NPPD lease rates on agenda for City Council

McCOOK, Neb. — The McCook City Council will again discuss the option of increasing Nebraska Public Power lease payments to the city, at the regular meeting Monday, 5:30 p.m., at city council chambers in the McCook Municipal Building.

The council first took up the item at the Nov. 18 regular meeting, when it was asked to increase the lease payments from NPPD to the city from 12.5% to 13% of retail sales, as allowed under the retail agreement.

But several on thee council balked at the increase, such as Councilman Gene Weedin and Mayor Mike Gonzales, who wanted to know if the increased lease payment would be passed on to McCook customers. They asked city staff to discuss with NPPD if increasing the lease payment would impact McCook customers.

NPPD leases the city’s electrical distribution system to serve McCook residents and businesses. In return, NPPD pays the city a percentage of electrical sales sold in the city.

The new agreement set a 25-year lease term, differing from the prior 15-year lease. NPPD has requested a longer term to ensure their investment is “secure,” according to the Nov. 18 city manager’s report. In return for the longer lease, NPPD agreed to allow incremental increases in the lease payments, up to 14%. As approved by the city council in 2018, the current rate is 12.5 % of retail sales sold. Additional increases must be done annually.

Since the Nov 18 meeting, city staff has discussed with Stan Clouse of NPPD the impact on McCook customers of a half cent increase to the NPPD lease payment. According to the city manager’s report, the response was that the increase is a community decision, would apply to McCook customers only and any increase in the lease payment percentage will have an comparable impact on the rate payers.

The proposed increase would generate an additional $55,000 for the city’s general fund. Lease payments to the city from NPPD for this year are estimated at around $1.3 million. At Monday’s meeting, this is a discussion item only with no voting scheduled.

The council is also slated Monday night from the regular agenda to receive and file information concerning a sole source purchase of line stopping equipment for the water department, rather than putting out bids for the purchase.

The quote for the equipment is $61,814, with funds are available in the 2019-20 water department budget for the purchase. The equipment needed is highly specialized and is only available from one company in Hastings, Neb., according to Jesse Dutcher, City of McCook utilities director.

The third and final item on the regular agenda is the approval on its last reading a city ordinance amending the City of McCook's Local Option Economic Development Plan to provide for early childhood care and educational programs as a qualifying business. The ordinance is required per state law when amending LB840 programs. 

The LB840 program is funded by using a portion of the city’s sale tax. The McCook Economic Development program would administer programs to help alleviate the shortage of childcare options in the city, including scholarships for early childhood education and incentives for licensed daycares.

The consent agenda item is packed full with items up for council approval. Consent agenda items are usually not discussed by the council and approved in one vote, unless a council member, city staff or member of the public pulls an item for discussion and a separate vote.

These items are:

- Receive and file update on a 2019 Blight and Substandard Study for the City of McCook. On Dec. 9, the McCook Planning Commission voted unanimously to approve the study but also asked if unimproved lots located west of U.S Highway 83 and north of Road 716 could be included in the proposed Redevelopment Area No. 5. The lots are owned by Farm Credit Services of America and the A.M. Bishop Family Trust. City staff would like Miller and Associates to review the lots to determine if they can be included in Redevelopment Area 5.

Property identified as blighted and substandard are eligible for Tax Increment Funding (TIF), a financing method businesses use as a subsidy for redevelopment or improvement of property.

- Adopt Resolution No. 2019-16 providing for the levy of special assessments for cost of demolition to abate nuisances. The resolution provides for the levy as a special assessment for the costs incurred by the city with the demolition of the property owned by Elizabeth Kleckner and located at 1107 W. Fourth. The resolution also provides for the filing of a lien against the property. At the Dec. 2 regular meeting, the council approved using special assessments for the costs of demolition at that property.

- Approve the Certificate of Substantial Completion for the Ravenswood Road Paving Project and authorize the Mayor to sign

- Receive and file the agreement for street superintendent services between the City of McCook and Greg Wolford for the 2020 calendar year. The contract includes fee and payments not to exceed $6,000 per year.

- Approve the recommendation of the Fuel Contract Advisory Committee to continue the fuel purchase agreement, for calendar year 2020, with Frenchman Valley Cooperative, Inc., to purchase fuel for government vehicles.

- Authorize the Mayor to sign the Certification of Compliance for the 2019 Maintenance Agreement between the City of McCook and the Nebraska Department of Roads.

- Approve the renewal of Maintenance Agreement No. 17 between the Nebraska Department of Roads and the Municipality of McCook and authorize the Mayor to sign.

- Adopt a resolution establishing crosswalks on the west side and south side of the intersection of Norris Ave and H Street. This resolution establishes the cross walks. Citizens requested the cross walks due to concerns of children crossing Norris Avenue from the library to Norris Park. The crosswalks have already been painted.

- Approve the automatic renewal of all current retail liquor licenses in the City of McCook for the year 2020 and instruct the City Clerk to publish individual notice of the right of automatic renewal of each license.

- Approve the Second Amendment to the lease between Dick Trail and the City of McCook for the lease of property at McCook Regional Airport and authorize the Mayor to sign.

- Approve the Lease Agreement, as amended by the Lessee, between AirMD, L.L.C. d/b/a LifeSave and the City of McCook

- Ratify the Mayor’s reappointment of Terry Peterson to the Housing Agency Board - term expires November 2024.