SILOAM SPRINGS — City directors approved a payment plan with the Grand River Dam Authority for the costs incurred during the winter storm in February.
According to a staff report prepared by City Administrator Phillip Patterson on Aug. 10, the city will make four quarterly payments of $963,939 and not pass the $3,855,758 the city owes GRDA onto utility customers, the report states.
The board voted 6-1 in favor of the proposal with Director Reid Carroll voting against it. Payments will begin either in the fourth quarter of 2021 or the first quarter of 2022, the report states.
Originally on the consent agenda, the payment plan was pulled off by Director Mindy Hunt. She said the plan Patterson proposed at the previous city board meeting Aug. 3 to pass the cost onto consumers was just a plan.
“It was presented to us for our feedback, not for a vote, and as part of that plan, consumers would have paid back their share of what was used, it was not a tax,” Hunt said.
Hunt also said there was no precedent for using reserves to pay off the debt.
The city director said she spoke to several residents and heard mixed feelings on the issue.
She did say she would like Patterson to show the board how using reserves will impact the city’s future plans, particularly street improvements.
However, Hunt said she was in favor of the city absorbing the cost. She said the winter storm was an extraordinary event, but the fact that it happened during the coronavirus makes it even more extraordinary.
“The combination of the two events has increased living expenses for all of our citizens, so if we can do something to help I am in favor,” Hunt said.
Director Brad Burns said he hopes the board will stand together if projects get pushed back because of using the reserves to pay the debt. Director Carol Smiley said she initially was in favor of passing the cost to the citizens, but she also appreciates what Hunt said.
Smiley said she hoped this didn’t take away from street repairs. Carroll said he was glad there were seven directors to help make a good decision.
He went on to say not everyone in Siloam Springs has all electric homes.
“Some of us have gas, and to me to see it taken care of out of reserves, that kind of gives a windfall to those who have electric only, not that we’re throwing money at him what have you, but I feel like it’s not an equitable distribution,” Carroll said.
Carroll said he felt the city could do something that might be a little more than that, although he did not say what that “something” might be or what an equitable distribution would look like.
Making this an equitable distribution would require more than just taking it out of reserves, Carroll said.
Carroll went on to say he is not here to fight against the decision or rant against it, but Carroll said he would like the board to make a wise and informed decision.
Director David Allen, said the city has $13 million in utility reserves with a $7 million minimum for that account and $20 million in the general fund reserves with a $5 million minimum for that account.
He questioned why the city needs to borrow money from the utility account for street repairs.
Allen also said the city is a nonprofit business, which is different from a for-profit business that can easily pass the cost off to its customers.
“This is why money is set aside is to cover acts of God,” Allen said.
He went on to talk about how the city could have a second revenue from broadband service in 2012 and how the funds from the hospital sale was supposed to be set aside for an emergency.
“It was the sale of a city-owned asset, and I will explain once again this city is owned by the taxpayers, the citizens that reside within the city limits,” Allen said.
After a few more minutes, Burns initiated a call to order because he did not know how this related to GRDA. Allen asked Burns if all of his points had to do with GRDA, but Mayor Judy Nation reminded Allen that the point of order had been called and all discussion had to cease.
The board voted in favor of the payment plan.
City directors also approved the following items:
PRESENTATION
• Donation of $3,750 by the American Legion Family for the ADA (American Disabilities Act) fishing pier and kayak launch.
CONSENT AGENDA
• Workshop minutes for the Aug. 3 workshop.
• Regular meeting minutes for the Aug. 3 meeting.
• Dedication of utility easements for 717 N. Mount Olive St.
• Purchase of a John Deere 550 K Crawler Dozer from Stribling Equipment for the water and wastewater department in the amount of $124,876.
• Purchase of a Hitachi Excavator from Stribling Equipment for the water and wastewater department in the amount of $130,729.
• Budget amendment to purchase vehicles from Old Fort Harley-Davidson for the police department in the amount of $24,146.
• Property purchase and utility easement dedication in the amount of $10 for the electric department of the Moss substation.
PURCHASES
• Change Order No. 2 with Burns & McDonnell Engineering Company Inc. for the water and wastewater department in the amount of $876,219.
• Budget amendment for the purchase of a qualification turning target system in the amount of $39,933 for the police department.
APPOINTMENTS
• Appointment of the Sager Creek Advisory Committee.
ORDINANCES
• Placing Ordinance 21-16 regarding the rezoning from R-2 (Residential Medium) and R-3 (Residential Two-Family) to R-4 (Residential Multi-Family) on its second reading.
• Placing Ordinance 21-17 concerning the amendment of the zoning code with regard to private drives and sanitation on its second reading.
• Placing Ordinance 21-18 regarding body art businesses on its second reading with Burns voting against the ordinance.
STAFF REPORTS
• Subdivision and housing construction update.
• American Rescue Plan Act funds recommendation.
• Administrator’s report.
Marc Hayot can be reached by email at [email protected] .