Board of Commissioners Meetings

A Regular April 28, 2015 A regular meeting of the Board of Commissioners of the City of Henderson, Kentucky, was held on Tuesday, April 28, 2015, at 5:30 p.m., prevailing time, in the third floor Assembly Room located in the Municipal Center Building at 222 First Street, Henderson, Kentucky. INVOCATION was given by Mrs. Becky Durham, Youth Minister, Presbyterian Church, followed by Mayor Austin leading the assemblage in recitation of the Pledge of Allegiance to our American Flag. There were present Mayor Steve Austin presiding: PRESENT: Commissioner Jan Hite Commissioner X R. Royster, III Commissioner Robert M. (Robby) Mills Commissioner Jesse Johnston, IV ALSO PRESENT: Mr. Russell R. Sights, City Manager Mr. William L. Newman, Jr., Assistant City Manager Mrs. Dawn Kelsey, City Attorney Ms. Carolyn Williams, City Clerk Mr. Robert Gunter, Finance Director Ms. Kay Mulligan, Revenue Supervisor Mr. Trace Stevens, Parks & Recreation Director Mr. Jerry Vanden-Brook, Assistant Fire Chief Mr. Tom Williams, HWU General Manager Mr. Leason Neel, HWU Chief Financial Officer Mr. Gary Quick, HMP&L General Manager Mrs. Tammy Konsler, Administrative Assistant to General Manager Mr. Randall Redding, HMP&L Attorney Mr. Ken Christopher, HMP&L Human Resources Director Ms. Barbara Moll, HMP&L Comptroller Mr. Wayne Thompson, HMP&L Power Production Director Mr. Steve Smith, HMP&L Transmission & Distribution Manager Mr. Brian Hardesty, HMP&L Communications Director Mr. Brad Bickett, HMP&L Reliability Compliance Manager Mr. Gary Bell, HMP&L Board Chairman Mr. Chris Hopgood, Dorsey Gray Norment & Hopgood Mr. Mike Farmer, 1126 South Main Street Mr. Ron Jenkins, 34 South Alves Street Ms. Margaret Ann Nelson, 714 N. Main Street Mr. Robert Pruitt, 522 Fagan Street Mr. Tom Davis, 603 Cherry Street Pastor Mary Johnson, 1603 Washington Street Rev. David Petrie, 208 S. Adams Street Mr. Ernest Green, 4269 Bishop Lane Mr. Mike Richardson, Police Reserve Officer Mr. Frank Boyett, The Gleaner __________________________ PUBLIC HEARING: OUTSIDE AGENCY FUNDING APPEALS MR. RUSSELL R. SIGHTS, CITY MANAGER, stated that all agencies have been advised in writing on the allocations being recommended by the Ad Hoc Funding Committee. Those agencies that did not receive the amount of funding they asked for, and that either received no funding or some funding can now come forward to the Board of Commissioners to appeal the recommendation of the Ad Hoc Committee. Hearing none. Mayor Austin closed the Public Hearing at 5:34 p.m.  A Regular April 28, 2015 PUBLIC HEARING: ELECTRIC RATE INCREASE MR. GARY QUICK, HMP&L GENERAL MANAGER, used a Power Point Presentation to explain where the utility stands concerning rates in comparison to other utilities and how it now finds itself in a financial hole. He gave details on various historical rate increases, one in 2007 and one in 2009 [for Bond Payments]. Mr. Quick stated that we have the lowest costs in the Commonwealth of Kentucky and made clear that even after rate increases, the utility will maintain a competitive edge. Several members of the general public spoke against the increase. Pastor Mary Johnson, Oasis Forever Ministries, stated that for the past three years she has been clothing, feeding and providing for some people who are falling through the cracks; those who are in that area of making too much money to receive from the government programs but not enough to have for their families. She is concerned over the rate increase being discussed tonight. Mr. Ernest Green felt that it was too much, too quick. COMMISSIONER ROBERT M. MILLS stated that the Board of Commissioners appoint the board members at HMP&L and he felt that they were a very competent Electric Board. HMP&L had hoped to have automatic annual increase to keep pace with inflation, but City Attorney, Dawn Kelsey, said they would have to go through a public hearing and receive approval from the Board of Commissioners each year to comply with state law. COMMISSIONER JESSE JOHNSTON IV asked Mr. Quick if after the increase takes effect, taking reserves into consideration, are we still at a loss? Mr. Quick answered “yes, we will still be at a loss.” COMMISSIONER ROYSTER asked “if he had implemented any cost containment, cost reduction, any plans?” “What do you see coming down the road regarding an aging Station II?” Mr. Quick replied “the game plan is the same plan when we brought it on line; just to maintain it, replace what needs to be replaced and fix what’s broken and that’s what they do.” “The only thing between now and then is that not many things were broken 40 years ago.” Commissioner Royster asked ”Do you have a schedule set out to replace these things?” Mr. Quick replied “they do that every year in the budget; they go through the process of fixing the stuff that’s broken at Station II, or needs to be fixed because it is worn out or is not efficient anymore. In terms of replacing the entire facility, that discussion needs to begin probably in about 5 years based on the remaining useful life of the facility.” Commissioner Royster added “with Big Rivers?” Mr. Quick said “Big Rivers has a contractual right to run those plants for the life of the plants or as long as they want to. Are you going to buy a nuclear plant? How about another coal plant; I’m guessing they are not going to let any coal plant go on line in this country. You could get into an array of solar panels, not reliable, wind could be an option, maybe hydro, or maybe you partner up with other municipalities. There are some municipalities that are divorcing their suppliers and they will go to market looking for service. Every day, every hour of the day, there is a price set for power. Go to market to buy power but you may not like the price but you could buy power.” MAYOR AUSTIN stated that the question of how many cutoffs did we have during the winter has been asked. In November 2014 there were 16,029 customers billed and 115 customer service disrupted or less than 1% (0.72%). In December 2014 we billed 16,018 customers and had 146 customers services disrupted or less than 1% (0.91). In January 2015 we had 16,008 customers billed and 131 customers service disruption or less than 1% (0.82%). In February 2015 we 15,027 customers billed and had 66 service disruptions, on account of nonpayment, that is less than one-half of 1% at (0.41%). MR. ROBERT PRUITT suggested that the Board of Commissioners not allow the automatic Cost of Living increase to the HMP&L rate increase. He questioned how the HMP&L Board came up with a 22% increase when the consultant recommended 33%. “The people of Henderson own the city utilities.” Mr. Pruitt said that numbers were not used. Mr. Pruitt challenged any commissioner who had attended the HMP&L Board Meetings to stand up. Mayor Austin stood up to say that he was a member of the Board of Commissioners.  A Regular April 28, 2015 MR. TOM DAVIS said that Henderson citizens understand the need to keep the utility financially healthy so it can continue to provide some of the lowest rates in the country. He recalled all of the years that the utility only had “band-aids” put on it. MR. MIKE FARMER said “we have had a really good ride with that plant since the early seventies and there were people who had the vision to go into that agreement.” “Perhaps, due to the political climate over the years, we have avoided rate increases at times when we really needed to have rate increases. From time to time, all of our utilities have reason to go out and have to bond improvements and borrow money. It is important to recognize that owning our utilities, all three of our utilities, not only affects us on Main Street but affects the ability of this Board of Commissioners with your bonding activities as well. He continued by stating that “ultimately the user pays and he thinks it is time to put the rhetoric aside, make the smart, intelligent business decision and appreciate the job and accept the recommendation that our HMP&L Board has given you.” REVEREND DAVID PETRIE stated that we are blessed to own our utilities. He declared that he understood that increases are necessary and urged us to keep our eye on the prize and do the right thing for the citizens of this community. MR. JESSE JOHNSTON IV suggested that “with these rate increases maybe do a 5% increase and then before the next 5% increase, is it possible to have another Public Hearing in order to review as it goes to the people? Or, maybe after a year?” MAYOR AUSTIN said “In its effort to offer Henderson residents the lowest electric power rates in the state of Kentucky, and Kentucky is known for its low power rates around the country. HMP&L has lost money on its operations for the past four years. Those losses have been made up by tapping its unrestricted reserve funds. But now the unrestricted reserve funds, as I read it, is down to less than 60 days of operating costs. Auditors suggest that unrestrictive reserve be at least three months of operations expense. We are down to 60 days and we have a $2 or $2.5 million loss that’s going to happen this year. Although, no one enjoys increases, this rate plan will enable our utility to continue in business, which is critical for our home, commercial and industrial clients. Henderson Power and Light will remain among the lowest cost electric providers in the country and like all of our utilities, this Board of Commissioners must have provided the opportunities for our Utility Boards to have healthy utility systems for our community in the future. Mayor Austin closed the Public Hearing. _______________________________ CONSENT AGENDA: MAYOR AUSTIN asked the City Clerk to read the items on the Consent Agenda. Minutes: April 14, 2015, Regular Meeting April 21, 2015, Work Session MOTION by Commissioner Mills, seconded by Commissioner Royster, to approve the items on the Consent Agenda. The vote was called. On roll call, the vote stood: Commissioner Royster --------------- Aye: Commissioner Mills ------------------ Aye: Commissioner Johnston -------------- Aye: Commissioner Hite ----------------- Aye: Mayor Austin ------------------------- Aye:  A Regular April 28, 2015 ORDINANCE NO. 07-15: SECOND READING ORDINANCE AMENDING UTILITIES ORDINANCE AN ORDINANCE AMENDING CHAPTER 23, UTILITIES; BY ADDING NEW ARTICLE IX TELECOMMUNICATIONS, SECTIONS 23-167 THRU 23-206, OF THE CODE OF ORDINANCES OF THE CITY OF HENDERSON BY CREATING AND ESTABLISHING FOR BID A NON-EXCLUSIVE TELECOMMUNICATIONS FRANCHISE FOR THE PLACEMENT OF FACILITIES FOR THE GENERATION, TRANSMISSION, DISTRIBUTION AND SALE OF TELECOMMUNICATIONS SERVICES WITHIN THE PUBLIC RIGHTS-OF-WAY OF HENDERSON, KENTUCKY FOR AN INITIAL TEN (10) YEAR PERIOD, WITH ADDITIONAL EXTENSIONS OF UP TO FIVE YEARS EACH; AND PROVIDING FOR COMPLIANCE WITH OTHER RELEVANT LAWS, REGULATIONS, STANDARDS, AND ORDINANCES; ESTABLISHMENT OF A FRANCHISE FEE BASED ON FIVE PERCENT (5%) OF GROSS REVENUES; WORK, MATERIALS AND CONSTRUCTION STANDARDS; WIRE MOVING AND TREE TRIMMING; PERFORMANCE BONDS; INDEMNIFICATION; INSURANCE; ACCESS TO PROPERTY AND INSPECTIONS; NOTICE OF FILINGS WITH THE PUBLIC SERVICE COMMISSION; NO VESTED RIGHTS; LIMITED ASSIGNMENT; NOTICE OF FORECLOSURE AND BANKRUPTCY; CANCELLATION OR TERMINATION; VIOLATIONS AND PENALTIES; PERMITTING AND INSPECTION FEES; ADDITIONAL PERMITTING AND OTHER REQUIREMENTS FOR SUBSTANTIAL NEW CONSTRUCTION; AND BID REQUIREMENTS; ALL EFFECTIVE ON DATE OF PASSAGE. MOTION by Commissioner Royster, seconded by Commissioner Hite, that the ordinance be adopted on second reading. The vote was called. On roll call, the vote stood: Commissioner Royster --------------- Aye: Commissioner Mills ------------------ Aye: Commissioner Johnston -------------- Aye: Commissioner Hite ----------------- Aye: Mayor Austin ------------------------- Aye: WHEREUPON Mayor Austin declared the Ordinance adopted, affixed his signature and the date thereto and ordered that the same be recorded. /s/ Steve Austin Steve Austin, Mayor April 28, 2015 ATTEST: Carolyn Williams, City Clerk ______________________________ ORDINANCE NO. 08-15: SECOND READING ORDINANCE ACCEPTING PUBLIC IMPROVEMENTS FOR PROPERTY LOCATED AT 411 HARDING AVENUE MOTION by Commissioner Mills, seconded by Commissioner Royster, to accept public improvements for Lot #2 of Cornbleet & III C of KY at 411 Harding Avenue.  A Regular April 28, 2015 The vote was called. On roll call, the vote stood: Commissioner Royster --------------- Aye: Commissioner Mills ------------------ Aye: Commissioner Johnston -------------- Aye: Commissioner Hite ----------------- Aye: Mayor Austin ------------------------- Aye: WHEREUPON Mayor Austin declared the Ordinance adopted, affixed his signature and the date thereto and ordered that the same be recorded. /s/ Steve Austin Steve Austin, Mayor April 28, 2015 ATTEST: Carolyn Williams, City Clerk ______________________________ ORDINANCE NO. 09-15: FIRST READING ORDINANCE ADOPTING SCHEDULE OF ELECTRIC RATES AND SERVICES SUMMARY: AN ORDINANCE APPROVING AND ADOPTING A SCHEDULE OF ELECTRIC RATES AND SERVICES FOR HENDERSON MUNICIPAL POWER & LIGHT TO ITS CUSTOMERS AND CONSUMERS TO BECOME EFFECTIVE FOR ALL SERVICES BILLED ON OR AFTER JULY 1, 2015; INCREASING RATES FOR SERVICES AND FEES BY AN AMOUNT EQUAL TO 5% OF THE CURRENT SCHEDULE FOR RATES AND SERVICES ON JULY 1, 2015, NOVEMBER 1, 2015, MAY 1, 2016 AND NOVEMBER 1, 2016, AND BEGINNING JANUARY 1, 2017, IMPLEMENTATION OF AN AUTOMATIC ANNUAL RATE INCREASE, INCLUDING THE ADOPTION OF A NEW CONSUMER PRICE INDEX (CPI) ESCALATION RATE SCHEDULE TO DEFINE ENERGY RELATED RATE INCREASES AND SERVICE FEE INCREASES; AND REVISING THE EXISTING FUEL ADJUSTMENT CLAUSE RATE SCHEDULE; AND ESTABLISHING A NEW RENEWABLE DISTRIBUTED GENERATION INTERCONNECTION RATE SCHEDULE; A REVISION TO EXISTING ADDITIONAL CUSTOMER SERVICE RATE SCHEDULE; AND ADOPTING THE MISCELLANEOUS RATE SCHEDULE FOR DISCONNECT/RECONNECT FEES AND TAMPER FEES. MOTION by Commissioner Mills, seconded by Mayor Austin, that the ordinance be adopted on first reading. COMMISSIONER HITE said that she wanted to hear, one more time, that the automatic CPI rate beginning in 2017 will not, in fact, be added but will have to come to the Board of Commissioners. MRS. DAWN KELSEY, CITY ATTORNEY, stated that there will have to be a Public Hearing and then heard by the Board of Commissioners.  A Regular April 28, 2015 COMMISSIONER ROYSTER asked if we wanted to consider Commissioner Johnston’s suggestion? Mrs. Kelsey said that it could be tabled. Mr. Sights said that since you have this before you, you could amend your motion to vote to revise this ordinance rather that tabling it. Commissioner Mills added that a substantial amount of work and expense sits before you now, and you have heard their need. He felt that it was important to act on what we have before us and not muddy the water. MOTION by Commissioner Johnston, seconded by Commissioner Royster, to review this in one year. MR. QUICK, noted that Moody’s bond rating company has their eye on us and we have been having weekly conversations with them about the rating on the bonds that we issued a few years ago. He feels that it would not please the bonding agency if we make a change tonight. MR. SIGHTS added that we know we are going to market for a bond for at least $8 million or more. “The bond rating companies don’t just sit in New York and look at the internet and see what they are going to put on their rate. They will have a “rating call” and we are very familiar with it. That call will last an hour or more. There will be a joint call and specific questions will be asked. “I would hate to see this be a negative factor on a future bond rating and I think it would run that risk.” Commissioner Johnston said he would like some structure where we would not find ourselves in this type of situation again, with the bond rating becoming so important. Mayor Austin suggested that HMP&L could come before our board to watch what would be happening. The vote was called on the amendment. On roll call, the vote stood: Commissioner Royster --------------- Nay: Commissioner Mills ------------------ Nay: Commissioner Johnston -------------- Nay: Commissioner Hite ----------------- Nay: Mayor Austin ------------------------- Nay: The vote was called on first read: On roll call, the vote stood: Commissioner Royster --------------- Aye: Commissioner Mills ------------------ Aye: Commissioner Johnston -------------- Aye: Commissioner Hite ----------------- Aye: Mayor Austin ------------------------- Aye: WHEREUPON Mayor Austin declared the Ordinance adopted on its first reading and ordered that it be presented for a second reading at a meeting of the Board of Commissioners. ________________________________ RESOLUTION NO. 44-15 RESOLUTION AUTHORIZING MAYOR TO EXECUTE DEED OF EASEMENT ON BEHALF OF THE CITY AND HENDERSON WATER UTILITY AND MOSAIC CROP NUTRITION, LLC MOTION by Commissioner Hite, seconded by Commissioner Mills, to adopt the resolution authorizing the Mayor to execute a Deed of Easement on behalf of the City and Henderson Water Utility across property owned by Mosaic Crop Nutrition, LLC near the River Port.  A Regular April 28, 2015 The vote was called. On roll call, the vote stood: Commissioner Royster --------------- Aye: Commissioner Mills ------------------ Aye: Commissioner Johnston -------------- Aye: Commissioner Hite ------------------- Aye: Mayor Austin ------------------------- Aye: WHEREUPON Mayor Austin declared the resolution adopted, affixed his signature and the date thereto, and ordered that the same be recorded. /s/ Steve Austin Steve Austin, Mayor ATTEST: April 28, 2015 Carolyn Williams, City Clerk ______________________________ RESOLUTION NO. 45-15 RESOLUTION AUTHORIZING REVISED AGREEMENT BETWEEN CITY OF HENDERSON AND THE CITY OF CORYDON WATER SYSTEM; AND AUTHORIZING MAYOR TO EXECUTE ON BEHALF OF THE CITY MOTION by Commissioner Hite, seconded by Commissioner Johnston, to adopt the resolution authorizing the execution of a revised agreement between the City of Henderson and the City of Corydon, Kentucky, for the provision of wastewater treatment service. The vote was called. On roll call, the vote stood: Commissioner Royster --------------- Aye: Commissioner Mills ------------------ Aye: Commissioner Johnston -------------- Aye: Commissioner Hite ------------------- Aye: Mayor Austin ------------------------- Aye: WHEREUPON Mayor Austin declared the resolution adopted, affixed his signature and the date thereto, and ordered that the same be recorded. /s/ Steve Austin Steve Austin, Mayor April 28, 2015 ATTEST: Carolyn Williams, City Clerk ________________________________ RESOLUTION NO. 46-15 RESOLUTION AWARDING BID FOR THE DEMOLITION AND REMOVAL OF STRUCTURES FROM UP TO TEN (10) PROPERTIES IN THE CITY OF HENDERSON; WITH UP TO FIVE (5) PROPERTIES AWARDED TO B&B HAULING AND EXCAVATING, INC., HENDERSON, KENTUCKY, AND UP TO FIVE (5) PROPERTIES AWARDED TO HAZEX CONSTRUCTION COMPANY, INC., HENDERSON, KENTUCKY, IN THE TOTAL AMOUNT OF $28,060.00 MOTION by Commissioner Mills, seconded by Commissioner Royster, authorizing the Award of contracts to B&B Hauling and Excavating, Inc. and Hazex Construction Company, Inc., both of Henderson, for the demolition and removal of structures from up to five properties each (ten properties total) in the low bid total amount of $28,060.00.  A Regular April 28, 2015 The vote was called. On roll call, the vote stood: Commissioner Royster --------------- Aye: Commissioner Mills ------------------ Aye: Commissioner Johnston -------------- Aye: Commissioner Hite ------------------- Aye: Mayor Austin ------------------------- Aye: WHEREUPON Mayor Austin declared the resolution adopted, affixed his signature and the date thereto, and ordered that the same be recorded. /s/ Steve Austin Steve Austin, Mayor April 28, 2015 ATTEST: Carolyn Williams, City Clerk ________________________ REPORT: MR. ROBERT GUNTER, FINANCE DIRECTOR Mr. Gunter announced that a 2014 Delinquent Property List would be published on May 8, 2015. ____________________________________ CITY MANAGER’S REPORT: MR. SIGHTS announced that the Time Warner and Comcast merger was not going to take place. MAYOR AUSTIN stated that the City was applying for a grant with the Breakfast Lions for funding assistance at the East End Park. ______________________________________ REAPPOINTMENT: HENDERSON-HENDERSON COUNTY RECYCLING ALLIANCE MAYOR AUSTIN asked the Board to reappoint Commissioner Jan Hite and Commissioner Robert N. (Robby) Mills to another two-year term as City representatives to the Henderson-Henderson County Recycling Alliance. MOTION by Commissioner Royster, seconded by Commissioner Johnston IV to reappoint Commissioner Hite and Commissioner Mills to another two-year term in the Henderson-Henderson County Recycling Alliance. The vote was called. On roll call, the vote stood: Commissioner Royster --------------- Aye: Commissioner Mills ------------------ Aye: Commissioner Johnston -------------- Aye: Commissioner Hite ------------------- Aye: Mayor Austin ------------------------- Aye:  A Regular April 28, 2015 REAPPOINTMENT: HENDERSON-HENDERSON COUNTY RECYCLING ALLIANCE – CITIZEN APPOINTMENT MAYOR AUSTIN asked for a motion to reappoint Mr. Alan Taylor, who is an avid recycler, as the citizen representative, to the Henderson-Henderson County Recycling Alliance for a two year term. Mr. Taylor is jointly appointed by the County Judge Executive and the Mayor of the City of Henderson. MOTION by Commissioner Johnston IV, seconded by Commissioner Royster to serve a two year term. The vote was called. On roll call, the vote stood: Commissioner Royster --------------- Aye: Commissioner Mills ------------------ Aye: Commissioner Johnston -------------- Aye: Commissioner Hite ------------------- Aye: Mayor Austin ------------------------- Aye: __________________________________ MEETING ADJOURN: MOTION by Commissioner Royster, seconded by Commissioner Mills. WITHOUT OBJECTION, the meeting adjourned. _______________________ Steve Austin, Mayor ATTEST: May 12, 2015 ___________________________ Carolyn Williams, City Clerk