Minutes 07/25/1983 - Laserfiche WebLink

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MONDAY 1 i JULY 25, 1983 -- As a result, there was unanimous opinion among Council and the City Administration to proceed with Phase II-A at a cost of $131,899. In April, 1980, the legal firm of McGuire, Woods & Battle was selected as Bond Counsel. In June, 1980, Council selected Wheat First Securities, Blythe, Eastman, Paine, Webber, Inc., and Saloman Brothers to serve as Financial Advisors and ultimately to do the Bond Underwriting. What was it that persuaded Council to "stay the course"? - I remember when the $40 million price tag was first mentioned and Francis West started shaking his head. (You see, Francis usually deals in just one million at a time.) Beside the price tag, there were philosophical differences on Council (Private vs Public Power). Again, why did we stay with it? The subject itself is tough! We tried to grasp the meaning of such electrical terms as Demand, Megawatt, Peaking and Ratchet. In addition, the financing plan was new to most of us. (Ask Barry Greene to explain Ramped Capitalized Interest Concept to you or try "Arbitrage" on your neighbor.) We pressed on because there was a world-wide energy shortage and Appalachian publicly stated that it might have to ration. To off- set its own capacity shortage, Appalachian planned to build two coal-fired plants. The construction costs of these plants (due to the environmental problems) would push Appalachian's rates upward. In addition, water power is a renewable source of power. Let me tell you what this present 80-year-old plant has meant to you and me. In the past 8 years (including '83-'84) by June 1984, we will have transferred $6,265,803 from the Electric Fund to the General Fund. ..an average of $783,225 per year. This is the equiv- alent of 24~i per $100 in our property tax rate. We would have been paying $1.00 today, instead of 76i. These are the actual figures. The $850,000 that we have spent, translated into real estate tax rate, has cost us between 3i and 4i per $100 on an annual basis ($850,000 + 8 years = $106,250 per year). The Electric Fund today has $1.9 million in Escrow and a forecast surplus for 6/30/84 of $1.8 million. All this from our 1.0 megawatt plant. Ridgeway was slated to be a 20 megawatt plant (20 times our present plant). In addition, in the early days of this project, one study predicted that the new lake would attract 1 million visitors per year. Multiply this by any number of dollars you choose and you can apprec- iate what this might have meant to the area. These numbers are familar to some of you. They are repeated to emphasize the significance of the decision that Council must make.