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Kahoka Council Explains Electric Rate Increase At Public Hearing

Kahoka Council Explains Electric Rate Increase At Public Hearing

By Mike Scott

“It’s something we’re not happy with, but it’s something that has to be done, ” Mayor Herb Butler said at Monday night’s public hearing on the city’s electric rates. The city is raising it’s electric rates by one cent per kilowatt hour, a move which will cost the average Kahoka household about $12 per month, starting next month.

Kahoka resident Jill Shinn questioned the board about its stepped increases, which started last November.

“Have you already started paying the higher rates?” Shinn asked.

Board members answered that the wholesale rate the city pays won’t change until January 1, 2009, but that they currently do not know what the new rates will be.
Shinn then questioned what is happening to the money generated by the higher rates already being charge electric customers. The answer: It’s in the bank. Since August, 2007, the balance in the electric fund has increased from roughly $391,000 to $600,000.

“We have to make money or the city will not survive,” Alderman Larry Young said. “It’s not just the wholesale cost of electricity that’s increasing, it’s wire and poles and people.”
Fuel costs have increased dramatically. The city recently used 3000 gallons of diesel fuel while generating electricity-a cost of over $12,000
“That surplus could disappear overnight if we had to replace a motor,” Butler added.
Current estimates are that when the new contract with Ameren UE takes effect January 1, the city’s cost will increase approximately 89 percent, which is why the city has been building it’s electric account balance with the stepped increases. Another increase is expected early next year, after the wholesale cost from Ameren UE is known.

“I think you should have waited until then,” Shinn said.

“So if we had a 50% increase or more all at once, would that have been better?” asked Alderman Curtis Mack.

Next on the agenda, a public hearing was held to discuss a possible conflict of interest with the CDBG Demolition Grant. City Assistant Jim Sherwood has a property which he would like included in the demolition, but wanted to make sure there was no conflict of interest.

Attorney Rick Roberts stated that there should be no problem because Sherwood does not make the decision, and the Sherwood’s property would be considered only after any
other eligible properties. His would be the last property demolished with available funds.

In regular business, the council:
–Approved a bid of $1470 for a drive-up drop box for utility payments. The box will be located behind city hall.
–Approved a bid of $5668.25 for metal culvert tubes.
–Decided to re-bid the replacement of 32 sections of sidewalk damaged in the city’s waterline replacement project.
–Accepted the low bid for a small pickup truck for city use. The low bidder was Advantage Auto of Kahoka, for a Chevrolet or GMC Colorado for $15,928.
–Approved removing two trees from private properties because they threaten electric and cable lines. The property owners will pay one-half of the cost.
–Approved changes to city’s wage ordinance.
–Approved the voluntary annexation of the Joe and Ann Edlen property into the city.
–Approved building permits for Bill Conger, Joe Roberts, Boyd Woods and Daniel Vineyard.
–Fire Chief Lary Fountain requested that all fire hydrants be painted yellow. The council gave its approval.
–Accepted a bid of $2700 from Sturm’s Garage to paint the city’s new Fire Department equipment truck.
–Discussed whether cemetery policies should be the form of an official ordinance.
–Agreed to work with Dadant to get their utility bills to them as quickly as possible to help them avoid a late penalty, as their payments come from out of state.