|
|
|
ARMA —
The Arma City Council continued discussing the pros and cons of acquiring Rural Water District No. 7 in Franklin at its Monday night meeting.
Arma has been selling water wholesale to the district, which then supplies residents in and around Franklin. The district’s board approached the city about the possibility of taking over control of the district.
It would mean that the city would take ownership of all of the district’s assets, including cash in the bank and water lines. It also means the city would take over the district’s indebtedness of about $80,000.
That’s where it gets a little tricky, council member Buddy Bualle said. The council had seemed on board with the proposal at its Aug. 7 meeting, and with good reasoning. As the board understood the situation at the time, the water district’s cash amounts to slightly less than it owes, though the exact amount was unclear. It seemed that over time, because Franklin residents pay a higher rate for their water than Arma residents — an average of about $22.16 per month for Franklin residents compared to about $15.49 in Arma — the venture would become profitable for the city, Bualle said.
But Franklin also has 13-year, 400,000 gallon per year contract with RWD No. 2, which is south of Franklin, and council members aren’t sure how that would affect the city — i.e., if it would have to take over payments on that contract or if that obligation would remain with Franklin.
Bualle said that as he understood it after going over the figures multiple times and allowing for the addition of an employee to take care of the water meters and the money the city makes selling water to Franklin, it would actually lose money. And that was before the issue of the RWD No. 2 contract.
“I recommend that we not proceed with the acquisition,” Bualle said.
But council member Rock Anderson wasn’t yet convinced that the deal was a failure and suggested that the council take another look at it after it had consulted about the contract.
“I think there’s an opportunity here,” he said.
Council member Johnny Logiudici agreed.
“I’m not ready to throw in the towel yet, either,” he said.
Arma city attorney Rick Smith said the council could look into revising the contract to reflect that the city would not take on Franklin’s obligations. The council revisit the issue at its next meeting in two weeks.
The Arma City Council continued discussing the pros and cons of acquiring Rural Water District No. 7 in Franklin at its Monday night meeting.
Arma has been selling water wholesale to the district, which then supplies residents in and around Franklin. The district’s board approached the city about the possibility of taking over control of the district.
It would mean that the city would take ownership of all of the district’s assets, including cash in the bank and water lines. It also means the city would take over the district’s indebtedness of about $80,000.
That’s where it gets a little tricky, council member Buddy Bualle said. The council had seemed on board with the proposal at its Aug. 7 meeting, and with good reasoning. As the board understood the situation at the time, the water district’s cash amounts to slightly less than it owes, though the exact amount was unclear. It seemed that over time, because Franklin residents pay a higher rate for their water than Arma residents — an average of about $22.16 per month for Franklin residents compared to about $15.49 in Arma — the venture would become profitable for the city, Bualle said.
But Franklin also has 13-year, 400,000 gallon per year contract with RWD No. 2, which is south of Franklin, and council members aren’t sure how that would affect the city — i.e., if it would have to take over payments on that contract or if that obligation would remain with Franklin.
Bualle said that as he understood it after going over the figures multiple times and allowing for the addition of an employee to take care of the water meters and the money the city makes selling water to Franklin, it would actually lose money. And that was before the issue of the RWD No. 2 contract.
“I recommend that we not proceed with the acquisition,” Bualle said.
But council member Rock Anderson wasn’t yet convinced that the deal was a failure and suggested that the council take another look at it after it had consulted about the contract.
“I think there’s an opportunity here,” he said.
Council member Johnny Logiudici agreed.
“I’m not ready to throw in the towel yet, either,” he said.
Arma city attorney Rick Smith said the council could look into revising the contract to reflect that the city would not take on Franklin’s obligations. The council revisit the issue at its next meeting in two weeks.
