M I N U T E S
 SPECIAL  CITY COUNCIL MEETING - COLUMBIA, MISSOURI
 JANUARY 16, 1997

INTRODUCTORY
    The City Council of the City of Columbia, Missouri met for a special session at 5:35 p.m., on Thursday, January 16, 1997, in the Council Chamber of the City of Columbia, Missouri.  The roll was taken with the following results:  Council members KRUSE, HINDMAN, COBLE, JANKU, CROCKETT, and CAMPBELL were present.  Member HARLINE was absent.  The City Manager, City Counselor, and City Clerk were also present.

OLD BUSINESS
B13-97     Proposing an amendment to the Home Rule Charter to make language gender neutral, and
                  calling a special election on the amendment.
    The bill was given second reading by the Clerk.
    Mr. Beck explained that the Council asked that this ordinance be prepared at this time so that a special election would not have to be held to deal with the proposed amendments.
    Ms. Coble noted that this amendment would identify members of the Council as Council members and would not change the substance of any of the provisions of the Charter.  She said they were not getting into any other language other than people's positions -- changing masculine pronouns to the title of their job.
    Mr. Campbell said this change was long overdue and was glad to see that Council member Coble had taken a lead in the issue.  He thought it would be widely supported by the public.
    Mrs. Crockett noted that she received several calls regarding the cost of this.  She asked Mr. Boeckmann if she understood correctly that the only cost incurred would be the cost of printing the ballot.  Mr. Boeckmann said there would be an extra charge for the printing of the ballot and also for publication because it has to be published in the newspapers of general circulation two times before the election.  He said there would be a slight extra cost for that, but the bulk of the cost for elections was for the City's share of the election judges and so forth.  This was a cost that would be incurred anyway.  Mrs. Crockett commented that by proposing the amendment for voter approval now, it would be done at a time when it would be most feasible for the City.  Mr. Boeckmann said that was correct.
    Mayor Hindman opened the public hearing.
    There being no comments, Mayor Hindman closed the public hearing.   B13-97 was given third reading with the vote recorded as follows:  VOTING YES:  KRUSE, HINDMAN, COBLE, JANKU, CROCKETT, CAMPBELL.  VOTING NO:  NO ONE.  ABSENT:  HARLINE.  Bill declared enacted, reading as follows:

B14-97     Calling the municipal election to be held April 1, 1997, to elect Councilmen for Wards 2
                  and 6.
    The bill was given second reading by the Clerk.
    Mr. Beck noted that this had been prepared in accordance with the City Charter.
    Mayor Hindman opened the public hearing.
    There being no comments, Mayor Hindman closed the public hearing.
    B14-97 was given third reading with the vote recorded as follows:  VOTING YES:  KRUSE, HINDMAN, COBLE, JANKU, CROCKETT, CAMPBELL.  VOTING NO:  NO ONE.  ABSENT:  HARLINE.  Bill declared enacted, reading as follows:

B19-97     Calling for an election for the Water & Light Revenue Bond Issue.
    The bill was given second reading by the Clerk.
    Mr. Beck explained that the Council had several reports and two work sessions to discuss the need for this bond issue, what the rate impacts would be, and the project list.  Revisions were made that have been presented to the Council this evening in accordance with Council guidance following the work sessions.  The City's special bond counsel, working with staff, prepared the necessary paper work for this particular ballot issue.  Mr. Beck noted that this is a revenue bond issue and would have no impact on the City's property tax.  He said it would be paid off from rates and added that the list of projects was consistent with the City's long range financing strategy.  The list was considered to be basic to the City's needs.   Mr. Beck called on David Wollersheim, Chairman of the Water and Light Advisory Board, to make a few comments.
    David Wollersheim, 2801 W. Broadway, wanted the Council to know that the Water and Light Advisory Board endorsed and strongly supported the bond issue.  He said the Board continuously monitored the Water and Light budget, especially the capital improvement plan, year by year.  This bond issue was certainly consistent with their funding strategy.  At one time, the Board planned on having a bond issue of this sort every five years, but there has not been one since 1982.  It has almost been that long since the last electric utility rate increase.  Mr. Wollersheim said we had been very fortunate in terms of the rate of growth and power supply in the City, and have been able to generate enough revenue from utility rates to maintain the growth of the electric and water utility.  He noted that Tom Baumgardner, a member of the Advisory Board, was also present and they would be glad to answer any questions.
    Dick Malon, Director of the Water and Light Department, gave a brief overview of the revenue bond projects and financing strategy, similar to that recorded in the minutes of the last regular meeting.
    Mr. Beck emphasized there would be no rate increase in electric service.  He said the water rate would increase two percent per year beginning October 1, 1997.  Over the five year projected period, the amount would be less than ten percent as there would be only four increases.
    Lori Fleming, Finance Director, explained how the financing mechanism would work.  She pointed out that this bond proposal was consistent with what she considers the business plan for the utility.  The amount of the bond issue was sufficient to cover capital needs for five years, and that the City would be funding those capital needs with a combination of bond proceeds and monies generated from the operation of the utility.  As such, the City could anticipate that there will be this type of bond issue every five years because that is what our business plan calls for -- funding a portion of our capital projects with debt.  She said it is desirable to fund a portion of capital projects through debt because that spreads the cost to those who will benefit as future customers on the system.  Ms. Fleming reported one might question if it is the City's business plan to have a bond issue every five years, why we have been able to go so long without a bond issue in the past.  Ms. Fleming said the City had been fortunate, but needed to consider the environment we were in when the business plan was prepared that set the rates and the amount of the bond issue.  At that point in time, interest rates were almost at an all time high so a set of projections were developed, a business plan.  Projections indicated interest rates were going to be high, fuel costs were going to be high, and cost of power was going to be high.  Because of that, the rates were set accordingly.  Through good management and planning, the City was able to reduce costs and take advantage of lower interest rates by refinancing and restructuring the debt so that there was an inflow of almost $9 million into the capital cash.  She said the money was not spent as fast as had been anticipated.  Ms. Fleming noted that the City of Columbia enjoys an excellent bond rating - double A, with the highest rating being a triple A.  There was no anticipated impact on the bond rating because of the additional debt that would be incurred.  Ms. Fleming reported they believed this bond issue would be well accepted in the financial market and there would not be any adverse affect on the financial condition of the utility with the issuance of the debt.  It was felt the City would continue to enjoy a good bond rating in the utility.
    Mr. Campbell commented that we have an excellent system in place and pointed out that this was not a crisis, but simply maintenance of the excellence we have.  He noted that he had been on the Council for eight years and had never had any complaints about the Water and Light Department services, only compliments.  He commended Mr. Beck and his staff, Mr. Malon, and the Water and Light Advisory Board for a job well done in providing an excellent quality of service.  Having watched this for many years, Mr. Campbell said the City has had absolutely no increases in electrical rates and the increases in water rates had not begun to keep up with the cost of inflation.  He said even though there have been some small increases, the City was still well under the rate of inflation so the cost of water to the consumer has actually been going down.
    Mr. Janku pointed out that the City's Water and Light utility operates as a business and is separate from the general tax funds received from property tax and sales tax.  Like a private business, they have developed a capital improvement plan to implement over the next five years.  He explained that the City had the option of issuing special obligation bonds, without voter approval, but the Council had elected to submit these revenue bonds to voter approval because this is the lowest cost strategy for funding the capital improvement plan.  The issuing of revenue bonds brings lower interest rates for the benefit of the customers of the utility.  Mr. Janku's point was that this approach was consistent with what a private utility would be doing to finance its capital improvement plan.
    Mayor Hindman noted that passage of this bond issue would allow the City to expand with the community and to keep the plant up to date in every respect.  He said it was a capital expenditure in the true sense that the City is spending these monies in order to generate the revenues that will pay back the bonds.  Mayor Hindman thanked the citizens who are serving on the Water and Light Advisory Board.  He said Board members do so unselfishly, they meet regularly and tackle very difficult problems.  The members are experts in financing and in the world of utilities.  He said the City was very fortunate in that respect.  Mayor Hindman reiterated that the only rate increase proposed was two percent per year on water only -- nothing on electricity.  According to calculations, the two percent increase would be $.27 per month, per household.  Over the four year period, that would total $1.08 per household.
    Mr. Janku pointed out that the electricity issue deals solely with distribution, not with the power supply.  Recently, the Council authorized an agreement with Union Electric guaranteeing the City's power supply into the year 2004.  He said this agreement would keep the rate stable.
    Mr. Janku made the motion that they amend B19-97 by adding the number "2" after the word "proposition", both in the body of the ordinance and in Exhibit A to the ordinance.  The motion was seconded by Mr. Campbell and approved unanimously by voice vote.
    Mayor Hindman opened the public hearing.
    There being no comments, Mayor Hindman closed the public hearing.
    B19-97, as amended, was given third reading with the vote recorded as follows:  VOTING YES:  KRUSE, HINDMAN, COBLE, JANKU, CROCKETT, CAMPBELL.  VOTING NO:  NO ONE.  ABSENT:  HARLINE.  Bill declared enacted, reading as follows:

    There being no further business, Mayor Hindman adjourned the meeting at 6:20 p.m.

                                                                                         Respectfully submitted,

                                                                                         Penny St. Romaine
                                                                                         City Clerk