City approves $450K interfund loan to itself

by Eric Mullens
WALSENBURG — The Walsenburg City Council Tuesday night approved a resolution calling for a nearly half million dollar loan from the municipal gas enterprise to the city’s water and sewer fund enterprises.
The resolution, 2012 R-14, was approved with two changes. The vote was unanimous, with council members James Baca and Rick Jennings absent.
The two modifications were: lowering the interest rate from the proposed two percent rate, to one half of one percent; and changing the words “water fund” to “water / and or sewer fund.”
The resolution allows for a $450,000 loan from the gas enterprise, at half a percent annual interest rate, to the water and sewer fund enterprises to ensure bond indebtness to those funds may be met.
With the closure of the Correction Corporation of America private prison, both the water and sewer funds have been underperforming with the substantial loss of the prison’s revenue stream. City finance director Dave Johnston said the city had adopted a wait-and-see attitude after the prison’s initial closure, but because the private prison firm continues to lay people off around the nation, it is doubtful the prison in Walsenburg will reopen anytime soon.
The funds from the loan will be used as needed to shore up the coffers of the water and sewer enterprise funds as the city continues to work on a new water and sewer rate structure they promise will be more fair to all users and also allow for establishment of a line item within those budgets that will address future infrastructure issues.
The city recently had to address another water line break, this time on Walsen Ave. costing an estimated $10,000.
The city was forced to bid out repairs to this break due to the extreme depth, 13 feet, in which the pipe was buried. Special trench barriers are necessary on a repair of this kind for worker safety. Johnston reported the leak was in a 5-inch cast iron pipe no longer manufactured, and 300 feet of the pipe was replaced with a 6-inch PVC pipe. In addition to the main contractor cost, there was also the cost of air/gas injection to the pipe so the exact locations of the leaks could be determined.
Johnston said three firms bid on the project and the city accepted the mid-cost bid in the end.
In other business, the city council approved, on first reading, Ordinance 1011 that prohibits the re-sale or distribution of city provided water, and prohibits the transportation of water off approved premises without city consent. It also provides for private premises water hauling permits to be issued for a fee.
The ordinance approved has an emergency clause that shortens the time between final approval and implementation.
For specific information on the proposed regulations, note that next week the full ordinance will be published in the Huerfano World Journal, the municipal newspaper of record, then the following week the ordinance will be back before city council for approval on second reading. If the city council approves it then, the emergency clause will allow the ordinance to go into effect the following day.
The city council approved the final contract document with Tetra Tech for the Northlands preliminary engineering report.
Discussions with the city attorney, Dan Hyatt, indicate the city will still have to hold another GID (General Improvement District) election this November that will include the residents and real property owners in the Huajatolla Hills area which is within the GID Northlands area.
On a unanimous vote, the city council approved adoption of the Sheridan, Colo. administrator’s evaluation form. Acting city administrator Beth Neece’s job performance will likely be evaluated in the next few weeks.
In closing comments, Mayor Larry Patrick urged all council members to try their best to attend the next city council meeting, so the issue of the vacant Ward 2 council seat may be addressed.
The city is quickly closing in on a 60-day deadline that would require an election for the open seat as opposed to a council action appointment.