Springfield, MO

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CU salaries factor into rate-increase opposition

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City Council members approved a bill related to a trio of City Utilities electric rate increases by a 5-4 margin. Members said votes were swayed based on such pros as the competence of the CU staff to such cons as the limited options available for struggling customers who cannot afford to pay higher bills.

At Springfield City Council’s Oct. 18 meeting, council extended the public hearing on the rate increases. The 11 residents who addressed council were as divided in their remarks about the bill as council members themselves; five spoke in favor and six voiced opposition.

“I know, as a small-business owner, I made huge cuts and sacrifices for my business to keep going, and I would hope CU would do the same,” said Dennis Cox, co-owner of Cox Auto Group.

City Utilities fiscal 2011 budget of $520.7 million includes plans to delay $51.6 million in spending during the next four years, including $21 million for capacity-related projects. Other savings are in maintenance and employee benefits, as well as a hiring freeze for noncritical positions. Springfield Business Journal reported in September that CU had 79 positions left unfilled and had frozen wages for nonunion employees two years ago.

Speaking in favor of the increases was Ryan Mooney, senior vice president of economic development for the Springfield Area Chamber of Commerce.

“Reliable, affordable power is essential as we market Springfield across the country,” Mooney said. “To the decision makers with the corporations and with the consultants that they hire, our utilities are certainly perceived by those folks as an asset.”

For resident Carl Herd, CU salaries indicate the organization had room to tighten budgets before it asked customers to pay a series of three rate increases totaling 7 percent for residential customers and between 2.5 percent and 7 percent for commercial customers. According to Herd’s calculations, which were based on salary breakdowns provided by the utility, 500 CU employees earn annual salaries of $60,000 or more. He noted that CU custodians can make up to $31,000 a year, while a beginning teacher with a bachelor’s degree earns $33,000 annually.

“A meter reader makes $58,000 a year, a teacher with a master’s degree and 30 years of experience makes $58,000,” Herd said. “Could you believe that CU could absorb this rate increase for a period of time?”

Council members Cindy Rushefsky, Nicholas Ibarra, Doug Burlison and Dan Chiles cast dissenting votes. For Ibarra, who told a story about two struggling, working parents, the CU salaries did play a role in his decision.

“How do I tell that mother that she needs to suck up a rate increase and eat cake, when there are meter readers making more than people with master’s degrees (and) custodians making more than teachers? You tell them that,” he said to his council peers.

Councilman Scott Bailes voiced sympathy for people struggling with the economy, but he noted that economic conditions aren’t the responsibility of CU.

The first, 3 percent rate increase will take effect in October 2011.

Orthopedic plans
With an 8-1 vote, council approved a preliminary term sheet which lays out the development agreement between the city and Sisters of Mercy Health System related to the development of an orthopedic hospital for St. John’s.

According to city Economic Development Director Mary Lilly Smith, construction of an east-west arterial across southern Greene County has been discussed for years. The construction of the hospital at the southwest corner of Highway 65 and Evans Road would require the construction of Phase I of the arterial.

According to the agreement, Mercy would grade the project site before dedicating the right of way to the city. The city would take responsibility for the remainder of the construction project, with Mercy contributing up to $3 million, Smith said, and the city paying for the parcel and acquisition of the right of way. A Transportation Development District also would be formed on the Mercy-owned property, she added, noting the TDD would allow for a half-cent sales tax to cover the cost of design, right of way and construction in Phase I.

She noted that Mercy expects to begin mass grading in January and begin the two-year, $104 million construction project in April.

The cost of Phase I has yet to be determined, Smith said, adding that varying appraisal values for the right-of-way parcel had delayed the estimate.

Councilman Ibarra cast the only negative vote, stating his hope that the wrinkles would be ironed out before council’s next discussion of the project.

Council will consider the development agreement for the proposed hospital on a first reading during its Nov. 1 meeting, Smith said. The health system’s acquisition of 30 acres at Highway 65 and Evans Road by is contingent on council approving the development agreement with the city.

Brewery abatements
Springfield developer Jeff Schrag is hoping council members will declare an area near the intersection of South Grant Avenue and West Walnut Street blighted, which would authorize a tax abatement agreement between the city and Schrag’s Ozark Mountain Redevelopment Corp.

Schrag plans to build a $1.7 million microbrewery at 727 W. Walnut St., with parking in a lot across the street. The brewery is expected to employ as many as 20 full-time workers, said senior planner Matt Schaefer, noting the 25-year agreement would allow for 100 percent abatement on real property taxes and any improvements to the property for the first 10 years,
with a 50 percent tax abatement on the land and improvements for the next 15 years.

Council will vote on the bill at its Nov. 1 meeting.
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