October 25, 2014

Gardner owes $475K, council members learn

Danedri Thompson
dthompson@gardnernews.com
The city of Gardner owes Johnson County Rural Water District No. 7 (RWD No. 7) nearly half a million dollars, according to an agreement the entities inked in 2008 and amended in 2011. But city council members first learned of the $475,000 debt during a March 17 work session.
Under the terms of the agreement, the city would become the water service provider for areas that had been annexed into the city since the 1970s, and the city would reimburse the rural water provider for an existing transmission line and related facilities within the transferred area.
Bill Gay, who sits on the Johnson County Rural Water District No. 7, said city officials and the water board drafted the agreement to settle service boundary disputes. The agreement also includes an equation to determine the monetary value of customers. Using the agreement’s model, the average customer is valued at approximately $5,000.
City council members approved a supplement to the 2008 contract. Under the terms of the supplement, the city transferred two of its water customers to RWD No. 7 and paid the water district $10,394 for the Kill Creek Wastewater Plant.
The city paid the $10,394, but has yet to transfer customers identified in the 2008 agreement or pay for the customers. The customers are valued at approximately $431,000.
Brian Faust, public works director, said the city has two choices to make good on the contract. Council members could agree to pay $431,000 to RWD No. 7 and transfer customers identified in the 2008 agreement; or the city could transfer the customers identified in the 2008 agreement and in lieu of paying RWD No. 7, the city could transfer additional existing customers to RWD No. 7. Faust proposed transferring customers in two areas to the water district.
The areas include 17 city water users near 159th and Waverly Road and 16 customers near 199th Street and Gardner Road, including Nike Elementary School and Olathe RV.
The council did not budget for the expenditure this year.
City finance director Laura Gourley said the city legally cannot finance the purchase of utility customers through the issuance of bonds. She said she doesn’t think the city would have to dip into reserves to come up with all of the funds, however.
Council member Larry Fotovich questioned whether the contract was a binding agreement.
“I’d go back and have the document looked at to see if we really are obligated,” Fotovich said.
City attorney Ryan Denk didn’t provide a definitive answer, but said there is some question as to whether a previous governing body could bind a future governing body as the contract does.
Council member Kristi Harrison said she would like to see a recommendation from staff about how to handle the financial obligation.
The recommendation could include cash from reserves or the transfer of customers or some combination of both.
“From my perspective, we owe $475,000,” she said.
Faust said the city transfer of customers could affect the city’s ability to service potential future customers.
For example, if the city transferred customers and infrastructure on the western edge of town, the city could annex more property beyond those customers.
“We can annex anywhere we want. It’s just  who provides water service,” Faust explained.
However, the city would not have water lines to service those further western customers.
He said the water department would like to keep its existing customers if possible.

Comments

  1. Judith Rogers says:

    The deals the politicians make don’t go away but you can bet your bippy the average citizens will have to pay the costs.

    Gardner citizens better be getting ready to cover some bond payments since the Russell Family is delinquent in paying their benefit district assessments. I checked a couple of days ago and 4 out 5 parcels of land owned by the Russell Family haven’t paid their 2nd half of taxes/assessments for 2012 and haven’t paid anything on their 2013 taxes/assessments. And these assessments aren’t small, much unlike their taxes since they are still getting their dear ole “farm” classifications on these parcels. I just love it when my city gives a benefit district to so many of these jaybirds who are getting “farm” appraisals and who pay so very little in taxes for the needs of the community.

    The assessments due on those 5 parcels total around $212,053.16 and if they decide not to pay the assessment on the 6th parcel, you can add another $70,254.44 and come up with a total of $282,307.60. Citizens might be wanting to ask Gourley where the money has been coming from to make the bond payments on this benefit district for the past year.

    City of Gardner and its citizens have been through one lawsuit with the Russell Family, paid legal fees, etc. Council approved for the Russell Family to have 20 years rather than the normal 10 years to pay for the benefit district. I hate to think what the next 20 years will entail getting the money owed from the Russell Family, especially since recently they asked to be de-annexed.

    Citizens should be asking oodles of questions on the Russell Family deal and you might want to start planning on how to pay for those bonds if the need arises. I just know since general obligation bonds were issued, then taxes will be raised, if necessary, for the city to meet its debt obligations. Don’t you just love it when the politicians and the City Administrative Staff place you in this type of position so, in my opinion, the thieves can be taken care of.

    Economic development is No. 1 on the City’s list – citizens better be fully informed and educated as to what is actually involved in economic development and what their role will be.

    P.S. The “farm” classifications are still in use here in Gardner where no farming activities are present and I continue to raise hell about them with the County Appraiser, Board of County Commissioners and Dist. Attorney Steve Howe’s Office. We are losing thousands and thousands of dollars here locally and millions of dollars across the state due to these mis-classifications. Sure would be nice if the citizens of Gardner would address this costly problem to help themselves. Their representative, Mr. Sutton, nor their senator have stepped forward to help the citizens on this issue just like several representatives and senators before them haven’t, such as Rob Olson. The only way citizens can get decent government is for them to do their jobs by providing the needed oversight and raising hell when needed or getting decent people into office who will actually protect their interests – that is my opinion.

  2. yesicare0 says:

    If I read this right the city council and new lawyer are not sure if a decision made by a prior council has to be upheld. Sweeeeeeeet…. that means whatever they don’t agree with can just not be there. This could be applied to any decision the council makes in the past, present and future. Hmmmm.

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