110 E. Walnut Street - Oglesby, Illinois 61348  ·  Phone: 815-883-3389

October 1, 2012, Meeting Minutes

November 2, 2012 by bclinard  
Filed under Council Meeting Minutes

A WORKING MEETING OF THE OGLESBY CITY COUNCIL WAS HELD ON MONDAY, OCTOBER 1, 2012, AT CITY HALL. THE MEETING WAS CALLED TO ORDER AT 5:30 P.M.

PRESENT: COMMISSIONERS DANEKAS, PORTER, RIVARA, MAYOR FINLEY, ATTORNEY JAMES ANDREONI, CITY CLERK BECKY CLINARD.

ABSENT: COMMISSIONER YBORRA

Verbal Blakely of BHMG, the consultant who conducted the electric rate study, spoke about her findings.

The key points she brought out:
1. The Rate of Return on operating expenses should be in the 12 percent to 15 percent range. Based on the most recent year, Oglesby’s is 3 percent.
2. Oglesby’s reserves total about $200,000. Municipal utilities should, ideally, have reserves equal to ½ to 1 year of revenue ($3.4 million). Oglesby Electric would be unable to address expansion, aging facilities or an emergency such as a tornado or ice storm damage in its current financial state.
3. There is a disparity between customer classes. Residential, Large Power and Buzzi provide the least amount of margin (less than 2% each), leaving commercial customers shouldering much of the burden. Rates need to reflect a similar rate of return across the different customer classes so that the city isn’t as affected as greatly during down-turns in the economy. An example of this is the closing of the Buzzi plant. For years, Buzzi subsidized residential electric rates, allowing Oglesby residents and other large power users the benefit of artificially low rates.
4. Oglesby has the 9th lowest electric rate in the state. Oglesby’s rates need to be competitive, but “you also have to be able to pay your bills.”
5. Other city departments and services have relied on the electric department’s reserves for years. The city generally transfers $150,000 from the electric fund to the general fund and the electric department “pays” for $140,000 worth of expenses that aren’t expenses related to the department. With reserves of about $200,000 and projected income (based on today’s rates), the electric department will have drained its reserves and be operating in the red in just two years.
6. Oglesby’s electric department’s non-electric purchase expenses are less than 20 percent of the department’s total expenditures. Blakely praised the “very frugal” department, noting that she didn’t see an easy way to lower expenses. Layoffs are not an option, as a 4-man crew is necessary to be able to do many of the maintenance and construction projects.
7. Blakely praised the previous councils who enacted the Power Cost Adjustment, noting that without it, the city would have been in much worse shape sooner. “It’s the only reason you are where you’re at now,” (rather than sooner) she said.
8. Blakely suggest raising rates 15 percent, or approximately 1.5 cents per kwh. Even with this increase and modest capital projects, it would still take 10 to 15 years for the city to get reserves in the $1 million mark.
9. She suggested addressing the PCA, to reflect annual increases in the cost of operations as well as recouping power losses and any transfers to the general fund.

Blakely was instructed to work with Attorney Andreoni on an ordinance that would increase the electrical rates and power cost adjustment.

____________________________
Becky Clinard, City Clerk

A MEETING OF THE OGLESBY CITY COUNCIL WAS HELD ON MONDAY, OCTOBER 1, 2012, AT CITY HALL. THE MEETING WAS CALLED TO ORDER AT 7:00 P.M.

PRESENT: COMMISSIONERS DANEKAS, PORTER, RIVARA, MAYOR FINLEY, ATTORNEY JAMES ANDREONI, CITY CLERK BECKY CLINARD.

ABSENT: COMMISSIONER YBORRA

A MOTION WAS MADE BY PORTER, SECONDED BY RIVARA to approve the regular meeting minutes from September 17, 2012. AYES: DANEKAS, PORTER, RIVARA, MAYOR FINLEY. MOTION CARRIED.

A MOTION WAS MADE BY DANEKAS, SECONDED BY PORTER to approve the bills to be paid as submitted: AEA, $2,350.00; Ameren IP, $27.51; APCO International, $25.00; Apple Press, $322.40; Bio-Torn, Inc., $422.50; Brownstown Electric, $786.33; Call One, $552.64; City Of Oglesby, $8,377.66; Comcast, $48.95; Creative Apparel, $1,760.24; $Cruz concrete, $15,676.67; Dever & Sons, $520.50; Rose Durbin. $65.32; Cathie Edens, $181.24; Emergency Medical Products, $222.44; Fastenal, $122.61; Fleet Services, $5,068.95; Gensini Excavating, $10,598.87; Timothy Gibbard, $148.53; Victor Gonzalez, $10.00; Grainco FS, $400.00; Grosenbach’s, $605.71; William Hankins, $99.67; George Hickey, $5.25; Holloway’s Portables, $150.00; HyVee, $10.53; Il Dept. of Central Management, $576.75; Illinois Valley Business Equipment, $338.33; Illinois Food and Deli, $21.15; ITron, Inc., $785.62; Jack’s Gas and Service, $66.00; Braden Kennedy, $200.54; Kiesler’s Police Supply, $707.00; Doug Knoblauch, $ 20.00; LaSalle Office Supply, $28.99; Leone Grain & Supply, $160.03; James Mandujano, $10.00; Mautini Distributing, $66.00; Menards, $154.15; Mertel Gravel, $894.13; Tracy Montoya, $250.00; Motorola, $225.74; NewsTribune, $60.00; North American Salt co., $2,136.62; Patten Industries, $58.16; PDC Laboratories, $240.00; Ragan Communications, $2,835.00; Revere Electric, $52.45; Riverstone, $82.20; SBK, Inc., $29,045.87; Screenvision Direct, $368.00; Smith Ecological, $964.55;Smith’s Sales, $204.00; Somonauk Water, $85.50; USPS, $689.85; Universal, $917.68; Utility Equipment, $393.34; Viking Chemical, $1,679.00; Water Products Co., $1.122.67; Western Aggregates, $267.69; TOTAL: 94,367.44 AYES: DANEKAS, PORTER, RIVARA, MAYOR FINLEY. MOTION CARRIED.

A MOTION WAS MADE BY RIVARA, SECONDED BY DANEKAS to accept the recommendation of the Oglesby Zoning Board of Appeals and deny the request from Joseph and Carmen Heinz to rezone property at 623 N. Columbia from residential to business. AYES: DANEKAS, PORTER, RIVARA, MAYOR FINLEY. MOTION CARRIED.

A MOTION WAS MADE BY DANEKAS, SECONDED BY PORTER to place on file an intergovernmental agreement with the State of Illinois for the Local Debt Recovery Program. AYES: PORTER, DANEKAS, RIVARA, MAYOR FINLEY. MOTION CARRIED.

A MOTION WAS MADE BY RIVARA, SECONDED BY DANEKAS to place on file a pole agreement with Comcast. AYES: DANEKAS, PORTER, RIVARA, MAYOR FINLEY. MOTION CARRIED.

A MOTION WAS MADE BY PORTER, SECONDED BY DANEKAS to approve a request by Oglesby Schools to close a portion of Bennett Avenue on Oct. 31, 2012, for the annual Halloween parade. AYES: DANEKAS, PORTER, RIVARA, MAYOR FINLEY. MOTION CARRIED.

A MOTION WAS MADE BY RIVARA, SECONDED BY PORTER to approve a request by the American Legion Auxiliary No. 237 to sell poppies at the intersection of Walnut Street and Columbia Avenue on Saturday, May 25, 2013. AYES: DANEKAS, PORTER, RIVARA, MAYOR FINLEY. MOTION CARRIED.

The Mayor then opened the floor for public comments:
• Resident Greg Stein expressed concern about the precarious condition of the overhang on a building at 240 E. Walnut Street. Stein said that he didn’t believe the overhang would survie the first snowfall. He also said he had sent the owner a letter advising him of the situation. Mayor Finley said that the building inspector had filed a report. Commissioner Porter also noted that when a window was broken on the property a couple of years ago, it was repaired the same day.
• Resident Drew Merriman asked if the city would be furnishing a detailed report on “what’s been spent” on the new park. He also voiced his opinion that anyone serving on a board should not do business with the city.
• Resident Vern Seimers expressed his opinion that more residents should have attended the earlier working meeting on the electric rate study to “see why they’re getting nailed.”

Commissioners’/Mayor Reports
Commissioner Danekas praised the work on McPhedran Park.

Commissioner Rivara said now that the agreement with Comcast had been done, he would be moving onto AT&T. He also mentioned that his department is working on supplying power to the new Water Treatment facility and he expects the cost to be approximately $50,000.

Commissioner Porter announced that the Ambulance and Firefighter Associations would be hosting an open house on Saturday, Oct. 13, from 10 a.m. to 1 p.m. He said Vial of Life kits and child safety seat checks would be available.

Mayor Finley announced that the Zonta Club would be hanging purple ribbons in the city to raise awareness of Domestic Violence. The Park Board will meet at 6 p.m. Wednesday, Oct. 10 at 6 p.m.

MOTION MADE BY DANEKAS, SECONDED BY DANEKAS to adjourn at 7:15 p.m. AYES: DANEKAS, PORTER, RIVARA, MAYOR FINLEY. MOTION CARRIED.

____________________________
Becky Clinard, City Clerk