As 2012 has begun, and with the election coming up, I thought now would be a good time for an update on City of Bloomer activities. With the unseasonable warm weather, it certainly has shortened up the winter doldrums. Even if we get some more snow, you will notice we had far less expense this year for snow removal. In a year where our shared revenue from the State was cut by $80,000, the nice weather came at a good time.
Beginning with the Electric Utility, the city has entered into an agreement with AEP (American Electric Power) where we will be purchasing our electricity from them starting on Jan. 1, 2013. We have a locked in rate through Dec. 31, 2015 and we know our cost of electricity per unit through Dec. 31, 2016. Bottom line is we expect you to see a lower electric utility bill after Jan. 1, 2013. We will also be rebuilding the substation just south of the Dairy. Presently we lease the substation from Xcel Energy.
The Wastewater Treatment Plant has only five years left to pay on its 20 year loan. We originally financed the construction of the WWTP at an interest rate of 3.06 percent. We were very fortunate to be able to lock that rate in at the beginning of the note, even though with interest rates as low as they are now, we have come out substantially ahead finance wise. Right now with the waste water rate at $12.55 per 1000 gallons used, the loan portion of the rate you pay amounts to about $6.50 per thousand.
Not only will the loan be paid off in May of 2017, from it’s inception we have had an equipment replacement fund already built into the existing rates.
Water rates appear like they will stay the same. Other than the daily operation of the water system, the only large expense comes from when we replace existing water lines when we redo city streets. Over the last 20 years we have been aggressive replacing the oldest water lines in the city and I am happy to say that we are in pretty good shape for the future.
The recycling center is continually busy. We attempt to sell our recycleables at the best market prices. Even though our state funding was cut in half for recycling, we still have what some proclaim to be the “best recycling center in the state.” Curb side garbage pick-up works very well for our city, and the cost of service compared to private garbage service is certainly comparable if not less expensive to the property owner.
Our jointly owned ambulance service stays pretty consistently busy also. We have a very good and dedicated ambulance staff along with dedicated volunteer fire department personnel and First Responders. We have a semi-annual meeting coming up next week with the owners of the ambulance and fire department and first responders, and we hope to have numbers concerning a rate increase for the ambulance. Our biggest financial issue is Medicare and Medicaid. They only pay a fixed amount that does not cover expenses, so we need to raise rates accordingly. Medicare and Medicaid amount to about 75% of our runs.
At the end of March the existing union contracts expire. With the new legislative action, we will be moving forward transferring a number of employment issues from the union contract to the city’s employee handbook. Details of normal hours of work, vacation, holidays, etc. are just some of the issues the council will need to take action on.
Lastly, we were fortunate in this day and age to receive only a four percent rate increase in our employees health insurance by changing companies, however it is with a company that had insured us in the past. I believe everyone was generally content with this company the last time we were with them.
As always, if anyone has any questions or comments regarding the State of the City, please do not hesitate to call me.
Remember to vote on April 3.