The Elkton City Council met in special session on Wednesday, February 23, 2011 with Mayor Nancy T. Camp presiding.
City Council members present: Eugene Jefferson; Doug Gibson; Jimmy Scott; Danny Laster; David Powell; and, Cindy Sidebottom.
Others present: City Clerk/Treasurer Laura Brock; and, Utility Superintendent Terry Frogue.
Mayor Camp called the meeting to order at 5:00 PM and reminded the council only items on the agenda can be discussed.
Agenda
1. Sewer Line Extensions and KIA Loan
2. Water Loss
3. Commerce Street Development
Clerk Brock informed the council that KIA has modified the loan conditions for the three sewer extension projects (West Main Street; Highway 68/80; Commerce Street) which will cost the city approximately $141,000. KIA will now require a 10% sewer rate increase immediately instead of the original 16% increase. Brock believes that KIA would allow a 5% increase immediately and 5% next year, if requested. Also, KIA might allow a review of the second rate increase if the city could prove there is sufficient revenue to pay the annual loan payment of approximately $8,200. The sewer department annual revenue is about $415,000. Therefore, a 5% increase would bring in an additional $20,000 in revenue. A 5% immediate rate increase would increase the minimum sewer bill by $1.25 per month. If the city used reserve funds to pay the construction cost we would lose about $4,752 in investment income each year. Clerk Brock stated that if reserve funds are used to pay for the project instead of the loan, she estimates that the sewer rates will need to be increased by 6% in the next two years. There was also discussion that reserve funds will be needed in the future to apply for grants and loans to replace sewer mains that are deteriorating and need replacing. After much discussion, Mr. Gibson motioned to apply for the 1% interest loan through KIA if the sewer rates can be increased 5% immediately and 5% next year, with a request to negotiate the second rate increase. Motion seconded by Mr. Jefferson. Voting in favor of the motion were Gibson, Jefferson, Scott, Powell and Sidebottom. Voting opposed was Laster. Motion carried. After further discussion, Mr. Scott motioned to bring the loan application back to the council for discussion if they do not allow the sewer rate increase to be applied 5% this year and 5% next year. Motion seconded by Mr. Laster and carried unanimously.
Clerk Brock reminded the council that bids for the West Main Street and Highway 68/80 sewer extensions were received on January 14, 2011 with the following bids received:
1. Garrison Construction $ 67,146.30
2. Charles DeWeese Construction $ 76,231.34
3. Twin States Utilities $ 76,582.00
4. Scott & Ritter $ 79,095.00
5. Cleary Construction $ 84,610.00
6. Creative Concrete $ 137,967.68
Clerk Brock stated that McGhee Engineering has reviewed the bids and based on past work experience recommends awarding the project to Garrison Construction. After discussion, Mr. Powell motioned to authorize the Mayor to sign the Notice of Award giving the contract to Garrison Construction at a cost of $67,146.30. Motion seconded by Mr. Jefferson and carried unanimously.
Mr. Frogue reported to the council that a large water leak was found in Laster Subdivision and repaired last week. He estimates water was leaking at least 25 to 35 gallons per minute, which equals approximately 1,000,000 gallons per month. However, we do not know if the line had been leaking for several months or a few days, therefore it is unknown how it will affect the overall water loss in the city at this time. Mr. Frogue discussed that all of the 5/8 inch meters in the city have been replaced, which accounts for approximately 66% of water use in the city. The remaining 34% use in the city is from larger meters that are older and may be running slow. Mr. Frogue requested $10,000-15,000 in funds to spend on new 1” and 2” meters that will more accurately measure water usage and to test the rest of the larger meters to see if they should be replaced. There are currently no more funds in the budget for these type expenses. Mr. Frogue stated that this amount will get him started and he will return to the council with the results of testing and any other expenses that might be needed to help find water loss. Mrs. Sidebottom motioned to approve expenditures not to exceed $15,000 for new water meters and testing. Motion seconded by Mr. Gibson and carried unanimously.
Mr. Frogue reported the Elkton Planning Commission met to discuss the Commerce Street development with property owner Doug Rose. After the meeting, Mr. Rose is willing to give the city an easement to run the sewer line down the future right-of-way of the Commerce Street extension in order to get to Joey Wells’ property on B. White Road.
There were no other items on the agenda and therefore Mr. Jefferson motioned to adjourn and seconded by Mr. Gibson. Motion carried unanimously and meeting adjourned at 6:00 PM.
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