HomeMy WebLinkAbout10.19.1998October 29, 1998
The Council of the City of Waterloo, Iowa, met in Special Session at City Hall Council, Waterloo, Iowa, at 7:45
a.m. on Thursday, October 29, 1998. Mayor John R. Rooff in the Chair. Members present: Getty, Gronen,
Collier, Anders_ Members absent: Murphy, Jordan, Krizek.
111155 - Getty/Gronen
that the Agenda, as proposed, for the Special Session on Thursday, October 29, 1998 at 7:45 a.m., be
accepted and approved. Ayes: Four. Absent: Murphy, Jordan, Krizek. Motion carried.
111156 - Anders/Collier
that the Calls for the Special Session on Thursday, October 29, 1998, be received and placed on file.
Ayes: Four. Absent: Murphy, Jordan, Krizek. Motion carried.
111157 - Jim Walsh, City Attorney, stated that upon completion of the trial, the judge ruled from the bench that
IBP should bear some of the financial responsibility for the new industrial wastewater treatment plant
the city constructed to meet new ammonia nitrogen standards imposed by state and federal
environmental agencies. The judge asked both parties to negotiate the financial aspects of the
settlement. The city and IJ3P met many times over several months. Mayor Rooff and 1BP officials met
and an agreement was reached whereby IBP will pay $6.5 million to the city over the life of the
contract. The company agrees to pay the city a lump sum of $3 million as follows: $1 million upon
signing the agreement, $1 million 12 months after signing the agreement, and $1 million 24 months
after signing the agreement. IBP also agrees to pay the city a base sewer rate of $0.72 per Ccf
beginning on November 1, 1998, and the base sewer rate existing on August 2, 2004 shall be increased
by 15 cents, and increased 5 cents on August 8, 2009.
Mayor Rooff stated that the agreement extends the contract with IBP to August 7, 2014, but every five
years the base rate is increased. Mayor Rooff stated that the city wants IBP to be a participant in our
community. 1BP recently donated $100,000 to the Peoples Community Clinic and $100,000 to the
Cedar Valley soccer complex. The two sides have pledged to work together for the betterment of the
community.
Mr. Walsh stated that if the city raises its sewer rates or there are changes in the environmental
standards, IBPs rates will also increase.
Councilperson Anders questioned what the administration ten years from now will think about the new
contract
Mr. Walsh responded that the attorneys who drew up the current contract in 1988 put a clause to
increase IBPs fees when a new plant was built. This contract will allow the city to pay for the new
sewer plant without increasing the city's sewer rates, Mr. Walsh feels that ten or fifteen years from
now people will say that this was a pretty good contract.
Mayor Rooff stated that if the city raises the fees paid by our citizens, IBP will also have an increase in
their rates. Mayor Rooff reiterated that this administration is working toward stabilizing the city's
sewer fees.
Bruce Meisinger, Finance Manager, stated that the city cannot issue Sewer Revenue Bonds next year,
and this contract with IBP will allow us to do improvements without issuing sewer revenue. The
reason for short term net revenue is because for a period of six to eight weeks Eagle Tannery was on
strike and the city lost $200,000 in income. Hunt -Wesson started paying billed revenue this year so
things are happening where the city will recover from thin revenues. IBPs rate increases will help in the
following years. Mr. Meisinger reported that bonds issued next year are based on the year ending June
30, 1998. Hunt -Wesson came on line in August 1999 after year ending June 30, 1998. Net revenues
will recover and enable the city to issue sewer revenue bonds. Mr. Meisinger stated that bond
participatory rate could be used.
October 29, 1998
Page 2
Mayor Rooff stated that another option would be to not proceed with the new construction for one
year.
Mr. Meisinger stated that the city put a hold on construction of the facility for one year to enable the
city's cash flow to recover, and the same condition will happen over the next 20 months of construction
until the city is reimbursed by the federal grant.
Mayor Rooff stated that if the city had settled with IBP prior to June 30, 1998 our sewer revenue cash
flow would look differently than it does today. Mayor Rooff stated that the fund is healthy.
Getty/Groner
that "Resolution 'approvht Second Agreement of Amendment with IBP, Inc.", be adopted and Mayor
and City Clerk authorized to execute same. Ayes: Four. Absent: Murphy, Jordan, Krizek.
Resolution adopted and upon approval by Mayor assigned No. 1998-691.
Mayor Rooff and Council Members reviewed with Department Heads agenda items that have been
placed on the Council Agenda for Monday, November 2, 1998 .
111158 - Getty/Collier
that the Council adjourn at 8:17 a.m. Ayes: Four. Absent: Murphy, Jordan, Krizek. Motion carried.
Nancy Eckert
City Clerk