CLOVERDALE -- Restructuring and refinancing of existing bonds would allow the Cloverdale Town Council to finance necessary repairs on the town's standpipe without increasing any utility rates.
At the monthly town council meeting, Buzz Krohn, one of the accountants working for the town, said First National of Cloverdale was willing to refinance an existing bond at a more favorable rate.
"Right now we pay about $93,000 a year on the bond payment," Krohn said. "This would reduce our overall debt payment obligation by about $20,000-$23,000 a year. That would be a benefit for the situation we have with our water rate."
The agreement would reduce the interest rate on the bonds from 5.5 percent to 4.75 percent. The town would not have to pay on the principle until December of 2012 and it would also free up the town's debt reserves for working on the standpipe. The bond would be paid out over a longer period of time.
A decrease in the number of customers for the water system is part of what contributed to the financial problems for the water utilities. The ethanol plant now owned by POET used much more water under the previous ownership, as well as other water customers leaving.
"We've taken a couple of hits to our customer base," Krohn said. "We've taken a 12 to 15 percent reduction in our overall sales volume."
Kohn said a utility increase may come down the road, but not as a result of the standpipe, or water tower repair.
Another area where the town incurred more expenses than planned was employee insurance. The town currently pays $20,000 per employee each year for health care.
The council looked to address health care at this meeting, first voting to move to IACT Medical Trust for insurance. The town will save $19,000 a year with the switch, according to board president Cathy Tipton. The board is also considering shifting more responsibility for the healthcare onto employees. Currently, the town pays for 99 percent of its employees' healthcare. Tipton said she wanted to try and phase any changes to that in over time.
"If we do change that, maybe say we'll do it in September or so," she said.
The board agreed to hold changing that percent until a later date.
The meeting also saw a bit of drama, as Cloverdale Clerk Treasurer Cathleen Monaco took issue with the way town attorney Alan Yackey organized his bills. Monaco had asked Yackey to provide more detail in his bills.
"Even if he just gave me a key list of abbreviations," Monaco said.
Monaco said she had asked Yackey to provide more clarification, and said Yackey's response was condescending.
Yackey responded by pointing out that he had used his billing structure for over two decades, and hadn't had an issue before. He also said any requests to change the way he does business would have to go through the council.
"You are not my client. The town council is my client," Yackey said.
Monaco said that since she signs all the checks, she has a right to question things. She also asked the board if Yackey's fee for the POET opening for 4.5 hours of work, with a fee of $652.50.
"I wanted to know before I presented this bill to council if the council is in agreement paying him for that.
Council member Don Sublett suggested Yackey provide a legend of key people. He also asked if Yackey was at the POET meeting as a representative of the council. Tipton said that Yackey was at the meeting as a representative of the town.
"He does represent the town and I think it was necessary for him to be there.
Tipton also pointed out that asking for increased record keeping would run the bill up further.
After some heated debate, the council voted to ask Yackey to increase the amount of information he included unanimously Tipton, Larry Fidler and Dennis Padgett voted to pay Yackey for his time at the POET opening, with Sublett voting against it.
Don Gedert with the redevelopment commission gave an update to the board, including some information about the horse arena. Gedert said there was a rumor of a buyer who would maintain the property as a horse arena.
Gedert isn't positive where the tax liability would land in the event of a new owner, since the arena currently has around $139,000 in back taxes. The bankruptcy proceedings on the property have been dismissed. Gedert wasn't aware of the current status of the property, whether it was under the control of its original owners or under a receivership, with the change in bankruptcy status. Both Gedert and Yackey said they would get more information for the council.
Tipton presented the board with documentation for $43,394.71 in issued checks, invoices for $35,352.77 in unissued checks and $17,397.93 in gross pay.