ST. MARYS — City councilors received an update regarding the possibility of a multi-million dollar payment to cover costs associated with a now-defunct AMP power plant project.
During their monthly meeting Monday night, 3rd Ward Councilor Bill Slemmons gave a report from the electric committee regarding the status of a $2.7 million bill the city has been stuck with involving a coal-fired power plant that was to be built in Meigs County. In 2009, officials with AMP decided to pull to the plug on the project because costs unexpectedly increased 37 percent. The decision left the 81 member communities on the hook for a portion of the costs already consumed by the project.
“We have to pay our share of the project,” Slemmons said.
There are several payment options available to the city. Officials can decide to pay off the total in one lump sum — a tactic recommended by Electric Superintendent Jerry Wolfe — or the payments can be spread out during a period not to exceed 15 years. The city also would be reimbursed for any payments if litigation is successful. The lump sum payment would avoid interest, Slemmons said.
“I think we will be money ahead,” Slemmons said.
“We checked with Jerry because that’s a good chunk of money to make sure we aren’t going to be caught short-handed. He said he could not see any reason why we couldn’t pay it and we should pay it.”
Currently the city has $6.5 million in its electric fund. Paying the entire bill would leave approximately $4 million in the fund.
Slemmons said the payment, which will be up for further discussion in January via an ordinance, has been added to the 2012 budget.
If councilors approve the payment, the money would first have to be appropriated.
“I told him (Safety-Service Director Tom Hitchcock) to put it in the 2012 budget,” Slemmons said.
Council President Dan Hoelscher said adding the payment to next year’s budget would give councilors, as well as the public, more time to consider payment options. Hoelscher said questions remain regarding if the $2.6 million would be the final cost assessed to the city.
“The more likely possibility is that we would get a refund on part of this payment because, as indicated, there are going to be ongoing lawsuits filed by AMP Ohio against some of the people who were advising AMP Ohio regarding this,” City Law Director Kraig Noble said, noting AMP owns 600 acres in Meigs County that could be sold and proceeds could be returned to the city and the other 80 partner communities.
Noble also cautioned councilors against banking on litigation being success in returning a significant portion of the payment.
“Nobody’s got any pie in the sky ideas that we are going to get a bunch of money back,” Hoelscher said.
“But what they wanted to prevent was the loss of any more — $2.6 million is enough and any delay in paying it is going to cost us interest on the balance.”
Councilor-at-large Pat McGowan tossed out the idea of paying half the bill and then spreading out the other half if interest rates are beneficial to the city.
“That’s a big if,” McGowan said.
In other business, councilors:
• Approved the third and final reading of an ordinance authorizing the safety-service director to enter into a fire protection contract with Noble Township from Feb. 1 to Jan. 31, 2015.
• Approved the third and final reading of an ordinance authorizing the safety-service director to execute continuing ambulance service contracts with the various political subdivisions in Auglaize County.
• Approved, under suspension of rules, an emergency resolution authorizing the mayor to enter into a revolving loan fund administration agreement for certain Community Development Block Grant Funds.
• Approved, under suspension of rules, an emergency ordinance annexing 32.502 acres of land from St. Marys Township. The parcels are located across from Parker Hannifin and are owned by St. Marys Missionary Baptist Church, New Community Church and John R. Hirschfeld. Councilors previously agreed to the annexation request.
• Approved the first reading of an emergency ordinance approving the 2012 budget.
• Approved the first reading of an emergency ordinance authorizing the purchase of various materials, equipment and services for the city’s departments.
• Approved the first reading of an emergency resolution authorizing the city auditor to sign updated Ohio Municipal League 457 deferred compensation plan documents.
Councilors entered executive session to discuss police sergeants’ negotiations and personnel matters.
When councilors reconvened in regular session, they voted to accept the agreement with the police sergeants. The deal includes salary increases of 2 percent, 2 percent and 1.5 percent during the life of the three-year pact. The union previously ratified the agreement.
The next meeting of the St. Marys City Council is scheduled for 5 p.m. Dec. 30 in the city building located along East Spring Street.