By James B. Bartle
The Sullivan Board of Aldermen participated in more than an hour of discussions during the requests and petitions portion of their regular meeting on Tuesday night, Mar. 2.
Three different people addressed the council during this portion of the meeting all expressing concerns of the city utility rates, hiring of an economic developer in the city and the city’s reserve funding.
Jim Turntine, town of West Sullivan president and a property owner in Sullivan, addressed the council regarding a number of issues.
Turntine began his discussions with the council by stating that he was opposed to the city hiring an economic developer and felt that, with the city’s reserve funding and funding for the economic developer, these funds  would be better spent to pay down the city’s debt on utilities such as the new wastewater treatment plant and lower utility rates.
Turntine asked city officials what the city had in reserve funding and what they loaned the Elmont overpass project from reserve funds.
City administrator Mark Falloon reported that the city loaned around $4 million to the overpass project.
Mayor J.T. Hardy stated that a previous city council entered into an agreement with the Missouri Department of Transportation to conduct a 50/50 cost share on the overpass project, with the city having to pay their portion upfront for the project. He added that the city receives about $730,000 a year in sales tax for the overpass. He added that Oak Grove Village receives a portion of the transportation tax in Sullivan.
Turntine then asked how much money the city had coming back from MoDOT on the overpass project that will be placed back into reserves.
The council estimated about $6 million, of which a portion is being used to pay on the new wastewater treatment plant. Specifically, Mayor Hardy indicated that, of the $40,000 treatment plant payment, $20,000 is being paid by the city through the reserves fund; thus, the city lowered water and sewer rates accordingly.
Turntine then asked again what the city had in reserve funding.
Falloon reported that, as of January 2010, the city had $9.8 million in reserve funds.
Mayor Hardy stated, of that, there are some restricted MoDAG and UDAG funds of $600,000.
Turntine then stated the new treatment plant cost about $7.2 million and the city had paid some $400,000 off, thus far, and still owed some $6.8 million. He asked what other debts were out there to the water and sewer departments.
Falloon reported that there are several bond issues, including $1.2 million in revenue sewer bonds, dates 1999 series; $700,000 in water revenue bonds, 2000 series; and an additional $600,000 in sewer bonds.
“So, the city has generally $15 million in reserves if you include the $6 million coming back from the overpass and the $10 million in reserves now,” said Turntine.
Turntine then suggested once again that the council lower utility rates by using their reserve funds to pay down the city debts.
Discussions then turned to water rates and the city water usage being down some 25 percent last year.
Turntine suggested that the usage was down because rental homes are vacant in Sullivan and people have moved out of the city.
The council suggested that this was, in part, due to a wet year and residents did not water their yards as much and other contributing factors.
Turntine stated why not lower the utility rates and bring folks back into town. He also stated that, with the upcoming census, a lower count in the city could result in less tax revenue for the city through fuel sales tax.
The meeting then turned to electric rates, with the council explaining that they have absorbed the last two rate increases the city has received and not passed them along to city customers. The funds to cover this are from reserve funding.
Turntine explained that the city has a large amount of electric reserve funds from money they have made from the utility service and that the funds are deemed for an emergency. He felt the funds would be better spent paying down the loans the city has to lower rates.
Turntine asked the city, in recent years, what is the most they have spent on an emergency in the electric department.
Falloon replied about $300,000.
Turntine stated that, in most cases of a disaster or emergency, the state and federal government disaster assistance, SEMA and FEMA, would come in and provide aid of 75 percent to 100 percent of the incident. He also commented that, like Crawford Electric, the city could have a line of credit established for emergency incidents and use their reserve funds to lower utility rates.
Mayor Hardy agreed with Turntine that the city may not need $10 million in reserve funds, but stated how much was enough to have and that the city is no longer building reserve funds in the electric department as they have absorbed the last rate increases.
“We’re all here to do the best we can for the citizens,” said Hardy.
Turntine stated that he believed that there are grants out there that could have helped the city in the past and present and that sometimes having too much money, as the city may have in reserves, can prevent them from receiving these types of grants.
Some discussions then centered on the city rates in Sullivan versus West Sullivan.
Turntine was asked what the water rates were in West Sullivan.
He replied that the base rate was $36 and that included the first 3,000 gallons for a homeowner. It was an additional $5 for every thousand gallons.
Alderman Jarrett Dace then stated that, in West Sullivan, if you use 4,430 gallons of water your water bill would be $46 and in Sullivan that same rate would be $26.04.
The discussions then turned to electric rates for another time, with Mayor Hardy stating that St. Clair residents are seeing an increase coming from Ameren for their electric and, at the present time, the city is in limbo not knowing which direction they are going to go for electric suppliers and may have to purchase the substations currently owned by Sho-Me Power.
Turntine also questioned the city GASB 34 accounting system and stated that he cannot find anywhere in the state of Missouri that you can’t use reserve funds to pay for capital improvements. The GASB 34 system is a computer program for municipalities for various departments. The program, according to Turntine, does not require each service to be self-sufficient.
Turntine concluded his presentation stating, “Pay down your debts. I hope you all hear this. Pay down the debts and lower the utility bills. If I can help, I’ll be here. I just don’t think you need $10 million in reserves.”
David Thexton and John Thexton each addressed the council stating that they agreed with Turntine and wanted to see the utility rates lower and didn’t feel an economic developer was needed.
John Thexton stated that he was raised in Sullivan and moved away for work, but came back to Sullivan to start his business after being encouraged by alderman Mike Ryan.
Thexton stated that he is a bachelor and lives in a small apartment with an electric bill last month of $253.
“I kept my thermostat at 68 degrees. I’m never home,” said John Thexton. “You people are Sullivan’s best selling point. You don’t need an economic developer. My electric bill is half the cost of my total rent bill.”
Following some discussions, this portion of the meeting concluded.
The City of Sullivan submitted a response to several items discussed by Jim Turntine in a recent editorial that appeared in the Sullivan Independent News on Feb. 24, and to items discussed at the meeting on Tuesday. The editorial from the Feb. 24 issue is also available at www.mysullivannews.com.
The city response is located on this week’s editorial page.