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Hydro plant to go to June bond election
by Lisa Boshell
Feb 02, 2011 | 772 views | 0 0 comments | 3 3 recommendations | email to a friend | print
PAROWAN – The city council decided last week to call a special election allowing residents to vote on a general obligation bond that would fund the Center Creek Hydro Plant.

The council was given a recommendation from the power board that the council use the least expensive option, to move the hydro plant further up the canyon. Several options were proposed by Dominion Engineering Associates of Murray, who were hired as consultants on the project.

Mark Edminster, a financial advisor for the city on the possibility of issuing bonds, presented to the council the option of calling a general obligation bond for the project, which would have fewer restrictions and would allow the city to refinance an old bond for the city’s power system with much lower rates. Edminster said the general obligation bond would be the cheapest financing available for the project.

While the project was initially hoped to cost $1.25 million or less, Von Mellor, electrical department supervisor, said in order to do the complete project including rebuilding the pen stock, the project would actually cost $1.7 million and would probably not pay for itself.

Councilor Troy Houston expressed his concern that the hydro plant would not be a good investment for the city, as it had been discussed at previous meetings that any project over $1.25 million may cause power rates to increase.

Houston made a motion that the council decommission the current non-functioning hydro plant and not move forward with the proposed hydro plant project. Councilor Mary Halterman seconded the motion, but Councilors Steve Decker and Dennis Gaede voted against the motion. Since Councilor Diane Lister was ill and absent, Mayor Don Landes had to make the determining vote and also voted against the motion.

Decker then made a motion to call for a general obligation bond to refinance the existing power bond and finance a new bond to fund the complete project, including the pen stock.

“Let’s let (3,000) make the decision instead of six people,” Gaede said regarding the bond election.

A resolution to set the parameters for the general obligation bond election will be voted on at the next meeting, Feb. 10. The election will take place in June.

The council also heard from Decker regarding a sewer billing issue that was raised at the last council meeting, in which some residents were being charged sewer fees though they were not hooked up to the sewer line.

Several options were given to resolve the issue, including leaving the ordinance the way it stands, requiring anyone living within 300 feet of a sewer line to pay a monthly fee; changing the ordinance to require a hook up within 30 days of a new sewer line being installed; or giving residents the 2011 calendar year to hook up to the sewer line with the connection fee being waived.

One issue that was extensively discussed was whether or not the monthly fees should be waived during the one year grace period, as the loss of those fees would cost the city $10,000 in income that is needed to pay the bond financing the new sewer line.

The council decided that further information and discussion was needed on the issue before making a formal decision.

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