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EDITOR'S NOTE-The Herald asked members of
the Kings Mountain City Council to respond to
questions most asked by readers concerning the Feb.
7 bond referendum in Kings Mountain at which the
city is asking voters to approve general obligation
bond amounting to $9.2 million for utility improve-
ments. Here are their responses.
o Cities may reissue a percent of bonds or
bond payments per fiscal year without a vote of the
people. Is it the intent of the present administration to
use this method to finance further projects?
A. Councilmember Fred Finger:
"A city may borrow without a vote of its citizens, up
to two thirds (2/3) of the amount of principal paid on
bonds. The prior year, for example, the City paid ap-
proximately, $200,000 on what we owe on bonds for
utilities. Of this amount about $40,000 was interest on
bonds and $160,000 was principal. We could borrow,
without a vote of the citizens, 2/3's of $160,000 or
about $106,560 using this method.
At the present time, it is not the intent of the present
administration to use this way to finance future pro-
jects."
eo Is the $9 million figure for the total bond
package the maximum amount of bonds that can be is-
sued by the city? If so, is this not tying the harids of fu-
ture administrations?
A. Councilmember Fred Finger:
"No, therefore the $9 million figure does not tie the
hands of future administrations."
Norma
Bridges
Fred
Finger
§ J.D.
Barrett
e Why design the electrical, water and sewer
improvements to operate at capacity when capacity vol-
umes are required only on a few days of the year?
A. Councilmember Norma Bridges:
"Good engineering practice is to design for peak ca-
pacity. The demand for utilities is 24 hours per day, 365
days per year. There must be some time when parts of
the plant are down for routine maintenance, mechanical
or electrical problems, and power outage. When this
happens the plants are not operating at normal capacity,
yet the normal demand for the service is still there.
Peaks can vary depending upon the time of year. For
example, hot-dry weather would raise water and electri-
cal usage. In planning for the future growth of our City,
we should design the system to handle peak capacity."
o Why cut a new transmission line into town?
If cost is the reason, why not cut the size of the pipe?
A. Councilmember Norma Bridges:
"We looked at the option of a 24" line vs a 36" line,
and the cost was $3.5 million vs $4.5 million. The extra
$1.0 million more cost would give us 2.26 times the
water carrying capacity. However, neither line is much
good without an expansion of the plant, which would
cost another $2.9 million. As you can see, to do both
would cost either $6.4 million for the 24" line or $7.4
million for the 36" line in addition to the proposed im-
provements. The City Council did not feel that we
could raise rates anymore at this time to make these
improvements."
Harold
Phillips
A. Councilman J.D. Barrett:
"Paying as we go was considered, however the im-
provements need to be made now to keep our system up
to date, be able to take on new customers, and meet
state requirements in the waste water treatment. If we
put $1.0 million each year for the next 9 years into a
separate fund, the cost of the project would have in-
creased by about 8% per year by the time the special
fund had sufficient funds for the needed projects."
o The city has only one transmission line to
town, a 26 inch line. A proposed 36 inch transmission
line was scrapped in the bond package. Why not con-
sider a 24 or 30 inch new line, redesigning the trans-
mission line to be feasible? Why build storage facilities
at the lake (clearwell) if there is no way to get the water
to town?
A. Councilman J.D. Barrett:
"A 36 inch cost is $4.5 million.
A 24 inch cost is $3.5 million.
The $1.0 million difference buys a pipe that will sup-
ply 2.25 times the amount of water at the same pres-
sure. The $1.0 million difference still would not make
this project affordable at this time.
Clearwell water is reserve - to pump into the system
on a regular basis, but especially in an emergency.
When the water treatment plant goes down it gives you
more water to pump, therefore more time to find and
correct problems plus maintenance and get back on
line. An auxiliary generator is included, in case of pow-
er failure, to run pumps."
Humes
Houston
Wednesday, January 25, 1989-THE KINGS MOUNTAIN HERALD-Page 5A
‘Bond Vote Questions To Council
e¢ Why cut out a new transmission line into
town? If cost is the reason, why not cut the size of the
pipe?
A. Mayor Kyle Smith:
"A new 36" line was going to cost 4.5 million dol-
lars. We figured that was not feasible at this time and
still keep the rates reasonable.
We looked at cutting the size of the pipe to 24". A
24" line would cost 3.5 million dollars saving a million
dollars. A 36" line would carry 2.26 times the amount
of water a 24" line carries.
The long range plans should be the 36" line when we
can reasonably afford it. We still feel that at the present
time to provide a safety factor we need to build more =
storage tanks in town in case the existing line breaks.
That is the reason for the 5.0 million gallon storage
tank.
Al
Moretz
Kyle
Smith
Q. The bond package is to be repaid with user
fees. In the event there is a turn down in the economy
or one or two industries close, how does the administra-
tion plan to offset the loss of that economy? Would you
increase taxes? Would you increase rates to users?
A. Councilman Harold Phillips:
"First, there would be less demand on the systems,
and therefore while revenues might go down, so would
some of the cost. In addition, not all industries would
be cutting back, and some might want to add to their
water and sewer allocations. For example, we have
some industries and local governments who would like
to buy more water right now. So, we should not have a
major problem with revenues. If a choice had to be
made between raising taxes or raising rates, rates
“should be raised because some of our customers are
outside the city and would not contribute if taxes were
increased." :
e A comparison of proposed utility rates with
surrounding cities are being publicized. Why do you
feel that the average citizen is concerned with other
cities they do not live in or pay taxes? Do you feel the
average citizen is really concerned about the water and
sewer rates charged in Shelby, Rock Hill, Gastonia,
etc.? :
A. Councilman Harold Phillips:
"Yes, Kings Mountain citizens are, and should be
concerned because our industries compete with indus-
tries in those cities, and we need to make sure our rates
are competitive with them. In addition, we compete
with these other cities to attract new industries, and
must remain competitive with them for that reason."
Q. Once the improvements are in place does the
city plan to proceed a more aggressive outside policy as
far as utilities are concemed or stay with the present
policy of improvements within the city limits only?
A. Councilman Humes Houston:
"The current policy is as follows:
Any development inside the city limits, the city will
pay 1/2 the cost of water and sewer lines.
Any development outside the city limits, the devel-
oper pays the total cost for water and sewer.
However, Industrial prospects are subject to negotia-
tion, depending upon the economic benefit to the com-
munity weighed against the cost to extend water and
sewer lines. :
The city pays for extension of electric and gas lines
inside the city; and will pay for them outside the city if
the revenues from new customers will repay the cost of
extension within a reasonable time period.
The present city council intends to continue this poli-
cy. This policy encourages planned growth on the
fringes of the city, which can ultimately become a part
of the city by annexation."
eo What's going to happen to the funds that you
say are presently subsidizing water and sewer (electric
and gas)?
A. Councilman Humes Houston:
"The subsidy for the current year was budgeted
at $475,000. In the future, $230,000 of that would be
needed to pay the Electric bonds' principal and interest.
Therefore, the subsidy would be reduced to $245,000
annually. It was not stopped completely because water
and sewer rates would have had to raise still higher to
generate that amount. The city does want to end the rest
of this subsidy eventually, but it needs to be phased out
to keep water and sewer rates at a reasonable level."
Q. In the event the bond issue fails, have you
considered setting up a separate fund and let the in-
creased rates go into the fund along with the budgeted
items and pay for the improvements as you go rather
than go to revenue bonds?
o Is the $9 million plus figure the maximum
the city can sell bonds? Once those bonds are passed in
February, can the city come back next year and ask citi-
zens to pass another $3 million bond issue?
A. Councilman Al Moretz:
"No, that is not the maximum the city can borrow. $3
million additional more would not approach the maxi-
mum band allowable amount but there are not any
plans at this time for requesting additional bonds."
o The city pumped 7 million gallons of water
at capacity 16 days last year, the new improvements are
designed for maximum capacity every day. Why not cut
the design and cut the cost? Kings Mountain's usage per
day of water is a little over 5 million gallons and pump-
ing capacity is 8 million. Why not pick an average day
of watér usage and design the plant for average usage?
A. Councilman Al Moretz:
"Water systems are designed for peak conditions to
prevent interruption of service, to allow for downtime
to perform necessary maintenance, and to allow for
growth.”
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