Hillsboro council agrees to create utility reserves

?Decision is first step toward official plan

Hillsboro City Council members took the first step toward developing a cash reserve policy for the city?s four utilities by agreeing unanimously at the Dec. 16 meeting that having such a policy is important.

Hearing the council?s direction on that specific question was all City Admin?i???strator Larry Paine asked for when he reopened the discussion from the Dec. 2 meeting.

At the earlier meeting, Paine made the case that having sufficient cash in reserve was a sound business practice. In the event of a natural or mechanical emergency, the reserve funds could be used to continue basic city services: electricity, water, sewer and refuse removal.

Paine said an added benefit for the city would be a more favorable bond rating from Standard & Poor?s, which recommends that a city have 90 to 120 days of reserve funding on hand. A city?s bond rating affects the interest rate it pays when bonds are used to cover the cost of major projects.

Paine reported at the previous meeting that Hills?boro?s water utility currently had cash reserves to cover 10 days of operation and the electric utility had enough for 11 days.

Authorized by the council?s vote to develop a policy draft, Paine was prepared to move to the next agenda item. But Councilor David Loewen said he had written a policy think-piece as a discussion starter.

The think-piece called for one policy that would establish a separate reserve fund for each of the four utilities that would cover a minimum of 90 days and a maximum of 150 days.

The second policy required that revenue generated by each utility be used only to address the needs of the respective utility ?and not spent on other city ?needs.??

It also stipulated that ?the use of utility user fees for other than said utility or its attendant reserve fund shall be considered a misappropriate of funds.?

The council did not discuss the think-piece, but some members did indicate general affirmation of its direction.

Other business

In other business, the council:

? approved a 2 percent increase in the price of water the city sells to Pea?body, effective Jan. 1. Paine said he talked Peabody leaders about the need for the increase a few months ago so they could incorporate it into their 2015 budget. The contract was approved by the Peabody City Council April 14.

? the council approved a lease purchase agreement for the city to acquire a ?box blade tractor? to will be useful for street repairs and other projects. The 2013 John Deere tractor and box blade was available for government-discount price of $71,500. A brand new machine would list for just over $100,000, Paine said.

? approved a leasing contract for $3,500 through White Equipment for use of a skid steer loader. The new rate is $1,063 lower than the previous lease, thanks to the negotiation effort of Dale Dalke, street supervisor. The city will use the loader for one year, then trading it for a new one.

? approved the mayor?s appointment of Rod Hamm to the Hillsboro Recreation Commission and the reappointment of Krista Hein?richs and Jessi Nickel to the Board of Zoning Appeals.

? approved, pending a positive review by Police Chief Dan Kinning, renewing cereal malt beverage licenses for the Hillsboro Gold Association, Heartland Foods, Casey?s General Store and Cooperative Grain & Supply-Ampride.

? approved Resolution 2014-13, which adjusts map boundaries to fit the legal description of the city limits. The city engineer had identified some inconsistencies with the existing map.

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