City Council opts to pay off $7 million Hydro debt in five years

9 months ago by Jamie Busen, QuincyJournal.com and WTAD News

The plan takes $490,390 a year from capital funds in the city budgets in 2014, 2015 and 2016

The Quincy City Council Monday night approved a five-year plan to pay off the bonds used in the City's failed attempt to put a hydro plant at Lock and Dam 21.

The Council approved 11-2 the resolution, known as Option 3, that outlines how to pay off the more-than $7 million debt.

Third-Ward Alderman Kyle Moore and Seventh-Ward Alderman Terri Heinecke, both Republicans, were the "no" votes. Fifth-Ward Alderman Jennifer Lepper was absent.

Months ago, Moore got talks started by presenting his own plan. His called for using unspent money to pay down the bonds, refinancing the remaining debt, utilizing Ameren franchise revenues and trimming the general fund's expenses and expenditures.

The two series of bonds are due in 2012 and 2015. The first payment, for nearly $5 million, must be deposited into an account no later than Dec. 1 of this year.

The approved plan uses $1.45 million from the City's cash reserves, $400,000 from enhancement funds and $200,000 from the Ameren franchise fee. It also takes money from the Capital Projects Fund including $120,000 obtained by delaying the training facility project for a year. About $65,000 comes from a sidewalk project on North 12th Street. Director of Administrative Services Gary Sparks said they don't have the engineering done on the project, anyway, so it's on hold. More savings comes from two police cars and a snow plow, and Sparks said Mayor John Spring surrendered his City car back into the police fleet.

"We're still going to be able to fund almost every major project that we've got on for this construction cycle, even with pulling these dollars back," Sparks said.

The city will also put the remaining $2.9 million in unspent funds from the bonds in a trust and use the money to help pay off the bonds. According to the plan, no new taxes would need to be levied.

"I'm very happy with the plan," Sparks said.

The plan takes $490,390 a year from capital funds in the city budgets in 2014, 2015 and 2016.

Moore said he agreed with the financing part of the plan "100 percent" and is glad taxes won't be raised - his reason for voting no was his concern with how the debt is being paid for.

Passing off $1.5 million dollars worth of capital cuts to future Councils and administrations is something he doesn't agree with.

"My preference would have been to earmark 100 percent of Ameren revenues through 2016," said Moore, who had consistently voiced his concern over the hydro project proposals. "It's my preference that we identify how we are going to pay for this plan. It's great that any excess revenue is going to pay for the debt. But we don't know if revenues are going to be over and above our expectations."

Earlier this year, the City signed a 10-year franchise deal with Ameren Illinois that brings the City $3.7 million.

Heinecke said she voted no because Option 3 takes out enhancement dollars.

"That's what I really don't like. My Ward needs those dollars, and I can't get done what I need to get done. Kyle's plan didn't make those cuts," she said. "Enhancement dollars are very important to the Seventh Ward."

She cited horrendous alleys and crumbling sidewalks in her part of the City as a reason she didn't feel comfortable voting for a plan that pulls money.

"That was the big drawback," she said.

In other business the Council approved a resolution authorizing the lease of an office area inside the restaurant space at the Quincy Regional Airport. The lease comes with the stipulation that if a party is interested in the restaurant portion, AgIntellex Inc. will vacate the area.

In new business, Council heard a storm cleanup update from City Engineer Jeff Steinkamp. He said about 35 tree trunks were uprooted in June's storm, and those are being taken care of over the next few days. The City will then start taking care of the damaged sidewalks. Concrete may not be poured just yet, but crews will be adding gravel and soil to make them passable for the time being.