Alva City Council approves $5 million bond issue for water projects
September 24, 2023
The Alva City Council meeting Monday, Sept. 18, lasted around two and one-half hours. The longest discussion concerned Resolution 2023-019 for the issuance and sale of promissory note by the Alva Utility Authority to the Oklahoma Water Resources Board (OWRB). To allow interested parties in the audience to get on the road earlier, Mayor Kelly Parker moved this item forward in the meeting.
Parker said this was an opportunity to secure some financing for water projects without increasing the annual debt limit the city has been paying. Some of the debt items will be paid off, and the bond payoff is designed to not increase that debt total.
Engineer Bill Myers told the council that “through the years we have tried to do what we could with what we have.” He said the $5.835 million being borrowed would fund three water infrastructure projects.
First is a water storage tank located at the wellfield. The World War II era tank will require $1.75 million to replace. Water from wells is pumped to the tank. From there it flows by gravity to Alva. Myers said the replacement tank would be similar to the one at Young Street and Thunderbird Road in Alva but it will not be as tall.
Second is a new telemetry system. The current system is 15 to 20 years old and not reliable. A telemetry system keeps tabs on the wells and the water flow. Currently, city employees make at least one round trip a day to the wellfield to monitor the wells and water flow. When there are problems, those trips increase in number. Myers estimated the cost of a new system at $315,000. This system would operate with individual radios on each of the wells, the storage tank, the chlorine tank and water towers. Radio is considered more reliable than internet or cellphone service at present. The new system would also alert the city to water issues in a timely manner.
The remaining money will go to replace critical water mains within the city of Alva. Myers estimates 16,000 feet of lines can be replaced. The replacement lines will be moved to the street right of way, getting them out of the middle of streets. Relocation means streets won’t have to be torn up whenever there’s a waterline leak.
Myers said since around 1980 everyone has been using PVC for waterlines, but in the 1950s the material of choice was cast iron. He said those old lines are all over town.
Councilmember Joe Parsons asked the percentage of 16,000 feet of line compared to the total infrastructure. Myers said about 10 to 12 percent of the total. He said about 10 percent of lines might already be PVC so that would be about 20 percent PVC.
Asked about a timeline on construction, Myers said the closing on the bonds would probably be mid-November. Then there’s bidding and getting materials. He guessed construction could begin about May or June.
Parker commented that the city has $420,000 budgeted for street work, but they’ve been holding off on resurfacing streets until they can get waterlines out from under the streets.
Bonding and Promissory Note
Next to speak was Alan Brooks, bonding attorney. He was accompanied by Chris Gander, described as the financial person. Brooks said the note has been set up to be paid off over 30 years. Alva has been handling payments of $192,000 a year. Payments on this note will not increase that amount on average since some of the older debt is being paid off.
Brooks explained the role of the OWRB. They have a financial assistance program where they go out and issue bonds. Already committed to the current bond issue are Broken Arrow, Owasso and Seiling. Duncan is slated to join next month, and Alva would also join next month with passage of this resolution. This brings the total being borrowed to around $50 million which makes it more attractive to those buying bonds. The interest rate is not to exceed 5.5 percent.
Mayor Parker asked if he was correct that the city council had to have six votes in favor to approve the issuance of the bonds. Brooks said yes, it must pass by a 2/3 vote, which would require six in favor.
Parsons apparently had talked with Brooks earlier to ask questions. Now he brought up that Brooks and Gander would each receive 1.5 percent of the total note as their pay for work on the bond issue. He asked if the city checked with other bond counsel who might offer a lower rate. Parker said no he had not. Brooks and Gander have worked with the city on other projects. He also said that Brooks was the only one who returned his calls.
Parker explained further that the 1.5 percent is the only pay that Brooks and Gander receive, and if the bond issue is not approved they receive nothing for the hours they put in on it.
Brooks said there are companies that charge less and companies that charge more. He said the services they offer vary. He believes it’s a fair price for the quality of service he and Gander offer.
The discussion was drawn out as Parsons continued to discuss the fee and his wish that the city checked with others to get a comparison and possibly better pricing.
Finally, Mayor Parker said, “Do the project. Impeach me. Take care of the people of the community.” He later added, “This is not a political issue.”
Sadie Bier made a motion, seconded by Greg Bowman, to approve the resolution. Voting in favor were Bier, Bowman, Parsons, Gail Swallow, Dr. Garrett Lahr and Daniel Winters. Voting no were Brooks and Taylor Dowling. The resolution was approved 6-2.
Parker called for a recess while paperwork on the bond issue was signed. Everyone had the opportunity to stretch, move around and visit the restroom.
When the meeting resumed, Parker opened the Alva Utility Authority meeting. Since the bond issue is for a water project and is supported by utility revenue, the AUA also needed to give approval.
Winters made a motion, seconded by Lahr, to approve Resolution 2023-011 of the AUA.
Brooks than spoke saying he and Gander had talked during the break. As a show of good faith, they agreed they would reduce their fee by $10,000 each.
The motion passed 6-2 with Brooks and Dowling again voting no.
A video of the meeting may be viewed at http://www.AlvaReviewCourier.com.