by Larry Patrick
WALSENBURG- In a special meeting on Wednesday night, the City Council was to vote whether to ask residents to approve taking a half million dollars out of the Power Trust Fund to help pay for the cost of the new waste water treatment plant. The council was expected to approve the idea since they have a deadline of this Friday to put such a proposal on the November ballot for consideration.
At Monday night’s finance meeting, City Treasurer, Jacque Sikes, presented the proposal to the full council. The City is approximately $650,000 short in paying for the new sewer plant. That is using the $3.8 million they have banked for the project plus the $514,680 from the sale of the Kincaid Ranch earlier this year. The cost of the project is $4.9 million if there are no additional changes that could add to the cost. The city is hoping that taking the money from the Power Trust Fund would leave them with a debt of only $140,000 to pay the project off.
The Power Trust Fund was set up from the sale of the city’s power plant to San Isabel Electric in 1989 for 1.3 million dollars. In the past, the city of Walsenburg has asked voters to approve taking out $400,000 for paving projects and $400,000 for the building of the water park. If voters approve taking out the $500,000, it will empty the fund balance.
Sikes told the city council the other alternative would be to pay the shortfall for the waste water treatment plant out of the various city fund balances sending them to zero and relying on sales tax revenues being high enough to fund operations. Sikes believes taking the money from the Power Trust Fund is less risky and fairer because the monies benefit all the citizens and the new state-mandated sewer plant benefits everyone.
Former city administrator Alan Hein was exploring whether the contractor would loan the city money, at interest, to cover the shortfall. This is a practice that has been done in other developments across the country. It is not known if Hein explored this alternative fully prior to his leaving. Large contractors will often work with their clients when shortfalls exist, but with the nature of the economy and the inability of many businesses to secure money from banks, this option may or may not be available or preferable to the Trust Fund proposal.
The city does not have enough financial reserves on hand to get loans from banks to pay off this project. The city council had to act Wednesday night if they wanted to get this issue on the ballot by the Friday deadline to be considered in November by voters.