple of people you can talk to.?

Shepherd said he will not vote for the third and final reading of the ordinance until the city receives a cash flow analysis. He said that analysis is critical because everyone should be treated fairly.

?If we wait a month, it?s going to hurt us because we?re going to lose that month?s increase, but we?ve got to be right,? said Shepherd. ?We?ve got to be right with the public.?

Councilor Karen Wilson-Johnson entered the discussion by saying, ?We sat here a month ago with our administrator pounding the importance of getting this rate increase done now. That?s why we didn?t wait then. We started the hearings then because we need to get this rate increase going ASAP.?

?But our interim administrator is saying, ?I?m not comfortable with this,?? responded Shepherd. ?If someone who has been through this, and this is his expertise, isn?t comfortable, how can you be comfortable in front of the public and say, ?This is right.??

Wilson-Johnson responded that the city has not raised sewer rates in several years and that it needs to do so soon.

Hagie said, ?We are digging a hole in the ground and we haven?t borrowed the money yet. I don?t like that. It makes me very nervous. I want the money coming in, and we?ll figure out very quickly how to pay.?

The council could not enter into a contract with Blankenship?s firm because that was not on the agenda. The councilors agreed that item should be on the next agenda.

In other news, the council officially annexed several pieces of property into the city limits. Those properties are the Washington City Airport plus the 63 acres the city bought northwest of it from John and Jan Berdo, the 90 acres the city bought from the Washington School District on the northwest edge of town and the 126 acres from Bernard and Judith Bartholow for the new sewer plant west of Elm Grove Cemetery.

The councilors talked about when the community could meet the finalists for the city administrator position. The councilors agreed on a tentative date of Friday, Aug. 12.