Hillsboro makes adjustments due to energy prices

The City of Hillsboro Council met on Tuesday, April 6 where they voted to slightly increase the electrical rate ordinance to allow for the collection of surcharges related to the February 2021 winter storm charged to the city by Kansas Power Pool (KPP). The KPP was able to use their emergency funds to keep the power on and help out Hillsboro and other cities.

While the ordinance was approved at the meeting, customers will not see the charge on their bills until the first of June. The June bills reflects energy usage from mid-April to mid-May.

City Administrator Matt Stiles explained that the surcharge for February 2021 was $19,021.76. While we don’t have the actual bills for months of March, April, May, we can estimate those based on the average from the last three years. The average of the last three years for March would be a cost of $18,070.56. The average of the last three years for April would be a cost of $17,124.04. The average of the last three years for May would be a cost of $16,146.53. The estimated total cost of the surcharges for the months of February, March, April and May would be $70,362.89. This is an estimate and the actual numbers will be reported and collected as they come in. That money would be paid by the fund and then recuperated by extending the end of the surcharge.

It is estimated that the increase will be for around 24 months and then the normal rate will resume.

Residential and commercial monthly rates inside city limits will be $0.1195 per kWh with a base charge of $12.10 per month.

Residential monthly rates outside city limits will be $0.1195 per kWh for the first 4,000 kWh and then $0.1250 per kWh for all over 4,000 kWh. There is also a base charge of $12.10 per month.

For temporary service which means use of electricity for temporary purposes or services connected for short periods of time not to exceed 90 days, the base charge is $18.00 per month and $0.1195 per kWh usage.

The council met as the Public Building Commission (PBC) and heard from Salem Home CEO Peter Mungai regarding a request for $155,748 for the installation of a new heating and cooling system for the nursing home.

Mungai explained that the old system is connected to both Salem Home and the city-owned hospital and bills reached a high amount this winter with the extreme cold. While Salem Home has done some repairs and paid much out of pocket on other expenses, Mungai expressed concern that the city needed to help with the bills since they own a portion of the building.

Stiles gave a little background explaining that the city has paid separation costs of $101,132.52 since 2018 to separate the buildings.

“There is a question of how much have we contributed already. They split the electrical as much as they could, but the generator that we have is also the backup generator that they (Salem) are currently using. According to Elcon, once their project is finished, they will be completely split electrically,” said Stiles.

Stiles also explained that while the current heating and cooling system does run through both the city-owned old hospital and the nursing home, the city is responsible for the bills for the hospital part. The nursing home would need to be responsible for their portion and for the system they need for their building.

“The anticipation is that they will do what they need to for their heating and air conditioning and we will take care of the hospital side with space heaters for the hospital attic and other necessary methods,” said Stiles.

The city has already forgiven rent that was owed to them by Salem home prior to selling the building to Salem for $1. The amount of rent forgiven was $358,050.

Stiles pointed out that the PBC currently has 195,000 in their account and there are still “hefty” bond payments owed for the new hospital building.

“If you made a $156,000 investment in the HVAC for Salem Home, you will take out a majority of your account.While I appreciate their perspective on it, I couldn’t recommend you doing this project just for the financial impact it would have on the PBC. I also don’t think it’s our responsibility to provide HVAC for their wing,” said Stiles.

“We are going to have our own costs for heating the hospital space let alone any additional costs we would take on,” pointed out Councilman Brent Drigger. “If we took this on, we would have to find somewhere to get the money.”

“Right, I recommend you not do this,” said Stiles.

The council spent much time debating it and both Stiles and Mayor Thurston expressed thankfulness for Salem Home.

“I have been nothing but impressed with the job that you have done there, Peter. You took something that was teetering on the edge and have made it better. I understand the passion that you have for Salem Home and the passion that you have for your job. I may not support everything you ask for, but I do 100 percent support everything that you have done for this city,” said Thurston.

Thurston went on to say that the city has already spent a substantial amount of money to help Salem Home and doing more just isn’t feasible at this time.

“The hard fact is we don’t have the money. The money’s just not there. The city did forgo 55 months of rent which equals $358,050. It was critical to do that so we could keep Salem Home going,” said Thurston. “There just is no money.”

The PBC decided not to help in order to preserve the funds for paying off the bond.

Stiles updated the council on COVID-19 Vaccines. He said that the city has hosted one Marion County Health Department POD and several Hillsboro Community Hospital vaccine clinics.

“Vaccines continue to be distributed as more vaccine comes into the county. We will continue to work with health care professionals to expand access to vaccines,” said Stiles.

Stiles stated that the city has completed hiring for most of the open positions.

“To fill the Golf Course Superintendent spot, we’ve hired Avery Unruh. Avery is scheduled to start with us on April 12 and work with Gary through the rest of year. The sewer and water department have hired Shane Ringle to fill the trainee position. Shane will be moving to town with his family and will start once he is able. I have hired Danielle Bartel to fill the City Clerk position. Danielle will be starting at the end of April and work with Jan until taking over in mid-June. As of Friday, April 2 the Front Desk Clerk position is not filled, but we have completed interviews,” said Stiles.

Representatives from Bomgaars, the store opening in the old Alco building, will be hosting a hiring fair on April 21-22 in west room of City Hall. The regional manager indicated that they have hired a store manager and will be looking to fill a few dozen positions to work at the store. More information can be found on Bomgaars website, www.bomgaars.com/content-box-events/.


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