Roachdale proceeds with Gavilon agreement

ROACHDALE -- In a move that has the potential to save its town exponential amounts of money over a short period of time, the Roachdale town council agreed to move ahead with negotiations Tuesday in becoming Gavilon Grain LLC’s main natural gas supplier.

With a Ladoga address, Gavilon Grain LLC serves a wide region and several towns around the tri-county area and sits less than two miles north of Roachdale just inside Montgomery County.

Providing the company with gas from its main supplier, Utility Gas Management (UGM), Roachdale would see an increase of income almost overnight. Granted, a price tag from gas engineering firm Utility Safety and Design Inc. (USDI) of $250,000 to route gas lines through farmland for nearly two miles out of town is a large expenditure for the town.

However, the move would result in a “win-win” situation that would quickly pay off for the town, the grain company and the gas supplier, Board President Zach Bowers said Tuesday.

“With the amount (of natural gas) that Gavilon uses, our gas supplier is certain we can make that money back within a year ... and that would be a very conservative estimate,” Bowers said, later citing that the fall is Gavilon’s busy season and will use enough natural gas within the first two to three months to accrue nearly all initial costs of routing the gas. “Gavilon is also very interested in this because it will save them a substantial amount of money (relative) to what they’re currently paying.

“(USDI) now needs approval from us to get to work on a contract between the town of Roachdale and Gavilon and to get the ball rolling for putting bids out to get this work done,” Bowers continued, “because it probably needs to be finished by September at the latest.”

As gas lines would be routed through adjacent farmland, the board has made it a priority to have the project completed by September. Furthermore, Gavilon enters its “drying” season around the same time, making a September completion crucial.

The board also stated that financing for the project would be paid for via increased natural gas rates for Gavilon and local financing, leaving taxes for Roachdale residents unaffected.

“This would obviously be a project that we would have to finance upfront ... (Clerk-treasurer) Debbie Sillery and I could work with the local banks to get that financed,” Bowers said. “But I believe we could have that paid back well within a year.”

The next steps for the board will be for USDI to write a contract and “once Gavilon signs it, USDI will put numbers in of what the prices of the gas rate is.”

“(The gas rates) will be more, initially, to help us pay for the project and then once they pay for the project then we can renegotiate the price of gas with them,” Bowers said, citing another reason for increased prices. “Gavilon’s price of gas would also be increased because I don’t think they want to pay up front for construction costs.”

First discussed during a special meeting in January, the project will result in the town playing middle-man to the benefit of both the town and Gavilon, the latter of which seeing an overall decrease in gas prices despite paying a higher rate to finance the project.

“Based on the pricing options we had last month, it’d still be cheaper for Gavilon even at a little bit of an increase and I think we would easily be able to pay that back within a year based on their average usage of natural gas,” Councilman Kevin Cook said.

Bowers went on to say that a USDI representative informed him that, if Gavilon was to record its highest-average usage of natural gas, the company would more than double that of the town, leaving Roachdale as the main beneficiary.

Bowers then asked for a motion to approve the creation of a USDI contract to be used between the town of Roachdale and Gavilon Grains LLC; the motion also included seeking bids for the construction process.

The board approved Councilman Cook’s motion via 3-0 vote pending review of the contract at the board’s next regularly-scheduled public session in March.

In other business:

• A Wastewater System Rehabilitation update was presented by Bowers, saying town employee’s are currently moving through a “punch list” that should be wrapped up shortly.

Jason Hartman, a new-yet-familiar individual who assists Utility Superintendent Troy Elless, said the Wastewater System Rehabilitation project is “pretty close to being substantially completed.”

Bowers included a Storm Water Project update as well, saying the “project is moving along really well.”

Residents and passers-by alike may notice large, concrete storm water pipes sitting around town. Children are heavily discouraged from playing with the pipes and an orange construction fence is set to be installed.

“(Crews) are currently at East Street and Columbia Street, they’ll be working at that intersection this week,” Hartman said. “From there, they’ll actually go north on East Street.”

• A “PASER” Street Inventory update was also given by President Bowers.

Recent traffic counts have been completed, another thing that had to be done to apply for a PASER Grant, he said.

One use for the grant would be to repair the railroad crossing on North Indiana Street. As it is a matching grant, the Indiana Department of Transportation would match any funds put up by the town.

Permits to repave the roads are currently being sought by town employees. The council will need to decide how much money will be put towards the repair in the next three months.

• Property cleanups were again a topic of discussion Tuesday with the board pointing out that the Simpson residence has seen little to no improvement. The board decided that town attorney Dave Peebles will write another letter to the residents and that two previous fines of $25 and $50 will be upheld until payment is received.

• Town Marshal Mike Mahoy gave his Marshal’s Report, saying a new bullet-proof vest is needed for one of his deputies. Having already researched the matter, Mahoy presented a quote from Nelson and Company in Greencastle to fit the deputy with a new vest that will cost less than $1,000.

Since the vest will cost less than $1,000, Mahoy did not need approval from the board. However, he presented the quote to the board on Tuesday anyway, seemingly in a show of good faith and transparency.

The Roachdale board will host its next regularly-scheduled public meeting on Tuesday, March 14 at 7 p.m. inside Roachdale town hall, located at 205 N. Indiana St.