AN UPDATE ON THE CREAMERY BRIDGE AND ESTIMATED TIMELINE OF REPAIR
Osawatomie, Kansas – City Manager Mike Scanlon toured the damage at the Creamery Bridge (8th Street) on Tuesday, April 6th, 2021, with Miami County Engineering Project Manager Matt Oehlert. Scanlon and Oehlert discussed the next steps necessary and the areas of repair that would be needed; primarily, the vertical hangers inside the south east arch in the northbound lane of the bridge.
Officials estimate that it will take an estimated 90-100 days to prepare specifications and submit permits for approvals to conduct the repairs (noting that this is an historic structure and all work will require approval by the State of Kansas); bid the repairs to be made this summer (2021); begin repairs in mid-late summer (2021); complete necessary repairs by the end summer/early fall (2021). During this process, officials must also certify the structure for the loads that can be carried and modify any signage required. Following the successful completion of these steps, the bridge and its roadways will be opened after construction completion in the fall of 2021.
The historic bridge was damaged on April 1st, 2021, following a motor vehicle accident and was subsequently closed to all traffic due to safety concerns. Updates regarding the bridge and other City news can be found at www.osawatomieks.org.
MEDIA CONTACT: Sam Moon, Public Information Officer [email protected] 913-755-2146 x103
Due to damage sustained in an accident, the 8th Street bridge (Creamery Bridge) is closed until further notice. Please use an alternate route. This closure includes Plum Creek Road from Osawatomie City Limits to 335th Street.
An employee of Miami County accidentally hit parts of the bridge and caused damage to some support pillars. The County is awaiting an inspection to gauge the level of damage and to determine the repairs that will be required. Once there’s a plan for repairs, we will be able to provide residents with a better calendar for when the bridge might be accessible again.
The following is a to-the-day timeline of the severe weather-related utility price spikes experienced by the City of Osawatomie and the actions taken by staff and the Governing Body. A summarized news release regarding this continually evolving situation can be found here.
February 22, 2021 – Following the record-breaking cold weather and utility crisis that took place in mid-February, staff is notified by the Kansas Municipal Energy Agency (KMEA), an association of city utilities of which we are a member, that they are going to have a large bill and member cities would be moving to a weekly billing cycle the next two weeks instead of the regular monthly billing cycle. The reason for this is that KMEA’s Line of Credit that they could borrow against was $5,000,000 and the bill that they were going to get from Southwest Power Pool was for $9,000,000+; this imbalance meant that members needed to provide payment to the group on a more frequent basis to cover the gap in finances. As part of this temporary change in billing, KMEA provided all their member entities with an estimate and told Osawatomie to expect a bill between $700,000 and $1,000,000 for the total cost over the next two weeks (with the caveat it could go up or it could go down). KMEA said they wouldn’t know the final number for the first week’s payment until Friday (2/26/2021), but that we would need to have funds in the bank ready to be withdrawn by 12:00pm on Tuesday, March 2nd. So we were given notice that we needed to have some portion of $700,000 available by the following Tuesday, only two business days away. At that time, we only had about $500,000 in cash on hand in our Electric Utility Fund. We feared we were early in this financial/energy crisis and at this point there seemed to be a lot of guessing, so we started solving for a $1,000,000 problem, not knowing what it might be, but figuring that would give us some cushion.
February 25, 2021 – Working with our Bond Counsel and Financial Advisor, we identified KSA 10-116a which is a State Statute that allows city utilities to issue No Fund Warrants (borrow money) up to 25% of their annual revenues in a Utility Fund, if there is an extraordinary emergency in that utility. City Council meets in a special meeting and Resolution 849 is passed which then gave staff the ability to borrow up to $900,000 in No Fund Warrants. Remember, at this point we are still solving for what might be a $1,000,000 – we don’t know. That ability to borrow $900,000 and use $100,000 in cash on hand would get us to the $1,000,000.
February 26, 2021 – KMEA contacted the city at 10:57 am with what our first bill would be for the period of 2/10 through 2/16: the amount was $195,531.77. We asked if we could expect a similar amount for the following week, and the answer was probably, yes, but it could go up or go down. We then made an assumption that even if it did go up we could probably use some of our cash on hand to pay, but that we wanted to preserve as much cash as possible not knowing how all of this would eventually play out.
Simultaneous to all that was happening internally, we and several other cities/associations engaged the State in the problem. A bill was introduced and we submitted testimony in support of what became SB88, which created the City Utility Low-Interest Loan Program.
Mike Scanlon, City Manager
March 2, 2021 – The first payment of $195,531.77 is withdrawn. We hold another Special Meeting of City Council so the Governing Body can discuss and vote on Resolution 850, which grants us the authority to issue NFW and sell them to First Option Bank. The Resolution is published, becomes law, warrants are issued, and First Option provides us with $400,000 to both replenish and have cash available before our next payment due on 3/9/2021. We negotiated with First Option Bank and they agreed to buy our NFW at 1.2% APR.
March 3, 2021 – At 2:49 pm we receive our second bill from KMEA, totaling $498,163.32 which covered the period of 2/17 through 2/23. This represents what we believe to be our last “spike” billing for the City of Osawatomie, which brings the total in received spike bills to $693,695.09. This bill is due for withdrawal on 3/9/2021, just three business days away.
March 3, 2021 – In Topeka, SB88 is published and becomes law. The bill was introduced in the morning and voted through both the House and the Senate in the same afternoon. Governor Kelly signs it into law that evening. City of Osawatomie and other municipal utilities are eligible to borrow money from the state at .25% (one quarter of one percent).
March 4, 2021 – State Treasure starts promulgating rules and holds a conference call with municipal utilities to provide an update on the what is now called “City Utility Low-Interest Loan Program”
March 5, 2021 – The City Utility Low-Interest Loan Program application portal opens, and applications are accepted until March 15th.
March 19, 2021 – The City paid off the NFW at First Option Bank as was specified in Ordinance 3794. At this point the City has a $700,000 loan with the State of Kansas with a current annual interest rate of .25% (one quarter of one percent). This rate is adjustable every January. The loan from the State was 1% below what we offered by First Option Bank, so we took advantage of the lower interest rate.
Our first estimate was that we needed $700,000 available for payment over the course of eight business days for the two weeks of spike billing from KMEA. We only had $500,000 in our Electric Fund on hand, and we used $1,000,000 as our planning number – there was some fear that the $700,000 estimate might grow. Between NFW and cash on hand, we had a plan. The first bill from KMEA came in lower then expected, and we used it as a base line number to issue $400,000 (not up to the full $900,000 that Resolution 849 allowed) in NFWs. However, the second bill came in much higher and our total was closer to the original estimate of $700,000. Simultaneous to us issuing NFWs, the State jumped in to help cities and came up with a low-interest loan program which we used to pay off the original $400,000 in NFWs and cover most of the increased costs seen between 2/10 – 2/23. We are now working on how to best pass this “price spike” on to our electric utility customers, and will have a final plan in place after the April 8th City Council meeting.
How to Stay Informed
For residents wishing to stay informed of City news and happenings, we provide a variety of communication tools and always encourage attendance at Council meetings, which are held on the second and fourth Thursdays barring any federal holidays. Council meetings are free to attend, open to the public, and attendees are each allotted up to five minutes at the top of the meeting to voice concerns or questions regarding City business.
In addition to our online presence, the City also distributes a printed quarterly insert in the Miami County Republic that offers a comprehensive update of City news to those who might not have regular internet access. The next edition is scheduled to publish in the April 7th, 2021, edition of the Miami County Republic.
In emergency situations, the City also utilizes the Everbridge Alert System managed by the Miami County Sheriff’s Office. We encourage all residents to sign up for notifications through Everbridge.
Continued Utility Billing Actions Taken Regarding Electric Spike Charges
Osawatomie, Kansas – City officials continue to work toward a solution regarding the mid-February cold snap that caused price spikes in electric and natural gas utilities across the entire Midwest. The City of Osawatomie received around $700,000 in charges for a two-week period of severe weather, which is roughly the cost of six to eight months during a regular year. The issue has been a primary topic of concern at the February 25th, March 2nd, and March 11th meetings of City Council, and officials continued their discussion of the electric spike charges at the regularly scheduled March 25th meeting.
The City of Osawatomie was glad to receive a $700,000 ultra-low-interest loan from the State’s newly introduced City Utility Low-Interest Loan Program, which was designed for use by municipalities facing exorbitant utility bills as related to the February severe weather. This loan allows the City to pay off the $400,000 in higher interest no-fund warrants (NFW) as originally issued for the first portion of the charges due, and the City is able to stretch out repayment up to 10 years as compared to the one-year repayment for the NFW. This more forgiving repayment opportunity allows us to keep the monthly impact to consumers as low as possible.
After a presentation from City Manager Mike Scanlon regarding several proposed repayment options, and after listening to feedback from the residents in attendance, Council voted to approve a proposed 36-month framework repayment calendar. A final version of the plan will be presented and voted on at the April 8th meeting before implementation can begin in mid-April. The loan program timeline and necessary actions from City Council prevented these changes from appearing on the bill arriving next week as originally stated in a March 1st release. Once a plan has been established and approved by Council, the City will notify customers of their payment options.
The City of Osawatomie and all its associated staff members, community partners, and other advisory groups are grateful for the support and understanding of residents during this incredibly trying time. This has been a period of exhaustive new information, record-breaking speed of legislation, and complicated financial mathematics. The City is proud to have been on the forefront of many of these statewide conversations and spearheaded many of the solutions being implemented across the region.
Consent Agenda ; Appointments (KMEA/EMP1) ; Public Hearing (USDA Grant/Loan Application) ; Unfinished Business (Public Works Roof Bids) ; New Business, Including Resolutions 851 – 855 and Ordinance 3794 ; Staff Reports from Utilities and Police Department
OSAWATOMIE URGES RESIDENTS TO PREPARE FOR HIGHER UTILITY BILLING DUE TO EXTREME WEATHER AND THE RELATED ENERGY CRISIS
Osawatomie, Kansas – As the Midwest dug itself out of the extreme winter weather in mid-February, a new but related challenge presented itself. Power partners and providers across the Midwest were seeing hyper-inflated pricing due to the out of balance open markets, and municipalities across the region were scrambling to pay weekly energy bills that are more than 10x higher than their previous monthlyaverages. Osawatomie was not immune to market conditions, as we were told to expect our next weekly bill from KMEA to be valued at near $1,000,000.
Fortunately, some rates have been reevaluated and our pool credit applied to the open market charge and this week’s bill is now $195,531.00. We expect next Friday’s bill to be similarly high, as the rates didn’t immediately drop back to regular levels. In order to pay these much higher bills, we’re working with financial partner First Option Bank to issue no-funds utility warrants equivalent to $400,000 that we expect will cover the payments for this week and next. We sought this short-term financing in an effort to preserve our existing fund balances and protect our assets moving forward should another emergency present itself.
What does this higher bill mean for the consumer? It means that utility bills for Osawatomie residents willbe significantly higher for the month of February. We estimate that the average consumer will see an additional $235.00 on top of regular winter usage charges. This number will of course fluctuate depending on your home’s efficiency and your usage throughout the month. We recognize that this is yet another financial burden during an already financially stressful period for many households, so we are preparing two different payment plans for those unable to pay in full. “Plan A” will allow residents to pay the balance over three (3) months and “Plan B” will allow payment over six (6) months.
While this is undoubtedly a shock to many household budgets, we hope residents recognize how much worse this could have been and instead pride themselves on their conservation efforts during our energy crisis. We fully believe that our community’s dedication to conservation was the main contributing factor to our bill being so much lower than originally estimated. Because of your resolve to keep our community online and safe during the worst winter weather in a generation, you likely saved yourselves several hundred dollars in additional energy costs.
We urge residents to prepare for these increased utility bills and consider keeping usage to a minimum as we move into more pleasant spring-like weather to help offset the higher charges coming on the February bill.