02-21-1979 Minutes1
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City of Salina, Kansas
Special Meeting of the Board
of Commissioners
February 21, 1979
The Special Meeting of the Board of Commissioners met in the City
Commission Meeting Room, City -County Building, on Nednesday, February 21, 1979,
at nine o'clock A.M.
There were present:
Mayor Jack Weisgerber, Chairman presiding
Commissioner Keith G. Duckers
Commissioner Dan S. Geis
Commissioner Karen M. Graves
Commissioner W. H. Usher
comprising a quorum of the Board, also:
L. 0. Bengtson, City Attorney
W. E. Harris, Acting City Manager
D. L. Harrison, City Clerk
Absent:
None
The meeting was called for the purpose of considering the Hilson and
Company, Engineers and Architects, Salina Calcining Plant Study.
Mr. Bob Selm, Hilson and Company, was present and explained, "It is
the work we did to evaluate the plant and prepare a plan that we believe would
satisfy the requirements of the State. The State of Kansas put us under a
compliance order that we had to either cease operations or clean up the emissions
from the plant, so in accordance with your instructions we surveyed the plant
and found the extent of problem and found that the l,la.ter Treatment plant was
discharging approximately 4 times the allowable amount of emissions. Previously
the only known violations were opacity tests, looking at it and comparing it
with standards; however, an actual particulate test was run as a result of this
investigation and in this particulate test we discovered we were actually
discharging about 19 pounds an hour of particulate matter where our limit is
4.3. We went through the plant carefully to examine its mechanical condition.
While we had some ideas that certain parts of the plant were defective in terms
of obsolescense and inefficiency, in going through the plant carefully, from a
mechanical standpoint, and a process standpoint, we determined that there were a
couple of alternatives that could be presented to you, which we have done here.
One is to cease operation of the plant, the other alternative would be to make
the minimal fix and the cost thereof, and then the most cost effective fix.
Those three cases are presented in the report. The most costly thing to do
would be to shut the plant dorm. lle show the backup information for that. In
the long run the cost to the city would be the greatest if we shut it down and
buy our lime. This would mean we would have approximately a car of lime a week
that would have to be shipped in and unloaded and almost twice that much sludge
would have to be disposed into the lagoon system which was prepared. The costs
of this have been worked up and are presented in the report. The minimal fix
which was the next subject we addressed was that of just fixing what had to be
fixed to keep the plant operating in its present configuration and this cost was
determined to be $350,000. This fixes the things we know have to be fixed to
keep operational so the air emissions will meet the standards. Primarily this
consists of putting on a new scrubber and making some necessary repairs to the
furnace. The true extent of damage, I shouldn't say damage, I should say wear
and tear on the furnace was not known, of course, until we can net into it,
clean it out and get into it, cool it down and make a detailed inspection. The
furnace, we found, is badly bent out of shape. Ue have some pictures which we
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will pass around later that show how this wall is bent and how the bricks have
sagged. You will probably recall this was repaired about 10 years ago. He went
through the same thing and there is considerable doubt on the part of the people
who do the brick repair work whether this will indeed even be effective. We
have assumed it will and we could make such repairs and this is the minimal fix
at $350,000 capital cost. It also proposes certain other needed repair items
which again are fair wear and tear and obsolescence. The last case was that of
what is the most cost effective, and this is on the basis of cost per ton of
lime, overall cost annual cost to the city for operation. lle have to have a
certain amount of lime to run the plant and what have after here is the least
cost to get that lime. It turns out that this third case, which involves the
expenditure of approximately $600,000, is the most cost effective of the 3
solutions. We are glad we didn't have to run up to the bill that I mentioned at
the very beginning of a million and a half. That was if the whole system would
have been replaced and we find a number of the components of the plant can be
retained in service with minimal repair. That summarizes what we have in the
report. I will be happy to answer any questions."
Commissioner Usher asked about the fuel cost differential.
Mr. Selm explained the old kiln is not as fuel efficient as the propose
rotary kiln.
Commissioner Geis asked if lack of maintenance on the part of the city
has attributed to the problem?
Mr. Selm said he cannot ascribe the problems of the calcining plant to
neglect in any way. The furnace is just old and in the 25 years it has been in
operation it has had the proper care. Repeated breakdowns are due to obsolecence
and because parts are no longer available.
Commissioner Graves asked about financing the project. She asked if
there is any money left from the last Nater bond issue?
Mr. Harrison reported the Wilson Report recommends a bond issue or
other arrangements. "I talked with Tom Phoenix, Boettcher and Company, last
night and I mentioned the possibility of a bond issue and he about dropped the
phone. He said this would immediately kick the "A" rating on the bonds we
issued a year ago if we would come back with a bond issue at this time, which
would be a third lien bond. He put thumbs down on a bond issue at this time.
At the end of the year, the Depreciation and Emergency Fund had a balance of
$365,000.00. The bond ordinance requires a $125,000 minimum, so we have $240,000
there. In the $3,000,000 bond issue of 1977, there will be a $200,000 balance.
The bond ordinance requires any excess money in the operating treasury be
transferred to a Bond Retirement and Extension Fund. At this time we have
$600,000. I propose we take $260,000 out of that fund to come up with the
$700,000. I called our bond attorney, Jerry Powell, in Kansas City, and he is
checking the bond ordinance to see if there would be any violation of the
ordinance in doing this. I don't think there is because the only 2 requirements
set out in that ordinance are $125,000 for Depreciation and Emergency and $410,00(
in the Bond Reserve Fund, which I have in another fund. !,!e have all the money
invested and we will be building some more dollars in interest."
Commissioner Graves asked if any projects would not be done out of the
1977 water bond issue.
Mr. Harrison replied the remaining jobs are the !!est Crawford water
line and the water tower in North Salina.
The Commissioner discussed the need to raise the water rates again,
and the alternative methods of financing the project.
Mr. Harris said the City Commission will need to have a financial
feasibility study made when we get into the sedimentation basin at the inlet and
river channel improvement project. (!e said he thought we could possibly throw
this all together into one bond issue, but Tom said no way. It appears we have
the available funds to handle this immediate situation.
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Commissioner Graves asked how long we will be under the strict bond
limitations because of the water refunding bonds?
The staff replied when the water refunding bonds were issued, we told
Hoody's Investors Service that there was nothing in the foreseeable future that
would require a bond issue, so it would be a number of years.
The commissioners discussed the project, FPA standards, and necessity
of the project.
A motion was made by Commissioner Duckers, seconded by Commissioner
Usher to accept Wilson and Company's recommendation of the most cost effective
way for the City of Salina to go on this particular problem and authorize the
expenditure of not to exceed $700,000 to correct the problem to put the calcining
plant back in A-1 condition, subject to the Finance Director getting approval
from our bond attorney and to finance the project as explained. Ayes: (5).
Nays: (0). Motion carried.
Mr. Harris asked the City Commissioners if they wish to consider a
couple of Industrial Revenue Bond requests in an executive session at the Regular
Meeting of February 26, 1979?
Commissioner Graves said she would like to consider a resolution and
application drafted by the City Attorney, providing for the procedure for
requesting the issuance of Industrial Revenue Bonds, before they consider any
further Industrial Revenue Bond requests, and moved to place the consideration
of this resolution on the agenda for February 26, 1979. The motion was seconded
by Commissioner Geis. Ayes: (5). Nays: (0). Motion carried.
A MOTION was made by Commissioner Duckers, seconded by Commissioner
that the Special Meeting of the Board of Commissioners be adjourned. Ayes:
,Geis
(5). Nays: (0). Motion carried. The meeting adjourned at 9:36 A.M.
D. L. Harrison, City Clerk
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