Peabody residents will likely face a slight increase in sewer charges to accommodate a plan to pay back a cash deficit created by a mercury remediation project and to build a fund for sewer line replacement.
During budget workshop discussions Monday evening, the council considered issuing $250,000 in general obligation bonds with an annual principal and interest payment of about $22,000 for 10 years. The bonds would “pay back” money the city borrowed from itself to pay for cost overruns when mercury was discovered in the former sewer plant and removed per KDHE regulations.
The increase in sewer charges will pay off general obligation bonds and allow the city to build-up a fund for sewer line replacement.
A sewer fee increase of $2.50 per customer will be implemented about Sept. 1, followed by another $2.50 increase Jan. 1.
In late spring of 2010, the council will review the plan in conjunction with budget talks and see whether another $2.50 increase is warranted for June 1 or whether money could be taken from another area in the city budget.
A final increase, bringing the total to $10, could go into effect Jan. 1, 2011, if there is no other way to fund bond payments and sewer replacement.
The cost for replacing a block of sewer pipe is about $18,000. The city does not have the money to replace more than one block a year.
In 2008, it had to replace three blocks, and money to do so had to be transferred from other areas.
Most of the sewer pipes in Peabody are 100 years old. Many of those that have been replaced are 60 or 70 years old.
Council members anticipate the increase in sewer charges will generate about $60,000 a year — enough to make the bond payment and add to the sewer replacement fund.
In other business:
- A request for bids to sell the former shop building was reviewed. The minimum bid was changed from $10,000 to $5,000 with a submission deadline of 5 p.m. Aug. 27.
- The amount of required liability insurance for local contractors will be reviewed. Next month, the council will review the ordinance and discuss possible changes.
- There are no written plans for the intersection at Second and Plum streets. City administrator Mac Manning reported that he talked to Union Pacific Railroad about engineering plans to repair drainage and crossing problems at the intersection. Manning received oral assurance that drainage work and repairs would be done correctly, but the work is being subcontracted to another company and the railroad would offer the city no written guarantees. Manning and Public Works Director Darren Pickens will talk to the contractor about repair plans and the city’s concerns. Police Chief Bruce Burke will photograph the street and crossing before construction begins.
- Discussion with the county about the purchase of supplies to repair a bridge on Fifth Street continues. Manning will ask the county commission to provide assistance or will attend a meeting to discuss the issue. Bridge plans were tabled until the next city council meeting.
- A new sewage grinder pump is on the way, and work will begin on the alley in the 300 block between Sycamore and Maple as soon as the rain stops for a significant time.
- New truck parking signs on First Street have been installed, and new truck route signs are up. Burke said there is only one parking spot for a refrigerated unit, and the city will likely have to find more. No action was taken. By city ordinance, it is against the law to park a refrigerated trailer in city limits.
- Burke noted an increase in vandalism at City Park. Officers have been patrolling more there and downtown. It was suggested they do foot patrol.
- Health and safety officer Tammy Whiteside presented a sample letter to be sent to property owners about trimming trees that hang over streets and sidewalks. After discussion, the council agreed that giving homeowners 10 days to get the work done was unrealistic. The ordinance will be reviewed at the next meeting.
- Nuisance properties were reviewed. Properties adjacent to city entrances were added because of overgrown grass and weeds.
- City court clerk Cindy Harms will attend a free training session at Sedgwick County sheriff’s department Thursday.
- Burke will attend a free training session for identity theft investigation August 13 and 14 in Des Moines.
- Manning said that more people are paying their water bills late. He thinks it is related to the economy. Payment deadlines and shut-off penalties were discussed, but no action was taken.
- The city received a $2,200 refund from its worker’s compensation insurance based on the description of Manning’s position as city administrator. Since he does not physically supervise the public works crew on site, the premium for his job is less.