Council considers water rate increase, purchases property

Springfield City Council was presented with City Utilities' proposed fiscal 2010 operating budget during its Sept. 8 meeting, and while expenditures are down from the current year, the budget also includes an increase in water rates.

The budget, not including costs for the Southwest Power Station expansion, comprises $440 million in expenditures, down from $444 million in the revised fiscal 2009 budget. Expenses include $196 million in fuel costs and $193 million in noncapital expenditures.

Lisa Officer, vice chairwoman of the Board of Public Utilities, told council that expenditures were kept in check through a combination of delaying unnecessary expenses and reducing base staffing levels. Staff totals are expected to shrink by 20 to 1,026 employees, according to previous SBJ coverage.

The utility also proposed increasing water rates by 8 percent a year during the next three years. The increased rates would pay for infrastructure improvements; utility officials say 28 miles of the 1,200 total miles of water lines are more than 100 years old, while more than 200 miles are at least 50 years old.

Ron Ponds, a former CU board member and former member of the CU Citizens Advisory Committee, said the rate increase is necessary.

"Our infrastructure needs work, and a big part of this increase goes toward improving that infrastructure," Ponds told council. "As consumers, when we want something, we want it right now. When we turn that tap, we want water."

Council is expected to vote on the water rate proposal at its Sept. 21 meeting; the budget will be considered at council's Sept. 22 luncheon, due to charter requirements that two weeks must pass between first and second readings on budget bills.

Land purchase

Council approved the purchase of the former Springfield Mill and Lumber facility at 216 W. Central St.

The property, which is in the footprint of the city's Government Plaza, became available when M. Lloyd Wright and Martha Wright closed their business earlier this year.

The $1.5 million purchase will be funded through $1,473,900 from the U.S. Housing and Urban Development Economic Development Initiative, which is designated for property purchases in the Jordan Valley area. The remaining funding comes from $26,100 in level property tax money earmarked to acquire property in the city's Vision 20/20 long-range plan.

Mayor Jim O'Neal said there has been some confusion about the purchase price and value of the property; the county assessor's site lists the appraised value of the land at just less than $700,000.

O'Neal said the city is required by federal law to negotiate in good faith with potential sellers and to offer a fair market price. He pointed to a listing of the property by Bill Beall Co. for nearly $1.9 million.

"I was on council when the plan was approved to expand the government plaza area in 1991," O'Neal said. "Here we are with an opportunity to buy the land from a willing seller with money that we wouldn't get otherwise, for the express purchase of buying land in the Jordan Valley redevelopment area. When this land became available, it jumped to the top of our list."

City officials have not decided on the exact use of the land, but they said the purchase had to be made before the HUD grant money expired Sept. 30.

City finances

In the city manager's report, Greg Burris said sales tax receipts for September totaled $4 million, down 10.33 percent from the same period last year.

The receipts cover purchases made in June and July as well as sales at businesses that report sales quarterly. The drop puts the city down 9.75 percent for the year.

"The city has taken some steps to mitigate the losses; we have continued the hiring freeze, which has led to additional savings in the first quarter," Burris told council.

Burris plans to meet with the management team so that he can have an analysis of the city's current financial status ready for council's Sept. 22 lunch.

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