Council OKs tapping cash reserves

Council OKs tapping cash reserves

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Following some lengthy discussion in regard to the recent energy audit of city facilities, the Chadron City council passed a motion, 3-2, to proceed with upgrading and replacing lighting fixtures of the Chadron Police Department, with taking the expenditure out of the cash reserves of the City budget.

Council member Cheryl Welch, who requested the audit several months prior, also made the motion. Mayor Miles Bannan noted the audit was performed, and City Manager Greg Yanker further pointed out the audit was limited to just the lighting of City Hall and Chadron Police Department at this time, and it is open for discussion as to how far council wants to take it.

Bannan said they would look at coming to agreement as to whether upgrades would be planned to City Hall and the police department, whether the audit process would be continued to other buildings and how streetlights are rated and maintained.

Council member George Klein said upgrading the lights at the police station would be a “no-brainer,” as the approximate cost of switching to LEDs—a one-time expense— would be $2,919.26 to $6,242.62, with an approximate cost savings of $2,482.27 per year and 1.2-2.5 years for a return on investment. There is also a $565 incentive to the police department.

Vice Mayor Keith Crofutt and Bannan, both of whom voted “no” on the motion, were of the mind to fit the cost into the 2020-21 budget. Bannan further noted continuing the audit process for other City buildings would not have a budgetary impact and would be worthwhile.

Welch noted the cost for the improvements could come out of the contingency, which is essentially the City’s cash reserves. In the budget, Yanker noted, there is $202,000 set for contingency. This would transfer into cash reserve for the next fiscal year.

Welch agreed with Klein that changing out the lights of the police station would be an obvious choice. She respected the opinion that the project could be budgeted for next year, but put forth the council could not wait because of the incentives and they could potentially pay off the project within a few years.

Crofutt pointed out the incentives will still be there after the next budget cycle, and there is no hurry. He said it would be irresponsible to dig into the contingency for something that’s not an emergency when there is still quite a bit of the budget year left.

Bannan, in an effort to move discussion forward, suggested a motion to proceed with further energy audits of City facilities, discussion of getting firm numbers for actual costs and further discussion. Welch pointed out she asked for the audit presented Monday seven months ago, and she didn’t want wait several months for further information. Instead, she said, the money should be invested now and the City can start chipping away at the investment to pay it off in a few years.

A motion to convert the 81 decorative post top lights in the downtown area from the M2 to the M1 rate died, 2-3, with Welch, Crofutt and Klein voting no. The options available to the city were: to keep the 81 lights at the current M2 rate and do no LED conversions on the poles for an approximate cost of $774.36 per month; keep the M2 rate and convert to LEDs with a one-time replacement expense of $40,330, for an approximate $281.88 per month; or transition to the M1 rate for an approximate $873.18 per month.

The lights are currently owned and maintained by the City under the M2 rate code, though under the M1 code they would be maintained by Nebraska Public Power District (NPPD). According to information presented, there would be an additional approximate cost of $98.82 per month—$774.36 increased to $873.18—to go from M2 to M1. This total is for all lights, but the City is not required to maintain the lights under the M1 rate.

Welch likened the transition to the M1 rate and having NPPD responsible to an insurance policy. The City pays a bit more, but NPPD takes all the risk and handles all the maintenance. She asked how much the City is currently paying per month. City Manager Yanker noted it is more on an “as needed” basis, but the City has an average of two light poles per year that need replacing at a cost of about $2,000 per pole.

Mayor Bannan said he didn’t have the appetite to try and find $40,000 simply to change the tips of the lights to LEDs and still have the costs of maintenance, repairs and replacement.

Welch took the $40,330 to convert the poles to LEDs and divided it by the 81 poles, coming up with a cost of $497 to replace just the LED. Further, she took the M2 rate with no conversion to LEDs against the M2 rate where the City does the conversion and found the difference to be about is $493. Doing the conversion, she pointed out, the City saves every month what it cost to switch a pole to LED. It was pointed out there would also be labor and material costs, as well as additional maintenance costs if the City remains on the M2 rate.

Moving forward, more information on the rate conversion and what has been spent on maintenance is expected at a future meeting.

Council also made the decision to continue the audit process for lighting at City buildings, and engage in the audit process of HVAC systems and insulation for other cost savings.

In other action, Council approved the Professional Retail Operations Agreement with NPPD, effective April 1 of this year.

City Manager Yanker explained in 2017 the City commended the Professional Retail Operations Agreement from April of 2004. At that time, it was noted if there was a new agreement developed by NPPD the City would be able to enter into it.

Since then, NPPD has developed a new agreement. The largest changes from the amendment and the 2004 agreement, Yanker said, is to allow the City to increase its lease payment from 12% up to 14% on half-percent annual increments. There is also the addition of the Renewable Generation article, which allows the City to continue to move forward with the community solar energy project. Other minor changes cleaned up language that was no longer necessary.

It was pointed out that, just because the agreement was approved it doesn’t mean the City has to implement it, meaning it is not mandatory for Council to increase rate.

Terry Rajewich with NPPD noted another item that does allow for change in the agreement, for future reference, is the ability to collect on municipal accounts. Any entity that receives a municipal discount of up to 33.3% could also be charged a lease payment in the future. If this option is used, the City must charge all municipal accounts and is not able to pick and choose.

Following a brief executive session, council passed a resolution to enter into an agreement with the Fraternal Order of Police, Northern Panhandle Lodge No. 69, Chadron Labor Committee, for the purpose of promoting harmonious relations between the City and its employees, establishing equitable procedure for resolution of employment differences, and establishing pay rates, work hours, safety standards, procedures for employee advancement and other employment conditions.

Mayor Bannan signed the proclamation that Feb. 2-8 is Future Business Leaders of America-Phi Beta Lambda (FBLA-PBL) Week.

Future Business Leaders of America-Phi Beta Lambda is a nonprofit educational organization whose first chapter was established in Johnson City, Tenn. In 1942. It has grown to encompass more than 250,000 members. It is dedicated to bringing business and educations together in a positive working relationship through innovative leadership and career development programs. Members perform community service activities and strive to build student understanding of the realities of the modern world.

Lauren Collins, president of the local chapter, noted in a few weeks they will be serving at Closer to Home. Other community service has included the 12 Business Days of Christmas. They are planning activities to celebrate the week at Chadron High School.

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