Aldermen approve $15M line of credit for CWLP – Nov 19, 2013

The Springfield City Council on Tuesday approved a new $15 million line of credit for the city’s water and power utility. Alderman voted 9-0 to allow City Water, Light and Power to establish a five-year revolving line of credit to replace its current borrowing ability that expires in September 2014. The utility has tapped the line of credit three times since it was established in 2009 to borrow a total of $11.9 million and still owes the bank $2.2 million.

Ward 7 Ald. Joe McMenamin made an unsuccessful attempt to amend the ordinance to give the city council more oversight of the utility’s borrowing. The amendment, which failed on a 4-5 vote, would have required council approval anytime CWLP wanted to draw on the line of credit, among other changes. The amendment would have implemented “some checks and balances into our line of credit,” McMenamin said.

Eric Hobbie, CWLP’s chief utility engineer, and finance director Craig Burns told aldermen that having to pass an ordinance every time the utility needs to draw on the line of credit could force it to borrow more frequently and for longer periods to ensure being able to meet payroll and other expenses.

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Most recently, CWLP borrowed $4 million last year to pay overdue bills, which officials attributed to lower-than-expected revenues and unit outage costs. The utility borrowed $5 million in 2011 to cover expenses related to a planned outage of the Dallman Unit 33 power generator and $2.9 million in October 2009 to cover a $1.7 million shortfall for health insurance and $1.2 million for outage expenses.

The mayor also faced criticism from aldermen Tuesday for his administration’s handling of a plan to solicit proposals from outside companies to manage the city-owned Oak Ridge Cemetery, home of the Lincoln Tomb State Historic Site. Edwards said he didn’t appreciate finding out in an email late Friday afternoon that the city had hired a consultant to study options for the future of the cemetery.