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THE CITY REBORN FROM THE ASHES OF AMERICA'S MOST DISASTROUS FOREST FIRE
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City Postpones BPM Rate Request To April 16 Meeting

Issue Date: April 11, 2019

After nearly an hour of intense discussion at its regular monthly meeting on Wednesday, April 3, Peshtigo City Council voted unanimously to postpone a decision on a request from BPM, Inc. for a reduction in wastewater treatment fees until its annual reorganization meeting on Tuesday, April 16.

The request for a rate decrease had been received by the city's Water and Sewer Committee in a letter from BPM, Inc. in December. In response to that request they had commissioned a rate study. After completion of that study and closed-door contract discussions at a series of meetings the committee has recommended denying the request.

Citing lack of information due to all the information being at closed-door committee meetings, Council postponed their decision to get more information on which to base their decision.

The Water and Sewer Utility Committee consists of long-time members Dan Seymour, Fred Meintz and Chair Tom Gryzwa. Seymour was present for Wednesday's Council meeting as was BPM, Inc. General Manager Jim Koronkiewicz.

The BPM, Inc. letter had stated if no satisfactory agreement could be reached with the city by April 1 they would consider building their own wastewater treatment facility, which would result in a huge rate increase for all other customers of the city utility.

At Wednesday's Council meeting Koronkiewicz said the high cost of wastewater treatment in Peshtigo has already influenced some company decisions on investments in the city, and could have greater impact in the future.

The Council's regular monthly had been postponed from Tuesday to Wednesday due to the elections on Tuesday, April 2. In other business the Council approved keeping Revolving Loan Funds in a separate account under control of the RLF/UDAG Committee and investing the money in an interest-bearing account with a Marinette County financial institution; spending $5,000 of UDAG or RLF for a study by UP Engineering to determine if there are at least 15 buildable acres on a property they did not identify, and if so, entering a contract to buy that property for an undisclosed price.

They also approved some special licenses and street closure requests for upcoming events, acted on operator license requests, and agreed to have the dumpster site at the city garage open for refuse collection for a minimum of four hours on Saturday, June 8. Information for the cleanup day will be sent with the next water bill. Peshtigo residents can either pay their disposal costs in advance or be billed for what they bring in on that special cleanup day.

Most of the meeting was spent discussing the BPM rate decrease request.

In a Dec. 11 letter to the Water and Sewer Committee Koronkiewicz had advised that BPM Inc had been investigating the increasing costs associated with Water and Sewer services provided by the City of Peshtigo. "In an effort to work with the city of Peshtigo on utilization of the existing Water Treatment facility and reducing our costs to insure future stability and growth, BPM requests the following""

The letter had asked for an 18 percent reduction in quarterly fixed costs to Class C customers. (Class C customers are billed between $63,608.02 to $52,158.58, and BPM is the only Class C customer in Peshtigo.) They also asked to pay reduced amounts for bio degradable solids and total suspended solids.

They asked that the rates be guaranteed for three years, and in return, to help offset income lost by the reductions, they offered to provide Operator In Charge services at the Wastewater Treatment Plant for three years at no charges and provide assistance with electrical and mechanical maintenance there to be coordinated between the Operator In Charge, City Engineer and plant operators.

Koronkiewicz' letter had said the requests need to take effect beginning April 1 of this year, and if unable to reach agreement "BPM will be inclined to start the permitting process for construction of a private Wastewater Treatment facility." The letter said they would consider the former pulp mill property on the east bank of the Peshtigo River across from Riverfront and Badger parks.

"Should BPM construct its own facility the city residents would see dramatic increases in their costs associated with wastewater treatment," the letter had concluded.

That letter and discussions that followed led the Committee to hire a rate study by Ruekert & Mielke, Inc., and when the results came in they were discussed at long closed sessions on March 12, 19, and 29. Koronkiewicz and Gary Motkowski of BPM, Inc. were present for the final one, on March 29, along with Taryn Nall of Ruekert & Mielke, Inc., Mayor Cathi Malke, City Attorney David Spangenberg, Public Works Director George Cowell, and Clerk/Treasurer Tammy Kasal.

After returning to open session at the March 29 meeting motion was made by Gryzwa, seconded by Meintz and approved by Seymour to recommend that Council deny the rate reduction requested by BPM.

During time for public comment at the start of the April 3 Council meeting Koronkiewicz referred to the Water and Sewer Committee's recommendation and declared, "BPM refutes this and asks that council be provided with more information on which to base their decision"..This will have a major impact on future investments in the city!" He noted Council had no information on the rate study results and had not participated in the closed session discussions, and continued, "If not accepted, we have to look elsewhere for other options, including our own treatment plant. If the costs continue, we have to consider downsizing operations. We have already held operations due to costs."

Next to speak was Seymour, who said the $65,000 income the wastewater utility would lose by granting the rate reduction would result in loss of six to seven percent of their operating budget, such a large percentage that they could not do it. He said the last rate study was done in 2013, and the last rate increase, in 2016, was done due to auditor's recommendations. He concluded, "Based on the study, we can't afford a rate decrease of $65,000"that's why we recommend to deny." He said there were other reasons for recommending the denial that he could not talk about here because they came up in closed session.

Mayor Cathi Malke read the March 29 recommendation from the Water and Sewer Committee and asked for a motion to approve it.

After a bit of silence Alderman Brigitte Schmidt moved to approve. Alderman Archer Leupp agreed to second, "but just to get it on the floor for discussion."

"What are the repercussions if we refuse?" Alderman Debbie Sievert asked. "If the cost to the community is going to be more than $65,000, where's the balance?"

Malke said since the discussions were in closed session reasons could not be discussed here, but declared, "This committee has been together for a long time"I have faith in their decisions"They did due diligence"I would go by their recommendations."

Malke asked Seymour to explain what he could. Seymour said if the utility accepted the proposal from BPM they would need to raise rates for other customers to cover expenses, and by law, any increases would need to be justifiable, based on use and cost of treatment.

Leupp noted BPM is the only Class C customer in the city, and asked if the committee had seen any figures from the BPM studies, and if they had looked into what the impact would be on others in the city if BPM stopped using the city utility.

Seymour said that had been done in closed sessions and could not be disclosed here. He had not seen the BPM study documents.

"Those 2013 rates had a tremendous impact on the financial stability," Koronkiewicz declared. He said some of the BPM numbers were shared in the closed sessions, and repeated, "If this is denied we may to build our own facility"If costs continue where they are we would consider downsizing our operations here"It has already impacted possible expansion"I won't speak to the closed session because I cannot!"

"I realize I'm a newcomer to the city," Leupp commented, but said he is curious as to what the impact would be on the city if BPM put its wastewater facility on the river bank site of the old pulp mill versus making that property available for development into an attractive area with shops, hotels, etc. "I can't make a decision at this point," he declared.

Cowell mentioned effects of BODs and Suspended Solids in the industrial waste stream from BPM, and said there was a 51 percent increase in flows from 2015 to the present. They had a rate increase of about 11.7 percent over the last five years, about two percent a year. He talked about cost of the renovation in 2012 which just took care of the aeration basins and did not address other issues.

He said the utility had to borrow to keep the plant going, and that expense goes directly on their rates.

Leupp asked if all the expense Cowell mentioned was due to BPM loading, and Cowell said it was not, it was from the entire wastewater treatment plant and wastewater collection system for the city. He said the sludge thickener and main lift station were impacted by BPM, and concluded, "I think we've done a good job of controlling our rate increases." He said there was a rate study done on the impact to other customers, but since the data was presented in closed session he could not discuss it. He added that their rate structure has to be based on facts"on the flow and the cost of treatment. He said the information Leupp and others were requesting is available, but there would need to be another closed session discussion, and then a Water and Sewer meeting in open session to bring it out. They are also waiting for the auditor's report, Cowell said. The Water and Sewer Committee has a meeting set for 8:30 a.m. on Tuesday, April 16, and the City Council's annual reorganizational meeting is 7 p.m. that night.

Cowell also said BPM would most likely not be allowed by the DNR to build a wastewater treatment facility on either of the two sites they have suggested because of laws requiring them to be a certain distance from residences. He said it is in the NR110 codes and added, "I suggest you read them so you can judge for yourselves."

"I've been on Council since BPM owned and operated that plant," Alderman Mike Behnke commented. "I recall some of the tremendous costs of upgrades over the years"the Federal grants that were snatched away from us""

He said everybody says they cannot discuss closed session information, ""but we as a council do not make a decision blinded!" He said he would like a packet of information and data, and suggested, "Whether we (the full Council) go into closed session or open, we need to have the information. There's no way I can make a decision with the information we have, and I will not! I will not vote on accepting or denying until I get more information." He then attempted to make a motion to table.

Behnke also serves as a supervisor on Marinette County Board. The Water and Sewer Committee meeting is at 8:30 a.m. on Tuesday, April 16, the same day as the 9 a.m. Marinette County Board meeting. Malke urged him to skip the county Board meeting and attend the Water and Sewer Committee meeting so there could be Council action at its meeting that evening.

After more discussion it was decided to start the Council's April 16 meeting at 6:30 p.m. instead of 7 p.m, and then, after adjourning the old Council sine die, hold a half hour closed session discussion of the reorganized Council. Cowell felt they would need at least an hour in closed session to do what they need to do.

Seymour said at some point the rate study his committee had done will have to be made public. He added they had made some adjustments in closed session. Cowell said there is a lot in the study that the consultants can explain.

Schmidt gently objected to discussing everything in closed session, and suggested, "When making a decision, it would be nice if we had more information that we could share with the public."

Behnke asked Koronkiewicz to also bring his information to the special closed Council meeting so they can understand why the rate reduction was requested.

"I will provide as much information as I can," Koronkiewicz agreed.

Schmidt repeated her request for more information for the public.

Behnke felt it would help if Council gets as much information as possible prior to the April 16 meeting.

Malke asked Koronkiewicz if he could be present for the evening meeting on April 16, and Koronkiewicz said he would be there.

Council then voted unanimously in favor of the motion to table the sewer rate issue until April 16.

Next came action on the RLF/UDAG recommendations. Behnke asked if they had received advice from the auditor on how to set up the special account for the recently released RLF funds, Kasal said the auditor said he needed more time to review.

Schmidt explained simply putting the money into the special account would put no restrictions on what the money could be used for, "It just makes sure it says in the separate account and does not get lost in the General Fund. Everyone voted in favor.

When it came to approving the $5,000 study and if the results were favorable, "enter into a contract to buy a property at the maximum price discussed in closed session"" , Behnke was not happy. "Here we go again," he declared. "I don't have any information!" Malke reminded him he had been at that meeting, and he reminded her he had left before the closed session. He said the other aldermen were not there in any case, and added,"You can't keep Council completely in the dark and expect us to make decisions!"

"If you want to be informed you have to go to the meetings," Malke told him.

Leupp asked if $5,000 was the price of the property, and Schmidt said it was not, it was the cost of the study to be sure there are at least 15 buildable acres.

"So we're going to spend $5,000 on property we're not going to buy?" Alderman John Berendt asked.

Despite the questions and lack of answers, all voted somewhat reluctantly in favor of spending the $5,000 for the study and buying the property if it was found satisfactory, except for Schutte. Schutte explained she would abstain because she was not at that meeting.

After some questions and answers Council agreed Parks and Recreation Director Dave Zahn should seek RFPs for the security camera system based on a proposal he had put together. Malke wanted to be sure they were comparing apples to apples. After remarks from Alderman Jillian Schutte that the vendors were the experts who should decide how many cameras were needed and how they should be placed, he added a caveat that if any dealer had a better idea to offer, "Let us know, so I can share that with the other vendors as an amendment."

As recommended by the Parks and Recreation committee, council approved increasing the Hometown Hero Banner fee to $150 each, with a limit of 30 new banners for 2019; approved street closure requests for Zion Evangelical Lutheran Church for an annual car show on July 27 and Peshtigo Historical Day Committee for Peshtigo Historical Day on Saturday, Sept. 28; accept low bid of $88,545 from Northeast Asphalt for the 2019 Aubin Street resurfacing project, and authorized Cowell to apply for a forestry grant through American Transmission Company.

They approved a Temporary Class B license for St. Mary Parish for events on Thursday, April 25 and Friday, May 17. They also approved an operator's license for Matthew Leonard, and denied a similar license request from Wayne McClister on recommendation of Police Chief Rick Badgley.

Early in the meeting, before starting more serious business, Mayor Malke noted the "Selena's Voice Walk" fundraiser will be held in Peshtigo on Saturday, May 4. At its meeting on March 27 the city's Streets and Drainage Committee had received a request for the event. It was agreed the road will remain open and barricades will only be placed along the edge of the street. Malke noted that registration starts at 11 a.m. at the Center Bowl and the opening ceremony at noon will be immediately followed by state of the walk. "It's for a very worthy cause, Malke commented.


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